Understanding the ubiquitous nature of entrepreneurship is a global challenge. The Global Entrepreneurship Monitor (GEM) study conducted each year around the globe attempts to draw into focus what stirs people to create an entrepreneurial venture.
Having conducted several GEM nation-wide studies into entrepreneurial activity whilst based in the United Arab Emirates, the findings are somewhat perplexing, for example, Central and South American countries repeatedly top the list with the highest levels of entrepreneurial activity.
Well, two types of entrepreneurial activity are investigated in the GEM studies: Opportunity and Necessity driven entrepreneurial activity. Obtaining ongoing employment in Latin American countries is difficult, thus, there is a Necessity to create a small venture to sell consumer good just to survive. Conversely, in developed or developing countries one creates an entrepreneurial venture to exploit a profit-making Opportunity.
In an opportunity exploitation situation, the argument goes that entrepreneurs start up a new venture, not only because they can see an opportunity to generate beyond salary wealth, but also because they like the personal independence it offers and also expresses their individualism – let alone the chance to generate wealth beyond that of an employee.
And, research indicates that men, more than women, create a new venture. So is entrepreneurship principally a ‘Guy’ thing?
Is this so? Well, why did your friends start an entrepreneurial venture?
Well, there are a number of measures that are important in investigating drivers of entrepreneurship – some are as follows (simply put):
1. Power: the need to hold power in one’s own hands;
2. Individuality: the need to do one’s own thing;
3. Masculinity: is this a ‘guys’ thing; and
4. Uncertainty Avoidance: the desire to control one’s own life.
Which of the above is the reason you want to start up your own business venture?
We searched for databases that hold national ratings based on these instruments and found data for 31 countries across all four measures for similar years. The sample was for countries in the top, middle and low-end GDP nations.
We then compared the national data on the above instruments on nascent (less than one year), early-stage (one to five years), established (five+ years) entrepreneurial activity, as well as, simple enterprise acquisition measures then searched for the predictor(s) of why people start up a new venture.
Your best guess as to why – is?
No, it is not any of the above intrapersonal reasons – including a ‘guy’ thing!
The predictor is – national early stage entrepreneurial activity!
It appears that when people around us start up a new venture and achieve some success over a few years, then others want to give it a try as well.
How intuitive is this finding?
Well, we can hear the yelps of shock horror from afar because this study could not be classified as a rigorous piece of research. Needless to say, it fits well with our suspicions from studies into national entrepreneur activity and, therefore, in our view worthy of further investigation.
Our suspicions is that entrepreneurial activity is a not only a function of national capacity to create and absorb innovations, but a function of national strategy aimed at stirring the nation to create new products/services and ways of doing business.
The United Arab Emirates is a classic example where in 2006 it was lowly ranked at 40 out of 42 nations in overall entrepreneurial activity with an entrepreneurially conducive environment ranking of 3 after the USA and Singapore. However, within one year its’ overall entrepreneurial ranking shot up to 25 out of 42 nations!
The national government set in train entrepreneur support programs that were well funded – and promoted the concept of entrepreneurship as a legitimate, desirable and respected activity especially for women and, even including the subject in the High School curriculum.
All of a sudden the nation was ‘a jumping’ with aspiring entrepreneurs. Friends and acquaintances were getting into the act – either as an entrepreneur or as an investor in new ventures.
So, when friends and acquaintances get into the act – like ants to a honey pot – we join in the feast.
Can you smell the honey yet?
Maybe that’s because your friends haven’t either!
Or, is it because I am not a ‘guy’?
And, if, and when you do, do you want to be the entrepreneur, the venture capitalist or the employee? Why?