David Smallbone

The distinctiveness of entrepreneurship in transition economies

This paper is concerned with the distinctiveness of entrepreneurship and small business development in countries that are at different stages of transformation to market based economies. Following a discussion of the potential relevance of selected conceptualisations of entrepreneurship to transition conditions, the authors present original empirical data referring to the characteristics of entrepreneurs and their businesses from countries at different stages of market reform. Distinctive features of entrepreneurial behaviour identified reflect the unstable and hostile nature of the external environment and the scarcity of key resources, particularly capital. In an unstable and weakly structured environment, informal networks often play a key role in helping entrepreneurs to mobilise resources, win orders and cope with the constraints imposed by highly bureaucratic structures and often unfriendly officials. Moreover, the social context inherited from the former socialist period appears to affect both the attitudes and behaviour of entrepreneurs and the attitudes of society at large towards entrepreneurship.

The characteristics and strategies of high growth SMEs

Based on an empirical investigation of the development of a group of manufacturing SMEs comparing the characteristics and strategies of firms achieving high growth between 1979‐90 with the weaker performing companies. Shows that high growth can be achieved by firms with a variety of size, sector and age characteristics; such firms are distinguished more by the strategies and actions of managers than by their profile characteristics. The clearest differences between fast growth firms and other firms are with respect to their approach to product and market development. While high growth firms were above average investors they were not production‐led; instead they were characterized by an ability to make changes in production to complement an active market development strategy. To grow successfully over ten years, firms also needed to develop their internal organizational structure in ways that enabled the leader of the firm to delegate responsibility for operational tasks to become more focused on strategic...

Institutional perspectives on entrepreneurial behavior in challenging environments

This paper examines the institutional embeddedness of entrepreneurial behavior. The institutional context influences the nature, pace of development, and extent of entrepreneurship as well as the way entrepreneurs behave. This is particularly apparent in challenging environments such as emerging market and transition economies with an uncertain, ambiguous, and turbulent institutional framework. The paper develops suggestions as to how to extend the current institutional approach by emphasizing that institutions not only influence entrepreneurs but entrepreneurs may also influence institutional development by contributing to institutional change. This also includes acknowledging the heterogeneity of entrepreneurial responses to institutional conditions, depending on the situational configuration of institutional fit, enterprise characteristics, and entrepreneurs background, in which the role of trust as an influence on entrepreneurial behavior needs to be investigated. By focusing on these interrelationships, the paper aims to make a theoretical contribution to the field of entrepreneurship, illustrating how entrepreneurial behavior is linked to its social context.

Female entrepreneurship in transition economies: the case of Lithuania and Ukraine

Abstract To date, little research has focused on female entrepreneurship in the context of transitioning countries. This paper compares from an institutional perspective two countries at different stages in the process of transformation. Lithuania followed a rapid transitional path leading to European Union membership, while Ukraine is on a much slower development path. Women entrepreneurs in Lithuania and Ukraine share many common features and problems; however, there are important differences in the experiences of women in these two countries. This indicates a need to recognize the diversity that exists among transition countries, reflecting different inheritances from the Soviet past as well as differences in the pace of change during the transition period.

Exploring the Role of Trust in Entrepreneurial Activity

Trust is a phenomenon which, over the past decade, has gained attention across many disciplines and fields of study, e.g., psychology, organizational theory, sociology, economic theory, and business management. There is no single comprehensive definition of trust, and even within disciplines several definitions often exist. However, in terms of business behavior, trust is based on a perception of the probability that other agents will behave in a way that is expected (Gambetta, 1988). In addition, there is a danger that academics concerned with different aspects of human behavior may sometimes be guilty of exaggerating the role of trust, which emphasizes the importance of developing robust methodologies to identify and assess it. As Endres (2004, p. 15) stated, “we are confronted with an inflationary use of the concept of trust in several scientific disciplines, while its use in everyday life is much rarer.” Compared with their contemporaries in fields such as management studies, entrepreneurship scholars have only recently started to pay attention to trust-related issues, which may or may not be justified. This special issue aims to contribute to a discussion of the role of trust in the field of entrepreneurship, both conceptually (Goel & Karri, 2006; Zahra, Yavuz, & Ucbasaran, 2006) and empirically (Howorth & Moro, 2006; Neergard & Ulhoi, 2006).

