Nascent Entrepreneurs in Canada: An Empirical Study
Dr. Teresa V. Menzies, Faculty of Business, Brock University, St. Catharines, Ontario, Canada L2S 3A1 Tel: 905 688 5550 x 4118, Fax: 905 984 4188,
[email protected] Dr. Yvon Gasse Faculté des sciences de l'administration, Université Laval, Sainte-Foy, PQ, Canada G1K 7P4 Tel.: 418 656 7960, Fax: 418 656 2624,
[email protected] Dr. Monica Diochon Department of Business Administration, St-Francis Xavier University, Antagonish, Nova Scotia, Canada B2G 2W5 Tel: 902 867 5412, Fax: 902 867 5385,
[email protected] Dr. Denis Garand Faculté des sciences de l'administration, Université Laval, Sainte-Foy, PQ, Canada G1K 7P4 Tel.: 418 656 7960, Fax: 418 656 2624,
[email protected]
Paper submitted for the Competitive Stream of the ICSB 47th World Conference, San Juan, Puerto Rico, June 2002
We gratefully acknowledge the funding support from SSHRC Research Grant No. 412-980025 and Industry Canada. We thank Peter Robinson and Lois Stevenson for their assistance in the early stages of this project. We also thank student research assistants for conducting the telephone interviews, and especially Maripier Tremblay for her dedicated attention to all aspects of this project.
Nascent Entrepreneurs in Canada: An Empirical Study
ABSTRACT This paper presents the results of a Canadian study of nascent entrepreneurs and the start-up process. The objective of this study is to ascertain population and individual level variables concerned with the nascent entrepreneur, the timeline and process variables associated with the start-up process, and the outcomes of the start-up process and associated variables. The study is part of the Entrepreneurial Research Consortium project being conducted in ten countries. Methodology and interview schedules are harmonized across countries. Initial results in Canada show that nascent entrepreneurs are found in 1.8% of Canadian households. After a 12 month period a third of nascent entrepreneurs have achieved an operating business (profitable), a third are still active in the start-up process and a third are either inactive or have quit. The characteristics of nascent entrepreneurs are compared to the Canadian population. Characteristics of the early-stage operating businesses are presented. Data collection is not yet complete and a 24 month, follow-up study, will be conducted by the end of 2002.
2
Nascent Entrepreneurs in Canada: An Empirical Study Nascent entrepreneurs (NEs) and the start-up process are topics that have been of considerable interest to researchers (e.g. Birley & Westhead, 1994; Capaldo, 1997; Carter, Gartner & Reynolds, 1996; Erutku & Valeé, 1997). Part of the early research into these topics includes model building in relation to venture formation (Cooper, 1970; Gibb & Ritchie, 1982; Greenberger & Sexton, 1988; Martin, 1984; Shapero, 1985). However, the model building research, and other new venture formation studies in general, have been criticized for adopting a narrow theoretical perspective, attempting to develop “universal” theories, and for using flawed methodology (Mason, 1989; Gartner, 1985; Shane, Kolvereid & Westhead, 1991; Reynolds & White, 1997). Methodological criticisms are due to the reliance on obtaining information from individuals who give retrospective information about the start-up process. However, identifying NEs for research purposes is difficult and expensive. NEs are defined as those individuals who are actively engaged in the start-up process, but who have not yet achieved an actual firm birth (a viable business) (Reynolds, 2000). Given the importance of the topics and the shortcomings of existing research, during the 1990s a group of senior entrepreneurship scholars initiated a large-scale study of NEs and the start-up process. This Entrepreneurial Research Consortium (ERC) has grown to include researchers in many countries (US, Australia, Canada, Finland, Germany, Greece, Netherlands, Norway, Sweden, United Kingdom), and is currently considered one of the most important collaborative research projects in entrepreneurship. (For further information, including the history of this international project, see Reynolds, 2000). The main objective of this large-scale study (Reynolds, 2000) is to answer in a rigorous and reliable way, the population level questions (e.g. what percentage attempt, succeed, fail to
3
start a business) and individual level questions about starting a business, and how the firm, once created, develops. The second objective is to investigate the cause of the variations, including economic conditions, personal and socio-demographic factors, the sequencing of events, market factors, the usage of resources, and the access and use of business help programs (Reynolds, 2000). The rationale for studying these topics is multifaceted. Entrepreneurship is theorydeprived and this study has important implications for building a theory that has “classical determinism” (Bygrave & Hofer, 1991: 17) in relation to entrepreneurs, and new venture startups and growth. In other words, we might develop theories that have predictive power for the individual firm. As entrepreneurship is such a vital instrument of economic prosperity (Birch, 1987), building “useful” theory (applicable, predictable) (Bygrave & Hofer, 1991: 16; Penrose, 1989), is the major goal of entrepreneurship researchers. Communication of theory and practical insights, through education and business programs, has practical applications by assisting those contemplating or engaged in starting a business. Policy initiatives by the various levels of government could be informed by this research. In addition to the national, regional and individual rationale for studying NEs and the start-up process, there are insights to be learned at the international level, through comparative studies of entrepreneurship in various countries. In this paper we present a conceptual model of the start-up process and indicate how the literature informs the model. We give an overview of the methodology adopted in Canada as part of this large-scale ERC project. Results of the preliminary stages of our study will be presented. We conclude with an explanation of how our study will proceed.
