essay about innovative entrepreneurship as business opportunity for young entrepreneurs

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Entrepreneurship and Innovation: Startup Hubs

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Essay on Entrepreneurship

Introduction to Entrepreneurship

Entrepreneurship is the cornerstone of innovation, economic growth, and societal progress. Entrepreneurship embodies risk-taking, innovation, and determination as entrepreneurs actively identify, create, and pursue opportunities to build and scale ventures. From the inception of small startups to the expansion of multinational corporations, entrepreneurial endeavors permeate every facet of our global economy.

This essay delves into the complex world of entrepreneurship, examining its importance, traits of prosperous businesspeople, function in economic growth, kinds of entrepreneurship, how to start one, obstacles to overcome, the ecosystem surrounding entrepreneurship, and motivational success stories of well-known businesspeople. Through this exploration, we aim to shed light on the dynamic nature of entrepreneurship and its profound impact on shaping our world.

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Historical Context of Entrepreneurship

Entrepreneurship, as a concept, has roots that stretch back centuries. It evolved in response to changing economic, social, and technological landscapes. While the term “Entrepreneurship” may be relatively modern, the spirit of entrepreneurship has been evident throughout human history.

1. Early Civilization and Trade

• Ancient Mesopotamia and Egypt: Merchants in ancient civilizations like Mesopotamia and Egypt actively engaged in trade, barter, and commerce, marking the earliest forms of entrepreneurship.
• Medieval Guilds: During the Middle Ages, guilds emerged as entrepreneurship centers, bringing together artisans and craftsmen to regulate trade, ensure quality standards, and foster innovation.

2. Age of Exploration and Colonization

• Age of Exploration: During the Age of Exploration, which lasted between the 15th and 16th centuries, international trade networks were formed, and as explorers looked for new trade routes, this encouraged commercial ventures.
• Colonialism: European colonial expansion in the 17th and 18th centuries created opportunities for entrepreneurial endeavors in trade, agriculture , and resource extraction, albeit often at the expense of indigenous populations.

3. Industrial Revolution

• Transition to Industrialization: The emergence of factories, mechanization, and mass production during the Industrial Revolution of the 18th and 19th centuries drove economic expansion and urbanization, so ushering in a revolutionary era for entrepreneurship.
• Innovations and Entrepreneurs: Visionary entrepreneurs like James Watt, Thomas Edison , and Henry Ford revolutionized industries through technological innovations, shaping the modern world.

4. 20th Century and Beyond

• Post-World War II Reconstruction: The aftermath of World War II saw a resurgence of entrepreneurship driven by reconstruction efforts, technological advancements, and the rise of consumer culture.
• Digital Revolution: The digital revolution, which began in the late 20th century and was marked by the widespread use of computers, the Internet, and information technology, fostered a new era of entrepreneurship focused on innovation, startups, and digital commerce.

5. Contemporary Entrepreneurship

• Globalization: In the 21st century, globalization has expanded opportunities for entrepreneurship, enabling businesses to operate across borders, access global markets, and collaborate on a scale never before seen.
• Social Entrepreneurship: Alongside traditional business ventures, the rise of social entrepreneurship reflects a growing emphasis on addressing societal challenges, promoting sustainability, and creating positive social impact.

Characteristics of Successful Entrepreneurs

• Visionary Leadership : Successful entrepreneurs have a clear vision of their goals and are adept at inspiring others to share. They can successfully communicate their vision and mobilize stakeholders behind it.
• Resilience and Persistence : Entrepreneurship is fraught with setbacks and obstacles, but successful entrepreneurs exhibit resilience in adversity. Despite obstacles, they continue to work toward their objectives and see setbacks as teaching opportunities.
• Risk-taking Propensity : Risk is a natural part of entrepreneurship, and prosperous businesspeople aren’t afraid to take calculated chances to seize opportunities. They possess the courage to step outside their comfort zones and embrace uncertainty.
• Creativity and Innovation : Entrepreneurs are creative people who are always looking for innovative approaches to addressing issues and satisfying consumer demands. Their imaginative mindset enables them to come up with original ideas and think outside the box.
• Adaptability and Flexibility : The business landscape is dynamic, and successful entrepreneurs demonstrate adaptability in response to changing circumstances. They are flexible and willing to pivot and adjust strategies as needed.
• Passion and Commitment : Passion fuels the entrepreneurial journey, driving entrepreneurs to pour their time, energy, and resources into their ventures. Successful entrepreneurs are deeply committed to their work and willing to make sacrifices to succeed.
• Strong Work Ethic : Entrepreneurship requires hard work, dedication, and perseverance. Successful entrepreneurs are willing to work long hours and exert the effort to build and grow their businesses.
• Effective Communication Skills : Effective communication depends on establishing and maintaining connections, obtaining funding, and promoting goods and services. Successful entrepreneurs possess strong communication skills, both verbal and written, enabling them to convey their ideas persuasively.
• Empathy and Emotional Intelligence : Understanding the needs and perspectives of others is crucial in entrepreneurship. Empathy and emotional intelligence are hallmarks of successful entrepreneurs. They build strong relationships with employees, customers, and partners.
• Strategic Thinking : Entrepreneurs must think strategically to navigate complex business environments and make informed decisions. Successful entrepreneurs possess strategic thinking skills, enabling them to set clear objectives, prioritize tasks, and allocate resources effectively.

The Entrepreneurial Process

The entrepreneurial process encompasses the journey from ideation to establishing and growing a successful venture. Entrepreneurs must go through several phases and processes to realize their ideas and add value to the market.

• Opportunity Identification : The entrepreneurial process often begins with identifying opportunities in the market or recognizing unmet needs and problems. Entrepreneurs may draw inspiration from personal experiences, industry trends, market gaps, or technological advancements.
• Market Research and Validation : Once entrepreneurs identify an opportunity, they conduct thorough market research to assess the viability of their ideas. It involves analyzing target markets, understanding customer preferences, evaluating competitors, and validating demand for the proposed product or service.
• Business Planning : With a clear understanding of the market opportunity, entrepreneurs develop a comprehensive business plan outlining their vision, goals, strategies, and operational plans. The business plan serves as a roadmap for the venture, guiding decision-making and resource allocation.
• Resource Acquisition : Entrepreneurs must secure the resources necessary to realize their ideas. This may involve raising capital through investments, loans, or crowdfunding, recruiting talent, acquiring technology or equipment, and establishing partnerships.
• Venture Launch : The launch phase marks the official start of the venture, where entrepreneurs execute their business plans and introduce their products or services to the market, involving product development, marketing and branding efforts, setting up operations, and launching sales channels.
• Growth and Scaling : As the venture gains traction and generates revenue, entrepreneurs focus on scaling operations and expanding their market reach, often involving refining business processes, optimizing efficiency, entering new markets, and diversifying product offerings.
• Risk Management : Entrepreneurship inherently involves risk, and successful entrepreneurs must proactively identify, assess, and manage risks throughout the venture lifecycle. They must also implement risk mitigation strategies, diversify revenue streams, and maintain financial resilience.
• Innovation and Adaptation : In a rapidly evolving corporate environment, entrepreneurs need to innovate and adapt to stay competitive continuously. It includes launching new goods and services, utilizing cutting-edge technologies, and reacting to shifting consumer demands and industry trends.
• Network Building and Relationship Management : Entrepreneurs must build a strong network of relationships to access resources, expertise, and opportunities. It includes cultivating relationships with investors, customers, suppliers, mentors, and other stakeholders.
• Continuous Learning and Improvement : Entrepreneurship is a dynamic and iterative process, and successful entrepreneurs are committed to lifelong learning and improvement. They seek feedback, learn from failures and successes, and adapt their strategies based on new insights and experiences.

Types of Entrepreneurship

Entrepreneurship manifests in various forms, each characterized by distinct goals, approaches, and impacts on society and the economy. Understanding the different types of entrepreneurship provides insights into how individuals and organizations engage in entrepreneurial activities to create value and drive innovation.

1. Small Business Entrepreneurship : Small business entrepreneurship involves creating and managing small-scale enterprises typically operated by a single individual or a small team. These ventures often serve local markets and focus on providing goods or services tailored to specific customer needs.

Examples: Family-owned businesses, local restaurants, independent retailers, and service providers such as plumbers or electricians actively operate within their respective domains.

2. Social Entrepreneurship : Social entrepreneurship blends entrepreneurial principles that address social, environmental, or humanitarian challenges. These ventures aim to create a positive social impact while generating sustainable financial returns.

Examples: Nonprofit organizations, social enterprises, and initiatives focused on poverty alleviation, environmental conservation, healthcare access, education, and community development.

3. Corporate Entrepreneurship : Corporate entrepreneurship refers to activities undertaken within established organizations, including corporations, companies, and institutions. These activities foster innovation, explore new business opportunities, and drive organizational growth and competitiveness.

Examples: Corporate innovation labs, intrapreneurship programs, new product development initiatives, and strategic partnerships with startups or external innovators drive innovation within established organizations.

4. Technology Entrepreneurship : Technology entrepreneurship revolves around the development, commercialization, and utilization of technological innovations to create new products, services, or solutions. These ventures often operate at the intersection of science, engineering, and business.

Examples: Software-development startups, biotechnology companies, hardware producers, and businesses concentrating on cutting-edge technologies like blockchain, artificial intelligence, and renewable energy are some examples of tech startups.

5. Serial Entrepreneurship : Serial entrepreneurship involves individuals who repeatedly start, grow, and exit multiple ventures throughout their careers. These entrepreneurs leverage their experience, networks, and insights from previous ventures to launch new initiatives.

Examples: Entrepreneurs who have founded and successfully scaled multiple startups across different industries or sectors, such as Elon Musk (PayPal, SpaceX, Tesla) and Richard Branson (Virgin Group).

6. Innovative Entrepreneurship : Innovative entrepreneurship emphasizes the creation of groundbreaking innovations and disruptive technologies that transform industries and markets. These ventures challenge existing norms and paradigms and introduce novel solutions to complex problems.

Examples: Startups like Airbnb, Uber, and SpaceX are pioneering revolutionary technologies or business models, such as peer-to-peer lodging, ride-sharing, and space exploration and transportation, respectively.

7. Cultural Entrepreneurship : Cultural entrepreneurship involves the creation, preservation, and promotion of cultural products, experiences, and heritage. These ventures contribute to the enrichment of cultural diversity, identity, and expression.

Examples: Art galleries, museums, cultural festivals, heritage tourism initiatives, and creative industries like film, music, literature, and fashion contribute actively to the enrichment of cultural diversity, identity, and expression.

Challenges Faced by Entrepreneurs

1. Financial Constraints

• Limited Capital: Accessing sufficient funding to start and sustain operations is a common challenge for entrepreneurs, especially in the early stages of venture development.
• Cash Flow Management: A company’s capacity to remain viable and sustainable depends on its ability to manage cash flow, especially in times of variable revenue and expenses.

2. Market Competition

• Competitive Landscape: Entrepreneurs must contend with intense competition from existing incumbents, emerging startups, and disruptive innovators who are vying for market share and customer attention.
• Market Saturation: Saturated markets pose challenges for entrepreneurs seeking to differentiate their offerings and carve out a niche amidst a crowded marketplace.

3. Regulatory and Legal Hurdles

• Compliance Requirements: Entrepreneurs must navigate complex regulatory frameworks and legal requirements governing business operations, taxation, licensing, permits, and intellectual property rights.
• Litigation Risks: Legal disputes, lawsuits, and regulatory penalties can pose significant risks to entrepreneurs, requiring proactive risk management and legal counsel.

4. Failure and Resilience

• Fear of Failure: Fear of failure can immobilize business owners and inhibit their willingness to take risks, which keeps them from taking advantage of chances and exploring novel concepts.
• Resilience and Grit: Building resilience and maintaining a positive mindset are essential for overcoming setbacks, learning from failures, and persevering in adversity.

5. Market Uncertainty and Volatility

• Economic Fluctuations: Entrepreneurs must navigate economic uncertainties, market downturns, and macroeconomic factors that impact consumer spending, business investment, and market demand.
• Technological Disruption: Rapid technological advancements and disruptive innovations can render existing business models obsolete, requiring entrepreneurs to adapt and innovate to stay competitive.

6. Talent Acquisition and Retention

• Recruitment Challenges: Hiring and retaining skilled talent is a persistent challenge for entrepreneurs, particularly in competitive industries and niche sectors with high demand for specialized expertise.
• Team Building and Management: Building cohesive teams, fostering a positive work culture, and managing interpersonal dynamics are essential for organizational success and employee engagement.

7. Scaling and Growth

• Operational Scalability: Scaling operations to accommodate growth while maintaining efficiency and quality requires strategic planning, infrastructure investment, and process optimization.
• Resource Allocation: Entrepreneurs at every stage of venture development face the strategic challenge of effectively allocating resources to support growth initiatives, expand market reach, and capitalize on new opportunities.

8. Market Disruption and Adaptation

• Disruptive Forces: Entrepreneurs must foresee and react to disruptive factors that have the potential to transform sectors and jeopardize established business models. These forces include technology innovation, shifting customer preferences, and shifting market dynamics.
• Adaptability and Agility: It takes agility, flexibility, and capacity to change course in reaction to shifting market conditions so business owners can stay ahead of the curve and profit from new trends.

9. Mental Health and Well-being

• Stress and Burnout: Entrepreneurship can damage mental health and well-being due to the pressures of running a business, managing uncertainties, and balancing work-life demands.
• Self-care and Support Systems: Long-term business success depends on prioritizing self-care, getting help from peers, mentors, and mental health specialists, and maintaining a healthy work-life balance.

The Role of Entrepreneurship in Economic Development

• Job Creation : Entrepreneurship is a primary engine of job creation, as new ventures often require a workforce to support their operations. Entrepreneurs generate employment opportunities, reduce unemployment rates, and promote economic inclusion by starting and expanding existing businesses.
• Innovation and Technological Advancement : Entrepreneurs are at the forefront of innovation, pioneering new technologies, products, and services that disrupt industries and drive progress. Entrepreneurs introduce novel solutions to market needs through research, experimentation, and risk-taking, fueling technological advancement and enhancing productivity.
• Wealth Creation and Economic Growth : Successful entrepreneurship leads to wealth creation, as ventures generate profits, attract investment, and increase the overall wealth of individuals and communities. This wealth is reinvested in the economy through spending, savings, and investment, contributing to economic growth and prosperity.
• Regional Development and Economic Diversification : Entrepreneurship promotes regional development by spurring economic activity in previously underserved or marginalized areas. By establishing businesses and investing in local infrastructure, entrepreneurs contribute to diversifying regional economies, reducing dependence on specific industries, and enhancing resilience to economic shocks.
• Income Generation and Poverty Alleviation : Entrepreneurship allows people from various backgrounds to increase their wealth, create income, and enhance their quality of life. By creating self-employment opportunities and empowering marginalized groups, entrepreneurship serves as a pathway out of poverty and promotes social mobility.
• Export Promotion and International Trade : Entrepreneurial ventures often engage in international trade, exporting goods and services to foreign markets and contributing to trade balances. By tapping into global markets, entrepreneurs access new growth opportunities, expand their customer base, and drive economic integration and globalization.
• Ecosystem Development and Knowledge Spillovers : Entrepreneurship fosters the development of vibrant ecosystems comprised of startups, investors, incubators, accelerators, and support organizations. These ecosystems facilitate knowledge sharing, collaboration, and networking, leading to the diffusion of ideas and best practices across industries and regions.
• Cultural and Social Impact : Entrepreneurship transcends economic boundaries, shaping cultural norms, values, and attitudes towards innovation and risk-taking. Successful entrepreneurs are role models, inspiring others to pursue their aspirations and contribute to societal progress.

Entrepreneurship and Innovation

• Catalysts of Change : Entrepreneurship acts as a catalyst for innovation, sparking the creation of groundbreaking ideas, technologies, and business models. Innovators, in turn, fuel entrepreneurial endeavors by presenting new solutions and opportunities ripe for exploration.
• Market Disruption : Entrepreneurs often disrupt markets through innovative products or services, challenging established norms and creating new market segments. This disruption prompts further innovation as incumbents respond with their advancements, leading to a cycle of continuous improvement and evolution.
• Risk-Taking and Experimentation : Entrepreneurship thrives on risk-taking and experimentation, essential ingredients for innovation. Recognizing that failure is often a prerequisite for eventual success, entrepreneurs strategically take calculated risks to transform their creative visions into reality.
• Ecosystem Collaboration : Vibrant entrepreneurial ecosystems foster collaboration between entrepreneurs, researchers, investors, and policymakers. By combining varied knowledge and resources, these collaborations promote innovation by quickening the development and commercialization of innovative ideas.
• Customer-Centric Solutions : Successful entrepreneurs understand the importance of innovation in addressing customer needs and pain points. They leverage innovation to create customer-centric solutions, driving adoption and loyalty while continuously refining their offerings based on feedback and market insights.
• Technological Advancements : Entrepreneurial ventures often drive the adoption and commercialization of emerging technologies. Entrepreneurs propel technological advancements forward by recognizing new technologies’ potential and integrating them into innovative products or processes.
• Social and Environmental Impact : Entrepreneurship and innovation increasingly address pressing social and environmental challenges. Social entrepreneurs leverage innovative business models to tackle issues such as poverty, healthcare, education, and environmental sustainability, creating positive change on a global scale.
• Economic Resilience and Competitiveness : Nations with thriving entrepreneurial ecosystems and a culture of innovation are better positioned to adapt to economic disruptions and maintain competitiveness in the global marketplace. Entrepreneurship and innovation foster economic resilience by driving productivity, creating jobs, and fostering economic diversification.

Ethical Considerations in Entrepreneurship

• Transparency and Honesty : Entrepreneurs should prioritize transparency and honesty in their dealings with stakeholders, including customers, employees, investors, and partners. Providing accurate information, being truthful about risks, and avoiding deceptive practices build trust and credibility.
• Fair Treatment of Stakeholders : Entrepreneurs should treat all stakeholders fairly and equitably, considering the interests and well-being of employees, suppliers, customers, and the community. Fair labor practices, non-discriminatory policies, and responsible supply chain management demonstrate a commitment to ethical conduct.
• Responsible Innovation : Entrepreneurs should pursue innovation responsibly, actively considering the potential social, environmental, and ethical implications. Entrepreneurs should consider the broader impact of their products or services, prioritizing safety, sustainability, and ethical use.
• Respect for Intellectual Property : Entrepreneurs must respect intellectual property rights and avoid infringing on others’ patents, trademarks, copyrights, or trade secrets. Protecting intellectual property created by the venture also safeguards against unfair competition and promotes innovation.
• Environmental Sustainability : Entrepreneurs should integrate environmental sustainability into their business practices, minimizing negative environmental impacts and promoting resource efficiency. Sustainable sourcing, eco-friendly manufacturing processes, and carbon footprint reduction initiatives demonstrate a commitment to environmental stewardship.
• Social Responsibility : Entrepreneurs are responsible for contributing positively to society, addressing social issues, and supporting community development. Socially responsible initiatives such as charitable giving, volunteerism, and ethical sourcing enhance the venture’s reputation and foster goodwill among stakeholders.
• Ethical Marketing and Advertising : Entrepreneurs should adhere to ethical standards in marketing and advertising, avoiding deceptive or manipulative tactics that mislead consumers. Clear and truthful communication, respecting consumer privacy, and avoiding false claims uphold integrity in marketing practices.
• Data Privacy and Security : Entrepreneurs must prioritize protecting customer and employee data, respecting privacy rights, and implementing robust cybersecurity measures. Safeguarding sensitive information against unauthorized access, breaches, or misuse is essential for maintaining trust and compliance with data protection regulations.
• Corporate Governance and Accountability : Entrepreneurs should establish sound corporate governance practices that promote accountability, integrity, and ethical behavior within the organization. Transparent decision-making processes, independent oversight, and ethical leadership foster a culture of accountability and responsibility .
• Continuous Ethical Reflection and Improvement : Entrepreneurs should actively integrate ethical considerations into the fabric of their ventures, engaging in continuous reflection and improvement. Regular ethical assessments, stakeholder engagement, and responsiveness to feedback help ensure ethical conduct remains a priority as the venture evolves.