Policies to support ethnic minority enterprise: the English experience

Continued political enthusiasm for encouraging entrepreneurship in the UK is beginning to influence business support policy towards black and minority ethnic businesses (BMEBs). The Small Business Service (SBS; the government agency charged with providing business support to small firms in England) has an explicit remit to cater for entrepreneurs from all sections of society. This is an important development given the widely noted reluctance of BMEBs to avail themselves of the services of mainstream business support agencies. This paper aims to assess the extent to which policy aspirations in relation to BMEBs have been realized. A survey of Business Links (the agencies contracted to deliver SBS services in England) and interviews with key informants are drawn upon to address three questions: To what extent do Business Links have a policy to support BMEBs? What form are initiatives to support BMEBs taking? How can these experiences inform a policy agenda towards BMEBs? The findings suggest that uneven and under-developed approaches to the support of BMEBS are commonplace. However, some encouraging examples of potentially fruitful initiatives are in evidence, which may reflect a growing awareness of the particular needs of BMEBs. A number of guidelines for future policy are presented, including the importance of diversity within mainstream provision; the need for an engagement strategy; improved access to finance; the promotion of sectoral diversity; and better evaluation.

The use of external assistance by mature SMEs in the UK: some policy implications

This paper is concerned with the use of external assistance by small and medium-sized enterprises and with the role of the public and private sectors in small business support. The paper focuses on ‘mature’ firms rather than new firms and the results from an empirical study of firms drawn from three different areas in the UK are used as a basis for assessing the adequacy of existing support for this type of firm. The survey covered the use of external assistance from a range of sources including banks, accountants and consultants as well as public sector agencies. The final part of the paper considers the priorities for improving the effectiveness of support for established SMEs with the aim of mobilizing more of the growth potential of the sector. These include the identification of particular target groups, recognition of the value of sector-based support and improvements in the delivery of consultancy.

Developing entrepreneurship and enterprise in Europe's peripheral rural areas: Some issues facing policy-makers

Abstract This paper is concerned with the various policies which encourage rural entrepreneurship and support for rural enterprise in the 10 case study areas covered by the FERP (The Future of Europes Rural Peripheries) project. After introducing a typology of existing policies, the paper addresses some lessons drawn from the experiences of existing policies before discussing the kinds of policies needed to stimulate potential sources of entrepreneurship and overcome the barriers to enterprise development. The paper concludes by arguing for a more strategic and coordinated approach towards building the entrepreneurial capacity of peripheral rural areas, based on a clearer vision of the role that enterprise can play in future rural development.

Networking and ethnic minority enterprise development: insights from a North London study

This paper is concerned with the role of networking in the development of ethnic minority enterprises, using empirical data drawn from a wider study of 82 ethnic minority businesses in North London. The paper uses a broadly based definition of networks that focuses on the exploitation of both formal and informal relationships for business development purposes, which includes social networks as well as voluntary and necessary business‐based linkages. More specifically, the paper considers the role of networking in raising capital, recruiting labour, identifying and finding customers, as well as accessing business support. The results show that personal and community‐based networks are used both to mobilise resources and to generate sales by business owners in all groups, although the nature and extent of the activity varies at different stages of business development. As other studies have shown, there is a very low level of take‐up of business advice and support from mainstream support agencies by these ethnic minority enterprises, not because of a lack of awareness but because of a range of negative attitudes towards them.

Innovative activity in SMEs and rural economic development: some evidence from England

Recent writings on the factors influencing the competitiveness of regional and local economies have emphasized the importance of innovation in SMEs. This paper discusses the findings of a study of the innovation process in a sample of SMEs located in rural environments. Adopting a broad, evolutionary view of the innovation process, the study highlights important sectoral variations using a multidimensional index of innovation. The way in which innovation is achieved is found to be shaped by various aspects of the rural environment, but relatively few firms are constrained by their rural location. Nor does the lack of local networking opportunities appear to hold back innovation in the more active SMEs. In conclusion, the most innovative firms are shown to make an important contribution to rural economies in terms of external income generation and employment generation.