4
Background Literature To assist with conceptualizing the entrepreneurial process and provide a framework for discussion, a model is presented in Figure 1. (The limitations of this linear, analytical tool are acknowledged). Our model shows the influence of the external environment (economic, social, political, and cultural). Previous research has found regional differences in the incidence of new firm creations. Reynolds, Storey and Westhead (1994) found evidence that increased demand, the presence of many small firms in an industry, and an urban location, were influencing factors in new firm creation. They did not find that unemployment, personal financial capital, receptive political and government structures or policies were strong predictors of new firm creation. Their findings regarding influences did not vary greatly by country studied (France, Germany, Italy, Sweden, UK, USA). However, the incidence of new firm births did vary by country. A later study by Reynolds, Hay, Bygrave, Camp and Autio (2000) measured entrepreneurial activity across various countries and also found considerable variation. (e.g. high rates reported for US and Australia and low rates for Japan and Finland). Results from the ERC project show nascent entrepreneurship rates of 2.1% in Germany (Welter, 2000), 3.8% in the Netherlands (EIM, 2000), 2% in Sweden (Delmar & Davidson, 2000), and 3.8% in the US (Reynolds, 1999). These studies point to the importance and influence of the external environment (e.g. Casson, 1995; Levie, 1994; Lin, Yates & Picot, 1999).
______________________ Insert Figure 1 about here _______________________
5
Psycho-social dynamics (Figure 1) also have a major influence on who will become a nascent entrepreneur. The influence of ethnicity (Butler & Greene, 1997; Menzies, Brenner & Filion, 2002; Storey, 1994), education (Bates, 1995; Robinson & Sexton, 1994), experience (Mathews & Moser, 1995; Storey, 1994), age (Gimeno et al., 1997; Reynolds & White, 1997), gender (Brush, 1992; Carter & Rosa, 1998; Marlow, 1997; Shane, Kolvereid & Westhead, 1991), parental venturing (Shapero & Sokol, 1982), psychological traits, attitudes, cognitive dispositions, and abilities (Bandura, 1986; Bhave, 1994; Kim & Hunter, 1993; Krueger, 2000; Krueger & Carsrud, 1993; Shane &Venkataraman, 2000; Simon, Houghton & Aquino, 1999; Stewart, 1996; Zietsma, 1999), and networks (Aldrich & Zimmer, 1986; Hite, 2000; Menzies et al., 2002; Singh, 2000) have been studied. Results from the Swedish ERC research by Delmar and Davidsson (2000) show that gender, employment status, age, education, and experience were important factors in predicting who will become a nascent entrepreneur. Marital status, number of children, and the length of working experience were not found to be significant. Honig and Davidsson (2000), using Swedish ERC data, showed that formal education was not a strong predictor of NEs, but they found support for the importance of personal networks and taking business classes. Results of the US ERC (Gartner, Shaver & Gatewood, 2000) revealed that the career attributions (innovation achievement, financial success, personal growth, and public recognition) of NEs have gender differences, and are different from those not engaged in starting a firm. The start-up process (Figure 1) as reported by Carter, Gartner and Reynolds (1996) does not have one uniform model of activities, nor a predictable time frame. The start-up process, according to Carter et al. (1996) can take from one month to three years, although the average was one year. The process has been found to be even longer for high technology ventures (Van
6
de Ven, Angle & Poole, 1989). Carter et al. (1996) found 20 start-up activities (e.g. developing the product, obtaining financial support, organizing a team, achieving sales, and filing a tax report). During the start-up process, NEs acquire and use information, however, results from the Swedish ERC project (Fiet & Samuelson, 2001) have shown that a prolonged search for information does not enhance the chances of firm birth. According to these authors, there is an “optimal stopping point” in information searching. Our model (Figure 1) shows the outcome of the start-up process as a firm birth. Samuelson (2001), using ERC data from Sweden, has categorized firm births into the concept of innovative (e.g. applying a new technology) versus an equilibrium (e.g. franchise, copy cat) venture opportunity. This analytical tool can lead to more specificity in examining the start-up process. Our model (Figure 1) indicates that some NEs quit the start-up process. Carter et al. (1996) found that those who eventually quit the start-up process aggressively pursued similar start up events as those who achieved an operating business. However, those who quit had decreased their activity pattern over time. Individuals who were engaged in the start-up process for a considerable time, and were not progressing speedily towards a firm birth, were found to be less active and aggressive in their start-up activities than those in the successful or quit categories. The inactive category in Figure 1 is used to indicate those who are not presently working on the start-up process.
