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p. 11. The importance of entrepreneurshipfree

  • Paul Westhead
  •  and Mike Wright

Abstract

‘The importance of entrepreneurship’ considers the vital role entrepreneurs are perceived as playing in a capitalist economy in promoting economic development and looks at the history of the entrepreneur. They can act as agents of innovative change and they can transform existing firms to exploit new opportunities. However, the expectation that entrepreneurs can provide the panacea to economic ills is not always a realistic one. It has been overestimated. Despite growing interest and activity relating to the entrepreneurship phenomenon, considerable debate surrounds the notion of entrepreneurs and entrepreneurship.

We appear to be living in a golden age for entrepreneurship. In 2011, a Global Entrepreneurship Monitor (GEM) survey of more than 140,000 adults (18–64 years of age) in fifty-four economies estimated that 388 million entrepreneurs were actively engaged in starting and running new businesses. Entrepreneurs can be vital agents of innovative change whose actions lead to the creation of new firms. They can also transform existing firms to exploit economic and socially beneficial opportunities. In the popular media, entrepreneurs are often presented playing a key role in promoting economic development. Indeed, GEM studies have discovered a significant link between the rate of entrepreneurial activity in a country and growth in that country's gross domestic product (GDP), although the link is not consistent across all countries. Entrepreneurs and their businesses can generate wealth and jobs, which can enable social and regional inequality to be reduced. Entrepreneurs can be pulled into entrepreneurship because they want to exploit a perceived business opportunity, or pushed into it of necessity because they have no other options for work. Either way, they are increasingly seen as the panacea to solve national and local development issues.

The expectation that entrepreneurs can provide the panacea to economic ills may be an unrealistic one. Joseph Schumpeter warned that while entrepreneurial acts ‘create’ new sources of p. 2competitive advantage, products and services, firms, industries, jobs, and wealth, at the same time they also ‘destroy’ firms and jobs in now out-of-date activities. In the popular mindset entrepreneurs are often portrayed as heroic yet maverick individuals, single-handedly and relentlessly pursuing opportunity and enjoying exotic lifestyles as a result. The dominant popular entrepreneur image relates to a Western heroic white male figure exhibiting aggression and assertiveness to create or discover business opportunities. But, when businesses close, with people losing their jobs and nefarious activities being revealed, some of the same entrepreneurs are then castigated as villains (e.g. Conrad Black, Robert Maxwell, Asil Nadir). So entrepreneurs can be heroes and villains, sometimes both at the same time depending on your point of view. Books about Richard Branson, for example, have presented conflicting portraits ranging from adventurous global entrepreneur to cunning and ruthless operator with a knack for undermining his rivals.

Because of the widely held belief about the contribution of entrepreneurs to the generation of economic and social well-being, international agencies and governments worldwide are promoting entrepreneurship policies. Venture capital (VC) firms operate to fund entrepreneurs in the belief that they can generate high financial returns. National research bodies, universities, and specialized research centres, as well as research foundations, have been keen to support research based on the assumption that this will help further the role of entrepreneurship in invigorating economic, technological, and social progress.

Entrepreneurs have been catapulted into the consciousness of the wider media through their high-profile activities, which help change fundamentally the rules of the game in a market. For example, Stelios Haji-Ioannou and easyJet transformed the airline industry in Europe, James Dyson's bagless cleaner changed the vacuum cleaner market, and Bill Gates's Microsoft and Steve p. 3Jobs's Apple, in their different ways, transformed the personal computing, communications, and entertainment markets.

Prime-time television programmes showing entrepreneurs and inventors pitching their ideas to rich investors have helped popularize entrepreneurs to a wide audience. Originating in Japan, this concept has itself proved to be highly entrepreneurial. Entrepreneurship-related shows are shown worldwide under different names, such as Shark Tank in the United States, Dragons’ Den in the UK, and Fikr wa Talash in Afghanistan. But not apparently in France where, according to the apocryphal (but untrue) statement attributed to President George W. Bush, the French do not have a word for entrepreneur.

The number of scholars researching entrepreneurship has grown rapidly. Academy of Management Entrepreneurship Division membership has increased by almost two and a half times, to top 2,750, in the decade from 2001 to 2011. Business schools report a proliferation of entrepreneurship courses at undergraduate and postgraduate levels. Science, technology, engineering, and medical departments in universities have also introduced entrepreneurship courses for students and faculty who want to create businesses to exploit the inventions they have created in the laboratory. Secondary and primary schools are now teaching entrepreneurship. These courses discuss hands-on issues relating to the creation of private and, increasingly, social ventures, as well examining how existing, large, and family organizations can be entrepreneurial. In addition, courses illustrate theoretical and policy issues.

