Nexus of Entrepreneurial Mindset, Prior Knowledge, and Business
Introduction
The creation of new businesses and entrepreneurship has developed to become a priority in the economic development of states, both for developing and developed countries, since such ventures are perceived to be crucial the development of the economy, job creation and the alleviation of poverty. Piperopoulos and Dimov (2015, p. 980) stated that entrepreneurship provides an employment opportunity for both graduates and non-graduate students, and has gained popularity due to the fact that it leads to self-sufficiency, which plays an important role in fighting unemployment. Nabi, Liñán, Fayolle, Krueger, and Walmsley (2017, p. 298) added that the spirit of entrepreneurship is important to every society since globalisation has exposed various local markets to the international arena where different companies can compete with each other and access a larger pool of consumers. In short, entrepreneurship has the ability to create a healthy and sustainable economy. The issue of what individual characteristics and mindset lead graduates to become entrepreneurs is classical. Besides, it is a common ideology that as much as the propensity to entrepreneurship mindset differs from one society to the other, a common element is that however much entrepreneurs emerge, most of them are likely not to succeed.
Different researchers have focused on comprehending the various factors that lead to the success and failure of various entrepreneurs, and why some people are more skillful to learning, assessing and take advantage of various opportunities than others. As much as different solutions have been given to the issue, various reviewed pieces of literature have supported various propositions that relate to the background knowledge and mindset to the divergent outcomes in entrepreneurship (Karimi, Biemans, Lans, Chizari, and Mulder 2016). Different literature has revealed that prior knowledge is associated with the discovery of entrepreneurial opportunities, the growth of firms and the overall success ventures. Studies have revealed that people with no prior business ownership experience and realise fewer entrepreneurial opportunities and have a lower probability of achieving positive business outcomes.
Empirical evidence on the relationship between Graduate Studies and Entrepreneurship
There have been various discussions on whether there is an association between a person’s knowledge and their respective expected business outcomes. While most works of literature have pointed out that graduate students have a higher probability of succeeding in entrepreneurial initiatives, there are selected cases where people with no entrepreneurial background and knowledge have made it business. Several reviews on entrepreneurship have compared individuals with an entrepreneurial background and those without (Audretsch, Belitski, and Desai 2015, p. 33). While this short evidence is not meant to be comprehensive, this article has focused on recent evidence that compared indicators of entrepreneurship among graduates and non-graduates.
An analysis by Nabi, Walmsley, Liñán, Akhtar, and Neame (2018, p. 457) examined first-year students who were studying business-related courses versus their counterparts who were studying non-business courses. The population was reviewed in terms of their respective entrepreneurial intentions. The study revealed that students with studying business-related courses had stronger entrepreneurial intention in comparison with students who pursued non-business causes. The study further found a positive correlation between entrepreneurial studies and the intentions to partake entrepreneurial initiatives. At the same time, the study revealed a positive relationship between studying business-related courses and the identification of entrepreneurial role models.
Kassean, Vanevenhoven, Liguori, and Winkel (2015, p.698) conducted a study in two universities in the USA among students within their four years of studies, which classified the students into two categories which are entrepreneurial and non-entrepreneurial. The researchers used the following traits to categorise their respondents who were, the need for success, risk-taking index, confidence, innovativeness, locus of control and ambiguity tolerance. The study concluded that all the entrepreneurship traits were more prevalent in students who identified themselves as future entrepreneurs as compared to those who chose the contrary viewpoint. Fayolle and Gailly (2015) further investigated entrepreneurial intent among 356 students undertaking undergraduate courses in the business field. The study revealed that the greatest determinant of entrepreneurial intention was the relevant educational background, while the relationship to their social background among other demographic qualities was weak. As much as the model used by these researchers focused on personal characteristics, family backgrounds, the field of training and the motivation to launch an initiative, revealed that only personal traits explained only the motivation to start a business.