Case Studies

Success Stories of Entrepreneurs and Lessons Learned from Failures

1. Steve Jobs (Apple Inc.)

• Success Story: Steve Jobs co-founded Apple Inc., leading it to become one of the world’s most valuable companies. He revolutionized industries with products like the iPhone, iPad, and Macintosh.
• Lessons Learned from Failure: Throughout his career, Jobs experienced many failures, including being fired from Apple in 1985 due to internal strife. However, in 1997, Steve returned to Apple, helping it achieve remarkable success. However, he returned to Apple in 1997, leading it to unprecedented success. His failures taught him the importance of perseverance, innovation, and resilience in adversity.

2. Sara Blakely (Spanx)

• Success Story: Sara Blakely transformed the fashion industry and empowered women worldwide by founding Spanx, a multi-billion-dollar shapewear company.
• Lessons Learned from Failure: Blakely faced multiple rejections when pitching her idea to manufacturers and investors. However, she persisted, self-funding her venture and learning from each rejection. Her experience taught her the value of persistence, self-belief, and resilience in overcoming obstacles.

3. Elon Musk (SpaceX, Tesla)

• Success Story: Elon Musk co-founded SpaceX, which revolutionized space exploration, and Tesla, which pioneered electric vehicles and sustainable energy solutions.
• Lessons Learned from Failure: Musk experienced numerous setbacks and near-bankruptcy with SpaceX and Tesla. Despite facing criticism and skepticism, he remained steadfast in his vision, learning from failures and leveraging them to fuel future successes. His journey underscores the importance of resilience, risk-taking, and relentless pursuit of goals.

4. JK Rowling (Harry Potter)

• Success Story: The Harry Potter series, authored by J.K. Rowling, became a global phenomenon, inspiring generations of readers and selling over 500 million copies worldwide.
• Lessons Learned from Failure: Rowling faced rejection from multiple publishers before finally securing a book deal for Harry Potter. Her experiences taught her the value of perseverance, belief in oneself, and the transformative power of resilience. Rowling’s journey exemplifies the importance of resilience in facing rejection and adversity.

5. Jeff Bezos (Amazon)

• Success Story: Jeff Bezos founded Amazon, which he turned from an online bookshop into the biggest e-commerce platform in the world and one of the most valuable firms.
• Lessons Learned from Failure: Bezos experienced failures and setbacks throughout Amazon’s journey, including failed product launches and financial challenges. However, he embraced failure as a learning opportunity, iterating on ideas and remaining focused on long-term goals. Bezos’ experience underscores the importance of adaptability, customer obsession, and a willingness to experiment.

Entrepreneurship is a beacon of innovation, economic dynamism, and societal progress. From the visionary leadership of pioneers like Steve Jobs to the relentless determination of trailblazers like Sara Blakely, the entrepreneurial journey is marked by triumphs forged from failures. Aspiring entrepreneurs must embrace resilience, creativity, and ethical conduct to navigate the challenges and opportunities that lie ahead in shaping a brighter future through entrepreneurship.

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The Secrets of Highly Successful Young Entrepreneurs

Getting a head start may help founders, but learning and taking risks are key to growth.

November 03, 2021

Young portfolio founders are the “stars” of serial entrepreneurs. | iStock/stonepic

In entrepreneurial circles, there’s a long-running, often contentious debate about who’s ultimately more successful — middle-aged founders or those who launch ventures in their 20s and 30s. Recent research has shown the average age of successful startup founders is 45. Yet founders under 40 run more than 40% of all new firms.

Plenty of well-known entrepreneurs got an early start. Mark Zuckerberg, Bill Gates, and Steve Jobs began their companies when they were in their 20s, contributing to the popular belief that the most successful entrepreneurs start young. (As the 22-year-old Zuckerberg stated, “Young people are just smarter.”) Those who see middle-aged founders as more accomplished say older founders’ years of experience and lessons learned contribute to their outsized success.

Kathryn Shaw , a professor of economics at Stanford Graduate School of Business, contributes to the ongoing discussion with a new paper coauthored with Anders Sørensen of Copenhagen Business School. Their research finds that founders in their mid-20s to early 30s learn and invest over time and can ultimately run new firms that are even more productive than those founded by older entrepreneurs.

In particular, entrepreneurs who get an early start running a firm and then open a second one can be quite successful, and in many cases are even more successful than founders who get started in middle age. Shaw and Sørensen find that young founders who become serial entrepreneurs see their sales revenues nearly double between their first and second firm. Their second firm is usually larger than the typical firm of older entrepreneurs.

The authors suggest that these ambitious young serial entrepreneurs share certain traits that feed into their success. “Serial entrepreneurs are very successful when they start young,” Shaw says. “Young people who end up being serial entrepreneurs learn on the job.”

These young businesspeople who “come of age” as serial entrepreneurs — 9% of all new founders — can evolve to be highly successful, Shaw says. “They’re a select group and they’re real go-getters.”

The Serial Entrepreneur’s Advantage

The researchers looked at data from Denmark on firm sales from 2001 to 2016, following more than 131,000 firms, most of which had founders who started only one firm.

On average, the founders they tracked were 38 years old and had 13 years of education. Seventy-five percent were male. Of all the firms analyzed — a combination of sole proprietorships and limited liability corporations across industries — nearly 18% were run by serial entrepreneurs.

Quote Young businesspeople who “come of age” as serial entrepreneurs can become highly successful. “They’re a select group and they’re real go-getters,” Shaw says.

In general, these subsequent firms tended to be more successful over time than novice, or standalone, ones. On average, serial entrepreneurs’ first firms were 57% bigger on their opening day than firms founded by novices.

The researchers discovered that young serial entrepreneurs, those in their mid-20s to early 30s, realize higher returns as they open their second business. Sales at younger founders’ first firms averaged $92,750 and $169,000 at their second, a jump of 82%. While sales at older founders’ first firms started off higher, at nearly $125,000, their second firms were only 20% larger than their first firms, and never matched the average sales level of younger entrepreneurs’ second firms.

Getting Older and Bolder

While some founders with a thriving first firm will choose to stick with a single endeavor, a subset will have both a great idea and the needed energy to start a second. Shaw and Sørensen also looked at these portfolio founders, who kept their first firm open as they opened their second firm, and made up 83% of all serial founders.

Young serial entrepreneurs’ second firms generally don’t fail as often or as fast as those run by novice founders. New firms run by novices fail, on average, three and a half years after opening.

The researchers also looked at the effects of parental business experience. Seven percent of the founders they studied had a father who was an entrepreneur. The probability that these founders would open an incorporated firm rather than a sole proprietorship was 4.3 percentage points higher when their fathers were entrepreneurs. The children of entrepreneur fathers also generated sales that were 5.9% higher than those of other founders.

As young serial entrepreneurs progress, they’re also more likely than older ones to register their second new business as an LLC, the researchers discovered, which protects them from personal losses should their firms fail. This increase in LLCs as young founders age also corresponded with the rise in sales between first and second firms, suggesting a link between the two.

Founders with an LLC may be even more emboldened, Shaw says. “The advantage of an LLC is that no creditors can go after your personal wealth if your firm fails,” says Shaw. “It gives downside protection, and when you have downside protection, you’re going to take on riskier projects in starting your new firm. Outsized firm success is then more likely when the entrepreneur takes greater risks, thus moving to LLC status with the second firm underpins the second firm’s greater sales success.”

“Young successful serial entrepreneurship is synonymous with portfolio entrepreneurship,” Shaw and Sørensen conclude. They describe these portfolio founders as the “stars” of serial founders. “We show that’s a clear way of achieving success,” Shaw says.

For media inquiries, visit the Newsroom .

Explore More

From local startup to pan-african success: the beem story, strategy: it’s the big bets that matter, executive coaching: from self-doubt to self-awareness, editor’s picks.

Coming of Age: Watching Young Entrepreneurs Become Successful Kathryn Shaw Anders Sørensen

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Youth entrepreneurship is transforming our economy, but what does it take to excel as a young entrepreneur? Uncover the essentials in this no-fluff guide. We lay out the strategies that are propelling young business minds to success, the impact they’re creating, and how you can follow in their footsteps.

Key Takeaways

Youth entrepreneurship is surging, driving economic growth and innovation, and providing young people with financial independence and invaluable life skills.

An entrepreneurial mindset coupled with creativity, risk-taking, resilience, leadership, and communication skills is vital for young business success.

Support systems, including education programs, mentorship, networks, and financial resources, are critical for overcoming challenges and propelling young entrepreneurs toward achieving their goals.

The Rise of Youth Entrepreneurship

Young entrepreneurs are shaping the future of our economy, from running their first lemonade stand to seizing opportunities in the broader world of entrepreneurship, including the informal economy. With more children launching businesses, youth are empowered to gain financial independence and foster their growth while generating employment for others.

No matter the age, anyone can start up their own business. Even a simple lemonade stand provides first-hand experience and imparts important life skills such as problem solving, customer relations and money management. For those interested, here's a great resource on how to start a lemonade stand , which can be the first step in a young entrepreneur's journey. These experiences will likely lead to success in larger entrepreneurial ventures down the road.

The blend of creativity and innovation brought forward by young entrepreneurs, whether they're selling lemonade or launching a tech start-up, has transformed how we view this space. It spans both traditional markets and modern technology platforms that enable new possibilities for today's youth.

Factors Contributing to the Growth

The youth entrepreneurship movement is driven by a variety of contributing elements, primarily access to knowledge. In today’s digital world, young entrepreneurs, even those running a simple lemonade stand, have access to an abundant selection of data and materials that aid them in making informed decisions, seizing chances for success and competing in the market efficiently. This advantageous availability benefits not just them but also suppliers they use as well as their employees, all having an impact on the greater community at large.

Supportive networks are crucial for young entrepreneurs, especially for elementary and middle school students who may be dipping their toes in entrepreneurship through ventures like lemonade stands. Being part of such a network creates a powerful atmosphere amongst like-minded individuals. This environment connects these aspiring entrepreneurs to larger circles. These circles offer invaluable advice and guidance. They also provide necessary tools like mentorship from successful role models.

These role models, who may have started their entrepreneurial journey with a lemonade stand, offer advice that is even more valuable. This support helps young entrepreneurs tap into the fast-evolving global economy. It's an economy where creativity often wins over competition from existing companies. This pushes forward growth and encourages more youthful participation within the industry, be it running a lemonade stand or launching a tech start-up.

Impact on the Global Economy

Young entrepreneurs, including those starting with simple ventures like running a lemonade stand, have a profound influence on the global economy. Not only do they generate profits, but they also make invaluable contributions to society by creating jobs and offering meaningful employment opportunities to others. These young innovators, even those who start with a lemonade stand, help foster an innovative spirit and introduce fresh ideas into the market. These contributions promote economic growth for developed countries as well as aid development in countries that are in need.

Entrepreneurship, even at the level of a lemonade stand, can help these less fortunate nations reduce poverty through job creation, alleviate income inequality, and catalyze their overall development progress – successes made possible with youth ambition at its center point. Thus, businesses managed by young people can be seen not just generating profit or increasing productivity but rather that it is making notable differences too far-reaching than what money alone could accomplish.

Building an Entrepreneurial Mindset

Fostering an entrepreneurial mindset is essential for the success of young entrepreneurs. This involves more than just business knowledge and technical expertise, it encompasses various attitudes and behaviors that will help them surmount difficulties, capture opportunities, and advance their enterprises forward. These include traits such as creativity and innovation, which can be honed through simple ventures like running a lemonade stand. For instance, learning a simple lemonade recipe can be the start of understanding product development.

Risk taking and tenacity are also crucial, which can be learned from managing a small business, such as a lemonade stand. Command and interaction, when blended together, equip these budding entrepreneurs with all the skills required to realize their ideas into successful businesses, whether they start with a lemonade stand or aim for a tech startup, making a substantial contribution to society.

Creativity and Innovation

Young entrepreneurs have the opportunity to stand out in today’s business world by utilizing creativity and innovation, even when it comes to running a simple lemonade stand. By creating unique concepts, products or services, like a lemonade stand with a special twist, they can gain a competitive edge that allows them to respond quickly with solutions when faced with market changes. For some creative lemonade stand ideas , check out this link.

Entrepreneurship provides an environment for budding professionals to develop ideas which meet their customer’s evolving needs while also challenging current norms of thinking. Even a lemonade stand can be a platform for them to experiment and learn from their mistakes. By encouraging experimentation and learning from mistakes as part of their entrepreneurial journey, young innovators will create businesses that are ahead of the game using modern strategies born out of creative problem solving.

Risk-taking and Resilience

Young entrepreneurs need to develop an entrepreneurial mindset which includes risk-taking and resilience. They must be open to taking calculated risks, trying new things, and leaving their comfort zone in order for a business venture to be successful. This includes coming up with catchy lemonade stand names to attract customers.

This is something that can easily start with children as even running a lemonade stand offers valuable lessons about these essential qualities of entrepreneurship. By being able to take chances while managing adversity constructively so they gain more insight into how businesses work effectively.

Leadership and Communication

Young entrepreneurs need to hone two key skills in order to lead their businesses effectively; leadership and communication. This development can start as early as running a small venture like a lemonade stand. Creative lemonade sign ideas can be a fun way to practice marketing and communication skills.

Making strategic decisions about pricing and product, motivating peers to join in, and building meaningful relationships with customers are all part of the process. Likewise, being able to articulate ideas clearly, comprehend what customers want, and negotiate well are skills that can be nurtured in these early stages.

These abilities are essential for young business owners to succeed in achieving their goals, whether it’s a lemonade stand or a tech startup. Thus, investing time into honing these capabilities from the get-go is of great importance for the success of any entrepreneur’s venture!

Inspiring Examples of Successful Young Entrepreneurs

Young entrepreneurs around the world have used their ideas and enthusiasm for entrepreneurship to create successful businesses. These ambitious trailblazers, who come from different backgrounds and industries, are setting examples by making a real difference with their passion for business-building. Essential to their success are the right tools and resources, such as finding the best lemonade stand supplies .

From technology innovators disrupting entire sectors of industry to social entrepreneurs utilizing sustainable practices in pursuit of solutions to big problems. Even creative minds find success through art - these motivated youth truly showcase what can be accomplished when armed with entrepreneurial spirit.

Technology Innovators

Young entrepreneurs, such as Mark Zuckerberg and Dustin Moskovitz who founded Facebook, prove that age does not define success in technology. The stories of these ambitious minds emphasize the necessity to have technical skills, passion for innovation, perseverance, which all contribute to achieving goals when creating products/services with a technological aspect. Similarly, even a simple lemonade stand flyer can be a step towards mastering marketing skills.

Their accomplishments show how vital it is for young entrepreneurs like them to adapt swiftly given their ever changing industry landscape so they can utilize modern technologies in order to maximize potential successes.

Social Entrepreneurs

Many young entrepreneurs are utilizing their businesses for social development. Notable examples include Kamaria Warren who founded Brown Girls Stationery, Lily Born the creator of Kangaroo cup and Fraser Doherty a leader in community beekeeping projects. These ambitious business people have created meaningful change in society by establishing companies that not only focus on making profits but also have the goal to tackle environmental and societal problems too. Even the aesthetics of a business, like lemonade stand decor , can reflect its values and mission.

Positively impacting lives as well as initiating progress within local communities with entrepreneurial methods. This highlights how being an entrepreneur can be used constructively creating motivation among other innovators aiming to make beneficial contributions through their own enterprises.

Creative Visionaries

Young people in the creative fields are achieving success by turning their artistic talents into thriving companies. Examples of such entrepreneurs include Moziah Bridges and his collection of ties and accessories, as well as Mia Monzidelis who has made waves with her Power Pony concept. They also learn to navigate the legal aspects of business, such as understanding if you need a permit for a lemonade stand .

These innovative businessmen have demonstrated that creativity can be used to achieve great accomplishments both financially and culturally. They bring color and beauty to our world while generating profit at the same time.

Their stories serve to inspire others on how one’s ideas should never remain just an idea – if you work hard enough then it could turn out successful like these very inspiring entrepreneurs show us every day!

Supporting Youth Entrepreneurship: Programs and Initiatives

Young entrepreneurs need the right support and resources to turn their business ideas into successful ventures. They require educational programs, mentorship opportunities, financial resources as well as training to help them navigate any potential challenges along the way. Engaging in activities like a lemonade stand game can also be a fun and educational way to learn about business. This kind of backing enables young entrepreneurs with knowledge, skills and necessary networks for beginning or expanding businesses in order to reach success.

The learning process within these programs not only provides an understanding of how things work, but also gives access to important connections that can greatly benefit a startup’s growth prospects while equipping them with the tools they would otherwise have no chance of obtaining alone, thus nurturing innovative minds toward achievement goals desired by all aspiring innovators. With this combination provided, motivated individuals are able more easily succeed in turning viable concepts into lucrative realities fueling innovation through proactive initiatives world wide.

Educational Programs

Youth entrepreneurs can benefit immensely from educational programs designed to bolster their business acumen and skills. Programs such as workshops, online courses, competitions, mentorship schemes, and initiatives like Lemonade Day offer young people the chance to gain practical experience with regards to topics like starting a company, analyzing markets and concepts, along with financial literacy and sales strategies that help them succeed in this area of work.

For kids attempting their own entrepreneurial endeavors (such as running lemonade stands), taking part in an education program or participating in events like Lemonade Day provides the perfect opportunity for children to gain hands-on knowledge in all areas of enterprise. This allows them to develop invaluable traits which may one day prove beneficial in any future ventures they embark on.

Mentorship and Networking Opportunities

Mentorship and networking can be incredibly valuable for young entrepreneurs to achieve success. Having a mentor provides guidance, support, encouragement and an example of what is possible with dedication. Networking enables them to connect with other business owners and professionals as well as potential customers, which opens up new paths of opportunity. These two important resources are essential in order to help build successful businesses for future generations of budding entrepreneurs.

Financial Support and Resources

Many young entrepreneurs have innovative business ideas, yet find it difficult to acquire the necessary capital. To get around this problem, they can depend on personal savings and contributions from friends or family members as well as receive loans or investments from angel investors and government grants.

Crowdfunding sites such as Kickstarter, Indiegogo, GoFundMe, Patreon are also becoming increasingly popular in providing resources for entrepreneurial ventures initiated by youth. Not only do these avenues offer monetary aid, but they also provide an initial platform to increase awareness of their venture amongst potential customers.

Young people hoping to gain funds through crowdfunding need merely pitch their businesses’ plans online directly reaching out to a larger public who may be interested in sponsoring them financially. This type of support allows startups access much needed backing along with creating customer leads for new enterprises at the same time, two advantages which prove especially beneficial when starting off small operations like that favored by aspiring entrepreneurs today.

Overcoming Challenges in Youth Entrepreneurship

For entrepreneurs, especially young ones, achieving success means conquering various obstacles. Things like managing their studies and businesses together or obtaining access to capital must be tackled in order for them to reach the goals they have set out with their business ventures. With commitment as well as proper planning of strategies and harnessing needed resources, however. These issues can easily be overcome enabling budding entrepreneurs to concentrate more on honing skills vital for being an entrepreneur while gaining progress towards successes that go beyond merely starting a lemonade stand but rather striking it big through innovative startups.

