This title was first published in 2001. The dynamics of New Firm Formation (NFF) are central to the phenomenon of economic growth and development. While the economic importance of NFF has been recognized, the mechanisms that drive NFF are not well documented or understood. Illustrated by an in-depth case study from Texas, this volume analyzes the relationships between NFF and its localized context. Using specially-formulated fixed-effects regression models, the study brings about controversial new findings. These provide a counterpoint to the neoclassical theory that there is an adversarial relationship between small and large firms by instead suggesting that the relationship is more of a symbiotic one. Furthermore, it suggests that deep churning - the turnover and replacement in a business base - is a key factor in understanding the forces shaping regional economies.
The belief that new business formation is a source of economic growth is widespread. This belief has been a strong motivation for a great deal of research in entrepreneurship. It has also motivated politicians in many countries to devise strategies aimed at stimulating the formation of new firms. However, the theoretical as well as the empirical foundation for this belief are remarkably weak. Empirical research on the issue started late and only recently have researchers begun to assess the effects of new businesses on economic development in detail. The effect of new business formation on regional development is an important field of research. A proper understanding of these relationships may provide valuable inputs for policies aimed at stimulating growth. This short introduction provides an overview on the current state of knowledge about the effects that new businesses have on regional development. The focus is on regions for three reasons. First, geographical units of observation are much better suited for such an analysis than are industries. Second, empirical research has shown that the magnitude of the effects of new business formation on growth differs considerably across regions pointing to the importance of region-specific factors. Third, regions are an important arena for development policy (for an extensive review see Fritsch, 2013).
Often considered one of the major forces behind economic growth and development, the entrepreneurial firm can accelerate the speed of innovation and dissemination of new technologies, thus increasing a country's competitive edge in the global market. As a result, cultivating a strong culture of entrepreneurial thinking has become a primary goal throughout the world. Surprisingly, there has been little systematic research or comparative analysis to show how the growth of entrepreneurship differs among countries in various stages of development. International Differences in Entrepreneurship fills this void by explaining how a country's institutional differences, cultural considerations, and personal characteristics can affect the role that entrepreneurs play in its economy. Developing an understanding of the origins of entrepreneurs as well as the choices they make and the complexity of their activities across countries and industries are of central importance to this volume. In addition, contributors consider how environmental factors of individual economies, such as market regulation, government subsidies for banks, and support for entrepreneurial culture affect the industry and the impact that entrepreneurs have on growth in developing nations.
Written by leading scholars, The Wiley Handbook of Entrepreneurship provides a distinctive overview of methodological, theoretical and paradigm changes in the area of entrepreneurship research. It is divided into four parts covering history and theory, individual differences and creativity, organizational aspects of innovation including intrapreneurship, and macroeconomic aspects such as social entrepreneurship and entrepreneurship in developing countries. The result is a must-have resource for seasoned researchers and newcomers alike, as well as practitioners and advanced students of business, entrepreneurship, and social and organizational psychology.
Recent entrepreneurship research has shed new light on how important new companies - firms less than five years old - are to economic growth, so the next question raised by economists and policymakers might be: How do we increase the number of firm formations? In a review of research into entrepreneurial orientation to help find answers, another important question has arisen: Why does the level of firm formation remain virtually consistent from year to year? This paper, the second in the Kauffman Foundation Research Series on Firm Formation and Economic Growth, explores this question and makes the following key points: • Firm formation in the United States is remarkably constant over time, with the number of new companies varying little from year to year. This remains true despite sharp changes in economic conditions and markets, and longer-cycle changes in population and education. While existing entrepreneurship data may miss some numbers of new firms, this does not appear to explain the steady level of firm formation across time. • Such constancy possibly reflects the nature of the United States economy, employment churn, and demographics. The paper discusses each in detail, as well as entrepreneurial motivations, talent, and the so-called “opportunity recognition” model. • A steady level of firm formation implies that relatively few factors, such as entrepreneurship education and venture capital, influence the pace of startups, although these factors may help prevent a decline of new firms and may affect specific companies at the margins. • A closer look at the relatively unchanging number of new firms each year offers potential lessons for public policy, especially when considering the future of entrepreneurship after the Great Recession of 2007-2009. This paper examines the implications of each of these points, such as possible reasons why firm formation is constant and what it means for the wider economy, why efforts to increase entrepreneurship have not had much effect on the level of firm formation, whether or not the volume of startups really matters to the economy, and how the recession has impacted firm formation. Further discussion of some of these questions will be reserved for future papers, but we can at least begin to explore them here.
