Jonathan Levie

A Terminal Assessment of Stages Theory: Introducing a Dynamic States Approach to Entrepreneurship

Stages of growth models were the most frequent theoretical approach to understanding entrepreneurial business growth from 1962 to 2006; they built on the growth imperative and developmental models of that time. An analysis of the universe of such models (n = 104) published in the management literature showed no consensus on basic constructs of the approach, and no empirical confirmation of stages theory. However, by changing two propositions of stages theory, a new dynamic states approach was derived. The dynamic states approach has far greater explanatory power than its precursor, and is compatible with leading edge research in entrepreneurship.

Regulatory Burden, Rule of Law, and Entry of Strategic Entrepreneurs: An International Panel Study

Entry into entrepreneurship is a strategic act for individuals who seek an optimal way to exploit their human, social, and financial capital. Trade‐offs associated with this choice are influenced by institutional conditions. We use signalling theory, employment choice theory, and theory on strategic entry to develop hypotheses on the effect of business regulations and rule of law on strategic and non‐strategic entrepreneurial entry. Analysing a six‐year panel of 54 countries, we find lighter burden of regulation associated with a higher rate and relative prevalence of strategic entrepreneurial entry. Rule of law moderates this effect such that regulation has a significant effect on strategic entry only when rule of law is strong. These findings are robust against alternative proxies. Implications are drawn for prospective entrepreneurs, existing organizations, policy, and further research.

Ten Years of Global Entrepreneurship Monitor: Accomplishments and Prospects

In its first ten years, the Global Entrepreneurship Monitor (GEM) has had three main aims: to measure differences in the level of entrepreneurial activity between countries, to uncover factors determining national levels of entrepreneurial activity and to identify policies that would stimulate entrepreneurship. This paper reviews the theoretical and empirical contributions by the GEM consortium ten years after the presentation of its first Global Report in 1999. The evolution of GEM measures of entrepreneurship is tracked, and the quantity and quality of peer-reviewed scholarship based on GEM data and models are assessed. Prospects and recommendations for the future are noted, as GEM continues to expand and scholars outside the consortium increasingly employ GEM data in their work.

Resource Mobilization and Performance in Family and Nonfamily Businesses in the United Kingdom

This study draws on agency theory and the resource-based view to hypothesize that family and nonfamily businesses differ in the capital that they deploy and the way that they deploy it. It, and test this hypothesis in a large U.K.-based sample of 319 family business and 258 nonfamily business owner/managers. The analysis revealed that adverse selection, opportunism, and niche marginalization are more prevalent among family business owner/managers. Yet, their businesses are similar to those of their nonfamily business peers in performance outcomes such as size and growth, which suggests that weaknesses in human and financial capital choice are offset by strengths in the social capital of family firms.

Mixed signals: why investors may misjudge first time high technology venture founders

This paper seeks to explain an unexpected result of a previous quantitative study which suggested suboptimal evaluation by investors of the human capital of first time high tech venture founders. A literature review revealed two possible reasons for this finding: biases/heuristics and signalling. Six investors across three countries (one venture capitalist and one business angel each from the US, UK and Israel) with experience in investing in early stage high technology ventures were interviewed using an identical semi-structured interview protocol. This research design is appropriate for research that seeks to reflect back unexpected findings of previous quantitative research on the subjects of research. Interviewees were first asked to state their own investment criteria, and then presented with the results of the quantitative study and asked for their views. Previous research suggesting a gap between in-use and espoused criteria, and extensive use of gut feeling in decision-making, was supported. Interviewees focused on harvest potential and de-emphasised measures of founder technology capability that predicted early survival and growth in the earlier study. The paper concludes by suggesting how investors might improve funding decisions in high tech ventures led by first time entrepreneurs, noting the studys limitations and making recommendations for further research.