According to various theories and the empirical evidence provided, it is clear that that entrepreneurship coursework courses are likely to produce higher levels of self-confident, career explorations, and higher outcomes among graduates. The process of shaping entrepreneurial outcomes and career explorations through education is evident across pieces of literature published across various periods. The recent upsurge in entrepreneurship initiatives could be attributed to the increased enrolment in graduate studies in recent years, especially in the 21st century. Therefore, from this discussion, it is clear that one can support the assertion that graduate training encourages the establishment of new entrepreneurial initiatives and facilitates better outcomes among the existing entrepreneurs. Lastly, Lima, Lopes, Nassif, and da Silva (2015, p.1044) also confirmed that entrepreneurship is not majorly an outcome of classical factors of economic progress. The author identifies seven major factors that influence entrepreneurship in any society; these opportunities include demographics, educational levels (the higher education level, the more one is likely to become an entrepreneur), the cultural background, infrastructure available, and the capacity to undertake entrepreneurial initiatives. The author also identifies a fundamental issue that informs the subsequent sections of this study, and that is, there is a positive relationship between entrepreneurship and economic development.
Entrepreneurship and Economic Growth
From the previous discussion, it is clear that graduates with entrepreneurial skills are likely to establish entrepreneurial initiatives and improve existing businesses. The issue now lies on whether such initiatives have the ability to an initiative or foster social and economic development. A classical theory developed by Robert Solow states that economic growth is an outcome of two inputs, which are the level of capital and labour in society. Technological innovations in that society determine the nature of this function. Therefore, according to the theory presented by Solow, economic growth of any country is determined by the amounts of labour and capital that the country has, and the technological possibilities that the society can access such as the level education within the society.
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According to Hechavarria, Bullough, Brush, and Edelman (2019, p.9), the mandate of entrepreneurs in the economic growth of any society is perceived to be spurred by a need in the society and is considered to be an essential facet in attaining economic success. Despite all these, the role of industrialists is important in the expansion of societies due to the fact that they provide conditions that are necessary for the advancement and economic development according to the society’s circumstances and characteristics. Due to the fact that entrepreneurs possess qualities such as leadership, management, hard work and innovativeness, such traits are likely to create competitiveness within a society, high performance, and productiveness which ultimately creates job opportunities within society. Therefore, entrepreneurs have a vital role in economic growth in various states.
From the perspective of various scholars, entrepreneurs can be regarded as the engine that accelerates social growth and development, which drives societies towards a dynamic society by creating a competitive environment. Since entrepreneurs are known to be innovative, they are likely to create quality products and services with the least available resources and infrastructure (Peris-Ortiz and Merigó-Lindahl 2015). It implies that creating commodities with the least costs possible can lead to the creation of newer markets for the goods produced. The fact that entrepreneurs hare skilled in detecting looming opportunities, and inclining towards turning these opportunities into monetary gains, makes them pioneers of economic change and social revolutions in an economy. New initiatives of entrepreneurs or developing existing business results in an increase and the re-definition of worker functions (Miles, Battisti, Lau, and Terziovski 2017). Such activities lead to descent environments for enhancing competition in various industries. Such an environment renders the productive sector more efficient and creates creative-based job vacancies. Besides, such facets also lead to the invention of new methods of pf production. Improving efficacy and invention in job sections in different sections and levels in organisations have interesting effects on the mass level of societies, which can provide the needed circumstances for economic progress and flourishment (Fritsch and Wyrwich 2016, p. 161). Besides, such progress renders consumers able to use high-quality products at a lower price. The existence of entrepreneurs, innovations, job-creating and competition thrives in the economy, and as a result, all individuals benefit from such initiatives.
Entrepreneurship and Social Advancements
In some cases, entrepreneurs have focused on establishing initiatives that aim at solving social problems such as poverty, education, environmental pollution, and healthcare, among other problems. Such companies have been established in nearly every sector in the economy to address the relevant social needs while at the same time making profits. The growth of social enterprises in different countries is a result of the growing realisation that entrepreneurs can be responsible for social change and well-being and at the same time, make profits. Social ventures majorly focus on creating both social and financial wealth. The ventures vary in terms of their business models, organisational structure, and financial channels (Premand, Brodmann, Almeida, Grun, and Barouni 2016, p. 325). As much as they focus on solving social problems such as offering pocket-friendly medical care for the disadvantaged in the society, these ventures differ from one another significantly due to their relative emphasis on financing and social objectives. Most of such ventures are hybrid and focus on specific goals; in most cases, they work in tandem with non-profit organisations, government agencies and community-based organisations in delivering products and services. Entrepreneurs use their existing resources to create these ventures to address various social issues and satisfy social needs that are particularly interesting to them
Entrepreneurship is by itself a social, motivational factor, which drives various ideas and new thoughts in the production of several merchandises and products. The process of entrepreneurship designs the progression of various activities and utilises the professional force in various specialities, which in itself is a reason for increasing efficacy in various sectors and generally leads to economic and social improvement (Coulibaly, Erbao, and Mekongcho 2018, p. 275). The most crucial roles of entrepreneurship in the progress of a society are the creation employment, balanced regional development, improved distribution of income, fair movement of resources, and utilisation of professional skills within a society. Such positive progressions in the society increase the quality of life, innovation and invention practices, increase in money circulation with the society and improved service delivery by both the private sector and government institutions. Entrepreneurship leads to social benefits for society members and the government and drives a decent distribution of income and limits social problems. The environment created by entrepreneurship does not only lead to social good, but they also foster a conducive environment for aspiring entrepreneurs. Future entrepreneurs are motivated by the fact that they can easily join the competitive market, they have entrepreneurial role models who can guide them through the process and the fact that there is an easy transfer of technology. Phillips, Lee, Ghobadian, O’Regan, and James (2015, p.433) added that entrepreneurship can lead to dynamic equality in the economy and can also motivate most the society through the creation of competitiveness among various productive and economic sectors. Entrepreneurs have the ability to revitalise national development. It is an essential facet that can help in creating, and developing new markets, and increase industrial productivity.
