Entrepreneurship and small firms

Citation

Jones, O. (2010), "Entrepreneurship and small firms", International Journal of Entrepreneurial Behavior & Research, Vol. 16 No. 3. https://doi.org/10.1108/ijebr.2010.16016caa.001

Entrepreneurship and small firms

Article Type: Editorial From: International Journal of Entrepreneurial Behaviour & Research, Volume 16, Issue 3

This issue contains three empirical studies and one conceptual paper which outlines the nature of the “Schumpeterian” entrepreneur. The papers illustrate the continuing international reach of IJEBR with a paper which examines Malaysian SMEs, one focusing on the barriers to finance of UK small firms and two papers from the Antipodes – New Zealand and Australia.

Ahmad, Ramayah, Wilson and Kummerow examine the links between entrepreneurial competencies and business success in Malaysian SMEs. The study, which incorporates the moderating impact of the business environment, is based on a sample of 212 owner-managers. The authors adopt structural equation modelling (SEM) to test their model, which demonstrated that entrepreneurial competencies were strong predicators of business success. Interestingly, these competencies had more influence on business performance in hostile environments than they did in more benign situations. The study is important because the authors provide clear and unambiguous evidence that entrepreneurial competence does really make a difference to the performance of small firms.

In recent years the topic of “green entrepreneurship” or “ecopreneurs” has begun to receive increasing attention in the literature. According to Kirkwood and Walton, ecopreneurs have “for-profit” businesses which have a strong commitment to green products or services. Kirkwood and Walton’s research is based on 14 case studies of green businesses in New Zealand. The qualitative research methods included interviews, media reports, industry statistics and information from the media. The objective of the study was to identify factors which motivated ecopreneurs and these included: green values, earning a living, passion, working for self and market opportunities. As Kirkwood and Walton point out, ecopreneurs seem largely to be similarly motivated to conventional entrepreneurs.

Schumpeter’s influence over the study of entrepreneurship remains incredibly pervasive. Betta, Jones and Latham draw on Schumpeteter’s early work in which he claims that change has to come from within to examine the influences on the “innovative self”. The authors also draw on the work of Michel Foucault to incorporate the idea of “technology of the self”. The authors argue that “the creation/formation of a person enterprise is a form of entrepreneurship embedded in a technology of the self based on self-care and self-knowledge”. Betta et al. suggest that their conceptual model confirms the importance of extending the concept of entrepreneurship beyond the narrow confines of a business context. Furthermore, they posit that this approach “transcends” both economic and social ideas related to entrepreneurship.

The financing of small firms also remains a topic which continues to attract a considerable amount of attention from both academics and policy-makers. Irwin and Scott draw on data from a telephone survey of SMEs carried out by the Barclays Bank research team (prior to the credit crunch). The study demonstrates that education, or human capital, made little difference to the sources of finance. Those with graduate-level qualifications did have the least difficulty in raising external finance. Importantly, the study confirmed that black and ethnic minority (BME) business owners had the greatest difficulty in obtaining funding and consequently relied on “bootstrapping” techniques (see Ebben, 2009). As the authors point out, the study has important implications for policy-makers particularly in relationship to BME businesses.

Something which fundamentally distinguishes the study of entrepreneurship and small firms from most other disciplines in business and management is the real desire amongst the academic community to influence both policy and practice. In this issue, the paper by Ahmad et al. confirms that those entrepreneurs with the appropriate competences can make a significant difference to business performance particularly when operating in challenging circumstances. Cleary such findings are important for those providing support for the small business community whether from academia or the private sector. Similarly, Irwin and Scott’s paper confirms the difficulties faced by those from BME communities in obtaining enough financial support to create sustainable businesses.

Oswald Jones