Balancing Education and Business

Young entrepreneurs often face the challenge of having to divide their attention between schoolwork and running a business. Fortunately, with careful planning and efficient time management, this problem can be effectively dealt with.

Parents have an instrumental part in helping their children achieve success by being there for support while providing resources such as guidance on how best to prioritize tasks so that both education and entrepreneurship are given appropriate attention. With the right level of assistance from loved ones, young aspiring businessmen/women will easily find ways to excel at all they set out to do academically or entrepreneurially!

Access to Capital

For young entrepreneurs, getting the necessary funding for their business ideas is a big challenge. Despite having great concepts in mind, limited financial resources may prevent them from setting up a new venture. With ambition and effective planning, it can still be accomplished through various methods such as personal savings or investment received from family members and friends, loans provided by banks or investors, and government grants. And crowdfunding platforms. These are just some of the possibilities that aspiring businessmen must take advantage of to get the sufficient capitalization needed to turn these unique notions into thriving enterprises.

Building a Supportive Network

Young entrepreneurs aiming for success must construct a strong support system. They can gain insight and resources by creating connections with mentors, peers in the same industry, and other experts. Such networking helps to negotiate entrepreneurship related issues while learning from others’ experience as well as allowing exposure of their businesses.

To form such networks, young entrepreneurs should participate actively at events or programs dedicated to entrepreneurship. Get involved in clubs/organizations that focus on it, look out for potential mentors specialized in this field, use digital channels (platforms and social media) to reach like-minded people, collaborators and eventually consumers. A supportive network gives ambitious business owners more chances to achieve successful results in their endeavors.

The journey of youth entrepreneurship has the potential to bring exciting opportunities for young people, allowing them to learn and evolve while also making an impact on our society. Through their creative business ideas (from a simple lemonade stand to launching tech startups), these budding entrepreneurs are helping shape today’s ever-changing market landscape with groundbreaking innovation.

As rewarding as it may be, embracing this entrepreneurial lifestyle is not without its difficulties. By equipping themselves with the right attitude along with necessary knowledge and resources, they can conquer any obstacle that comes in their path to success. We congratulate those already taking part in this venture now – being able to forge ahead into tomorrow’s world through their courageous decisions made today!

Frequently Asked Questions

Why is youth entrepreneurship important?

Youth entrepreneurship is incredibly valuable due to the innovative solutions it offers. Starting at an early age, these young minds generate ideas that can have a positive effect on society and address pertinent global issues.

By promoting entrepreneurial activity in youngsters, we inspire them to be problem-solvers as well as encouraging creative thinking, which may result in incredible inventions of benefit for all.

What is the youngest age to be an entrepreneur?

Anyone of any age can start a business, except in states where it’s expressly prohibited. In California, a 12-year-old can technically start an LLC with the help of a parent or guardian to navigate the process.

What is the disadvantage of youth entrepreneurship?

The challenge of youth entrepreneurship comes from the lack of knowledge that leads to a costly learning process for these young entrepreneurs. They often have difficulty getting financial support such as loans and investments due to limited access. This can make it difficult for them to grow their ventures successfully without having been exposed beforehand in this area. With perseverance and determination, most are capable of making progress along their entrepreneurial journey.

What is a youth entrepreneur?

Youth entrepreneurs are driven individuals who focus on business opportunities, even with the risks involved. They actively create and manage their own ventures in order to tackle economic issues like unemployment or poverty. Such enterprising young people look for ways to move forward despite any potential setbacks that may occur along the way.

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The Rise Of Young Entrepreneurs: How Millennials And Gen-Z Are Shaping The Business Landscape

Introduction

In an era defined by rapid technological advancements and shifting societal values, a new wave of entrepreneurs is emerging to challenge traditional notions of business and reshape industries worldwide. Millennials and Gen-Z, with their unique characteristics, innovative mindsets, and digital fluency, are at the forefront of this entrepreneurial revolution. Their ability to leverage technology and embrace social responsibility is not only transforming their respective sectors but also leaving a profound impact on the global business landscape.

Embracing Technology for Innovation

One of the key ways in which young entrepreneurs are reshaping the business landscape is through their adeptness at leveraging technology. Having grown up in the digital age, Millennials and Gen-Z possess an inherent understanding of technology and its potential to disrupt industries. They are quick to identify gaps and inefficiencies in existing systems and leverage technology to create innovative solutions.

Whether it’s developing cutting-edge apps, harnessing the power of artificial intelligence, or utilizing data analytics to drive business decisions, young entrepreneurs are pushing the boundaries of what is possible. Their fearless approach to embracing emerging technologies not only allows them to stay ahead of the curve but also opens up new opportunities for growth and success.

Social Responsibility and Purpose-Driven Ventures

Another defining characteristic of young entrepreneurs is their commitment to social responsibility and creating purpose-driven ventures. Millennials and Gen-Z are deeply passionate about making a positive impact on the world, and they view entrepreneurship as a means to bring about meaningful change. They prioritize sustainability, ethical practices, and social causes, aligning their business models with their personal values.

From launching eco-friendly startups that combat climate change to implementing fair-trade practices that support marginalized communities, young entrepreneurs are redefining success beyond financial metrics. They understand the importance of creating businesses that address pressing societal issues and contribute to the well-being of both people and the planet. By intertwining profit with purpose, they are inspiring a new generation of entrepreneurs who see business as a force for good.

Collaborative and Disruptive Mindset

Millennials and Gen-Z entrepreneurs possess a collaborative and disruptive mindset that sets them apart from previous generations. They actively seek out partnerships, collaborations, and mentorship opportunities to learn from industry experts and tap into diverse networks. This collaborative approach allows them to pool resources, share knowledge, and accelerate their growth.

Furthermore, young entrepreneurs are unafraid to challenge established norms and disrupt traditional industries. They approach problems with fresh perspectives and are not bound by conventional thinking. This willingness to challenge the status quo enables them to identify untapped opportunities, break down barriers, and introduce innovative business models that revolutionize entire sectors.

The Power of Digital Fluency

The digital fluency of Millennials and Gen-Z is a significant driving force behind their entrepreneurial success. Having grown up in a digitally connected world, they have a deep understanding of social media, online marketing, e-commerce, and digital platforms. This fluency allows them to reach a global audience with ease, build strong personal brands, and connect with customers in ways that were previously unimaginable.

Young entrepreneurs leverage the power of social media to raise awareness about their ventures, build communities, and engage directly with their target audience. They harness the potential of e-commerce to establish online stores, eliminating the need for traditional brick-and-mortar setups. This digital prowess gives them a competitive edge and the ability to scale their businesses rapidly.

The rise of young entrepreneurs, particularly Millennials and Gen-Z, is transforming the business landscape in unprecedented ways. Their innovative mindset, digital fluency, social responsibility, and collaborative approach are revolutionizing industries across the globe. As they continue to challenge conventional norms, embrace emerging technologies.

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Entrepreneurship in the twenty-first century

• Open access
• Published: 05 October 2021
• Volume 58 , pages 27–40, ( 2022 )

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• John Haltiwanger 1 , 2  

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Employer business startups contribute disproportionately to job creation, innovation, and productivity growth. This contribution is dynamic and complex involving much trial and error. Most startups fail or do not grow but a small fraction grow rapidly contributing substantially to economic performance. In the USA, there has been a decline in startup rate and the share of activity accounted for by young firms over the last couple of decades. This decline has accelerated and become pervasive in the post-2000 period even in innovative-intensive sectors. The flip side of this change is an accompanying increase in the share of activity accounted for by mega (10,000 +) firms in the post-2000 period. While both benign and adverse factors may underlie these structural changes, the post-2000 period has also exhibited a decline in productivity growth along with indicators of business dynamism. The global pandemic has had a major adverse impact on health, morbidity, daily life, and economic activity. However, there has been a surge in new business applications that may signal a turning point in entrepreneurial activity.

Plain English Summary

In the twenty-first century, we have witnessed a sharp decline in the number of new startups in the USA across all sectors, including those sectors considered high-tech and innovative. The reason why this has occurred is still open for discussion and debate. This development is worrying as new startups contribute disproportionately to job creation, innovation, and productivity growth. Alongside this, the global pandemic has brought about a massive reduction in economic activity and its restructuring. At the same time, there has been a distinct increase in applications for new businesses, especially in industries that facilitate remote interactions between businesses and consumers and businesses and workers. It is an open question whether this reverses the long-run trend of declining entrepreneurship that the USA has been experiencing or if this has only brought about a temporary change. There will be plenty of opportunities for future research to disentangle the reasons for and persistence in the business dynamics seen in US data.

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Much evidence shows that new employer startups contribute disproportionately to job creation, innovation, and productivity growth. Entrepreneurs both are induced by and induce innovation. This contribution of new employer businesses reflects patterns of trial and error and experimentation. Most new businesses fail within the first five years of entry and, conditional on survival, most do not grow (see Haltiwanger et al., 2013 , and Decker et al.,  2014 ). However, a relatively small fraction of young businesses grow very rapidly and it is these high growth firms that are especially important for job creation that persists, innovation and productivity growth. Footnote 1

While high growth firms are more likely to be found in innovative-intensive sectors (see, e.g., Acemoglu et al.,  2018 , Guzman and Stern,  2020 , and Decker et al.,  2016 ), young businesses in these sectors exhibit enormous dispersion and skewness in post-entry growth and other performance measures. Footnote 2 Indeed, consistent with the theories of experimentation and learning from Gort and Klepper ( 1982 ) and Jovanovic ( 1982 ), sectors that are undergoing rapid restructuring and innovation have a distinct dynamic pattern of entry, productivity dispersion, and productivity growth (see Foster et al.,  2021 ). Specifically, surges of entry in innovative sectors first yield an increase in dispersion of productivity and growth rates across firms in the sector along with a decline in productivity growth. It is only after an experimentation and learning period including a shakeout process that productivity growth ensues.

Evidence shows that this characterization of the contribution of entrepreneurship to innovation is consistent with evidence from virtually the entire twentieth Century. However, in the twenty-first century, there has been a notable decline in the contribution of young businesses in the USA even in innovative-intensive sectors such as high tech. Much ongoing research attempts to explain this decline in entrepreneurial activity (see, e.g., Davis and Haltiwanger,  2014 , Decker et al.,  2014 , 2016 , Decker et al.,  2020 , Karahan et al.,  2021 , Salgado,  2017 ) and the accompanying increasing dominance of large, multi-national firms (see, e.g., Autor et al.,  2020 ).

The global pandemic starting in early 2020 and continuing into 2021 has generated a massive downturn in economic activity that may be a turning point for entrepreneurship in the twenty-first century. The pandemic has had enormous adverse consequences for health, morbidity, social interaction, and economic activity. The negative effects of the pandemic are staggering. Perhaps in reaction to the large negative but uneven shocks to economic activity, there has been a surge in applications for new businesses in the pandemic that has been large and distinct (see Haltiwanger, 2021 ). The total number of applications in 2020 is the highest by far compared to all years for which the data have been available (since 2004). The increase from 2019 to 2020 in total applications exceeds 20% which is double the growth rate in any other year. The increase is in applications for both likely employers and likely non-employers. The increase in 2020 is wholly accounted for by a surge in applications in the second half of 2020. Based on historical patterns, this surge in applications should result in a surge in new employer and non-employer businesses.

The surge in new business applications has been uneven across sectors. Ten 3-digit industries out of about 100 3-digit industries account for 75% of the surge. Dominant industries include Non-store Retail (alone accounting for 33% of the surge); personal services; professional, scientific and technical services; administrative and support services; truck transportation; and accommodation and food services. Given that existing small businesses in Retail Trade and Accommodation and Food Services have suffered especially large declines in the pandemic, these patterns are consistent with restructuring induced by the pandemic (see Buffington et al.,  2021 ).

As the economy recovers from the pandemic, an open question is the extent to which the changes in business operations (especially increases in remote/telework activity) observed during the pandemic will persist. The extent to which these changes “stick” is likely to vary across types of businesses and locations. The shift towards e-commerce is likely to stick as this reflects a pre-pandemic trend. Viewed from this perspective, the pandemic may be accelerating ongoing trends and the surge in business applications is part of this process.

This paper explores the latest evidence on these changing patterns of entrepreneurship in the twenty-first century using the Business Dynamic Statistics (BDS) and the Business Formation Statistics (BFS) for the USA. Section  1 describes the data. Section  2 reviews the basic facts on the evidence of declining entrepreneurship in the USA using sectoral variation to help shed light on the alternative hypotheses that have been proposed. Section  3 reviews the evidence on new business applications from the BFS. The BFS offers high frequency (weekly and monthly) real-time evidence on new business applications. Sectoral variation again provides key insights to interpreting the surprising surge in new business applications during the pandemic. Concluding remarks are provided in Section  4 .

1 Data (BDS and BFS)

The analysis of young-firm activity in this paper relies heavily on two US Census Bureau statistical products: BDS and BFS. Footnote 3 The BDS includes employment statistics by firm size, firm age, and industry tabulated from micro data in the Longitudinal Business Database (LBD). Footnote 4 The LBD covers the universe of firms and establishments in the non-farm business sector with at least one paid employee. Employee counts pertain to the payroll period covering the 12th of March in each year from 1976 to 2018. Firm characteristics reflect the national firm. Firm age in the BDS reflects the age of its oldest establishment when the firm first became a legal entity. For a startup business comprised all new establishments, firm age is initially set to zero. For firms newly created from one or more existing establishments through a merger, spinoff, or corporate reorganization, firm age is initially set to the age of its oldest establishment. From that point forward, the firm ages naturally as long as it exists. Simple ownership changes do not trigger a change in firm age, and the BDS concept of business startups reflects new firms with only age-zero establishments. These features of the BDS are a major strength, as they ensure that our young-firm activity measures and their evolution are not distorted by firm restructurings and ownership changes.

For simplicity and brevity, the analysis in this paper focuses on two age groups: “young” firms that are ten years or less, and “mature” firms that are at least eleven years old. Footnote 5 Using these definitions, the BDS enables us to track young- and mature-firm activity measures at the national and detailed (4-digit NAICS level) from 1987 to 2018. Firm size is based on the number of workers at the national firm. In this paper, firm size is based on the size of the firm in t -1 (except for startups which use size in t ). Small firms are defined as firms with less than 500 employees, large firms are firms with 500 or more employees, and mega firms are those with 10,000 or more employees. The BDS enables classifying firm size by detailed industry and firm size by firm age but not a three-way classification.

The BFS is derived from administrative data from the Internal Revenue Service (IRS) on Employer Identification Number (EIN) applications. All employer businesses in the USA are required to have an EIN to file payroll taxes. New non-employer businesses also file for an EIN if forming a partnership or an incorporated business. Even new sole proprietor non-employers often file for an EIN to facilitate their business activity (e.g., working with other businesses or opening a business bank account). The EIN application form includes the name and address of the applicant and business, business start date, type of business entity, principal industry, and planned date of initial wage payments (if applicable). The filing date and business location information are used to aggregate individual applications to weekly and monthly frequency. The IRS transmits these applications to Census on a weekly flow basis in virtually real time.

The detailed information on the application permits decomposing new business applications (BA) into likely employers and likely non-employers. Businesses that have a high propensity of becoming an employer business based upon, for example, the application indicating planned wages are designated as High-Propensity Business Applications (HBA). Consistent with Bayard et al. ( 2018 ), evidence presented in this paper shows that there is a tight relationship between HBA and actual new employer startups over the subsequent 8 quarters. The difference between BA and HBA is referred to as likely non-employers (NHBA) in this paper, and the analysis in Haltiwanger ( 2021 ) shows that fluctuations in NHBA closely track fluctuations in non-employers. The public domain BFS also includes series by geography (state) and industry. The geographic and industry variation permits analysis of the dispersion in entrepreneurial activity across sectors and locations.

2 The decline of young businesses and the rise of “superstar” firms

2.1 basic facts.

The shift away from young, small businesses towards large, mature businesses is depicted in Fig .1 . At an economy-wide level, this shift has been ongoing since the late 1980s. Figure 1 masks substantial heterogeneity across industries in the changing structure of businesses by firm age and firm size. The BDS does not provide information by three-way characteristics (i.e., it does not provide firm age by firm size by industry) so the analysis here is for two sets of two-way pairs (by firm age and industry and then by firm size and industry).

Source: Business Dynamics Statistics. Note: young < 11, mature 11 + , small < 500, large 500 + 

Changing composition of employment by firm age and firm size.

Figures 2 and 3 show the evolving share of employment at young and mature firms by selected sectors. The 4-digit NAICS BDS statistics are used to classify industries into high-tech industries following Decker et al. ( 2020 ). This classification is based on the science, technology, engineering, and mathematics (STEM) intensity of the industry in terms of occupation mix and includes all of Information and Communication Technology (ICT) industries plus industries in biotech (e.g., high tech includes NAICS 5417, Scientific and Research Services which in turn includes Research and Development in Biotechnology, NAICS 541711).

Source: Business Dynamics Statistics

Changing share of employment at young firms, selected sectors.

Changing share of employment at mature firms, selected sectors.

Industries such as manufacturing and Retail Trade (and Food and Accommodation Services) Footnote 6 have exhibited long-run declines in the share of employment accounted for by young firms and the accompanying rise in the share of employment activity accounted for by mature firms. In contrast, the high-tech sector exhibited an increase in the share of activity accounted for by young firms through the early 2000s, but it has declined substantially since then.

There has been a growing shift in employment to large and even mega firms over this period (see Figs .4 and 5 ). These patterns have also been uneven across sectors and industries. Retail Trade (and Food and Accommodation Services) has exhibited the largest and steadiest increases. Manufacturing has exhibited a long-run secular decline which is striking given the shift towards more mature manufacturing firms. The high-tech sector has exhibited a decline in the share of employment at large and mega firms through 2000, and it has been relatively flat since then.

Changing share of employment at large firms.

Changing share of employment at mega firms.

Figure 6 shows that some of these patterns reflect distinct differences at a more detailed industry level. For manufacturing, there has been a secular decline in the share of employment at mega firms both for traditional manufacturing such as autos and petroleum and coal products and for high-tech industries such as communications equipment and computer manufacturing. For Retail Trade, there has been especially large increases in the share of employment at mega firms in detailed industries such as (other) general merchandise stores. For the non-manufacturing components of high tech (e.g., software publishing), there has been an increase in the share of employment at mega firms in the post-2000 period.

Changing share of employment at mega firms, selected detailed industries. A Manufacturing. B Retail Trade + Food and Accommodations. C Selected high-tech industries (non-manufacturing).

Over this period, there has been a shift within high tech away from manufacturing to the non-manufacturing components. Figure 6 helps account for the overall decline in mega firms in high tech given this shift as the manufacturing components have higher mega shares than the non-manufacturing components. Still, it is interesting that key non-manufacturing components of high tech have rising mega shares especially post-2000.

2.2 Interpretation

The economy-wide trend decline in activity accounted for by young businesses has led many to seek mono-causal explanations for the decline. These include the aging of the population (see, e.g., Karahan et al.,  2021 , and Hopenhayn et al.,  2020 ) and skill-biased technical change that favors larger, mature firms (Salgado, 2017 ). While these common factors are likely at work, the distinct patterns at the sectoral and industry level raise questions about mono-causal explanations of the changing structure of activity. Retail Trade has been undergoing a structural transformation for decades away from single-unit establishment firms (“mom and pop firms”) to large, national chains (see, e.g., Foster et al.,  2006 , 2015 ). Globalization and advances in information technology facilitate more efficient distribution networks for large, global firms particularly in sectors such as Retail Trade. The evidence shows that establishments of large, global firms are substantially more productive than single-unit establishment firms within the same sector. As such, this shift towards mega firms in Retail Trade has been productivity-enhancing. This discussion suggests that the rise of superstar firms in Retail Trade is thus potentially associated with benign factors.