Methodology The ERC, composed of over 111 individuals from 32 different organizations around the world (Reynolds, 2000), collaboratively developed a rigorous methodology for examining the research questions relating to NEs and the start-up process. The member units have made
7
adaptations to the ERC survey instruments and administration details. However, overall, there is a general standardization amongst all ERC units for identification of respondents, items used in the survey instruments, scheduling of interviews, and mail surveys. For a full discussion of survey protocols and items included in the surveys, see Reynolds (2000). Early in 2000, a national polling firm was utilized to perform a random sampling of the Canadian population to identify the subjects for our study. This stage of our research was funded by Industry Canada. Table 1 shows the breakdown of the numbers pursuant to this first stage of our research. Our unit of enquiry was the “household”, and we limited our study to adults, 18 years of age and older. The key questions asked when recruiting respondents were: Are you, alone or with others, now trying to start a business? Will you be an owner, in part or in whole of this business? During the last 12 months, have you done anything to help start this new business? We also identified intrapreneurs (e.g. sponsored by an employer), discouraged NEs or former business owners and business angels, however, these groups are not discussed in this paper. A control group of people not starting a business was identified in Stage One of the research, and they were also surveyed with a phone interview (112 questions), and a mail survey (9 pages) in late 2000. ______________________ Insert Table 1 about here _______________________ The second stage of our study involved a telephone interview with the NEs identified in the first stage. Preparatory to this, research collaborators each took responsibility for collecting data in a particular area of Canada. It was assumed that contact and identification with a university would enhance response rates. A postcard was mailed to each NE to ascertain the best
8
time to call. Phone interviews were then set-up and conducted during the spring and summer of 2000. The phone interview consisted of an instrument with 240 questions that could take over an hour to complete, and required one or more phone sessions. The questions were grouped into 26 areas of inquiry, and in a previous paper, Diochon, Gasse, Menzies & Garand (2001) categorized these into contextual factors, organizing issues, activities undertaken, and nascent individual influences. A 16-page mail questionnaire was also sent to respondents after a successful phone interview. The mail questionnaire contained items that required completion of a 5 point Likert scale and other questions not suitable for phone surveys. There was no payment for the first long phone interview, however, $10 was sent with each mail questionnaire as appreciation for participation. The third stage of the research was a follow-up phone call after a year to assess how the start-up effort had progressed. The phone survey contained 266 questions, but most questions were only applicable to those who had achieved operating business status. This was ascertained by determining if the business had revenues exceeding expenses for a period of 6 months or more. Those still actively engaged in the start-up were identified as well as those who had quit or were inactive. This was a challenging research project due to the methodology adopted. The ERC had adopted web-based phone interviews but these could not be made available for the Canadian team, and we developed our version independently, although using mostly the same questions. A questionnaire with over 240 questions and 49 pages in length, especially a phone interview, is problematical. The various research team members had to submit separate ethics reviews to their universities and this meant delays. Training of research assistants also required a large time commitment as well as the phone calls that had to be made by the researchers to potential
9
respondents to encourage their participation. Respondents are not receptive to divulging personal, financial and business information to callers whom they do not know. Other problems were typical for any phone survey (multiple call-backs, unable to contact the identified person in the household, lack of co-operation). Some respondents had ceased start-up activities, or achieved an operating business between Stage One and Stage Two. A two-year follow-up phone interview will be conducted with all respondents in spring and summer of 2002.