Some students have made significant wealth from their new ventures. Alex Tew conceived The Million Dollar Homepage to raise money for his university education. The home page consisted of a million pixels arranged in a 1,000 × 1,000 pixel grid. The image-based links on it were sold for US$1 per pixel in 10 × 10 blocks. The purchasers of these pixel blocks provided tiny images p. 4to be displayed on them, a uniform resource locator (URL) to which the images were linked, and a slogan to be displayed when hovering a cursor over the link. The aim of the website was to sell all of the pixels in the image. With the last 1,000 pixels being put up for auction on eBay, a final total of $1,037,100 was grossed.

Other students have dropped out to pursue major entrepreneurial ideas that have germinated at college. Mark Zuckerberg famously dropped out of Harvard in his sophomore year to complete the Facebook project, which he launched from his dormitory room.

Despite growing interest and activity relating to the entrepreneurship phenomenon, considerable debate surrounds the notion of entrepreneurs and entrepreneurship. Entrepreneurship and entrepreneurs are complicated and ambiguous phenomena. In this Very Short Introduction, our aim is to reflect this complexity and ambiguity, but also to weave a pathway through the debate and offer some clarity to the reader.

We provide a guide to entrepreneurial events, processes, and outputs in the contexts in which they occur. We will explore the following questions: What is entrepreneurship and why is it important? What do entrepreneurs do? Where do entrepreneurs come from? Do some types of entrepreneurs make greater contributions? What is distinctive about entrepreneurs? How do entrepreneurs think and learn from their experiences? What is the array of organizational modes in which entrepreneurship takes place?

Entrepreneurship

Entrepreneurship is about what entrepreneurs do. ‘Entrepreneur’ is a French word first appearing in the 1437 Dictionnaire de la langue française. Three definitions were listed in the dictionary, with the most common meaning referring to ‘a person who is active and achieves something’. The verb p. 5‘entreprendre’ means ‘to undertake something’. At the beginning of the 17th century, an entrepreneur in France was viewed as ‘a person who takes risks,’ but not all people who undertook risks were considered entrepreneurs. During the 18th century, a person who was contracted to perform a certain large task, generally for the state, for a fixed price was regarded as an entrepreneur.

Until the 18th century, there was no equivalent to the French ‘entrepreneur’ concept in the English language. A Dictionary of the English Language from 1755 reported the following definition: ‘Adventurer, he that seeks occasion of hazard; he that puts himself in the hand of chance’. Over time, the concept of entrepreneur in English became more broadly defined, and related to ‘situations where one person engaged in projects involving risk where the profit was uncertain’. By the end of the 18th century, the undertaker concept was replaced by the capitalist concept of a businessman.

Today, there continues to be no agreed definition of entrepreneurs and entrepreneurship. The Organisation for Economic Co-operation and Development (OECD) adopts a broad definition where entrepreneurship appears in both some small and large firms, in some new firms and established family firms, in private firms focusing on profit and social enterprises seeking to generate broader social and environmental benefits, in the formal and informal economy, in legal and illegal activities, in innovative and more conventional concerns, and in all regions and economic sub-sectors.

Entrepreneurs’ roles

Economic, sociological, personality/traits, psychodynamic, and/or cognitive approaches have been used to explain what entrepreneurs do. We shall explore these approaches later on, but this diversity and lack of consensus is illustrated by the following p. 6roles identified over two and a half centuries of research. The entrepreneur is:

1.

a person who assumes the risk associated with uncertainty;

2.

a person who supplies financial capital;

3.

an opportunity creator and innovator;

4.

a decision-maker;

5.

an industrial leader;

6.

a manager or superintendent;

7.

an organizer and coordinator of economic resources;

8.

the owner of an enterprise;

9.

an employer of factors of production;

10.

a contractor;

11.

an arbitrageur;

12.

an allocator of resources among alternative uses;

13.

a channel for the spillover of knowledge from a knowledge organization into a new firm to exploit the knowledge;

14.

an alert discoverer or seeker of opportunities.