It is difficult to make the case that benign factors account for all the patterns in the data. The innovative-intensive industries in high tech exhibited a surge in young firm activity in the 1990s and only exhibit a decline in the post-2000 period. Foster et al. ( 2021 ) show a tight connection between a surge in entry and subsequent productivity growth in the high-tech industries over the 1990s and beyond. Using detailed 4-digit NAICS sectors and 3-year non-overlapping periods, they find that a surge in entry in one 3-year period first leads to a rise in within-industry dispersion in productivity and actually a mild decline in industry-level productivity growth in the next 3-year period. However, in the subsequent 3-year period, there is a surge in industry-level productivity growth and a decline in within-industry productivity dispersion.

These patterns for high tech are consistent with the models and evidence in Gort and Klepper ( 1982 ) and Jovanovic ( 1982 ) that highlight that innovation both is induced by and induces entrepreneurship. Gort and Klepper ( 1982 ) provide examples over the entire twentieth century showing that industries undergoing high pace of innovation first observe a surge in entry, then a shakeout process and then the growth of the surviving firms.

Viewed from this perspective, innovation and entrepreneurship go hand in hand especially in industries where experimentation and trial and error are a critical part of the innovation dynamics. Figures 2 and 3 can be interpreted as reflecting a period where one key part of the economy (the industries in the high-tech sector) underwent these type of dynamics. Figure 7 provides supportive evidence consistent with Foster et al. ( 2021 ) showing that the surge in productivity in the 1990s and 2000s was driven by the high-tech component of the economy. Since the mid-2000s, Figs. 2 , 3 , and 4 together indicate that there is little evidence of any sector seeing the type of surge in young firm activity and the accompanying surge in productivity growth that the high-tech sector exhibited in the 1990s and early 2000s. It is also striking that in this era of rising mega firms in the high-tech sector (Fig. 6 ), productivity growth has slowed in the high-tech sector.

Source: Bureau of Labor Statistics

Declining productivity growth post-mid 2000s.

An open question is why there has been this coincident slowdown in productivity growth and a pervasive decline in young firm activity in the post-2000 period. One hypothesis is that innovation itself has slowed down (see, e.g., Gordon,  2015 ). Alternatively, but perhaps not unrelatedly, there have been other structural changes in the economy over this period. Accompanying the decline in young share activity is a decline in indicators of business dynamism (see Fig. 8 ). Figure 8 shows considerable heterogeneity in the patterns of the decline in business dynamism across sectors. These differences largely mimic the changes in the share of young firm activity in Fig. 2 . This is not surprising since young businesses exhibit a higher pace of business dynamism. However, Decker et al. ( 2014 , 2020 ) show that the changing age composition of firms can account for at most 30% of the decline in business dynamism.

Declining dynamism.

The causes of this decline are not yet well understood but Decker et al. ( 2020 ) provide evidence of an increase in adjustment frictions especially amongst young firms. Specifically, they find that the responsiveness of employment growth and investment to realizations of productivity have declined in the post-2000 period. They also find an increase in dispersion of revenue productivity measures within industries consistent with rising frictions or distortions. In related work, DeLoecker et al. (2020) find evidence of rising average and dispersion in markups across firms.

It is possible the benign and adverse effects of the changing age and size structure of firms are related. The rise of superstar firms from globalization, information technology, and other factors such as increased importance of network externalities may also underlie the rising markups and declining dynamism. Large incumbents have an incentive to engage in more defensive innovations (see, e.g., Akcigit and Kerr,  2018 ) and to stifle competition by killer acquisitions (Cunningham et al.,  2021 ) of young, innovative startups.

This perspective leads to a less optimistic outlook for future growth and the role of entrepreneurship in contributing to that growth in the twenty-first century. Not all share that less optimistic view given the major advancements in technology that seem to be just around the corner in terms of widespread adoption such as AI, robotics, and automation (see, Brynjolfsson and Mitchell,  2017 ). Indeed, Brynjolfsson et al. ( 2020 ) argue that the more recent advances have greater “J-curve” effects in terms of the disruption and slow diffusion process that often accompanies the introduction of innovation into the market place. While these arguments are interesting, the long history of young firms being critical in the experimentation with new technologies raises questions about whether the introduction of these new technologies will somehow be different in the twenty-first century.

3 The surge in new business applications in the pandemic

3.1 basic facts.

The patterns of new business applications (BA, HBA, and NHBA) from 2004:m7 through 2021:m4 are shown in Fig. 9 . The upward trend in NHBA and the downward trend in HBA from 2004:m7 through 2020:m4 are evident. At the outset of the pandemic, there is a sharp decline in BA, HBA, and NHBA in March through May 2020. However, by June 2020, the number of applications of all types exceeds any month from January 2019 through February 2020. The surge in applications of all types peaks in July 2020 but the numbers in August 2020 to April 2021 exceed the number of applications in all prior months back to 2004:m7 for BA and NHBA and in all prior months back to 2007:12 for HBA. April 2021 is the third highest month on record for all series.

Source: Business Formation Statistics

Applications for new businesses for likely employers and non-employers.

HBA tracks actual and projected transitions to new employer startups as shown in Fig. 10 . Indices are depicted in Fig. 10 given differences in levels, and the projected transition series is for transitions to employer business over the next 8 quarters. The transition rate is lower than 50% (see Bayard et al., 2018 ) even for HBA, highlighting that HBA should be interpreted as an indicator of nascent entrepreneurship in terms of potential new employer startups. However, since the correlation in the monthly index series is 0.88, it is apparent that variation in this indicator of nascent entrepreneur closely tracks variation in new employer startups. The BFS does not provide indicators of actual or projected new non-employers. However, a comparison of NHBA with published non-employer statistics indicates a tight relationship as discussed in Haltiwanger ( 2021 ).

Tight relationship between HBA and new employer business startups.

The weekly data enable a detailed comparison of the dynamics of new business applications in the COVID-19 Recession. A simple event study characterization of the dynamics is instructive following Dinlersoz et al. ( 2021 ) and Haltiwanger ( 2021 ). The reference week (0) is defined as week 10 of 2020 (the week ending March 13, 2020. The cumulative changes in applications (backwards and forwards) relative to week 10 of 2020 are first calculated. Then, the same computation is made for week 10 of 2018. Presented in Fig. 11 is the cumulative differences.

Source: Business Formation Statistics. Note: week 0 in crisis is week ending March 13, 2020. Week 0 in reference period is week ending March 10, 2018

Surge in new business applications during COVID-19 crisis.

Prior to the crisis (i.e., prior to week 10 in 2020), applications for likely employers in the first 10 weeks of 2020 were similar to those for the base period of 2018. Shortly after mid-March 2020, applications fell initially relative to the similar period in 2018 but then have risen dramatically. By early May 2021, new applications for likely employers were almost 500 K greater over a similar period from March 2018 through early May 2018. For likely non-employers, the first part of 2020 had slightly higher applications than the comparable first part of 2018. Applications for non-employers also declined initially early in the crisis but then quickly rebounded. By early May 2021, new applications for likely non-employers were more than 1.2 million greater than a similar period from March 2018 through early May 2019.

The surge in new business applications in the pandemic has been uneven across industries. A special release in October 2020 of the weekly BFS covering 2019:w1–2020:w40 provides 3-digit industry detail for overall applications. Figure 12 presents the same type of exercise as in Fig. 11 for selected 3-digit NAICS sectors. Since these data are only available only starting in 2019:w1, the benchmark reference period is 2019 in Fig. 12 rather than 2018. The surge in new applications is greatest for Non-store Retailers which increased its number of applications by about 200,000 over this period. In 2019, Non-store Retailers accounted for only 9% of overall applications. Thirty-three percent of the increase in applications from 2019 to 2020 is accounted for by this industry alone. Other industries with large increases include Personal Services; Professional, Scientific, and Technical Services; Administrative Services; and Trucking and Food Services.

Source: Business Formation Statistics. Note: week 0 in crisis is week ending March 13, 2020. Week 0 in reference period is week ending March 9, 2019

Surge in new business applications during COVID-19 crisis. Top contributing 3-digit industries.

3.2 Interpretation

As emphasized by Dinlersoz et al. ( 2021 ) and Haltiwanger ( 2021 ), this surge in new business applications in the pandemic differs greatly from the patterns in the Great Recession. In the Great Recession, applications for likely new employers declined sharply accompanied by a decline in actual new employer businesses. Explaining the reasons for these patterns is an active area for research. However, some factors already appear to be important. First, financial conditions are dramatically different across these episodes. The financial crisis that is at the root of the Great Recession included a decline in housing prices, a decline in net worth for households, and substantial challenges for bank balance sheets. Small business lending collapsed over this period. Some of this likely reflected demand side factors but Davis and Haltiwanger ( 2019 ) identify a credit supply channel that adversely impacted young businesses. In contrast, financial markets have been robust in the COVID-19 Recession with housing prices rising and financial intermediaries much healthier in this period.

Secondly, the COVID-19 Recession has induced a change in the structure of the US economy towards more remote activity and this provides incentives for new businesses to explore such potential opportunities. More broadly, the pandemic surge in business applications is associated with intensified restructuring on several dimensions. For one, entry by itself is an important component of restructuring in terms of business turnover. Second, the uneven patterns across sectors that change rapidly over a short period of time suggest that the restructuring has an important between-sector component. The sectors with especially high business application rates provide guidance about the nature of this restructuring. The dramatic rise in sectors such as Non-store Retail is consistent with the shift towards remote interactions between businesses and consumers.

Does this surge in new business applications imply there will be a surge in job creation, innovation, and productivity growth over the next few years? Related to the theme of this article, has the pandemic been a turning point in reversing the decline in entrepreneurship? Obviously, this is an open question but in considering these possibilities, several factors are important to consider. First, as discussed above, most new employer businesses fail within the first five years after entry and conditional on survival, most do not grow. A relatively small fraction of young businesses grow very rapidly and it is these high growth firms that are especially important for job creation that persists, innovation and productivity growth. All of this implies that it will take some time before we understand the implications of this surge in applications for likely new employers.

The surge in applications for likely non-employers is also of interest as an indicator of the changing structure of the economy. The number of non-employer businesses has been on an upward trend over the last 15 years or so with rapid acceleration in the post-2010 period. The surge in applications for likely non-employer thus also may reflect at least in part an acceleration of pre-pandemic trends. However, several factors suggest the surge is more complicated. For one, the surge in applications for likely non-employers are for those applying for EINs. The upward trend in non-employers pre-pandemic over the last decade has been dominated by the ridesharing industry (see, e.g., Abraham et al., 2021 ). Most of the non-employers in the ridesharing industry are sole proprietors that are not required to have an EIN. In contrast, the surge in applications for likely non-employers in the pandemic are in sectors that reflect promoting remote activity such as Non-store Retailers. Just as for new employer startups, an open question is whether new non-employers also will “stick.” A closely related question is whether the new non-employer business activity will mostly be stopgap or supplemental as in the past. Or alternatively, are we seeing an increase in the share of individuals where non-employer activity is the primary or only source of work activity?

4 Concluding remarks

Whither entrepreneurship? In the USA, there are mixed signals. On the one hand, there is a secular decline in employer startups that has become pervasive across sectors including high-tech innovative-intensive sectors in the post-2000 period. There has been a secular increase in non-employer entrepreneurship (i.e., self-employment without hiring employees) that has accelerated especially since 2010. The evidence is much of this is secondary or stopgap activity such as being a driver in the fast-growing ridesharing industry.

Accompanying this decline in entrepreneurial activity is an increasing importance in mature and large and even mega firms. This shift in activity towards large, mature firms is of course the flip side of the decline in entrepreneurship. The driving forces of these changes including whether there are changes making entrepreneurship less attractive versus making superstar firms more attractive remain open and active research questions.

While there may be benign factors at work accounting for some of these structural changes, adverse effects are likely at work as well. In the post-2000 period, there has been a decline in young share activity and the increase in mega firms in the high-tech sector. This contrasts with the 1990s when there was a shift towards younger and smaller firms in the high-tech sector. These patterns mimic the rise and fall of aggregate productivity driven by the high-tech sector over this period. Micro evidence also suggests a tight link between innovation, entrepreneurship, and productivity growth in the high-tech sector.

The global pandemic has led to a massive reduction in economic activity and restructuring of daily life. A surprising component of this period of upheaval is a surge in new business applications for likely new employer and non-employer businesses. The surge has been especially large in industries that facilitate remote interactions between businesses and consumers and businesses and workers. It is an open question how much the shift to more remote interactions in the marketplace will persist, but some persistence is likely. The surge in new business applications suggests entrepreneurs will play an important role in this restructuring. Whether this reverses the long-run trend decline in entrepreneurship or is a temporary surge remains to be seen. Even if it is a temporary surge, this highlights the important role that entrepreneurship plays in facilitating structural change in response to changing economic conditions.

Much of the empirical evidence presented in this article reflects the patterns of entrepreneurship in the USA. Evidence from Calvino et al. ( 2016 ) shows that many of these patterns hold across OECD countries.

The factors underlying the enormous heterogeneity in outcomes for entrepreneurs within narrowly defined sectors is a topic of active research. Managerial ability is likely one of the contributing factors (see, e.g., Lucas,  1978 ). Recent evidence highlights that the organizational capital created by and embedded in the founding team is important in understanding this heterogeneity (see Choi et al., 2021 ).

I have been fortunate to be part of the research teams developing the BDS and the BFS (see Haltiwanger et al.,  2009 , and Bayard et al.,  2018 ).

The BDS is a public-use database at www.census.gov/ces/dataproducts/bds/index.html .

The patterns are quite similar if young is defined as firms five years old or less. An advantage of using the narrower definition is that the patterns can be shown from the early 1980s. In examining those unreported results, the share of activity at young firms peaks around 1987, so starting in 1987, it does little to distort the characterization of the changing age structure of firms.

Food and Accommodation Services (NAICS 72) is combined with Retail Trade (NAICS 44–45) for expositional convenience but also because patterns are similar. In the legacy SIC system, much of NAICS 72 was included in Retail Trade.

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Haltiwanger, J. Entrepreneurship in the twenty-first century. Small Bus Econ 58 , 27–40 (2022). https://doi.org/10.1007/s11187-021-00542-0

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The Rise of Young Entrepreneurs: Inspiring Stories and Strategies for Success

In an era defined by rapid technological advancements and an ever-evolving job market, a new breed of go-getters is emerging: young entrepreneurs. Eager to flip the script and carve their own paths, these ambitious individuals are rewiring traditional notions of success and redefining what it means to be a leader.

From creating game-changing startups to harnessing the power of social media, the rise of young entrepreneurs is a testament to the unwavering spirit and innovative mindset of the millennial and Gen Z generations.

In this article, we will delve into inspiring stories and savvy strategies that have propelled these young pioneers towards remarkable success, guiding aspiring entrepreneurs on their own ventures of greatness. So buckle up and prepare to be inspired by the brilliant minds shaping the future of business.

The Growing Trend of Young Entrepreneurs

In recent years, the rise of young entrepreneurs has been noticeable and impactful in the business world. This growing trend is driven by several factors that contribute to its appeal and feasibility:

• Accessible technology : The widespread availability of affordable technology and online platforms has lowered the barriers to entry, allowing young entrepreneurs to start ventures with minimal resources.
• Inspiration from success stories : Hearing about young entrepreneurs who have achieved remarkable success serves as a motivation and proof that age is not a limitation in entrepreneurship.
• Changing attitudes towards risk : Younger individuals are more open to taking risks and embracing uncertainty, which are essential traits for entrepreneurship.
• Supportive networks : The emergence of startup communities, mentorship programs, and entrepreneurial education platforms provide valuable guidance and support to young entrepreneurs.
• Flexibility in work arrangements : The growing gig economy and remote work opportunities enable young entrepreneurs to pursue their ventures while maintaining flexibility in their lifestyle.

These factors combined have contributed to the increasing number of young individuals venturing into entrepreneurship, creating a vibrant and dynamic landscape for the future of business.

Defining Entrepreneurship Young

Entrepreneurship young refers to the pursuit of business ventures by individuals at a relatively young age. It signifies the willingness of young people to take risks, innovate, and create new opportunities. These individuals display a strong sense of ambition, resilience, and entrepreneurial spirit. They often challenge traditional norms and embrace unconventional approaches to problem-solving.

Entrepreneurship young enables individuals to gain valuable real-world experience early in their careers and provides a platform for self-expression. It empowers young people to transform their ideas into tangible businesses and make a meaningful impact on society. Successful young entrepreneurs inspire others, fuel economic growth, and contribute to the overall innovation ecosystem.

Benefits and Challenges Faced by Young Entrepreneurs

Young entrepreneurs have both benefits and challenges unique to their age group. One advantage is their fresh perspectives and willingness to take risks, which can lead to innovative ideas and approaches.

Additionally, young entrepreneurs often have a strong grasp of technology and social media, giving them a competitive edge in today's digital landscape. However, they may face hurdles such as a lack of experience, limited access to capital, and difficulty gaining credibility in established industries. Finding mentors and building a strong network can help overcome these challenges. Examples of successful young entrepreneurs demonstrate that with determination and adaptability, age is not a limiting factor in entrepreneurial success.

Inspiring Stories of Young Entrepreneurs

Success story: mark zuckerberg and facebook.

Mark Zuckerberg's success story with Facebook exemplifies the possibilities of entrepreneurship at a young age. He identified the potential of connecting people through a digital platform and transformed it into a social media empire. By focusing on user experience and constantly innovating, he turned Facebook into a global phenomenon. Zuckerberg's success highlights the importance of embracing innovation and staying ahead of the curve in entrepreneurship.

Young entrepreneurs can draw inspiration from his journey and apply similar strategies, such as prioritizing user feedback, staying adaptable to change, and continuously seeking ways to improve their products or services.

Success Story: Sara Blakely and Spanx

One notable success story in entrepreneurship young is Sara Blakely, the founder of Spanx. Blakely identified a problem: uncomfortable undergarments. She capitalized on this opportunity by creating a solution that revolutionized the industry. With a strong focus on innovation and marketing, she turned her idea into a multimillion-dollar business. Blakely's determination and ability to think outside the box were crucial to her success.

Her story teaches aspiring young entrepreneurs the importance of identifying a pain point, being creative in finding solutions, and relentlessly pursuing their goals. Through her journey, Blakely proves that with the right mindset and a unique approach, anything is possible for young entrepreneurs.

Success Story: Evan Spiegel and Snapchat

Evan Spiegel's success with Snapchat is a testament to the potential of entrepreneurship at a young age. By tapping into the growing popularity of visual storytelling, Spiegel revolutionized the way we communicate. He identified the need for a platform that allowed users to share temporary photos and videos, capturing people's desire for privacy and authenticity. This innovative approach attracted millions of users and propelled Snapchat to become a global phenomenon. Spiegel's ability to understand market trends and provide a unique solution demonstrates the power of keeping a finger on the pulse of consumer demands. Young entrepreneurs can learn from his example by observing emerging trends and finding creative ways to meet those needs.

Success Story: Danielle Weisberg and Carly Zakin of theSkimm

Danielle Weisberg and Carly Zakin co-founded theSkimm, a popular media company that provides succinct daily news updates. Their success story exemplifies the power of identifying a unique niche and delivering valuable content in a concise and accessible format. By understanding the need for busy individuals to stay informed, Weisberg and Zakin successfully built a brand that resonates with their target audience.

Their key takeaway for young entrepreneurs is to understand the pain points of their target market and find innovative solutions to address them. TheSkimm's success demonstrates that simplicity and convenience can greatly appeal to modern consumers.