Preliminary Findings This study has developed a representative sample of Canadian business start-ups. By collecting data on all adults in each sampled household, it has been possible to locate NEs in about 1.8% of these 21,116 households (margin of error less than 0.2%). This stratified proportional sample is representative of all Canadian adults and households, those 18 years or older, from all provinces. This study has also developed a random sub-sample of other types of entrepreneurs. Using the same technique, it has been possible to locate 1,549 households with other types of entrepreneurs (this sub-sample represents about 7.3% of the total sample). From this particular sub-sample, we have identified 11.7% of households with business owners, 5.3% of discouraged entrepreneurs, 9.4% of discontinued business owners, and 2.0% of business angels (margin of error between 0.7 and 1.5%). This information provides important population level information about entrepreneurial tendencies and investors in entrepreneurship. Table 1 shows the response numbers for each stage of the study to date. In this paper, we will present only frequencies, statistical techniques will be applied to our data once we have completed data collection (Stage 4 in Summer 2002). Some characteristics of the NEs are presented in Figures 2 to 9 and, firstly, we will make a comparison with the general population in
10
Canada. (Figures for the population comparison were taken from the 1996 Census by Statistics Canada.) There are more males in the NE group (Figure 2). The percentage of minority NEs is the same as in the general population (Figure 3). The NE group has fewer people whose main language is not one of the two official languages, when compared to the general population (Figure 4). This may have been due to the languages in which the study was conducted (only English and French). Nascent entrepreneurs were more common in the 26 to 55 age groups, as would be expected (Figure 5). More nascent entrepreneurs had university education than the general population (Figure 6). A higher percentage of the population are NEs in Ontario, Manitoba and Saskatchewan (Figure 7), and a lower percentage in Alberta and British Columbia. Due to a lack of comparative data, we cannot compare family income and net worth with the figures for the general population. ________________________ Insert Figures 2 - 9 about here ________________________ When comparing our NEs with the control group we surveyed, we find that the two groups are not well matched according to gender (Figure 2), ethnicity is comparable (Figure 3), Francophones are over-represented (Figure 4), and there are a higher percentage between the ages of 18 and 25, and over 55 in the control group (Figure 5). Our control group has a lower level of education than the NEs (Figure 6) and Quebec and the Maritimes are over-represented within the control group. Comparing the NEs and the control group according to net worth and family income (Figures 8 & 9) would seem to show the control group are a more wealthy group but may have slightly lower incomes. In future research we will test for significant differences between the NEs and the control group. However, on the basis of our work to date, it appears
11
that we do not have a representative control group. Obtaining control group respondent cooperation was extremely difficult and our sample reflects the varying response rate by gender, language, age, education level and province. We will address this problem in Stage 4 of our data collection. Stage 3 results (second long telephone interview) gives us an early assessment regarding the status of the start-ups. About a third (35%, n=47) of respondents had operating businesses (revenues exceeding expenses for six months or more). A similar number were still actively engaged in the start-up process (36.8%, n=50). The final third were grouped into those who were inactive (14%, n=19) and those who had quit the start-up effort (14.7%, n=20). For those still actively engaged, the major problem most cited was marketing (34%) and financial issues (16%). For those who were inactive, the major problem cited most frequently were financial problems (28%), personal reasons (17%), marketing problems (17%), and professional reasons/new job (11%). Of those who had quit, the most cited major problem was financial (25%) followed by professional or other business opportunity (16%), and economy and competition (16%). For those who had quit, 39% stated they had been 100% sure that this business was going to become an operating business when they had initiated start-up activities. Most of this same group who had quit (90%) said they that if they tried to start another business they would be more successful due to the experience gained. Of those still engaged in start-up activities, about 50% of respondents are almost sure (75-100%) they can achieve a firm birth. About 30% of those in the inactive category give their venture idea a 75% to100% chance of leading to an operating business. Respondents with an operating business (n=47; 67% male, 33% female; 83% Anglophone, 13% Francophone) were mostly pursuing local or regional ventures with low
12