Approaches to describe the entrepreneur

Roles of entrepreneurs have primarily emanated from economics’ focus on the functions of the entrepreneur in the market. Recently, more behaviourally oriented approaches have focused on the characteristics of the individual carrying out these roles, specifically ‘who is the entrepreneur’. Diversity in approaches to describe the entrepreneur as an individual is summarized in Table 1, where a distinction can be made between the great person school, psychological characteristics school, classical school, management school, leadership school, and the intrapreneurship school approaches.

Table 1. Summary of approaches for describing the entrepreneur as an individual

Entrepreneurial model

Central focus or purpose

Assumption

Skills and behaviour

Situation

Great person school

Born with intuitive ability

‘Inborn’ intuition makes the entrepreneur different

Intuition, vigour, energy, persistence, and self-esteem

Start-up

Psychological characteristics school

Unique values, attitudes, and needs that drive them

Values shape behaviour to satisfy needs

Personal values, risk taking; need for achievement, etc.

Start-up

Classical school

Focus on innovation

Process of doing rather than owning

Innovation, creativity, and discovery

Start-up and early growth

Management school

Organizers that own, manage, and assume risk

Can develop and train

Production planning, people organizing, capitalization, and budgeting

Early growth and maturity

Leadership school

Leaders that adapt their style to the needs of people

Cannot accomplish a goal on their own

Motivating, directing and leading

Early growth and maturity

Intrapreneurship school

Entrepreneurial skills used in complex organizations

Adaptation and organization building

Alertness to opportunities and maximizing decisions

Maturity and change

Source: Adapted from Cunningham and Lischeron (1991: 47)

The entrepreneurial process

The entrepreneurial process is at the epicenter of the debate about entrepreneurship. This is because it concerns what needs to take place to make entrepreneurship happen. Lack of consensus about p. 7p. 8‘what entrepreneurs do’ and ‘who entrepreneurs are’ gives rise to several approaches to understanding entrepreneurs and the entrepreneurial process. Generally, the entrepreneurial process involves all the functions and activities associated with perceiving opportunities and pursuing them. A narrow view focuses on the emergence of new organizations, while a broader view focuses on the emergence of opportunities irrespective of whether it takes place in a new or existing firm. Accessing resources is key. Some see entrepreneurship as the process by which individuals pursue and exploit opportunities irrespective of the resources they currently control. Others focus on how entrepreneurs can utilize the resource they have to hand, while yet others examine the process by which entrepreneurs access and coordinate their resources.

Organizing framework

Bill Gartner's framework for describing the phenomenon of new venture creation integrated four major perspectives in entrepreneurship. He made a distinction between: the characteristics of the individual(s) starting the new venture; the organization they create; the environment surrounding the new venture; and the process by which the new venture is created. Building on these insights, six themes within entrepreneurship studies are highlighted in Figure 1.

1. Themes explored in entrepreneurship studies

Theme 1 relates to theory. Several theories explore the entrepreneurial process, and the behaviour and performance of entrepreneurs and their organizations. These theories reflect the diversity of the nature of entrepreneurship and entrepreneurs.

Theme 2 relates to the external environment for entrepreneurship. To generate economic and non-economic benefits, governments in developed and developing economies have introduced policies to address external environmental barriers to business formation p. 9p. 10and development. These contexts shape resource availability, the actions undertaken by entrepreneurs, and the performance of their ventures, which is also illustrated by theme 4.

Entrepreneurship is a process that develops over time. Theme 3 relates to the process of entrepreneurship and focuses upon what entrepreneurs do with regard to creating and recognizing opportunities, as well as assembling and mobilizing resources to exploit opportunities (i.e. entrepreneurial team, organizational, and external environmental).

Theme 4 relates to types of entrepreneur. Different types of entrepreneurs exist and can be shaped by their context. Social context, such as where entrepreneurs come from, can shape aspirations, expectations, and access to specific human capital resources relating to industry know-how, management know-how, and entrepreneurial capabilities. Differences also relate to how entrepreneurs think and learn (i.e. personality and cognitive mindset).

Theme 5 relates to types of organization. We adopt a broad view of entrepreneurship. Besides the creation of new independent firms, entrepreneurship can be exhibited in family firms, corporate ventures, management buyouts and buy-ins, academic spin-offs, and social enterprises.

Theme 6 relates to the outcomes of entrepreneurial endeavours. The economic and non-economic outcomes of entrepreneurial endeavours relate to the entrepreneur and the firm.