Business and social entrepreneurs in the UK: gender, context and commitment

Purpose – The purpose of this paper is to investigate what sort of people become social entrepreneurs, and in what way they differ from business entrepreneurs. More importantly, to investigate in what socio-economic context entrepreneurial individuals are more likely to become social than business entrepreneurs. These questions are important for policy because there has been a shift from direct to indirect delivery of many public services in the UK, requiring a professional approach to social enterprise. Design/methodology/approach – Evidence is presented from the Global Entrepreneurship Monitor (GEM) UK survey based upon a representative sample of around 21,000 adults aged between 16 and 64 years interviewed in 2009. The authors use logistic multivariate regression techniques to identify differences between business and social entrepreneurs in demographic characteristics, effort, aspiration, use of resources, industry choice, deprivation, and organisational structure. Findings – The results show that the odds of an early-stage entrepreneur being a social rather than a business entrepreneur are reduced if they are from an ethnic minority, if they work ten hours or more per week on the venture, and if they have a family business background; while they are increased if they have higher levels of education and if they are a settled in-migrant to their area. While women social entrepreneurs are more likely than business entrepreneurs to be women, this is due to gender-based differences in time commitment to the venture. In addition, the more deprived the community they live in, the more likely women entrepreneurs are to be social than business entrepreneurs. However, this does not hold in the most deprived areas where we argue civic society is weakest and therefore not conducive to support any form of entrepreneurial endeavour based on community engagement. Originality/value – The papers findings suggest that women may be motivated to become social entrepreneurs by a desire to improve the socio-economic environment of the community in which they live and see social enterprise creation as an appropriate vehicle with which to address local problems.

The new venture mortality myth

This chapter reviews the literature on perceptions and measures of new business mortality, and notes wide and persistent gaps between perceptions and measures. Official statistics suggest that survival rates of new businesses in advanced economies tend to be around 80% after one year and around 50% after five years. Failure rates appear to be around half to a third of the inverse of the survival rate, depending on how failure is defined. A survey of estimates on the world wide web found the most quoted failure rate was 50% after one year. Explanations for this gap between perception and official statistics include the way firm births are measured, vested interests, and misleading referencing. Using the UK as an example, it is estimated that nascent entrepreneurship rates could be increased by a third if people knew the true failure rate for new businesses.

Entrepreneurial Profile of the UK in the Light of the Global Entrepreneurship and Development Index

In this research summary, we provide a novel look into the entrepreneurial profile of the UK in an international context. We use a new method – the Global Entrepreneurship and Development Index GEDI – to identify the entrepreneurial strengths and weaknesses of the UK economy, as well as to identify potential bottlenecks that hold back the performance of the UK relative to other advanced economies. We perform a Penalty for Bottleneck analysis to identify the bottlenecks in the UKs entrepreneurial profile. We also explore optimal resource allocation for UKs policy for National Systems of Entrepreneurship.

Entrepreneurial management and technology-based firm performance

A computer-aided surface lofting, fairing and manufacturing program, called G-SURF, has been developed for, and successfully implemented in, a small shipyard. The interactive menu-driven package runs on an IBM-AT or equivalent personal computer and interfaces with standard three-dimensional wire frame drafting packages.The naval architects small scale design drawing is approximated by a minimum number of smooth three-dimensional skeletal-lines running along the entire length of the surface. The skeletal-lines are formed by parametric taut-cubic polynomial splines and represent the essential features of the hull form. These lines are normally the profile, shear, chine and intermediate lines as necessary and are individually adjusted in three-dimensional space until smooth. A set of station-lines is formed as required through the skeletal-lines to fully define the hull surface.The hull can, if required, be lofted and faired as a developable surface that can be formed from flat sheet plate. The algorithms embodied in the program ensure developability and produce flat plate definition of the unwrapped hull form. The individual component plate shapes can be displayed on a graphics screen and interactively arranged to fit on a standard size of sheet plate material. During this ‘nesting’ process, the spacing between components, location of bridges, and direction, path and speed of cut are all specified.Positional nested plate data are postprocessed to give G-code data for a plasma-arc plate burning machine. G-code machine instructions can be sent directly from the host computer via an RS-232C serial line to the machine tool or can be stored on a disk for later use. The storage and transmission of part programs avoids the medium of punched paper tape, is flexible, reliable and can handle large amounts of data.Implementation of the G-SURF package has reduced the lofting, fairing and manufacturing time for ship hulls by a factor of three.

Perceptions of firm competitive advantages from teaming up with universities : an exploratory study

In the context of university collaborations, we know very little about why some firms perceive that teaming up with universities provide them with competitive advantages. One reason why we know so little is that university collaborations can take different forms and vary in terms of the nature of relationships, the motivation of parties and the outcomes that are expected from the collaboration. Another reason why is the lack of panel data that can be used to empirically study the competitive advantages that firms obtain from collaborating with universities. That said, the Kauffman Firm Survey (KFS) is a large dataset that asks firm owners about the competitive advantages of their firms and the reasons why they exist. In this paper, we use the KFS perceptual variables to explore the perception of firm owners about the competitive advantages of teaming up with universities. While there are limitations to the empirical conclusions that can be drawn, the research questions we explore using the KFS sample provide interesting avenues for future research.