If you want your startup to succeed, you need to understand why startups fail. “Whether you’re a first-time founder or looking to bring innovation into a corporate environment, Why Startups Fail is essential reading.”—Eric Ries, founder and CEO, LTSE, and New York Times bestselling author of The Lean Startup and The Startup Way Why do startups fail? That question caught Harvard Business School professor Tom Eisenmann by surprise when he realized he couldn’t answer it. So he launched a multiyear research project to find out. In Why Startups Fail, Eisenmann reveals his findings: six distinct patterns that account for the vast majority of startup failures. • Bad Bedfellows. Startup success is thought to rest largely on the founder’s talents and instincts. But the wrong team, investors, or partners can sink a venture just as quickly. • False Starts. In following the oft-cited advice to “fail fast” and to “launch before you’re ready,” founders risk wasting time and capital on the wrong solutions. • False Promises. Success with early adopters can be misleading and give founders unwarranted confidence to expand. • Speed Traps. Despite the pressure to “get big fast,” hypergrowth can spell disaster for even the most promising ventures. • Help Wanted. Rapidly scaling startups need lots of capital and talent, but they can make mistakes that leave them suddenly in short supply of both. • Cascading Miracles. Silicon Valley exhorts entrepreneurs to dream big. But the bigger the vision, the more things that can go wrong. Drawing on fascinating stories of ventures that failed to fulfill their early promise—from a home-furnishings retailer to a concierge dog-walking service, from a dating app to the inventor of a sophisticated social robot, from a fashion brand to a startup deploying a vast network of charging stations for electric vehicles—Eisenmann offers frameworks for detecting when a venture is vulnerable to these patterns, along with a wealth of strategies and tactics for avoiding them. A must-read for founders at any stage of their entrepreneurial journey, Why Startups Fail is not merely a guide to preventing failure but also a roadmap charting the path to startup success.
New Business Formation and Regional Development provides an overview of the effects that new businesses have on regional development. The focus is on regions because geographical units of observation are much better suited for such an analysis than are industries. Regional growth is a complex process that involves large numbers of start-ups in diverse industries, firm exit, and growing and declining incumbent firms. The determinants of the effects that new business formation has in this complex process may be different from those factors that make individual start-ups succeed or a fail. After an introductory explanation, section 2 begins with a brief sketch of the extant research on this topic. Section 3 reviews the main theoretical approaches that provide insights and explanations, and combines them in a more diverse and comprehensive explanation of the effects of start-ups on development. This eclectic approach particularly highlights the competitive challenge that start-ups pose to incumbent firms and the important role played by the regional environment. Section 4 reports the available empirical evidence on the different effects that new business formation might have on regional development. The research ends with a discussion of policy implications in Section 5, and outlining important questions for further research in Section 6.
This book, originally published in 1982, review the resurrection of the small firm, partly by a multi-disciplined examination of the existing literature on small and new firms and partly by reporting the results of a study of firms new (in the early 1980s) to the North East of England. Part 1 deals with the role of small firms as sources of potential or actual competition, and their role in research and innovation. In Part 2 the theoretical foundations for the study of entrepreneurs and their new firms are laid, using concepts from a cross-section of the social sciences. Part 3 tests some of the theories outlined in Part 2 and reviews the problems which the entrepreneurs faced in starting and developing their business and the impact which such businesses had upon the local economy. Part 4 reviews the lessons of the preceding parts in the context of the regional and national economy of the UK.
This text explores the factors that have made Silicon Valley such a fertile breeding ground for new technologies and new firms. It looks at how its pioneering achievements begana̧nd the forces that have propelled its unprecedented growth.
The spillovers in knowledge among largely college-educated workers were among the key reasons for the impressive degree of economic growth and spread of entrepreneurship in the United States during the 1990s. Prior 'industrial policies' in the 1970s and 1980s did not advance growth because these were based on outmoded large manufacturing models. Zoltan Acs and Catherine Armington use a knowledge spillover theory of entrepreneurship to explain new firm formation rates in regional economies during the 1990s period and beyond. The fastest-growing regions are those that have the highest rates of new firm formation, and which are not dominated by large businesses. The authors of this text also find support for the thesis that knowledge spillovers move across industries and are not confined within a single industry. As a result, they suggest, regional policies to encourage and sustain growth should focus on entrepreneurship among other factors.