Benefits of entrepreneurial firms

Table 2 illustrates that besides generating personal wealth, entrepreneurs can generate wider benefits. Entrepreneurial firms play a role in the process of economic development. They have a role in reducing unemployment and poverty, including being major creators of new jobs when large firms are downsizing. p. 11Entrepreneurial firms generate individual and employee wealth, which can generate tax revenues. They are also the seeds from which large successful organizations grow (e.g. Microsoft, Cisco Systems, The Body Shop).

Table 2. Entrepreneurial firms: positive economic and non-economic contributions and barriers to enterprise

Positive contributions

Barriers

Economic

Macro-economic

Economic development

Taxation, interest and exchange rates public

Reduce unemployment and poverty

spending, inflation policy, and regulatory framework

Job generation when large firms are downsizing

Wealth creation and taxes to support government policies

‘Seed’ firms grow into large ‘oak’ firms

Cultural barriers and narrow education base

Competition, innovation, productivity, and supply-chain benefits

Internationalization and balance of payments benefit

Provision of essential services to enhance quality of life

Advantages of large firms

Harmonious working environment

Seedbed nurturing future entrepreneurs

Attitudinal barriers

Protect and promote local communities and their development

Reluctant to pursue a career in enterprise, and to focus

Clusters of knowledge and technology-based firms create spillover, multiplier, job, wealth, and competitiveness benefits

upon firm growth and use external finance and expertise

Votes for policymakers supporting enterprise

Resource barriers

Non-economic

Information, finance, premises, skilled labour,

Reduce social and regional inequality

machinery, equipment, etc.

Promote diversity and encourage under-represented groups such as women to become entrepreneurs

Operational barriers

Promote choice, self-help, and personal empowerment

Imagination, creativity, innovation, and use of appropriate management and production systems

Strategic barriers

Inability to introduce appropriate differentiation

Government failure

Government supports wrong firms and entrepreneurs that do not require help

Entrepreneurial firms can be flexible and adaptable, enabling them to seize new opportunities. They can stimulate competition, promoting lower prices, more consumer choice, encouraging the creation and dissemination of new innovative products/services and/or better-quality products and services. This competition encourages more efficient use of resources and the displacement of non-viable inefficient businesses. Viable businesses that are more efficient users of resources will be associated with superior levels of productivity, which can enable them to sustain competitive advantage in local and international markets. Efficient entrepreneurial firms that can internationalize can create jobs and wealth, and play a role in reducing balance of payments deficits (or increasing surpluses), thus ensuring a healthy balance between a country's imports and exports. ‘Born-global’ innovative firms play a role in reducing balance of payments deficits right from their creation.

Few firms are engaged in truly innovative activities. Most new and small firms are imitative, or firms introduce incremental innovations to sustain their competitive advantage. A very small subset of entrepreneurs with unique scientific or technological knowledge creates radical innovations leading to the creation of new industries that promote economic development associated with the destruction of some old industries.

Most entrepreneurial firms are engaged in servicing private consumers (e.g. restaurants and retail outlets) or other enterprises. The servicing relationship between an entrepreneurial firm and its customers can range from cooperation to dependency and exploitation. Many large firms would not be able to remain profitable without the service provided by new and small firms in their supply chain.

p. 12p. 13Entrepreneurial firms, especially small firms, can provide a harmonious working environment. This is reflected in fewer industrial disputes and lower absenteeism. They may provide a nurturing role model and learning environment for potential entrepreneurs.

Entrepreneurial firms promote local development and the regeneration of deprived rural and urban communities as they frequently service local markets. The entrepreneur(s) may live close by and feel an allegiance to the area where the firm is located. They generally employ people and suppliers within easy reach. New firm formation (NFF) and growth can generate local multiplier effects that increase the demand for other new firms, which can promote a spiral of wealth creation and job generation to reduce local unemployment and poverty.

Entrepreneurial firms can generate several social benefits. A growing stock of entrepreneurial firms may reduce a dependency culture on the state and larger firms, as well as reduce the power of large firms and trade unions. Entrepreneurial firms provide working and learning contexts that promote choice, p. 14opportunity, empowerment, individualism, and self-reliance, particularly for economically disadvantaged groups in society such as women, young people, and ethnic minorities. Promoting entrepreneurship is part of a formula seeking to reconcile economic success with social cohesion.