Conclusion
Entrepreneurial initiatives can lead to the improvement of quality of life and give the community the right direction to social life, nationalises production and limits massive immigration to other regions. In general, entrepreneurship enhances the culture of self-employment and the culture of creativity on several social stratums. This is the reason for enhanced social cooperation, which leads to effective and constructive support for the progress of the cooperative sector. Entrepreneurs also have the capability of initiating the need changes in the labour market to foster more employment and lead to the efficient distribution of goods, services and jobs in different levels, which leads to enhancement of the self-employment culture, and limits social gaps. For this reason, one can conclusively agree with the statement that graduates with an entrepreneurial mind and skill-set enable the creation of new business and development of existing business, all of which are critical to social and economic well-being in our modern society
References
- Audretsch, D.B., Belitski, M. and Desai, S., 2015. Entrepreneurship and economic development in cities. The Annals of Regional Science, 55(1), pp.33-60.
- Coulibaly, S.K., Erbao, C. and Mekongcho, T.M., 2018. Economic globalisation, entrepreneurship, and development. Technological Forecasting and Social Change, 127, pp.271-280.
- Fayolle, A. and Gailly, B., 2015. The impact of entrepreneurship education on entrepreneurial attitudes and intention: Hysteresis and persistence. Journal of small business management, 53(1), pp.75-93.
- Fritsch, M. and Wyrwich, M., 2016. The effect of entrepreneurship on economic development—an empirical analysis using regional entrepreneurship culture. Journal of Economic Geography, 17(1), pp.157-189.
- Hechavarria, D., Bullough, A., Brush, C. and Edelman, L., 2019. High‐Growth Women’s Entrepreneurship: Fueling Social and Economic Development. Journal of Small Business Management, 57(1), pp.5-13.
- Karimi, S., Biemans, H.J., Lans, T., Chizari, M. and Mulder, M., 2016. The impact of entrepreneurship education: A study of Iranian students' entrepreneurial intentions and opportunity identification. Journal of Small Business Management, 54(1), pp.187-209.
- Kassean, H., Vanevenhoven, J., Liguori, E. and Winkel, D.E., 2015. Entrepreneurship education: a need for reflection, real-world experience and action. International Journal of Entrepreneurial Behavior & Research, 21(5), pp.690-708.
- Lima, E., Lopes, R.M., Nassif, V. and da Silva, D., 2015. Opportunities to improve entrepreneurship education: Contributions considering Brazilian challenges. Journal of Small Business Management, 53(4), pp.1033-1051.
- Miles, M.P., Battisti, M., Lau, A. and Terziovski, M., 2017. Economic Gardening: Entrepreneurship, Innovation and Small Business Ecosystems in Regional, Rural and International Development.
- Nabi, G., Liñán, F., Fayolle, A., Krueger, N. and Walmsley, A., 2017. The impact of entrepreneurship education in higher education: A systematic review and research agenda. Academy of Management Learning & Education, 16(2), pp.277-299.
- Nabi, G., Walmsley, A., Liñán, F., Akhtar, I. and Neame, C., 2018. Does entrepreneurship education in the first year of higher education develop entrepreneurial intentions? The role of learning and inspiration. Studies in Higher Education, 43(3), pp.452-467.
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