Taking the

entrepreneurial option
Dynamics of entrepreneurial supply

Start-up

Conventional
labour pool Entrepreneurs

Fall-out
 Factors in entrepreneurial supply

Push Inhibitors
factors

Conventional
labour pool Entrepreneurs

Pull
factors
 The supply of Entrepreneurs

-
Push + Pull

Conventional
labour Entrepreneurs
market
 Factors driving entrepreneurship

Pull factors
* financial rewards of entrepreneurship
* freedom to work for oneself
* sense of achievement
* freedom to pursue innovation
* desire for social standing
Factors driving entrepreneurship (Continued)

Push factors
* being unemployed
* job security
* career limitations and set-backs
* being a misfit
* limited freedom
* economic exclusion
Factors driving entrepreneurship (Continued)

Inhibiting factors
* identification of business opportunity
* inability to get hold of start-up capital
* high cost of start-up
* high risk business environment
* cultural restrictions
* legal restrictions
 The ‘Credibility Merry Go Round’

Money

People Premises
Credibility

Customers Suppliers

After Birley, 1989

 Cooper’s model of entrepreneurial drive

Incubator
organisation

Antecedent The drive to

influences entrepreneurship

Environmental
factors
 Cooper’s model of entrepreneurial
drive (Continued)

Antecedent influences

* Personality

* Education

* Life experiences

* Family background
 Cooper’s model of entrepreneurial
drive (Continued)

Environmental factors

* Economic conditions

* Availability of capital

* Availability of human resources

* Support agencies
 Cooper’s model of entrepreneurial
drive (Continued)
Incubator organisation

* Experience of sector

* Opportunity spotting

* Training

* Contacts
Considering the move
to entrepreneurship
As with all decisions in life, making
the move to entrepreneurship is a
decision that reflects the perceived
utility of alternative courses of action.
Utility is the degree of satisfaction
we gain from an object or situation.

Utility is an indication of the power

of an object or situation to satisfy
human needs.
 Maslow’s Hierarchy of Needs

Self-actualisation

Self-esteem

Social
} Personal development

Social

}
Security
Economic
Physiological
 Move to entrepreneurship

Knowledge
Personal Personal
development development
needs Possibility needs
Social needs Social needs
Risk
Economic Economic
needs needs
Valence

Satisfaction in Satisfaction from

conventional entrepreneurship
job
 Move to entrepreneurship (Continued)

Knowledge

* Knowledge of sector

* Awareness of market opportunities

* General business skills

* Specialist skills

* Relationship skills
 Move to entrepreneurship (Continued)

Risk

* Possibility that venture will not be

successful:

risk v uncertainty

real v perceived
 Move to entrepreneurship (Continued)

Possibility

* Legality of enterprise

* Support agencies

* Availability of human resources

* Existing contractual obligations

 Move to entrepreneurship (Continued)

Valence

* Willingness to play of needs

against each other:
Economic v Social v Self-development
 Balance in the start-up decision

Positives Positives

Start own
Decision Alternatives
venture

Negatives Negatives
 Balance in the start-up
decision (Continued)

Positives
Positives

Start own
Decision Alternatives
venture

Negatives
Negatives
 Balance in the start-up
decision (Continued)

Positives
Positives

Start own
Decision Alternatives
venture

Negatives
Negatives
 The Market for Entrepreneurs

Supply

Reward
for
Entrepreneurs

Demand

Number of Entrepreneurs