barriers to entry (2% had a patent). The major competitive advantage cited was personal service and quality. The opportunity had taken a long time to develop (65%) but for some it had been a sudden event (32%). Most businesses were independent start-ups with only 2% that were takeovers of existing businesses and another 2% franchise operations. A third (33%) were in retail, a third (33%) health, education or social services, and a third (33%) were communications related businesses. They were predominantly home-based businesses (82%), with only 20% incorporated and 70% with no employees. (Almost two-thirds (62%) thought that even in 10 years their business would have no employees.) The following gives some insight into the type of businesses started by the NEs who have been able to achieve an operating business (firm birth). (Comments are paraphrased from notes taken during Stage 3 phone interviews.) “My fiancé and I both graduated from college and now run our own landscape business. We do the designs with a computer program. We have many corporate clients, like McDonalds and some government contracts. We’ve also started designing personal commemorative gardens for funeral homes. We started slowly with no debt but are now making a profit.” “I retired early and decided to start my own business. I had 30 years in the radio and television industry. My business is in training, and I assess a client’s needs and design a training program and also produce training videos. I have a business plan, 60 pages long. My reason for success is my network.” “I’m self-employed and work out of the home because I’m a wife and mother. I used to be in charge of catering and special events for one of the big hotels. I cater for weddings, showers, funerals, corporate luncheons, and other special events. I sometimes partner with a friend who does party planning. I want to expand into personal catering for busy adults and seniors. I am now showing a profit. I’d like to move into a bigger home to expand my business.” “I immigrated here 20 years ago and work in a jewelry store. I make jewelry at home by personal request, mainly engagement rings, family rings, necklaces and pins. I contract out some of the work.” “I have a natural foods retail business. I work 80 hours a week and do everything myself with the help of the family. When I first immigrated I had an import business with a friend but then I got the chance to buy this business. I have a medical degree from my own country and find the natural health food business is really suited to me. Now that this store is profitable, I will expand and open a second retail store.”
13
“I make delicious treats for dogs, but cats like them too. I bake huge batches in my kitchen and use only the best ingredients. Lots of people want to become a partner but I am happy to run this business myself. I sell a lot through the mail, and am designing a web page and just got e-mail. I’m now making a profit.” Most NEs had a business bank account (87%) but fewer had a dedicated phone line (40%). The majority were single owners (68%) and 18% were owner/spouse teams. For over 75% it was their first attempt to start a business and 55% had 10 or fewer years experience in their industry. About two-thirds (65%) had invested less than $10,000 in their business, and a total of 95% had invested less than $60,000. Half were estimating revenues in the first year of business to be less than $20,000. The majority (67%) did not use credit cards to finance their start-up and did not intend to sell their business. Only 41% had a formal written business plan and fewer (33%) had prepared projected financial statements. Two thirds (69%) had filed an income tax return for their business. Over half were in full-time (40%) and part-time (13%) paid employment for an employer. About two-thirds (65%) had a household income of less than $50,000 and low net worth with only about half owning their own home. Most respondents had never attended (83%) any helping programs but 93% knew how to access these courses and programs.
Conclusion and Future Research This paper presents the preliminary results of the Canadian ERC study of NEs and the start-up process show. Figure 1 shows various levels of enquiry, however, due to space limitations and the early stage of our study, we have limited our reporting of results to a snapshot of what we have learned so far. We have compared the NEs with the general population and also to our control group. We identified deficiencies within our control group that need to be addressed in our subsequent research. We found that a third of the NEs had achieved a firm birth,
14
that a third were still actively pursuing a firm birth, and a third had either put their business venture activities on hold or had quit entirely. We then reported on the group of 47 NEs who have been able to achieve a firm birth. After completion of our summer 2002, 24-month followup phone interviews, we hope to be able to subsequently report on a much larger cohort of operating businesses. We will also be able to report on the characteristics of the NEs who are still in the active start-up, quit and inactive categories. ived. It is essential that we learn more about why people do not advance to a firm birth as well as how the successful NEs and businesses thrived. Regardless of the inherent problems of survey research, especially a large-scale research project with such lengthy questionnaires, there are interesting and potentially valuable preliminary results. However, the limitations of survey methodology has encouraged us to do a follow-up, qualitative study, of all respondents in each of the categories mentioned above. It is too early to gauge the contribution of this research to theory, practice or policy. On completion of our data collection and analysis, our papers will concentrate on targeted research areas that will have both theoretical and practical applications.