Success Story: Brian Chesky and Airbnb

Brian Chesky, the co-founder of Airbnb, exemplifies the success of young entrepreneurs in the realm of the sharing economy. By recognizing the untapped potential of spare rooms, Chesky transformed Airbnb into a global platform connecting travelers with unique accommodations. With a strong focus on user experience, Chesky prioritized building a trusted community, enhancing the booking process, and providing personalized recommendations.

This attention to detail, combined with continuous innovation and adaptation to user needs, enabled Airbnb to become a disruptive force in the hospitality industry. Chesky’s success story highlights the importance of identifying untapped markets, focusing on user experience, and leveraging technology to create unique value propositions in entrepreneurship young.

Strategies for Success in Entrepreneurship Young

Identifying and focusing on passion.

Identifying and focusing on passion is fundamental for young entrepreneurs. Passion fuels motivation and perseverance, enabling entrepreneurs to overcome obstacles. To identify passion, consider personal interests, hobbies, and experiences. Reflect on what creates excitement and energizes you. Once passion is identified, align it with a viable business idea.

For example, if fitness and wellness are your passions, explore opportunities in the health industry. By pursuing a venture rooted in passion, entrepreneurs are more likely to stay committed and driven, increasing their chances of success. Passion is the driving force behind innovative ideas and sustained effort, making it an essential ingredient for entrepreneurial success.

Developing a Strong Network

Developing a strong network is a vital aspect of entrepreneurship for young individuals. The connections you build can provide valuable resources, partnerships, and guidance. By actively participating in industry events, joining professional organizations, and attending networking gatherings, you can expand your circle of contacts. Engaging with like-minded entrepreneurs, experts, and potential investors allows you to exchange ideas and gain insights into industry trends.

Additionally, reaching out to mentors or seeking mentorship programs can provide you with valuable advice and guidance on your entrepreneurial journey. Building a diverse and supportive network can open doors to opportunities and collaborations that can significantly contribute to your success in the entrepreneurial world.

Embracing Failure and Resilience

Embracing failure and staying resilient is a fundamental aspect of entrepreneurship, especially for young entrepreneurs. It's important to understand that failure is not the end, but rather an opportunity to learn and grow. Resilience allows these entrepreneurs to bounce back from setbacks and maintain their focus on their goals.

By embracing failure, young entrepreneurs can use their mistakes as valuable learning experiences. This mindset encourages them to experiment, take risks, and innovate. They understand that failure is a natural part of the entrepreneurial journey and view it as a stepping stone toward success.

For example, many successful young entrepreneurs have faced multiple failures before achieving significant accomplishments. They acknowledge that setbacks are temporary, and their ability to adapt and persevere is what sets them apart.

To cultivate resilience, young entrepreneurs can seek support from mentors or join communities where they can learn from the experiences of others. They also prioritize self-care, as maintaining physical and mental well-being is crucial for staying resilient in the face of challenges.

Utilizing Technology and Innovation

Utilizing technology and innovation is a fundamental aspect of entrepreneurship for young individuals. Embracing the latest tools and advancements can provide competitive advantages, enhance efficiency, and enable scalability. For instance, leveraging social media platforms can amplify brand reach and engagement with target audiences.

Additionally, utilizing data analytics can provide valuable insights for informed decision-making. Adopting emerging technologies like artificial intelligence or blockchain can revolutionize business processes and disrupt industries. It's crucial to stay updated with technological trends and continuously explore ways to adapt and integrate them into your entrepreneurial ventures. Embracing technology not only helps streamline operations but also opens doors to new possibilities for growth and success.

Adapting to a Changing Business Landscape

Adapting to a changing business landscape is crucial for young entrepreneurs. Staying ahead of trends and industry shifts allows them to stay competitive and seize new opportunities. This means constantly monitoring the market, embracing technological advancements, and being open to innovation.

For example, many successful young entrepreneurs have successfully pivoted their business models to meet changing customer demands, such as shifting from traditional retail to e-commerce.

Building a Personal Brand

Building a strong personal brand is key for young entrepreneurs. It helps establish credibility and differentiate themselves in a competitive market. Start by defining your unique value proposition and target audience. Craft a compelling story that resonates with your audience and showcases your expertise. Consistently share valuable content on social media platforms to engage with your audience and build a following. Collaborate with industry influencers to expand your reach.

Attend networkingevents and speak at conferences to establish yourself as a thought leader. By consistently maintaining your brand image and delivering on your promises, you can attract customers and partnerships that align with your values and goals.

Seeking Mentorship and Guidance

Mentorship and guidance are vital for young entrepreneurs navigating the challenging world of entrepreneurship. Experienced mentors provide valuable insights, advice, and support, helping young entrepreneurs build their businesses effectively. By seeking mentorship, entrepreneurs gain access to a wealth of knowledge and industry expertise. Mentors can offer practical tips, share relevant experiences, and help entrepreneurs avoid common pitfalls. Whether through formal mentorship programs, industry associations, or personal connections, finding a mentor who aligns with your business goals can significantly enhance your entrepreneurial journey. A mentor's guidance can assist in making informed decisions, expanding networks, and accelerating growth.

Over to you

Today, young entrepreneurs are making a significant impact in the business world. This article highlights inspiring success stories and strategies behind their rise to prominence. It sheds light on the challenges they face and the innovative solutions they bring to the table. From tech-savvy individuals disrupting industries to social entrepreneurs striving for positive change, these young trailblazers showcase resilience, determination, and a forward-thinking mindset.

Their stories serve as motivation and guidance for aspiring entrepreneurs, revealing that age is no barrier to success.

Help Young Entrepreneurs Shoot for Success

Author: Beth Beene Entrepreneurship Published: Tuesday, 09 Jan 2024

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Image caption: Help young entrepreneurs shoot for success.

Do you know a young person bubbling with innovation and brimming with ideas? Supporting them on their entrepreneurial journey will not only shape them into future business owners and leaders but can also contribute to the vitality of our society. Young entrepreneurs bring fresh perspectives, groundbreaking ideas, and the potential to create lasting change. By empowering them through mentorship, resources, and platforms like JA Connect ™, we plant the seeds for a brighter future where entrepreneurial success becomes a shared achievement. Join the movement of supporting young entrepreneurs—an investment that paves the way for a dynamic and prosperous tomorrow, where their ideas and ventures make a lasting impact on the world.

Why Support Young Entrepreneurs?

Supporting young entrepreneurs is more than just a community endeavor; it involves creating a culture of innovation and shared success. This support actively contributes to economic growth, resilience building, and the realization of dreams. Cheering for young entrepreneurs is not only beneficial but vital. Firstly, nurturing innovation is paramount as young adults bring fresh perspectives and creative ideas, fostering a culture of groundbreaking solutions. Secondly, empowering young entrepreneurs is a direct contribution to overall economic growth, providing job opportunities and fostering economic prosperity. Thirdly, supporting them in the face of entrepreneurship challenges helps build resilience and adaptability crucial for their future success. Lastly, by backing the dreams of many young adults aiming to make a positive impact, we contribute to societal well-being, and each successful venture becomes a testament to the transformative power of encouragement and support in shaping the future.

JA Connect: A Catalyst for Turning Dreams into Business

Just as every winning team starts with a dream, every successful business venture begins with an idea. JA Connect is a catalyst for transforming these dreams into tangible business success. Junior Achievement provides this free website that provides interactive learning activities designed to help young people develop an entrepreneurial mindset and acquire tools for launching a business. The modules offered by JA Connect include:

Embark on the entrepreneurial journey by defining your "Why" and learning about successful entrepreneurs who started with a vision.

• Research and Planning:

Transform your awesome business idea into reality by delving into business planning and research. Lay the groundwork for a solid business foundation.

• Funding and Legal:

Navigate the complexities of funding a startup and ensure legal compliance before launching your venture. Learn the ropes of securing financial backing and making your business legitimate.

• Operations:

Discover the ins and outs of keeping a business running smoothly. From day-to-day operations to long-term sustainability, these modules provide essential insights.

• Marketing and Sales:

Learn how to effectively reach customers and generate revenue through marketing and sales strategies. Turn your passion into profit with practical tips and guidance.

Unleash their Inner MVP

Empowering the potential of young entrepreneurs is not just about individual success; it's about shaping a future where innovation is the norm, economies are resilient, and dreams are transformed into realities. Join the movement to give young entrepreneurs a shot and witness the transformative power of their dreams with JA Connect ! Unleash their inner MVP, empower their potential today, and play a part in the success stories that will shape the entrepreneurial landscape of tomorrow.

Get Involved with Junior Achievement!

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ORIGINAL RESEARCH article

The impact of young entrepreneurs’ network entrepreneurship education and management system innovation on students’ entrepreneurial psychology.

• 1 Institute of Quality Development Strategy, Macro-Quality Management Collaborative Innovation Center in Hubei Province, Wuhan University, Wuhan, China
• 2 School of Music and Dance, Yantai University, Yantai, China
• 3 School of Public Administration, Zhongnan University of Economics and Law, Wuhan, China

The purpose of the study is to solve the problems existing in entrepreneurship education and management under computer technology. The teaching content of entrepreneurship education in colleges and universities is proposed. Since entrepreneurship education is practical, the auxiliary mechanism of entrepreneurship education also needs to be highly integrated with entrepreneurship practice. First, the network entrepreneurship teaching and management system is constructed, and students’ entrepreneurial creativity, communication ability, leadership ability, and qualities are taken as the research object. Second, the traditional teaching method, case study method, and scene simulation method are used to analyze and discuss the influence of the entrepreneurial teaching mode, entrepreneurial experience, and entrepreneurial ability on students’ entrepreneurial psychology. Finally, the questionnaire survey is used to conduct the relative sample t -test (Student’s t -test), and the influence of three teaching methods on students’ learning effects is analyzed. The influence of the three teaching methods on students’ entrepreneurial psychological states is further analyzed by the statistical method. The experimental results show that the test result of the scene simulation method and the traditional teaching method is 0.584, the test result of the scene simulation method and the case study method is 0.842, and the test result of the case study method and the traditional teaching method is 0.595. This shows that the scene simulation method has a significant impact on students’ entrepreneurial psychology and their entrepreneurial ability. In addition, students’ cognition of professional status significantly affects their entrepreneurial psychology and attitudes, and the correlation coefficient is 0.576. Therefore, it is suggested that colleges and universities should adopt the scene simulation method to improve the teaching quality of entrepreneurship education and strengthen students’ cognition of professional status and their entrepreneurial practice.

Introduction

Innovation and entrepreneurship education in colleges and universities is opened to cultivate students’ entrepreneurial consciousness, innovative spirit, and entrepreneurial ability, which meets the requirements of society. It is designed for the groups who intend to start a business, have started a business recently, and have successfully started a business ( Ratten and Usmanij, 2021 ), so the course should be carried out hierarchically to cultivate the talents differently with the basic entrepreneurial literacy and creative personalities ( Jena, 2020 ). With the transformation and development of the social economy, the new economic model plays an important role in promoting social development. As a generation growing up in the new economic model, young entrepreneurs have a more intuitive and profound understanding of the evolution of the social market economy. Compared with the traditional entrepreneurial groups, they are more likely to succeed in the new economic model. College students are the main force in the new era of China, and they need systematic and scientific entrepreneurship training. Therefore, multimedia technology and Internet technology are combined to improve the teaching quality of entrepreneurship education in colleges and universities, to change students’ learning styles, and to fully meet the students’ learning needs and the development needs of economic construction in the new era ( Hou et al., 2019 ; Kurilova et al., 2019 ). However, there is little research on students’ innovation and entrepreneurship education, which is not conducive to the cultivation of students’ innovation and entrepreneurship capabilities. Therefore, college students should be educated by the teaching mode of the innovation and entrepreneurship education of young entrepreneurs based on information technology, and the influence of network entrepreneurship education and management system on students’ entrepreneurial literacy is analyzed.

Wei et al. (2019) studied the mediating effect of political skills and entrepreneurial opportunities on perceived entrepreneurship education and innovation and used structural equations to analyze the entrepreneurial information collected by the questionnaire. The results show that there is a positive correlation between entrepreneurship education and innovation, and political skills and entrepreneurial opportunities play a chain intermediary role between entrepreneurship education and innovation. Wu and Wu (2019) studied the impact of emotion on innovation behavior, and analyzed the mediating effect of job participation and behavior. The results show that positive emotion can mediate employees’ positive emotions, and engagement is the influence of positive emotion on innovation behavior. Boldureanu et al. (2020) studied the impact of entrepreneurial success cases on students’ entrepreneurial ability and attitudes and conducted experiments on students in qualitative and quantitative ways. The results show that after contacting successful entrepreneurial models, students can have higher social benefits for entrepreneurship. The study also finds that entrepreneurship education can change and arouse students’ entrepreneurial attitudes and enthusiasm by improving the teaching efficiency of developing entrepreneurial skills. Wu et al. (2019) studied the influence of a classroom response system on the interactive relationship between teachers and students and established an interactive classroom dominated by students. The results show that a classroom response system can promote the interaction between learners and learning content, arouse students’ learning enthusiasm and entrepreneurial motivation. Wu and Song (2019) studied the impact of social media on entrepreneurship curriculum from the perspective of learners. The results show that trust and profits are the important factors affecting the entrepreneurship curriculum. Obschonka et al. (2019) studied the impact of entrepreneurial thinking on organizational behavior, quantified the impact of personality traits on entrepreneurial passion in the organization, and tested this impact by using an alternative interpretation model. The results show that entrepreneurial personality traits can help inspire entrepreneurial enthusiasm. Zakieva et al. (2019) studied the impact of innovation activities on competitiveness and innovated an intellectual property law from the perspective of entrepreneurship education. The survey results show that 65% of teachers are interested in innovative entrepreneurship education courses, but they need to bear additional burdens and lack intellectual property rights in the field of innovation. According to the previous research, it is found that at this stage, an in-depth study is needed on the issue of entrepreneurship education in colleges and universities.

In order to improve the ability and quality of college students’ innovation and entrepreneurship, it is proposed that young entrepreneurs should use information technology to teach students how to start a business online and carry out situational simulation teaching through human-computer interaction (HCI). Since less importance is attached to entrepreneurship education and students’ entrepreneurial ability in colleges and universities, the current entrepreneurship education model should be optimized based on Internet technology. As the witness and participant of China’s economic transformation, young entrepreneurs have a good understanding of the entrepreneurial process under the new economic model. Based on HCI and psychology, the network entrepreneurial teaching mode of young entrepreneurs is analyzed, and the curriculum characteristics of different teaching modes are compared, and the influence of different entrepreneurial variables on students’ entrepreneurial psychological quality is discussed. The innovation of this study is to apply HCI to the network entrepreneurship teaching of young entrepreneurs, analyze the influence of optimized teaching mode and management system innovation on students’ entrepreneurial psychological quality, and judge the influence of network entrepreneurship teaching mode on students’ entrepreneurial ability and literacy. The research provides a reference for improving the teaching quality of entrepreneurship education in colleges and universities.

Entrepreneurship Education and Students’ Entrepreneurial Psychology

Entrepreneurship education and entrepreneurial ability.

The development of the entrepreneurship ecosystem in colleges and universities can effectively develop students’ entrepreneurial activities and promote the development of the social economy. In western countries, the entrepreneurship education ecosystem in colleges and universities is the main source of cultivating entrepreneurial talents for their own country, which promotes the development of the national economy. Therefore, it is necessary to establish a good environment for innovation and entrepreneurship education in colleges and universities to form a benign entrepreneurial ecosystem, so that the college students’ innovation and entrepreneurship can be improved. This system needs to include multiple subsystems, such as colleges and universities, students, families, husbands, and enterprises. Through the interaction between each system, a complete innovation and entrepreneurship education cultivation system can be established. As the backbone of the innovation and entrepreneurship education system, colleges and universities play an important role in the cultivation of entrepreneurial talents. As the receiver of innovation and entrepreneurship education, college students need to learn relevant innovation and entrepreneurship concepts and carry out entrepreneurial activities in practice.

The reason why entrepreneurship education courses are offered in Chinese universities is that the traditional university education system lacks the cultivation of college students’ innovation, entrepreneurial awareness, and entrepreneurial ability. As an important force to develop human society, innovation and entrepreneurship are important factors to enhance China’s international competitiveness ( Fiore et al., 2019 ). Entrepreneurial ability refers to the ability of students to discover and create a new field, and to create new things in this field. The existing technologies and methods are developed and used to make new achievements. The cultivation of students’ entrepreneurial ability depends on financial, material, and manpower. Compared with employment ability, entrepreneurial ability pays more attention to the ability to find and solve problems.

The research contents of entrepreneurial psychology include the psychological characteristics of entrepreneurs, the behavior control of entrepreneurs, the communication between entrepreneurial teams, the conflict of entrepreneurial teams, and the humanized management of entrepreneurial teams. The cultivation and management of entrepreneurial mental health is an important part of entrepreneurial success. Therefore, in the process of implementing innovation and entrepreneurship teaching, colleges and universities do not require college students to leave school for entrepreneurship but cultivate their innovation and entrepreneurship spirit, enhance innovation and entrepreneurship awareness, and prevent possible risks in the process of entrepreneurship by learning innovation and entrepreneurship knowledge and skills. Therefore, as participants in the economic model of the new era, young entrepreneurs need to encourage and help college students with entrepreneurship and innovation ability, boldly invest in innovation and entrepreneurship activities, and provide spiritual guidance for entrepreneurial students ( Komarova et al., 2019 ).

At present, the current entrepreneurship education mode is relatively backward, with fixed time and place, a single teaching mode, and the teaching pattern of teachers’ lecturing basically and students’ learning passively. This cannot adapt to the development of mobile Internet and students’ entrepreneurial needs. And the teaching content and teaching objectives of colleges and universities are out of line with the actual needs. The content of the course lacks the characteristics of the times, compound, and applicability, and doesn’t present the innovation of knowledge structure brought by the development of science and technology ( Linton and Klinton, 2019 ). The education system of colleges and universities advocates the key training of academic talents, while applied talents and entrepreneurial talents lack corresponding teaching modes, which cannot meet the needs of the development of vocational education and entrepreneurship education in the new era. Figure 1 is the requirements of students’ entrepreneurial ability under the new era economic model.

Figure 1. Entrepreneurial needs of college students under the new economic model.

In terms of higher education, computer-aided teaching can effectively enhance the vividness and intuitiveness of entrepreneurship teaching, help teachers to simplify teaching procedures, and promote students’ in-depth understanding of the knowledge. Therefore, in the process of teaching practice, teachers need to apply information technology in the new era to conducting targeted teaching guidance to students and try to ensure the application of computer-aided teaching in entrepreneurship education ( Aparicio et al., 2019 ; Tkachenko et al., 2019 ). Internet + education is the main development mode of higher education in the future. Therefore, an efficient innovation and entrepreneurship education system should consider the combination of innovation and entrepreneurship education and Internet technology. In network teaching, teachers, as the main body of education, need to use Internet thinking to reconstruct and exchange knowledge ( García-Morales et al., 2020 ). And the teaching content also needs to connect with the Internet. The teaching method of entrepreneurship should take offline + online teaching mode so that students can make full use of their leisure time to learn the knowledge anytime.

Analysis of the Teaching Mode of Entrepreneurship Education in Colleges and Universities Under the Innovation of Management System

Management system innovation is a key factor for the survival and development of an enterprise, and the factors affecting the success of different enterprises are not the same. With the comprehensive deepening reform of the social economy, young entrepreneurs are the main force in the process of the transformation of China’s new economic model, and they are creative, ideal, dare to question the status quo , and find opportunities. They are a group of young people who struggle to build an ideal world. They use business operations to analyze social problems and business rules to solve practical problems. Their purpose is not only to achieve commercial profits but also to organize and operate social welfare activities. In the globalization process, the competition for science and technology is becoming increasingly fierce. Young entrepreneurs should be more proactive in investing in the industry, joining the construction of the Belt and Road Initiative in China, and promoting the formation of an active “youth community,” bringing the spirit of dare to pursue their dreams and realize their values in the new era ( Feng and Chen, 2020 ; Lv, 2020 ).