Barriers

There are different types of entrepreneurial firms and entrepreneurs, with most new firms not desiring or reporting significant employment growth. Only 4 per cent of firms generate 50 per cent of job generation by the firms over a decade. The majority of new firms are born to die young as most cease to trade within three years of inception. Most firms that survive are born small and stay small. Many small firms are more interested in maintaining their current level of profit than in expansion. One reason for firms wishing to stay small is that the ownership and management reside in the same person or persons; so future firm goals are determined not only by commercial considerations but by personal lifestyles and family factors relating to the individuals or teams of individuals who own and manage them. Firm development can be restricted by entrepreneurs who want to maintain ownership and control of their firms, and who may only grow their ventures to an internal management comfort zone, which allows owners to maintain control and ownership. But it seems that the proportion of small businesses that want to grow is greater than the numbers that actually grow.

Table 2 summarizes several broad types of barrier. People need to believe they can be entrepreneurs and have the intention to grow. Government can play a role in addressing attitudinal barriers to enterprise. People need to raise their expectations, individualism, and self-reliance, and they need to believe they can be successful entrepreneurs. In addition, some people face resource, operational, and strategic barriers to NFF and development. People generally report market resource barriers (i.e. access to p. 15information, finance, premises, training, skills, compliance costs associated with statutory and regulatory administration, etc.).

Entrepreneurial firms generally have a limited track record. They can be deficient in the amount and type of resources they can mobilize. With inadequate credibility and links with partners they may not have the necessary experience to utilize their limited pool of resources efficiently. New firms can lack the skills both to adapt their product offering to what the market is really looking for, and to be able to gain legitimacy from external stakeholders and resource providers.

These problems comprise the liability of newness and are fourfold. First, new firms need to find resources and time to create new organizational roles and functions, knowledge, and learning. Second, the process of inventing and learning new roles is costly because it requires negotiation with others in the organization to agree new roles, responsibilities, and relationships. Third, reliance on relationships with strangers results in low interpersonal trust and potentially precarious relationships between co-workers. Fourth, new organizations face difficulties in establishing external relationships with other organizations because they have not built stable ties over time, for example with customers and suppliers. In addition, new firms engaged in creating and exploiting new knowledge face the liability of innovation.

Entrepreneurs can adopt behaviour and strategies to mitigate the effects of these liabilities. For example, innovative new firms can establish alliances with incumbent large firms. These links enable them to access resources to develop the technology further, as well as to gain downstream access to final customers when they do not have the sales and marketing skills to do so. Such alliances may be a precursor to the entrepreneur being able to sell the business to reap a capital gain. On the downside, the more powerful larger partner can dictate terms and expropriate some of the entrepreneur's potential gains.

p. 16Newness can, however, generate assets. It can bring advantages of flexibility and adaptability to changing market conditions. The phenomenon of internationalizing new ventures, or ‘born globals’ as noted earlier, shows how some innovative new high-tech firms can take advantage of opportunities in international markets from the beginning.

Policy initiatives

Governments concerned with generating the economic benefits highlighted in Table 2 particularly want to increase the number of technology- and knowledge-based high-growth ventures. Those concerned with reducing social and regional inequality in their countries can also promote people from disadvantaged groups and/or under-represented groups in enterprise to become entrepreneurs (i.e. women, young people, ethnic minorities, etc.). Policy intervention is designed to reduce the barriers faced by such people seeking to establish and grow entrepreneurial ventures.

An array of hard assistance such as grants, equipment, premises, and/or soft assistance such as education, training, information, counselling, mentoring can be provided. Types of intervention to support NFF and development are summarized in Table 3.

Table 3. Types of government support for new firm formation and development

•  Macro policies

– Interest rates

– Taxation

– Public spending

– Inflation

•  Deregulation and simplification

– Cutting red tape

– Legislative exemptions

– Legal form

•  Sectoral and problem-specific policies

– High-tech firms

– Rural enterprises

– Community enterprises/social enterprises

– Cooperatives

– Ethnic business

•  Financial assistance

– Business Expansion Scheme/Enterprise Investment Scheme

– Loan Guarantee Scheme

– Enterprise Allowance Scheme/Business Start-up Scheme

– Grants

•  Indirect assistance

– Information and advice

– Business growth training/other formal training

– Accelerator programmes

– Consultancy initiative

•  Relationships

– Small firm division in the enterprise department

– Lobbyist/policy formulation

Source: Adapted from Storey (1994: 269)