15
References Aldrich, H.E. and C. Zimmer, (1986), ‘Entrepreneurship through social networks’, in D. L. Sexton & R.W. Smilor (eds), The Art and Science of Entrepreneurship, Chicago: Upstart, pp. 3-20. Bandura, A. (1996). Social foundations of thought and action. Englewood Cliffs, N.J.: Prentice Hall. Bates, T. (1995), Self-employment entry across industry groups, Journal of Business Venturing, 10, 143-156. Bhave, M. P. (1994). A process model of entrepreneurial venture creation. Journal of Business Venturing, 9. 223-242. Birch, D. L. (1987). Job Creation in America. New York: The Free Press. Birley, S., & Westhead, P. (1994). A taxonomy of business start-up reasons and their impact on firm growth and size. Journal of Business Venturing, 9. 7-31. Brush, C. G. (1992). Research on women business owners: Past trends, a new perspective and future directions. Entrepreneurship Theory and Practice, 16(2). 6-30. Butler, J. S., & Greene, P. G. (1997). Ethnic entrepreneurship: The continuous rebirth of American enterprise. In D. L. Sexton & R. W. Smilor (Eds.), Entrepreneurship 2000 (pp. 267-289). Chicago: Upstart Bygrave, W. D., & Hofer, C. W. (1991). Theorizing about entrepreneurship. Entrepreneurship: Theory & Practice, 16(2). 13-22. Capaldo, G. (1997). Entrepreneurship in southern Italy: Empirical evidence of business creation by young founders. Journal of Small Business Management, 35(3). 86-92. Carter, N.M., Gartner, W.B. & Reynolds, P.D. (1996). Exploring start-up event sequences. Journal of Business Venturing, 11, 151-166. Carter, N.M. & Rosa, P. (1998). The financing of male- and female-owned businesses. Entrepreneurship & Regional Development, 10, 225-241. Casson, M. (1995). Entrepreneurship and Business Culture: Studies in the Economics of Trust. Volume One. Aldershot, Brookfield, Edward Elgar. Cooper, A. (1970). The Palo Alto experience. Industrial Research, 10, 58-60. Delmar, F., & Davidsson, P. (2000). Where do they come from? Prevalence and characteristics of nascent entrepreneurs. Entrepreneurship & Regional Development, 12. 1-23.
16
Diochon, M., Gasse, Y., Menzies, T.V., & Garand, D. From conception to inception: Initial findings from the Canadian study on entrepreneurial emergence. Proceedings of the Administrative Sciences Association of Canada, London, Ontario, May 27-29, 2001.22(21) pp. 41-51. EIM (2000). Entrepreneurship in the Netherlands. Zoetermeer, The Netherlands, EIM, 52pp. Erutku, C., & Vallée, L. (1997). Business start-ups in today's Poland: Who and how? Entrepreneurship & Regional Development, 9, 113-126. Fiet, J. & Samuelsson, M.. (2001). Knowledge-based competence as a platform for firm formation. Paper presented at the Frontiers of Entrepreneurship Research, Wellesley, MA. Gartner, W. B. (1985). A conceptual framework for describing the phenomenon of new venture creation. Academy of Management Review, 10(4). 696-706. Gartner, W. B., Shaver, K. G., & Gatewood, E. J. (2000). Doing it for yourself: Career attributions of nascent entrepreneurs. Frontiers of Entrepreneurship Research, Babson College,Wellesley, MA.1-14. Gibb, A. & Ritchie,J. (1982). Understanding the process of starting small businesses. European Small Business Journal, 1, 26-45. Gimeno, J., Folta, T. B. et al. (1997). Survival of the fittest? Entrepreneurial human capital and the persistence of underperforming firms. Administrative Science Quarterly, 42(4). 750784. Greenberger, D. & Sexton, D. (1988). An interactive model of new venture initiation. Journal of Small Business Management, 26(3), 1-7. Hite, J. M. (2000). Patterns of multidimensionality of embedded network ties in emerging entrepreneurial firms. Paper presented at the Academy of Management, Toronto. Honig, B., & Davidsson, P. (2000). The role of social and human capital among nascent entrepreneurs. Paper presented at the Academy of Management, Toronto. Kim, M., & Hunter, J. E. (1993). Relationships among attitudes, behavioral intentions, and behavior. Communication Research, 20(3). 331-365. Krueger, N. (1993). The impact of prior entrepreneurial exposure on perceptions of new venture feasibility and desirability. Entrepreneurship: Theory & Practice. 18(1).5-21. Krueger Jr., N. F. (2000). The cognitive infrastructure of opportunity emergence. Entrepreneurship: Theory & Practice, 24(3). 5-23.
