Much More Than Meets the Eye: Unveiling the Challenges Behind Nascent Entrepreneurship

Introduction

Entrepreneurship has been deeply studied over time as a driver of job creation, human wellbeing and economic development (Schumpeter, 1934; Dantas, Moreira, & Valente, 2015; 2017a; 2017b; Moreira, Dantas, & Valente, 2017; Bosma et al., 2020; Hamdana, Almubarak, & Sarea, 2020).

National governments and other authorities and experts are abandoning their traditional approach to measure economic development based on the analysis of the results of large companies with different financial and fiscal inducements; they are relying instead on the macro-economic growth induced by small and medium-sized enterprises (SMEs) and new ventures (Martínez-Rodriguez, Callejas-Albiñana, & Callejas-Albiñana, 2020; Stoica, Roman, & Rusu, 2020). This outcome is the result of entrepreneurship being more recognized throughout the world not only as “a good solution to creating jobs and enhancing per capita income growth” but also as “a key mechanism for enhancing economic development” (Shane, 2005, p. 1), and as primary driver of industrial dynamism and economic growth (Hamdana, Almubarak, & Sarea, 2020).

Entrepreneurship has been traditionally associated to the creation of new ventures (Gartner, 1989; Bosma et al., 2020). Moreover, an entrepreneur was traditionally defined by a set of personality traits and exceptional qualities. However, just as a basketball player is not only something one is, it is something one does (Gartner, 1989), an entrepreneur is an individual who exploits market opportunity through technical and/or organizational innovation leading to the creation of new ventures and/or strategic renewal of an existing organization (Schumpeter, 1934; França, et al., 2017). As such, as supported by Agarwal et al. (2010) and Bosma et al. (2020), one can also support that entrepreneurial activities structure the birth, growth and demise not only of organizations, but also of industries, regions, and economies.

There is no single concept attributed entrepreneurship, although it is related to how individuals manage uncertainty and innovation – namely the creation of new business opportunities, new markets and new economic development – and sense new business opportunities.

There are various factors that have been used to explain entrepreneurial behavior. For example the personality traits have been used to explain why some are more entrepreneurs than others (Nicolaou et al., 2008). Human capital has also been used to explain the positive effect in firms’ survival (Gimeno et al 1997), i. e. the entrepreneur’s human capital influences the capacity in assessing the industry and the proper entry of the firm into the market. Social is also important for entrepreneurship, as entrepreneurs use social ties to materialize business opportunities that eventually otherwise could not be obtained (Mesquita et al., 2007). Innovation is also important because it allows entrepreneurs to differentiate from competition and to create the foundations of a competitive market that goes beyond the typical price-based competition (Schumpeter, 1934).

From an economic point of view, entrepreneurship is seen as an outcome, where countries and regions can be distinguished by new business creation indexes (e.g. Bosma et al., 2020). There is a clear macro perspective where the individual characteristics of entrepreneurs are hidden and are not analyzed, i.e. what matters is economic performance in terms of growth, firm survival, job creation, cultural differences, among others (Dantas et al., 2017a; 2017b).

From a macro perspective, however, we can witness that countries as Nigeria, Ghana, Ecuador or Malawi (Bosma et al., 2020) are among the most entrepreneurial countries. However, some of the most developed ones, as Japan, Italy and France are among the least entrepreneurial ones. Clearly this indicates that we are before two different kinds of entrepreneurship necessity-driven entrepreneurship – motivated by self-employment, with a very low impact on economic growth – as opportunity-driven entrepreneurship – motivated by perceived market opportunities, in which new ventures have more room to growth successfully and to create wealth (Dantas et al., 2017a; 2017b). The former type of entrepreneurship is normally associated to less developed economies, whereas the latter is associated to more developed countries (Mohan, Watson, & Strobl, 2018).