Innovation is the first driving force to guide the development of the social economy and the strategic support to realize the construction of China’s modern economic system. Entrepreneurship is an important force to promote the progress of human society and an important way to realize the industrialization and commercialization of innovation achievements. They are interdependent in the process of social and economic development. Therefore, when entrepreneurship education is carried out, it is advocated to link innovation and entrepreneurship, use innovation to drive entrepreneurship and entrepreneurship to drive innovation ( Liang et al., 2021 ). Therefore, young entrepreneurs should be used as teachers of students’ entrepreneurship education. In the teaching process, teachers help students understand the development mode of entrepreneurship and solve problems by combining their own entrepreneurial experience and understanding the economic model of the new era, and enhance students’ entrepreneurial ability and entrepreneurial quality. Therefore, how to teach entrepreneurship courses in the teaching process is a problem that needs to be studied in depth. Common teaching methods include the traditional teaching method, case study method, and scene simulation method.

Traditional Narrative Method

Lecture teaching is a way of teaching students directly by teachers, which is widely used in college classroom teaching. With the advancement of the new curriculum teaching concept, lecture-based teaching is called inculcation teaching or cramming teaching, and independent, cooperative, and inquiry-based teaching methods are advocated in the new curriculum ( Wang and Park, 2021 ). However, in lecturing teaching, teachers can transform complex and profound textbook knowledge into superficial or concrete knowledge that can be understood by students, and eliminate students’ mystery and confusion in learning entrepreneurial knowledge. And lecturing teaching can spread knowledge to students in the form of stereotypes, avoid the misunderstanding and misinterpretation of students caused by teachers in the dissemination of knowledge, and reduce the difficulties encountered by students in learning. Lecture teaching is a basic way, and the other teaching methods are based on it. Students can convert the knowledge taught into their ability through subtle or conscious learning ( Wang, 2020 ; Deng et al., 2021 ).

However, there are also some shortcomings in the teaching method. When teachers use the teaching method, it will give students a false impression of being easy to learn. It seems that students only need to listen carefully to obtain the corresponding knowledge. However, in fact, students’ learning of knowledge needs to combine the knowledge they have mastered with independent thinking. In the process of imparting knowledge to teachers, they need to master the difficulties and questions encountered through independent thinking, and further use knowledge from one to another to promote the development of their abilities. The teaching method takes teachers as the center of teaching. Therefore, teachers’ understanding and thinking of knowledge affect students’ acceptance. In the teaching process, students will have psychological dependence, and they will wait for teachers to solve problems. In particular, the better the teacher speaks, the more serious the students’ psychological dependence is. This dependence will affect students’ active learning ability and independent thinking ability ( Ghimire, 2020 ).

Case Study Method

The case study method originates from the research field of anthropology and sociology and is widely used in psychology and pedagogy. It refers to the continuous investigation of an individual or group for a long time, and the behavior development of the research object in the whole process of change, also known as the case analysis method ( Li et al., 2019 ). In the case study, students need to collect, record and collate the case materials of one or more groups, and write the results of the study as a case report. In most cases, the research results of various discussion methods can be extended to the general situation, but some cases are used in practice after comparison. Therefore, the task of the case study is to organize the experience report for evaluating the process and to describe the case as the basis of the evaluation of general events. The case study method includes three types, namely, individual survey, group survey, and problem survey. The individual survey investigates one person as the research object. Group investigation is research on an organization or group. The problem survey is an investigation and study of a social problem or phenomenon ( Hui et al., 2019 ).

Scene Simulation

The scene simulation method is under the guidance of classroom teaching, students stimulate a role or post in the actual scene through the simulation. And then in the scene environment created by teachers, their enthusiasm is aroused in skills training and training. In the understanding of the corresponding role, it is a typical interactive teaching mode. As an action-oriented mode, the scene simulation method is characterized by the content and scene that are close to the actual events, allowing students to actively participate in the role, and substituting and understanding the psychological state and behavior of the role ( Corrales-Garay et al., 2020 ). Therefore, in the scene simulation teaching, the appropriate simulation teaching method can provide students with a more real entrepreneurial environment, enhance the interaction of teaching, train students’ language ability and problem-solving ability, understand the concept and mode of entrepreneurship in the new era, and establish a bridge between the theory and practice of entrepreneurship.

Network Entrepreneurship Teaching Mode for Young Entrepreneurs Based on Human-Computer Interaction of Psychology

With the development of multimedia technology and computer performance, computer technology becomes an important means of teaching assistance and receives extensive attention. There are also great changes in the way of study. The establishment of a network teaching platform can greatly improve the learning efficiency of educational resources, improve user experience and enhance students’ interest in learning by establishing interactive teaching methods. After the scene simulation teaching method is stimulated, computer technology is applied to the teaching of young entrepreneurs’ entrepreneurship to arouse students’ learning interest. According to the relevant content of psychology, a HCI network education mode is designed based on user experience to improve the educational effect of the scene simulation teaching method.

Attention is the direction and concentration of certain objects in psychological activities, and it is combined with human memory, consciousness, vision, and thinking. It belongs to common psychological characteristics. In most cases, students can only focus on one thing in the course of the class and filter out other external environmental stimuli, known as selective attention ( Arquisola and Muanar, 2019 ). Students’ attention is easily attracted by moving objects, human faces, and other objects. Therefore, in the design of HCI, it is necessary to pay attention to these factors and study a network teaching system that is more in line with students’ cognitive habits. User experience is an important index to judge the performance of the HCI interface from the perspective of the user’s subjective feelings. Therefore, the establishment of a HCI teaching mode centered on students and teaching system can effectively improve students’ entrepreneurial teaching experience. The designed model mechanism is shown in Figure 2 .

Figure 2. Educational mode based on users’ experience.

This mode is a comprehensive framework of user’ experience based on psychology and the results of students’ feelings and experience. This framework is a student-centered network teaching system ( Zulfiqar et al., 2019 ; Zhang et al., 2020 ). The instinctive sensory layer represents the psychological instinct reaction caused by students’ feelings, consciousness, and performance. The factors that affect the instinct level include visual and auditory factors. In this process, students may have more intuitive inner feelings, resulting in the visual and browsing experience. The interactive behavior layer is the experience after HCI with the system. The influencing factors include operability, system performance, system function, teaching content, and information framework.

The content of the interactive behavior layer is based on the students’ learning process on the network teaching platform, which includes all the students’ behaviors on the network platform. The psychological reflection layer is the basis of the inner feelings of the instinct sensory layer and the interactive experience of the interactive behavior layer, which can bring users a more advanced and complex emotional experience. The design of the model should include pleasure, self-value, personality, and social significance. Therefore, the designed model is applied to the network entrepreneurship teaching of young entrepreneurs, and the influence of entrepreneurial education mode, entrepreneurial experience, and entrepreneurial ability on students’ entrepreneurial psychological quality is analyzed ( Escolar-Llamazares et al., 2019 ).

Survey Analysis

The influence of the network entrepreneurship teaching and management system on students’ entrepreneurial creativity, communication and leadership, and qualities is studied. The seniors in an economic and management university are selected as the subjects to conduct a questionnaire survey, and their majors are law, business, industry and commerce, finance, and logistics. The teaching methods of entrepreneurship education for the seniors are the traditional teaching method, case study method, and scene simulation method, and the students are investigated by a questionnaire at the end of the semester. The questionnaires are distributed and convenience sampling and random sampling are used for data statistics. 350 questionnaires are distributed, and 336 are recovered, with a recovery rate of 96.0%. The criterion for determining invalid questionnaires is whether the questionnaire is completed. The influence of the teaching mode and the management system innovation on students’ entrepreneurial ability, communication ability, and leadership is further explored.

The design of the questionnaire falls into two stages. The first is the measurement of the research variables, which include opportunity motivation, survival motivation, status awareness, and entrepreneurial ability. The Likert scale is used as the measurement index, and the subjective cognitive feelings are scored through the quantitative method; the second is the information statistics of college students’ entrepreneurship. The variables having been used in the domestic and foreign research are selected and combined with the relevant variables to improve the reliability of the questionnaire, SPSS 25.0 is used to analyze the data of the survey and the influencing factors of the entrepreneurship education, and the t -test (Student’s t -test) is used to make the small size of samples distribute normally (for example, n < 30). The difference can be inferred through the distribution theory and the average scores are compared to reveal whether the difference is significant.

Discussion and Analysis of the Results of the Questionnaire Survey

Reliability and validity of the questionnaire.

To verify the reliability and validity of the designed questionnaire, Cronbach’s α coefficient, KMO (Kaiser-Meyer-Olkin), and Bartlett sphericity are used to test the reliability and validity of the questionnaire. The results are shown in Tables 1 , 2 .

Table 1. Reliability of questionnaire survey.

Table 2. Validity of questionnaire survey.

Table 1 shows that the reliability of Cronbach’s α coefficient is above 0.85, and the α coefficient of each dimension, in general, is greater than the standard of 0.8, indicating that the scale data used in the explanatory text have high internal consistency and good stability. Table 2 indicates that the value of Bartlett sphericity is significant, and the KMO value is higher than 0.8 KMO. The other two are all above 0.85, indicating that the effect of the scale is good, and is suitable for factor analysis.

In the questionnaire survey, the traditional teaching method, case study method, and scene simulation method are verified in analyzing their influence on students’ entrepreneurial learning. The results are shown in Table 3 .

Table 3. Results of t -test.

Table 3 shows that the traditional teaching method, case study method, and scene simulation method can improve students’ learning ability. The test result of the scene simulation method and the traditional teaching method is 0.584, the test result of the scene simulation method and the case study method is 0.842, and the test result of the case study method and the traditional teaching method is 0.595. This shows that scene simulation has a greater impact on students’ entrepreneurship education, and the results are better than other teaching methods in improving students’ entrepreneurial psychology and their entrepreneurial ability.

Analysis of Factors Affecting Students’ Entrepreneurial Psychology

Multiple stepwise regression analysis is used to analyze the factors affecting students’ entrepreneurial psychology. The research variables included industries, survival motivation, opportunity motivation, and status cognition of young entrepreneurs so that the influence of other factors on the main effect can be avoided. The youth entrepreneurs involved in the survey come from the industries of education, foreign trade, industry, and software. The specific results of the correlation coefficient are shown in Table 4 .

Table 4. Correlation coefficient.

Table 4 shows that the significant correlation between survival motivation and opportunity motivation of young entrepreneurs and status cognition and entrepreneurial ability is 0.465, indicating that there is a significant correlation between young entrepreneurs’ motivation and entrepreneurial psychology. The entrepreneurial motivation of young entrepreneurs can positively affect entrepreneurial psychology, with a value of 0.041. The cognition of entrepreneurs’ professional status also significantly affects college students’ entrepreneurial psychology and attitudes, with a value of 0.576. In summary, the influencing factors of students’ entrepreneurial psychology include their motivation and status cognition, and status cognition has the greatest impact on entrepreneurial psychology. The study provides opportunity-driven students with positive entrepreneurial emotions. Compared with the results of the previous studies, the content of the study describes the influence of entrepreneurs’ occupational status cognition on students’ entrepreneurship more accurately and promotes the development of entrepreneurship education theory in colleges and universities.

The study explores the entrepreneurial education in colleges and universities based on the optimization of HCI. In the research process, it is proposed to change the teaching method of college students’ entrepreneurship education, and the influence of entrepreneurship education and management network system on college students’ entrepreneurial psychology is studied. After analyzing the existing problems of traditional entrepreneurship education and the requirements of college students’ entrepreneurial ability under the new economic model, the study puts forward suggestions on using information technology to improve the teaching quality of college entrepreneurship education. Then it introduces different teaching methods for cultivating young entrepreneurs, and simulates entrepreneurship scenes through the network entrepreneurship teaching management system. Moreover, it analyzes the influence of different variables such as entrepreneurial teaching mode and entrepreneurial ability on students’ entrepreneurial psychology. The test result of the scenario simulation method and the traditional teaching method is 0.584, the test result of the scenario simulation method and the case learning method is 0.842, and the test result of the case learning method and the traditional teaching method is 0.595. This shows that the situational simulation method has a more obvious impact on students’ entrepreneurial psychology and entrepreneurial ability, and the cognition of occupational status affects students’ entrepreneurial psychology and entrepreneurial attitude.

The theoretical research contribution lies in analyzing the influence of entrepreneurial network teaching on students’ learning psychology; the practical enlightenment is to design a college entrepreneurship teaching system based on HCI and apply it to college entrepreneurship teaching classrooms. Compared with the research results of Lu (2021) , the network entrepreneurship teaching and management system for young entrepreneurs based on HCI can have a positive impact on students’ entrepreneurial ability and entrepreneurial psychology, and help them acquire entrepreneurial knowledge and skills. This research provides a reference for exploring entrepreneurship education in colleges and universities. However, there are still some shortcomings. For example, the designed questionnaire analysis is not in-depth, and the sample size of the research is small. This problem will be optimized and resolved in the follow-up research.

Data Availability Statement

The raw data supporting the conclusions of this article will be made available by the authors, without undue reservation.

Ethics Statement

The studies involving human participants were reviewed and approved by Zhongnan University of Economics and Law Ethics Committee. The patients/participants provided their written informed consent to participate in this study. Written informed consent was obtained from the individual(s) for the publication of any potentially identifiable images or data included in this article.

Author Contributions

ZW drafted and finalized the manuscript. RT collected and organized the data, researched and organized literature, and provided mentoring support. XC designed the framework of the manuscript and performed statistical analysis. All authors contributed to the article and approved the submitted version.

Conflict of Interest

The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

Publisher’s Note

All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article, or claim that may be made by its manufacturer, is not guaranteed or endorsed by the publisher.

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Keywords : entrepreneurship education, entrepreneurship management system, teaching methods, students’ entrepreneurship psychology, cognition of entrepreneurs’ professional status

Citation: Wang Z, Tang R and Cheng X (2021) The Impact of Young Entrepreneurs’ Network Entrepreneurship Education and Management System Innovation on Students’ Entrepreneurial Psychology. Front. Psychol. 12:731317. doi: 10.3389/fpsyg.2021.731317

Received: 26 June 2021; Accepted: 19 October 2021; Published: 10 November 2021.

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Copyright © 2021 Wang, Tang and Cheng. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) . The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

*Correspondence: Xin Cheng, [email protected]

Disclaimer: All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article or claim that may be made by its manufacturer is not guaranteed or endorsed by the publisher.

A Systems View Across Time and Space

• Open access
• Published: 06 February 2024

Exploring entrepreneurial intentions and motivations: a comparative analysis of opportunity-driven and necessity-driven entrepreneurs

• Aglaya Batz Liñeiro   ORCID: orcid.org/0000-0002-1152-2782 1 ,
• Jhon Alexander Romero Ochoa   ORCID: orcid.org/0000-0002-0937-3087 2 &
• Jose Montes de la Barrera   ORCID: orcid.org/0000-0002-8069-553X 1  

Journal of Innovation and Entrepreneurship volume  13 , Article number:  11 ( 2024 ) Cite this article

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This study investigates the impact of entrepreneurial attitudes, subjective norms, and perceived behavioral controls on entrepreneurial intention among two distinct groups of entrepreneurs: opportunity-driven and necessity-driven. It also explores the relationship between entrepreneurial motivations, intentions, and the number of ventures undertaken by entrepreneurs. Structural equation modeling and survey data from 201 necessity-driven entrepreneurs and 204 opportunity-driven entrepreneurs were utilized. Drawing on the Theory of Planned Behavior, the findings indicate that attitudes do not positively correlate with entrepreneurial intention for both types of entrepreneurs. Subjective norms significantly influence entrepreneurial intention among entrepreneurs by necessity but not among entrepreneurs by opportunity. Perceived behavioral controls exhibit a partial correlation with entrepreneurial intention, which is not significant for entrepreneurs by opportunity. Both motivations and entrepreneurial intention positively relate to the number of ventures undertaken by entrepreneurs by necessity, whereas motivations alone determine venture creation among entrepreneurs by opportunity. Furthermore, a significant correlation exists between being a female entrepreneur by necessity and entrepreneurial intention, while this relationship is not significant for women entrepreneurs by opportunity. These insights contribute to the literature on entrepreneurial intention and carry important policy and managerial implications in developing countries.

Introduction

The influence of entrepreneurial attitudes, subjective norms, and perceived behavioral controls on entrepreneurial intention and development Footnote 1 has been extensively studied, mostly on students (Hassan et al., 2020 ; Maussa Pérez et al., 2020 ; Moriano et al., 2012 ), formal workers (Bergner et al., 2021 ; Ma & Huang, 2020 ) and Entrepreneurs (Bouarir et al., 2023 ).

This suggests that the exploration of entrepreneurial intention involves delving into both ex-ante and ex-post samples. In this case, ‘ex-ante' entails studying the entrepreneurial intentions of individuals who have not yet ventured into business, while ‘ex-post' studies focus on those who currently operate or have previously owned a business.

Numerous studies have predominantly assessed entrepreneurial intention ex-ante, often utilizing samples comprising students and non-entrepreneurs. This approach has yielded insights into the perception of entrepreneurs within student populations (Maussa Pérez et al., 2020 ; Van Auken et al., 2006 ; Veciana et al., 2005 ). Research suggests that students' inclination towards entrepreneurship is positively associated with their attitudes towards entrepreneurship, subjective norms, and perceived control over planned behaviors (Moriano et al., 2012 ). Furthermore, students residing in environments that foster entrepreneurial activities exhibit a heightened aspiration to engage in entrepreneurship (Teixeira & Davey, 2010 ). However, low rates of entrepreneurial intention are frequently attributed to barriers such as limited access to financing and insufficient network support (Achchuthan & Balasundaram, 2014 ). It is important to note that when comparing entrepreneurial intentions across different countries, developing nations tend to exhibit higher levels of entrepreneurial inclination (Davey et al., 2011 ; Veciana et al., 2005 ).

Yet, there is a relatively limited scope in ex-post analysis centered predominantly on entrepreneurs. Within this domain, researchers have pinpointed several pivotal drivers of entrepreneurship. These encompass creativity, autonomy, the pursuit of social status, responsiveness to market opportunities, financial incentives, and the readiness to invest personal savings into a business endeavor (Volery et al., 1997 ). Moreover, analyses have focused on determining the factors that influence the success of startups. Ullah et al. ( 2016 ) underscore that thriving entrepreneurs commonly exhibit a positive mindset, self-efficacy, unwavering determination, an understanding of the market and local business dynamics, and adept financial management skills. Moreover, in the realm of ex-post analysis, it is significant to note that specific researchers have meticulously factored in variables, such as: (1) migration patterns, (2) gender disparities, or (3) intra-entrepreneurial dynamics. Knight’s ( 2015 ) findings shed light on the multifaceted motivations propelling migrants towards entrepreneurship, blurring the traditional distinctions separating cultural and economic drivers, as well as the lines between necessity-based and opportunity-driven entrepreneurial pursuits. In the realm of gender dynamics, women commonly face obstacles, ranging from apprehension and limited financial expertise to the complexities of choosing viable business locations, all compounded by the pervasive challenge of discrimination (Cho et al., 2019 ). Innovation-driven organizations incentivize employees to brainstorm ideas and identify opportunities, yet this stimulation does not automatically ignite an urge for entrepreneurial pursuits among them. Furthermore, on an organizational level, an excess of identified opportunities might exceed the firm's capacity, willingness to fully capitalize on them (Ma & Huang, 2020 ) or in some cases lead to ‘poverty of attention’ (Simon et al., 1971 ).