17
Levie, J. (1994). Can government nurture young growing firms: Qualitative evidence from a three nation study. Frontiers of Entrepreneurship Research, Babson College, Wellesley, MA. Lin, Yates, & Picot. (1999). The entry and exit dynamics of self-employment in Canada. Business and Labour Market Analysis Publication No. 134, March. Ottawa, Canada: Statistics Canada. Marlow, S. (1997). Self-employed women – new opportunities, old challenges? Entrepreneurship & Regional Development, 9, 199-210. Martin, M. (1984). Managing Technological Innovation and Entrepreneurship. Reston, VA: Reston publishing Company. Mason, C.M. (1989). Explaining recent trends in new firm formation in the UK: some evidence from south Hampshire, Regional Studies, 23(4), 331-346. Mathews, C.H. & Moser, S.B. (1995). Family background and gender: implications for interest in small firm ownership, Entrepreneurship & Regional Development, 7, 365- 377. Menzies, T.V., Brenner, G.A., & Filion, L.J. (In press). Social capital, networks and ethnic minority entrepreneurs: Transnational entrepreneurship and bootstrap capitalism. Hamid Etemad and Richard W. Wright, eds., Globalization and Entrepreneurship: Policy and Strategy Perspectives, Northampton, MA: Edward Elgar Publishing, 2002. Penrose, R. (1989). The emperor’s new mind: concerning computers, minds and the laws of physics. New York: Oxford University Press. Reynolds, P.D. (1999). National Panel Study of U.S. Business Startups: First Annual Overview, Wellesly, MA, Babson College. Reynolds, P.D. (2000). National Panel Study of U.S. Business Startups: background and methodology, Databases for the Study of Entrepreneurship, JAI/Elsevier Inc.,Volume 4, 153-227. Reynolds, P. D., & White, S. B. (1997). Entrepreneurial processes and outcomes: The influence of ethnicity. In P. D. Reynolds & S. B. White (Eds.), The entrepreneurial process (pp. 190-204). Westport: Quorum Books. Reynolds, P. D., Hay, M., Bygrave, W. D., Camp, S. M., & Autio, E. (2000). Global entrepreneurship monitor: 2000 executive report. 54p.Kauffman Centre for Entrepreneurial Leadership at Ewing Marion Kauffman Foundation. Reynolds, P. D., Storey, D. J., & Westhead, P. 1994. Regional characteristics affecting entrepreneurship: A cross-national comparison. Paper presented at the Frontiers of Entrepreneurship Research, Wellesley, MA.