Paul Reynolds and colleagues suggest that governments can stifle the efforts of those attempting to start new firms through onerous bureaucratic requirements, complex regulations, or merely through slow reactions to requests for decisions required to form a new firm. There are wide and surprising discrepancies between countries in the hurdles that entrepreneurs need to negotiate to start a new firm. The International Finance Corporation, part of the World Bank, ranks the top three in the world in terms of the ease of starting a new business as New Zealand, Australia, and Canada. The United States arrives in 13th place, behind Saudi Arabia in 10th but ahead of the UK in 19th, France in 25th, p. 17p. 18Germany in 98th, Spain in 133rd, Greece in 135th, and China in 151st (http://www.doingbusiness.org/rankings).

Intervention aimed at promoting entrepreneurship to address economic and social issues in regions can be problematical. Nationally applied policies to increase capacity for NFF in all regions can indirectly favour more prosperous and socially and economically well-endowed regions. A non-selective policy of encouraging NFF and growth, with no regional targeting built into it, may enhance regional differences by having relatively modest impacts in regions with existing resource shortages.

General measures to proactively provide a supportive environment for all forms of enterprise may not be cost effective. To promote NFF and development, particularly in hostile environments, governments can directly (or indirectly) support local-level initiatives that reduce uncertainty for entrepreneurs, and/or provide resources to enable more people to circumvent attitudinal, resource, operational, and strategic barriers to NFF and development.

Of course, there is no guarantee that intervention will succeed in promoting entrepreneurial activity that leads to improved economic performance. Intervention can be perceived as correct at the time of introduction, but in the future may generate some undesirable outcomes. Such intervention may have other objectives—notably, increasing votes and the chances of re-election for the government or its party in a locality.

Intervention is associated with costs. David Storey has warned that enterprise intervention policies can only be justified in a market economy where it can be demonstrated that the effect of government intervention will lead to an overall net improvement in welfare to the economy as a whole. If enterprise policy intervention leads to an increase in the number of new smaller firms but also to a compensating, or more than compensating, reduction in p. 19employment in large firms, then it is difficult to justify such policies on welfare grounds. Governments therefore need to consider the costs and benefits of the intervention to the recipient as well as to wider society. In other words, intervention needs to involve initiatives that encourage actions that would not otherwise have been undertaken (i.e. input additionality), contributing to better results than would otherwise have been achieved (i.e. output additionality), or changing behaviour in a desired direction (i.e. behavioural additionality). Government may not solely drive policy intervention. Charities and social enterprises discussed in Chapter 6 can fill some gaps. For example, the Prince's Trust Enterprise Programme in the UK supports unemployed young people between 18 and 30 years of age. It promotes business idea generation. It also provides business skills training, legal help, and business planning support to ensure ideas are viable.

There is a tension over whether policy support should focus on stimulating large numbers of new firms or supporting fewer, better-quality firms. Enterprise support focusing on increasing the quantity of new firms irrespective of the entrepreneurs’ need, ability, or growth ambitions may generate limited economic benefits. It may be preferable to target support to a smaller number of ‘winning’ firms, that is, firms with significant wealth creation potential. For example, policies can be targeted at stimulating sectors with the capacity to be world leaders to fulfil their potential. Governments concerned with reducing social and regional inequality recognize the need to target assistance for special groups of entrepreneurs, such as women and people from ethnic minorities.

Support is primarily provided to the individual entrepreneur during the NFF process. After the firm-initiation hurdles have been addressed and the firm has commenced trading, external support for enterprise becomes more focused on the needs of different types of firms (i.e. family, high-technology, exporting firms, etc.). There may be a need to focus upon the entrepreneur, rather than the firm alone, throughout all stages of the entrepreneurial process.

p. 20As we shall see in Chapter 4, entrepreneurs are not homogeneous in their human capital profiles, motivations, resources, behaviour, prior entrepreneurial experience, and performance. Different types of entrepreneur may require customized assistance. Recognition of this entrepreneurial diversity contributes toward the development of policies tailored to different types of entrepreneur, rather than the provision of broad blanket policies to all types of entrepreneur, irrespective of need or ability. This means a shift from support aimed at increasing new firm start-ups, only to see large numbers of them fail shortly afterwards, to include customized support that reflects the track record from prior business ownership experience. Support could be allocated to growth-orientated entrepreneurs to ensure that the full economic and societal potential of all businesses they own is realized.