Existing research has delved into various facets of entrepreneurial intention and motivation. Yet, these studies tend to be qualitative, primarily focused on developed nations, and often lack a holistic exploration of attitudes and motivations. Despite the abundance of literature on this subject, our comprehensive Scopus review unveiled a critical gap in integrative studies. There is a notable absence of comparative analyses that scrutinize entrepreneurial intentions, motivations, and venture creation, particularly between necessity-driven and opportunity-driven entrepreneurs—crucial aspects intertwined with the creation of ventures and wealth. Closing this gap could significantly enrich our understanding of entrepreneurial dynamics and their impact on wealth creation (Maleki et al., 2023 ).

Hence, this study investigates the impact of entrepreneurial attitudes, subjective norms, and perceived behavioral controls on entrepreneurial intention among two distinct groups of entrepreneurs: opportunity-driven and necessity-driven. The former, exemplified by individuals, such as immigrants striving for economic stability (Chrysostome & Arcand, 2009 ), typically embark on new ventures as a means of subsistence and fundamental income generation. Conversely, the latter group, as observed in studies like Block and Wagner ( 2010 ), engages in entrepreneurial activities with the goal of attaining financial independence. This research also examines the incidence of entrepreneurial motivations and intentions on venture creation within these delineated populations. By conducting a comparative analysis between necessity-driven and opportunity-driven entrepreneurs, the aim is to gain a more comprehensive understanding of the disparities in their attitudes, intentions, and motivations towards entrepreneurship. This comparative approach intends to unearth contrasting elements, allowing for a nuanced exploration that can inform more targeted research, policy initiatives, and managerial insights in this domain.

Drawing on the Theory of Planned Behavior (Ajzen, 1991 ; Armitage & Conner, 2001 ) we constructed hypotheses and a comprehensive framework that underwent empirical testing using survey data collected from 201 necessity-driven and 204 opportunity-driven entrepreneurs. The analysis employed Structural Equation Modeling (SEM) as the methodological approach. This study offers substantive contributions to the realm of entrepreneurship, particularly in the nuanced understanding of immigrant entrepreneurial attitudes, intentions, and motivations (Chen & Fan, 2022 ; Mago, 2023 ; Ullah et al., 2016 ), delineating its impact in three pivotal dimensions. Primarily, our study extends the scope of prior research by delving into the determinants influencing entrepreneurial intention and the establishment of ventures within immigrant communities, an under-represented area in existing literature.

Second, our analysis undertakes a comparative exploration between two discrete entrepreneurial cohorts, illuminating their distinct intentions and motivational factors, providing a nuanced understanding of their differing approaches towards entrepreneurship. Finally, our research attends to critical aspects, such as gender dynamics, informality in business, and the dynamics of venture creation, necessitating re-evaluation in the wake of the disruptive effects of the COVID-19 pandemic.

Literature review

• Entrepreneurial intention

Achchuthan and Balasundaram ( 2014 ) have identified two key areas in the existing literature on entrepreneurial intention: (1) the process of company creation, and (2) the role of the entrepreneur in evaluating and identifying business opportunities. Furthermore, McStay ( 2008 ) recognizes three primary approaches to study the entrepreneur as an individual:

Trait orientations seek to distinguish entrepreneurs from non-entrepreneurs and the specific traits of the first ones.

Behavioral perspectives , where the entrepreneur is understood as an individual with abilities to recognize and exploit profit opportunities that are not identified by others.

The cognitive process approach seeks to comprehend the way in which entrepreneurs think, and how they process information.

These theoretical frameworks are instrumental in revealing the core motivations and intentions that drive an individual's choice to embark on a new business venture. Predominantly, these investigations are rooted in Ajzen's Theory of Planned Behavior (TPB) ( 1991 ), which constitutes a foundational framework in this domain. As articulated by Ajzen ( 1991 , p. 4), a pivotal component of this theory revolves around the individual's intention to actively participate in a specific behavior:

Intentions are assumed to capture the motivational factors that influence a behavior; they are indications of how hard people are willing to try, of how much of an effort they are planning to exert, to perform the behavior. As a rule, the stronger the intention to engage in a behavior, the more likely it should be its performance. It should be clear, however, that a behavioral intention can find expression in behavior only if the behavior in question is under volitional control.

From this perspective, intentionality is conceptualized as the anticipation of a deliberate action in the future (Moriano et al., 2012 ). Accordingly, entrepreneurial intention refers to the development of motivation or aspiration to initiate a business prior to its actual establishment (Bird, 1988 ; Krueger & Carsrud, 1993 ). Within the entrepreneurship literature, entrepreneurial intention is recognized as the precursor to company creation.

According to TPB, there are three components that allow the prediction of entrepreneurial intention:

Attitude towards a behavior: Refers to a general evaluation of an individual's behavior.

Subjective norms: Refers to the perception of the subject regarding the social pressure to engage (or not) in a behavior or activity.

Perceived Behavioral Control: Refers a person's perception of its ability to perform a specific behavior.

A comprehensive review of existing research on entrepreneurial intention revealed a predominant focus on Asia, Europe, Australia, the United States, and Africa, with comparatively fewer studies dedicated to Latin American countries (Table  1 ). Most of these studies have relied on samples consisting primarily of university students, with a lesser emphasis on entrepreneurs. Moreover, investigations encompassing migrant populations in developing countries are notably scarce.

The reviewed studies encompass a range of research objectives, including the examination of key triggers and barriers during venture initiation (Shahid, 2022 ); exploration of factors driving entrepreneurial intentions among university students (Raza et al., 2018 ); analysis of the influence of family business experience on individuals' inclination to start a firm (Singh, 2016 ); and investigation of the predictive role of education in entrepreneurial intention among university students (Hou et al., 2022 ).

The main findings of these studies highlight the positive impact of entrepreneurial education programs on students' ability to identify business opportunities and develop entrepreneurial intention (Hou et al., 2022 ). In addition, the identification of opportunities and self-efficacy are identified as factors that positively influence students' entrepreneurial intentions (Hassan et al., 2020 ). In this sense, Ma and Huang ( 2020 ) emphasize that opportunity identification mediates the relationship between technical and market knowledge and employees' entrepreneurial intention.

Entrepreneurial motivation

A scanning of the literature on entrepreneurial motivation (Table  2 ) reveals that the main samples are made up of entrepreneurs belonging to consolidated companies and people who are not entrepreneurs yet. Furthermore, most research has focused on analyzing the variables significantly correlated with entrepreneurial motivations (Arenius & Minniti, 2005 ); the relationships between entrepreneurial motivation and entrepreneurial behavior (Collins et al., 2004 ); and the effects of the gender stereotypes and their implications in entrepreneurial motivation and intention (Bouarir et al., 2023 ).

Overall, studies about entrepreneurial motivation conclude that it can predict entrepreneurial activity (Arenius & Minniti, 2005 ). In addition, other authors have found that entrepreneurial motivation drives essential behaviors related to entrepreneurial intention (Murnieks et al., 2020 ). In this sense, Cardon and Kirk ( 2015 ) conclude that entrepreneurial passion has a mediating role in the relationship between self-efficacy and persistency, suggesting that there is an important role of affective processes in entrepreneurship. Finally, Rajabi et al. ( 2014 ) suggest that entrepreneurial motivation relates directly and positively to effort: salespeople with a greater entrepreneurial motivation exert more effort to perform their sales-related tasks, for example, in addition, competitiveness and self-efficacy are two antecedents of entrepreneurial motivation in a sales context.

Conceptual framework and hypothesis development

The influence of attitudes, subjective norms, and perceived behavioral control on entrepreneurial intention.

Moriano et al. ( 2012 ) assert a direct correlation between favorable attitudes towards entrepreneurship and heightened levels of entrepreneurial intentions. Similarly, Osorio and Roldán ( 2015 ) propose that prior exposure to entrepreneurial activities significantly bolsters the factors influencing entrepreneurial intention. Furthermore, Hassan et al. ( 2020 ) establish a positive association between entrepreneurial intention, the recognition of opportunities, and self-efficacy. They also emphasize that education plays a pivotal role in moderating the relationship between self-efficacy and entrepreneurial intention. Meanwhile, Bai et al. ( 2022 ) conduct a comprehensive analysis, identifying 16 distinct factors that significantly impact entrepreneurial intention. Among these, the expectation surrounding entrepreneurship and the ability to discern and evaluate opportunities emerge as the most influential determinants. Hence, we hypothesize:

H1. The attitudes of entrepreneurs by necessity and by opportunity are positively correlated with their entrepreneurial intention.

According to Yean et al. ( 2015 ) the opinions of parents, friends, relatives, and experts shape the belief of engaging in a particular behavior, playing a significant role, and pressuring a person to perform it. In a Vietnamese study Khuong and An ( 2016 ) found that the subjective norms do not influence entrepreneurial intention. Omidi Najafabadi et al. ( 2016 ) also found similar results in Iran. Conversely, Hossain et al. ( 2023 ) found that subjective entrepreneurial norms have a positive and significant association with entrepreneurial intention. This relationship was also found by Moriano et al. ( 2012 ) and by Bai et al. ( 2022 ) who argue that demographic and environmental conditions influence entrepreneurial intention through emotional perception and motivational factors. Since entrepreneurs by necessity may have a higher chance of being marginalized, vulnerable or part of a minority (Cho et al., 2019 ), the emotional support from others may have a bigger impact on their entrepreneurial intention, compared with entrepreneurs by opportunity. Hence, we propose the following hypothesis:

H2. Subjective norms have a stronger correlation with entrepreneurial intention between entrepreneurs by necessity than between entrepreneurs by opportunity.

Entrepreneurial perceived behavioral control (PBC), defined as the entrepreneur’s belief in their capabilities to perform certain behaviors (Brouwer et al., 2009 ) can serve as indicator of behavioral accomplishment. Some authors have found that PBC and entrepreneurial intention are not correlated. Mohammed et al. ( 2017 ) for example, found an insignificant relationship between entrepreneurial PCB and entrepreneurial intention. Conversely, Hossain et al. ( 2023 ) uncovered that entrepreneurial PCB is positively correlated with entrepreneurial intention. Similar outcomes were also found by Moriano et al. ( 2012 ). Therefore, we hypothesize:

H3 . The perceived behavioral control of entrepreneurs by necessity and by opportunity is positively correlated with their entrepreneurial intention.

The influence of entrepreneurial motivation on venture creation

By means of a meta-analysis Collins et al. ( 2004 ) found that the motivation that comes because of previous achievements significantly predicts venture creation. According to Bergner et al. ( 2021 ) specific traits, such as recognizing opportunities and taking risks, are factors that trigger a person’s new business development. Moreover, Adelowo and Henrico ( 2023 ) suggest that entrepreneurial education and motivation have a significant role in venture creation. Contrarily, Yin and Wu ( 2023 ) suggest that without the influence of external factors, individuals would consider business risk as a threat that reduces their business opportunity and motivation. Hence, the following hypothesis is proposed:

H4. The motivations of entrepreneurs by necessity and by opportunity are positively correlated with venture creation.

Shook and Bratinau ( 2010 ) argue that the motivations for being an entrepreneur can vary depending on the cultural milieu and the circumstances. Some entrepreneurs by necessity may have stronger motivations to create ventures due to their urgency to make a living, impossibility to find a job, and because entrepreneurship—formal or informal—is the only choice (Minniti et al., 2006 ). There is an association between motivation and intention (Amofah & Saladrigues, 2022 ). However, “Motivation drives us into action” (Hossain et al., 2023 , p. 9). Ryan and Deci ( 2000 ) argue that motivation is key for creating new businesses, it encompasses energy, orientation, determination, and intention and is the cornerstone of biological, psychological, and social modulation. These elements are fundamental for entrepreneurs by necessity, since they often function in an adverse environment, with major restrictions, and fewer opportunities. Accordingly, we hypothesize:

H5. Motivations have a stronger correlation with venture creation by entrepreneurs by necessity and by opportunity than intention.

Drawing on the Theory of Planned Behavior, this study explores the research framework illustrated in Fig.  1 .

Research framework

Methodology

The methodological approach for the development of this document can be summarized in the collection, processing, and analysis of the data, followed by the construction of the models and analysis of the results for the validation of the hypotheses (see Fig.  2 ). Each of these stages will be described below:

Methodological approach

Data collection

We conducted a guided survey involving Colombian entrepreneurs, categorizing them into two distinct groups: entrepreneurs driven by necessity ( N  = 201) and those propelled by opportunity ( N  = 204). Our data collection from necessity-driven entrepreneurs was sourced from regional entrepreneurship events and enterprises established along the Colombia–Venezuela border. Over a span of 3 months, we actively engaged with and established connections at entrepreneurial events organized by universities, chambers of commerce, and non-governmental organizations orchestrating such gatherings. In addition, those who could not assist to the gatherings were visited by the research assistant in situ to perform the survey. Our active involvement in these fairs facilitated the collection of data from entrepreneurs situated along the Colombian–Venezuelan border.

Conversely, data pertaining to opportunity-driven entrepreneurs was extracted from a repository encompassing university incubators and local Chambers of Commerce. Initially, entrepreneurs were contacted via email and subsequently subjected to personal interviews. Consequently, both groups were recruited via convenience sampling methodology (Etikan et al., 2016 ). Notably, both sample collections were carried out during the period spanning January to March 2023 and both required the guidance of the evaluator throughout the survey.

Data processing

The data collected was normalized by applying scores according to the amount of response options presented and compiled through the Likert scale. Other questions of binary response were generated as dummy variables and are a part of the control variables established on the different analyzes addressed in this study. Table 3 presents the Likert scores and categories assigned to each section of the analysis.

Data analysis and robust SEM

We carried out a confirmatory factor analysis (Bouarir et al., 2023 ) schematized through structural equation models (SEM) (Byrne, 2016 ) is applied under the robust (variance–covariance matrix of the estimators -vce-) standard error method that allow the measurement of constructs for each one of the groups of questions associated with attitude, subjective norms, and perceived behavioral control (see Appendix Fig. 3 a, b). These constructs are employed in the analysis of the different hypotheses addressed in this study as explanatory variables via several ordinary least squares (OLS). We used the statistical software Stata (Verardi & Croux, 2009 ) to measure the relationship between these variables and the distinct measures of entrepreneurial intention. In the same way, a construct of entrepreneurial intention is estimated (see Appendix Fig. 4 a, b) with all the constructs previously developed (attitudes, subjective norms, and perceived behavioral control), and other construct of motivations (see Appendix Fig. 5 a, b) associated with the entrepreneurial activity. All above, with the purpose of observing the effects of these constructs on the number of previous ventures undertaken. These analyzes are run independently for necessity-driven entrepreneurs and opportunity-driven entrepreneurs.

The validity of these constructs and regression models were evaluated using statistical indicators, such as the t-statistic of the coefficients (OLS), z-statistic of the coefficients of the factors and covariance of the constructs, the standardized root mean square residual (SRMR), and the coefficient of determination (OLS and SEM)—due the SEM was fit with vce(robust); only stats(residuals) valid—all of them under a confidence level of 0.90.

Methodological limitations

We acknowledge certain limitations stemming from our methodology and data collection process. First, a potential representativeness bias arises due to the absence of gender controls during data collection, resulting in a higher prevalence of male individuals (75%) within the opportunity-driven entrepreneurship sample and a higher frequency of females (65%) within the necessity-driven segment. This lack of distinction regarding gender in relation to the respective entrepreneurial groups signifies a representativeness bias, impacting the analysis of results by gender. Second, the utilization of convenience sampling, necessitated by the challenges in accessing data from the targeted entrepreneurial population, introduces potential limitations. Our varied contact strategies, including visits to entrepreneurship fairs, engaging entrepreneurs from incubation programs, and sourcing data from university entrepreneur databases, may inherently bias our sample selection. Finally, the occurrence of missing values within our data set poses another limitation. Errors during the data collection process, leading to omissions or skipped responses, were observed. Notably, these instances were retained without any attempts to rectify or substitute the missing values, potentially influencing the robustness of our analysis.

Table 4 synthesizes the effects of the constructs of attitudes, subjective norms, and perceived behavioral control on the entrepreneurial intention of entrepreneurs by necessity and by opportunity, controlling for gender, type of entrepreneur (native/local or migrant) and business status (formal or informal).

The analysis suggests that, first, H1— the attitudes of entrepreneurs by necessity and by opportunity are positively correlated with their entrepreneurial intention—is not supported. Contrary to expectations, in general, the attitudes (measured by soft and hard skills) of entrepreneurs—both by necessity and by opportunity—are not positively correlated with their predisposition to start a commercial venture; excluding E1 and E4, all the items evaluated are not significant. However, while a greater endowment of hard skills positively and significantly determines the willingness to develop a new business in entrepreneurs by need (E1; 0.41**), increased soft (E1; 0.37**) and hard skills (E4; 0.29*) exert a significant effect on the inclination of entrepreneurs by opportunity to start a firm.

Second, H2— subjective norms have a stronger correlation with entrepreneurial intention between entrepreneurs by necessity than between entrepreneurs by opportunity — is supported. While for entrepreneurs by need, subjective norms significantly and positively influence their entrepreneurial intention—the values are significant for all the items evaluated (E1 to E6), for entrepreneurs by opportunity subjective norms only influence one of the items (E1; 0.24**). Regarding entrepreneurs by necessity, subjective norms have the most positive effect on entrepreneurial intention. Third, H3— the perceived behavioral control of entrepreneurs by necessity and by opportunity is positively correlated with their entrepreneurial intention — is not supported conclusively. There is not a statistically significant relationship between the PBC of both types of entrepreneurs and their entrepreneurial intention. The relationship is present in entrepreneurs by necessity—only in three of the items evaluated (E1, E2 and E6)—but not in entrepreneurs by opportunity.

Regarding gender, the analysis also shows that, while there is a significant correlation between being a female entrepreneur by necessity and entrepreneurial intention—most of the elements assessed (E1, E3, E4 and E6) are significant—this relationship is not significant for women entrepreneurs by opportunity.

The analysis by type of entrepreneur shows that migrants have a negative and significant correlation with entrepreneurial intention (EI5 and EI6) among necessity entrepreneurs, the opposite for opportunity entrepreneurs (EI2 and EI6). The status of the company (formal or informal) has no effect on entrepreneurial intention.

Table 5 consolidates the relationships between entrepreneurial motivation, estimated entrepreneurial intention, and venture creation and entrepreneurship stage, controlling for gender, type of entrepreneur (native/local or migrant) and entrepreneurship status (formal or informal).

The analysis indicates that, first, H4—the motivations of entrepreneurs by necessity and by opportunity are positively correlated with venture creation—is supported. The relationship between the motivations and the number of ventures developed by entrepreneurs by necessity and by opportunity is positive and significant (0.29** and 0.37*). Second, H5—the motivations have a stronger correlation with the number of ventures undertaken by entrepreneurs by necessity and by opportunity than intention — is supported. While there is a positive and significant association between the motivations and the number of ventures undertake by both types of entrepreneurs, there is only a significant relationship between the estimated entrepreneurial intention and number of ventures among entrepreneurs by opportunity (0.28*), but this ratio is lower.

The findings indicate that entrepreneurial intention exhibits a positive and significant correlation with more advanced phases of entrepreneurship for entrepreneurs by opportunity, unlike motivations. Although the results for entrepreneurs driven by necessity are similar, they are not conclusive.