18
Robinson, P.B. & Sexton, E.A. (1994). The effect of education and experience on selfemployment success, Journal of Business Venturing, 9, 141-156. Samuelsson, M. (2001). Modeling the nascent venture opportunity exploration process through time. Paper presented at the Frontiers of Entrepreneurship Research, Wellesley, MA. Shane, S., Kolvereid, L.& Westhead, P. (1991). An exploratory examination of the reasons leading to new firm formation across country and gender. Journal of Business Venturing, 6, 431-446. Shane, S., & Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. Academy of Management Review, 25(1). 217-226. Shapero, A.C. (1985). Why entrepreneurship? A worldwide perspective. Journal of Small Business Management, 23(4), 1-5. Shapero, A.C. & Sokol, L. (1982). The social dimensions of entrepreneurship. In Encyclopedia of Entrepreneurship, Kent, C.A., Sexton, E.A. et al., Englewood Cliffs, N.J.: Prentice Hall, 72-90. Simon, M., Houghton, S. M., & Aquino, K. (1999). Cognitive biases, risk perception, and venture formation: How individuals decide to start companies. Journal of Business Venturing, 15. 113-134. Singh, R. P. (2000). Entrepreneurial opportunity recognition through social networks. New York: Garland Publishing, Inc. Storey, D., & Westhead, P. (1994). Management training and small firm performance: A critical review. Coventry: Warwick Business School, The Centre for Small and Medium Sized Enterprises. Stewart Jr, W. H. (1996). Psychological correlates of entrepreneurship. New York: Garland Publishing, Inc. Van de Ven, A. H., Angle, H. L., & Poole, M. S. (1989). Research on the management of innovation. New York: Harper & Row. Welter, F. (2000). Would-be entrepreneurs and their process of business formation in Germany. Frontiers of Entrepreneurship Research, Babson College, Wellesley, MA.1-15 Zietsma, C. (1999). Opportunity knocks-or does it hide? An examination of the role of opportunity recognition in entrepreneurship. Paper presented at the Frontiers of Entrepreneurship Research.
19
Figure 1. Conceptualization of Nascent Entrepreneur, the Start-Up Process, Firm Births and Outcomes (©Menzies 2002)
External Environment Influences? Adult Population Psychosocial Dynamics
Quit Variables?
Dormant Variables?
Growth Timeline and Process Variables?
Variables?
Nascent Entrepreneur Variables?
Business Start-up Process: Individual (team) actively attempting to create a viable business Timeline and Process Variables?
Firm Birth
Individual/group Level Population Level
Stability Reasons?
Failure Reasons?
Table 2 Details of Respondent Groups and Scheduled Surveys, Stages 1, 2 and 3 Respondent Details Stage One Random calls (Early 2000) Completed households calls Nacent entrepreneurs and intrapreneurs Nascent entrepreneurs willing to participate
Total Sample
Nascent
Control
49,763 21,116 463 416
Stage Two Completed Interviews (Summer 2000 nascent, late 2000 control)
150 Phone 82 Mail
Stage Three Completed Interviews (Summer 2001)
137 Phone
Stage Four Interviews to be conducted in Summer 2002
Phone
93 Phone 30 Mail
Note. Difference between 416 nascent and 150 in Stage Two is due to business closed or start-up abandoned prior to Stage 2, refusal to participate, unable to contact (wrong number and phone not in service). Difference between Stage Two and Three is unable to contact and ineligible due to misleading previous information.
20
Figure 2: Gender Distribution
Figure 3: Ethnic Distribution 100
70
60
Male
90
Female
80 70
Percentage
50
Percentage
White/Caucasian Other
40
30
60 50 40 30
20 20 10
10
0 Nas. Ent.
0 Nas. Ent.
Control
Gender
Cdn. Pop.
Control
Ethnicity
Cdn. Pop.
Figure 4: Language Distribution
Figure 5: Age Distribution
80
35
Anglophone Francophone
70
Nas. Ent. Control Cdn. Pop.
30
Other
60
25
Percentage
40
30
20
15
10
20
5
10
0 Nas. Ent.
Control
Cdn. Pop.
0 18-25
26-35
36-45
Language
45-55
55+
Age Categories
Figure 6: Education Level
Figure 7: Province of Residence
80
50 45
High School or less College/Tech
40
60
University Degree & Postgraduate
35
Percentage
70
50
40
Nas. Ent. Control Cdn. Pop.
30 25 20 15
30 10 20
5 0
bi a
rta
m
be
lu Co
ch
Al
ew an
ba ito an
h itis
O
nt
ar
c ue Q
M
at
Br
Cdn. Pop.
sk
Control
Education Level
Sa
Nas. Ent.
be
es itim ar 0
io
10
M
Percentage
Percentage
50
Province
22
Figure 8: Net Worth Distribution Figure 9: Income Distribution 60 70
50
Nas. Ent. Control
Percentage
Percentage
40
30
60
Nas. Ent.
50
Control
40
30
20 20
10 10
0
0
1m
1m
Income Categories
23
