What would-be entrepreneurs really want

Policy efforts to encourage entrepreneurship may need to be reshaped if they are to tap into the real incentives for launching a business, a study has claimed.Governments are increasingly pinning their hopes on innovative start-up ventures to stimulate economic growth in the wake of the global financial crisis. But new research suggests the inducements currently being offered might only scratch the surface of the resources potential entrepreneurs genuinely desire.According to academics, the average would-be business owner with an MBA wants a support package worth over three quarters of a million dollars to branch out on his own.

This team of researchers discovered budding entrepreneurs have comparatively little interest in commonplace incentives such as networking opportunities, office space and even severely undervalue the provision of financing capital.

Instead prospective entrepreneurs believe the single most important resource they can be provided with in starting a business is an experienced mentor who can give advice and guidance. They also heavily favour so-called “hybrid” or part-time entrepreneurship, which involves attempting to set up a new venture while already secure in another job.

“One of the difficulties facing public policy efforts to encourage entrepreneurship is that policymakers lack the data or an intellectual foundation from which to act.

“As a result we have a veritable mini-industry of advisers, bureaucrats and other players pursuing magic bullets designed to promote entrepreneurial activity.

“The search for solutions has involved a lot of trial and error, experimentation and failures, and knowledge on the topic is best described as tentative and inconclusive.

“Our aim was to examine the market for entrepreneurs and to establish which resources genuinely make a difference in compelling someone to start up a new firm.”

“We show what kinds of entrepreneurial support could dramatically improve policies’ effectiveness – and that some current policies may be wide of the mark.”

Source: IMD / Read, Dew, Ramesh | IMD.org | September 22, 2011