Furthermore, the results indicate a significant association between belonging to informal populations and the early stages of enterprise development for both necessity-driven and opportunity-driven entrepreneurs (− 0.06** and − 0.19***, respectively). When considering gender, the analysis reveals a significant correlation between being a female opportunity entrepreneur and reaching a more advanced stage of entrepreneurship (0.07*). However, this relationship is not significant for necessity entrepreneurs. In contrast, the type of entrepreneur, whether native/local or immigrant, has no discernible effect on the development of entrepreneurship.

Conclusion and discussion

Drawing from the Theory of Planned Behavior, the key objective of this research was to investigate the effect of entrepreneurial attitudes, subjective norms, and perceived behavioral controls on the intention of entrepreneurs by opportunity and by necessity to start a business. This paper also examined the incidence of entrepreneurial motivations on the number of ventures undertaken by these two types of founders. Three (H2, H4 and H5) of the five hypotheses were supported, generating key unexpected results that contradict and expand extant literature on immigrant entrepreneurial motivations and intentions.

Theoretical implications

This study expands our understanding on entrepreneurial intention by revealing that contrary to what extant literature suggests (Hou et al., 2022 ; Ma & Huang, 2020 ), the attitudes of entrepreneurs by necessity and by opportunity are not, in general, positively correlated with their entrepreneurial intention. However, while for entrepreneurs by necessity the hard skills influence a positive disposition towards entrepreneurship (E1; 0.41**), for entrepreneurs by opportunity soft skills (E1; 0.37**) affect this disposition, unveiling an important difference between these two types of entrepreneurs. While for some individuals, namely, university students, the attitudes are key to stimulate the intention to develop a venture (Hou et al., 2022 ; Ma & Huang, 2020 ), for others, such as members of incubation programs and immigrants, the attitudes may not drive entrepreneurial intention. Aspects like subjective norms have a stronger influence on intention, at least in entrepreneurs by necessity.

This research extends previous investigations by showing that the degree of influence that subjective norms exert on entrepreneurial intention varies according to the type of population. Although for entrepreneurs by necessity subjective norms significantly and positively influence their entrepreneurial intention, for entrepreneurs by opportunity this is not the case; for the latter, subjective norms only affect the willingness to undertake the necessary steps to create a new business (E1; 0.24**). Many extant studies in different contexts have suggested that, overall, subjective norms are positively correlated with entrepreneurial intention (Moriano et al., 2012 ); we found that opportunity-entrepreneurs’ subjective norms are not associated with entrepreneurial intention. Since immigrants tend to face more conditions of adversity and discrimination than non-immigrants (Chen & Fan, 2022 ), immigrants’ perceptions of others’ attitudes towards entrepreneurship (subjective norms) becomes crucial to foster the intention to create a new venture. Moreover, contrary to previous studies, we did not find a substantial and conclusive correlation between PBC of entrepreneurs—by necessity and by opportunity—and their drive to start a business. Meaning that how entrepreneurs perceive themselves as adequate for developing new firms does not always influence their resolve to create them. The association between PBC and entrepreneurial intention is marginally present in entrepreneurs by need (although it exhibits an inverse relationship) but not in entrepreneurs by opportunity.

Our analysis broadens the empirical work on entrepreneurial intention and gender by revealing that being a female entrepreneur by necessity is correlated with the resolve of creating ventures; however, this relationship is not significant for women entrepreneurs by opportunity. Women entrepreneurs by necessity may have a stronger pressure to create their own business to provide resources for their children, while having the flexibility to take care of them, especially when they are undocumented and cannot obtain a job easily (Laguía et al., 2022 ). Women may have a better entrepreneurial intention justified by the gender stereotypes (Bouarir et al., 2023 ), exclusion, discrimination and stigmatization of the labor market and unpaid work (homework), resorting to entrepreneurship due to the need for livelihoods, and promoting the empowerment of women.

This study also contributes to the entrepreneurial intention field by highlighting the important and positive role that motivation plays on individual’s recurrence of entrepreneurship. Extant research centers on the pivotal role of entrepreneurial intention on new venture creation (Arenius & Minniti, 2005 ; Dheer & Castrogiovanni, 2023 ), our findings, however, uncover that motivation plays a greater incidence on the development of new businesses. Although there is a positive and significant association between the motivations and the number of ventures initiated by both types of founders, there is only a significant relationship between the estimated entrepreneurial intention and number of ventures among entrepreneurs by opportunity, but not among entrepreneurs by necessity.

Practical implications for managers and policy makers

It is crucial for both managers and policy makers to discern the inherent disparities between entrepreneurs driven by necessity and those propelled by opportunity. Tailoring solutions to align with their distinct needs is imperative. Our study revealed that subjective norms exert a significant influence on entrepreneurs compelled by necessity, driving them to embark on new business ventures. This impetus arises from the critical need for swift and efficient income generation, bolstering their entrepreneurial ambitions. Consequently, it becomes imperative for both corporate and government leaders to not only devise enduring strategies for nurturing entrepreneurship among immigrant entrepreneurs driven by necessity but also to recognize the effectiveness of immediate, short-term interventions. These interventions encompass provisions, such as small loans, equipment, and technological assistance.

Moreover, technological assistance should encompass a comprehensive understanding of both the business as a value chain (Ataei et al., 2020 ; Contreras et al., 2012 ) and the geographical location. The choice of location significantly influences business success (Espitia-Escuer et al., 2015 ; Ferreira et al., 2016 ), particularly in cases where entrepreneurs have the flexibility to choose their location. However, for necessity-driven entrepreneurs, this flexibility might not be viable in most instances. Hence, technological assistance must be tailored to aid these entrepreneurs in devising alternative strategies that compensate for location-related deficiencies. Implementing such tailored strategies is pivotal in enabling these entrepreneurs to overcome location barriers. These pragmatic measures hold the potential to yield enduring and positive outcomes for entrepreneurial endeavors.

Furthermore, when formulating policies and programs, corporate and government officials should meticulously consider the divergent motivations that prompt entrepreneurs to embark on new business ventures. Anticipating these motivations beforehand can pave the way for more targeted, relevant, and efficacious solutions to amplify both the inception and sustainability of ventures. Entrepreneurs driven by necessity might be compelled to launch a business due to job unavailability or as their sole recourse (e.g., undocumented immigrants, individuals with criminal records), while entrepreneurs driven by opportunity might seek enterprise establishment to enhance their earnings, pursue personal or professional growth, or attain societal recognition. Policies and programs tailored for these two distinct demographics, each driven by their respective catalysts, necessitate nuanced approaches, encompassing varied content and scope.

Further research

The data analyzed was gathered in Colombia. Hence, to increase generalizability further studies should expand to other countries. Moreover, many of the immigrants who participated in this inquiry are from Venezuela. Therefore, future research should explore immigrants from different nationalities. Likewise, delving deeper into the motivations and barriers faced by migrant versus national entrepreneurs presents an intriguing avenue for exploration. Immigrant entrepreneurs often encounter heightened adversity and discriminatory conditions compared to their non-immigrant counterparts (Chen & Fan, 2022 ). Despite this, studies probing into the entrepreneurial intentions and motivations, particularly within samples reflecting necessity-driven entrepreneurship among migrants, remain limited. Such exploration would significantly contribute to expanding our comprehension of migrant integration into economies.

Furthermore, three out of six relationships hypothesized contradict extant literature, which may be a theoretical strength by itself; however, additional research could replicate this study with distinct methods and in other contexts to strengthen the validity of the findings.

Availability of data and materials

All materials will be made freely available to the academic community upon the publication of this manuscript.

According to Ajzen ( 1991 ), entrepreneurial attitudes refer to the evaluation of an individual over a certain behavior; subjective norms reflect an individual's perception of social pressures to perform or not to perform the behavior; perceived behavioral controls refer to people’s perception of the ease or difficulty of performing the behavior of interest (Ajzen, 1991 ). Entrepreneurial intention is the formation of a desire or motivation to develop a venture (Bird, 1988 ; Krueger & Carsrud, 1993 ).

Abbreviations

Entrepreneurial perceived behavioral control

Ordinary least squares

Standardized root mean square residual

Structural equation models

Theory of planned behavior

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Acknowledgements

We extend our gratitude to our collaborators involved in the Alliance Project 7, whose invaluable contributions shaped the design and facilitated the comprehensive collection of data through our meticulously structured survey. Our heartfelt appreciation goes to each of the dedicated research assistants: Daniela Moreno Arriola, Laura Marcela Santos, and Valentina Forero Bojaca, for their diligent efforts in gathering the essential information. In addition, we express our profound gratitude to Dr. Lizeth Fernanda Serrano Cárdenas for her pivotal role in co-designing the data collection instrument, an invaluable contribution that greatly enriched our study. In addition, we would like to thank the EFI Alliance for their support and our funders the Ministry of Science, Technology and Innovation, and the World Bank for their support.

This work is funded by the Colombia Científica-Alianza EFI Research Program, with code 60185 and contract number FP44842-220-2018, funded by The World Bank through the call Scientific Ecosystems, managed by the Colombian Ministry of Science, Technology, and Innovation.

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ABL: as project leader, I ensure that issues related to the accuracy or completeness of any part of the work are properly investigated and resolved. My role is also to design and generate the framework of analysis, i.e., to propose and structure the methodological framework. I also co-designed the instrument and facilitated its application. Finally, I revised and drafted the final version of the document and gave final approval to publish the content. JARO: as the research assistant of the project, he is responsible for the execution of the methods and writing the first draft of this paper. He also participates in the analysis of the results and the discussion of this paper. JMB: he is responsible for the co-design of the instrument. He also participated in the interpretation of results by drafting the discussion and conclusions sections. Finally, he critically reviewed the document.

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See Figs. 3 , 4 , and  5 .

a Estimated attitudes (SS and HS), subjective norms (AF) and perceived behavioral control (BA) for entrepreneurs by necessity (†Significance at 10%. \(\ddagger\) Not significant). b   Estimated attitudes (SS and HS), subjective norms (AF) and perceived behavioral control (BA) for entrepreneurs by opportunity

a   Estimated entrepreneurial intention for entrepreneurs by necessity. b   Estimated entrepreneurial intention for entrepreneurs by opportunity

a   Estimated entrepreneurial intention for entrepreneurs by necessity. b Estimated entrepreneurial intention for entrepreneurs by necessity

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Batz Liñeiro, A., Romero Ochoa, J.A. & Montes de la Barrera, J. Exploring entrepreneurial intentions and motivations: a comparative analysis of opportunity-driven and necessity-driven entrepreneurs. J Innov Entrep 13 , 11 (2024). https://doi.org/10.1186/s13731-024-00366-8

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Business Innovation – Entrepreneurship

Types of innovations

Qualities and the dark side of entrepreneurship, strategic planning.

Innovations can be defined as processes through which entrepreneurs are involved in the conversion of opportunities into ideas that are marketable. Creativity is the force behind creation of new ideas that have been referred to as innovation. Depending on the process itself how it occurs, innovations can be classified into various types. Invention type of innovation is whereby new ideas are generated by individuals from scratch. This is actually where creativity is so much involved because without brainwork invention cannot occur. Inventions occur when people like scientists come up with new ideas for instance concerning life like the invention of a process to cure a disease or even an instrument or procedure for measuring certain parameters. Inventions are actually breakthrough and can go even beyond the human experience. Some can be based on already existing models. Inventions can be in different areas for instance art, music, culture, science and so on.

The second type of innovation is the extension type. This is whereby somebody utilizes an already invented concept or idea to come up with another new dimensional idea or concept. It can be viewed in terms of developing an already created innovation.

In the music industry an artist can come up with an original song yet others will collaborate with him or her to come up with newer versions of the same song. Therefore this is innovation but in the extended form. The invention of Aloe Vera for curing skin infection has been further developed into the invention of other medicine that can even cure more than just the skin infection.( Afua,2003).

The third type of innovation concerns the duplication of pre-existing ideas. This is whereby an entrepreneur sees already existing new ideas in terms of increasing the number of copies of the same idea and find an opportunity in them. This type of innovation comes up because of unequal distriuibution of services or products within a particular geographical region. An entrepreneur noticing that international call services are offered at Town A only while town B has the same demand can come up with a duplicate innovation and set up the same business in town B.In such a case he /she is not the inventor of international telephone services in that location but he/she has simply duplicated another persons idea to come up with a new service..( Afua,2003).

The fourth type of invention is referred to as the combination innovation. This refers to innovation whereby an individual decides to bring together other pre-existing ideas to come up with a new innovation. Ideas which seem to be interrelated can be synthesized in the process so as to come up with a combination that has a new outlook and still be considered as a new innovation. This type of innovation can be exemplified in the computer programming filed whereby a programmer can join several ideas created by other programmers and come up with a software that is capable of doing a couple of tasks all under the same suit. For instance initially we can different software’s for word processing, calculations, database management and other tasks but with the synthesis innovation Microsoft was able to come up with the office suite that can carry out all these tasks all under the same package.

Entrepreneurs do not create change but exploit change..

They utilize change first of all because of the fact that change is part of them and they are used to the idea of living with it. For entrepreneurs change is actually the source of opportunity in a business environment. Without change it means that they still hold to the same products and services and same clients but with change the minds are opened up through thinking and this is what brings about new opportunities in the business. They view change as a normal and healthy occurrence that is necessary for the growth of business. Therefore in the course of searching for opportunities they look for change , welcome it into the business and then exploit that change so as to get opportunities for future advancements. Entreprenuers can be looked at as the exploiters of change rather than the creators of change because of the activities they are involved in the course of pursuing their business goals. It is important to note that they are involved in the coordination of factors of production such as land and capital and this role does not place them in a better position to create change. (Kuratko and Hodgetts 2004) Secondly Innovators are the ones who spot opportunity in a business after identifying that indeed change should take place.

Even though some theories claim that innovators are the ones who create change they do not go ahead to give an explanation as to where the change emanates from. Therefore they tend to leave some questions unanswered as to who is the real creator of change.

I think it is vital to note it is not possible that innovators can have the ability to exploit change that they do not know where it has come from. To some point critically looking at the statement one can come to a conclusion that entrepreneurs too are involved in the creation of change especially in small enterprises which are yet to begin. In new business ventures it is normally the work of the innovator to come up with change by being able to identify for instance specific products or services that cannot be found in a particular market. In big organizations entrepreneurs can be looked at in terms of exploiters of change. This is because change can be created in an organization for instance with the management but a lower cadre employees can come up with a unique opportunity that can lead to a new venture. In such a case the employee would have utilized the created change he never created to come up with a business opportunity.

So whether to associate an innovator with creation of change or not actually depends on the type of entrepreneur that is being referred to and the type of business or organization that is being analyzed.

Qualities of entrepreneurs are the attributes that make the entrepreneurs successful in whatever they are involved in. The first quality concerns risk taking whereby entrepreneurs are considered to be risk takers in whatever the venture into. This is a person who sets out to pursue a dream even without the resources properly arranged and manages to send out the risk to other related potentials. Entrepreneurs are independent thinkers as they are used to the idea of not allowing other people to think for them. This is why they are able to come up with not only creative but original and unique ideas that have never even been imagined. Creativity is another important quality of an entrepreneur. It actually creativity which drives someone to come up with change products or services which are unique in their own identity. An entrepreneur has to be confident and always believes in the power to succeed no matter what may come in the way of pursuing the objectives. You cannot separate entrepreneurship from handwork. This I mean that all efforts of the individual are directed to achieving the objectives of that business. There is no laziness in entrepreneurs as they are willing to even go the extra miles to see things moving. Entrepreneurs always have a passion of what they do. They are therefore not pushed by anyone to work or do whatever their business entails. Commitment is also a very important aspect of entrepreneurship whereby such people never get into other activities which interfere with what they are supposed to do for their business to succeed. Desire to succeed is a critical quality in entrepreneurship. This is actually what drives somebody into business no matter what the goals may be but everybody desires to succeed as nobody would desire to fail in life. Positivity always prevails in successful entrepreneurship. A successful entrepreneur has to have a positive mental attitude so as to be inspired into succeeding. Negative attitudes lead to failure of business because without a positive attitude there will also be lack of goodwill. Entrepreneurs are never in a hurry but they are always exercise patience in whatever they do. The results may not be forthcoming but with patience greater profits are bound to be realized in entrepreneurship. Flexibility is a very important strength in entrepreneurship as it can make one to move from a non-profit to a more profit business. (Kuratko and Hodgetts 2004)Entrepreneurship call for great sacrifices by those who want to succeed. It is not an easy going endeavor. For instance it can call for one to do away with a career that had been studied for a long time to pursue entrepreneurship.

The bad side of entrepreneurship concerns its destructiveness whereby an entrepreneur can leave for a worthy course to venture into high risks and end up regretting in the future. Entrepreneurship can also lead to unethical behavior that goes against the standards of the society. This is whereby as long as a venture is profitable whether the society approves or not does not concern the creator of the idea. When it comes to young entrepreneurs they are at a very high risk of being conned by fake investors who are out their looking for them another dark side of entrepreneurship concerns trust whereby there is a possibility of the entrepreneur not trusting the people who work for him /her because he /she holds a different view from them.

Ego in an organization at time can be major obstacle that is associated with entrepreneurship. This is especially noticed when an individual does not exercise humility to realize the organization is more important than an individual.

Strategic planning is the overall process of decision making whereby the entrepreneur chooses a course of the business by first of all determining where it is currently to where he would want the business to be in future. This entire process is carried out while considering the strengths and weaknesses of the venture. Strategic planning is a very essential part of the entrepreneurship process. This is because during the initial stages of entrepreneurship most entrepreneurs are normally involved in activities which appear to have urgency while overlooking the future or ultimate goals of the business.

There are factors that drive entrepreneurs into strategic planning. This include the demand on the strategic managers time , the speed with which decision making is undertaken, internal politics which cause problems, the uncertainty of the entrepreneur and other environmental factors. (Wickham,2004).

Most emerging entrepreneurs engage in planning activities but normally they are not formalized in nature. Therefore the main purpose of strategic planning is to ensure that all the issues that pertain to the business are well taken care of to avoid problems in the future. Strategic planning is essential in the sense that it is a framework for major decisions in the business and it becomes the basis from which the business can be approved since the issues can be seen clearly. For example to be given funding from organizations such as Banks one of the requirements is a detailed strategic plan for that particular business that needs funding. The strategic plan is also a vital document that is necessary to explain the business to friends and other people so as to inform them have them motivated and even incorporate them in the operations of the business. Some other parties involved in the business may be lacking awareness on what course the business is taking therefore this document comes in handy to give guidelines on the issues that business is supposed to undertake.. (Wickham,2004).

In terms of monitoring and evaluation of the business performance, the strategic plan is a very essential document that is supposed to set the benchmark for monitoring how the business would be faring. A strategic plan is not the same as a business plan because a business plan is much more detailed in form. A strategic plan is short in form and can even form the framework for writing a business plan. (Kuratko and Hodgetts 2004).

This document should also not be confused with a business operational plan. a strategic plan in this case is more visionary and directional while an operational plan is a document that is short time meant to address the immediate issues. For instance when planning for a holiday, the strategic issues can include the budget, venue, number of people and others while issues to be included in the operational plan include packing, weather conditions, travel arrangements and so on. The main components of a strategic plan include the mission, vision , values, objectives strategies. Goals and programs.

As already indicated most emerging entrepreneur engage in planning informally and even other do not. This can be attributed to a number of factors among which include the perception that the process is costly. Limited time is also an obstacle towards strategic management. Lack of knowledge and expertise is also a contributing factor. When there is no trust in the entrepreneurship process then there will be strategic planning since parties sense mischief against one another. Despite these obstacles strategic planning has proved to be of value to ventures for instance businesses have managed to save on costs, improved decision making, reduced the feeling of uncertainty and even increased the competition position among other benefits not mentioned. Therefore it is also an asset for emerging business ventures.. (Wickham,2004).

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