Please enable JavaScript.
Coggle requires JavaScript to display documents.
SBE Lect 4_ Part 1: Ch6 defining and measuring start ups (Key learning…
SBE Lect 4_ Part 1: Ch6 defining and measuring start ups
Key learning objectives
Become aware of the issues involved in defining the new business
Be able to identify the key issues involved in measuring the number of new businesses and
computing a start-up rate
The “entrepreneurial process”
Be able to describe how the entry of new businesses is related to the economic development of a country
Have an understanding of the role new businesses play for (1) individuals, (2) society, (3) industries, and (4) the economy
Latent entrepreneurship
see slide 3-4/28
average gap 36% between se and preference for se
Many people are not happy working for someone and decide to become an entrepreneur + social high status
Importance of new business
Individual perspective: A way to participate in the labour market
Brings utility (in monetary and non-monetary terms)
Choice for self-employment depends on relative utility (vs. unemployment or wage work)
Job satisfaction high for entrepreneurs
Suppose you could choose between two jobs. What would you prefer:
Being an employee
Being self-employed
“Latent and actual entrepreneurship in Europe and the US: Some recent developments”
Explanatory variables: Gender, age and education, country
Results profit model
: see slide 5 but one is counterintuitive:
men prefer se, young prefer se, education no relation
administrative burden makes you less likely to be willing to become se
risk as well
!! financial is conterintuitive !! most convinced (omitted variable bias : the participants tend to agree more because they are more se oriented and the once are not well informed give an uneducated answer
Survey data (2004) from the 15 old EU member states and the US
Importance of new business
Industry and economic perspective
New businesses change the business population in an industry and are important for competition
SMEs “agents of change” in many sectors, pioneering innovation
Creative destruction
Flexibility versus price strategy
Replacing inefficient businesses
New businesses may help to empower
Disadvantaged regions (e.g., revitalize part of a city)
Businesses as “social hub”
Disadvantaged groups (e.g., immigrants)
Productivity in manufacturing industry (UK)
Slide 6
Entrants are more productive than the stayers more efficient than the average business in the market. the efficiency and productivity increases due to the entrants which drives the trend upwards.
Selection in the market
See scheme slide 7
Entrants through the market process creates new capacities and exiting capacities with the side effects on the right