Title: Choosing an Entrepreneurial Development System: The Concept and the Challenges
1Choosing an Entrepreneurial Development
SystemThe Concept and the Challenges
- William L. Smith, Ph.D.
- School of BusinessEmporia State
Universitysmithwil_at_emporia.edu
2Abstract
- This paper presents a discussion of the process
of choosing an entrepreneurial development system
for a local rural community and region. - A later version of this paper is in press in
the International Journal of Management and
Enterprise Development
3Entrepreneurship has been defined in a number of
ways over the years
- From Schumpeter 1934 to the Internet of today
Google gives a page of definitions - I have adopted the definition of the field of
entrepreneurship as the scholarly examination of
how, by whom, and with what effects opportunities
to create future goods and services are
discovered, evaluated, and exploited - From Venkataraman 1997 and Shane and
Venkataraman 2000
4In Essence - the field involves
- the study of sources of opportunities
- the processes of discovery, evaluation, and
exploitation of opportunities, and, - the set of individuals who discover, evaluate and
exploit them.
5Figure 1 Entrepreneurial research framework
- (1) Opportunities, plus
- (2) Individuals, lead to
- (3) Entrepreneurial event
6Our Goal
- This paper seeks to explore the possibilities of
creating an entrepreneurial community
environment in a rural setting within which
individuals and groups of individuals may develop
sets of skills which allow them to recognize
opportunities for entrepreneurial activities that
did not seem to exist previously.
7Background
- Foundation support Kauffman and Kellogg
- Government support, Federal and State
- Enterprise Facilitation
- Lichtenstein and Lyons 1996, 2001
8Seven unique challenges for rural entrepreneurs
Kauffman, 1999, p. 1 of 2
- 1) culture that promotes entrepreneurship
- 2) distance to markets and services
- 3) capital availability and capital-ready deal
flow - 4) threshold of demand to justify the location of
support services - 5) absence of other entrepreneurs
9Seven unique challenges for rural entrepreneurs
Kauffman, 1999, p. 2 of 2
- 6) absence of industry clusters
- 7) independent spirit of rural population i.e.,
balance the entrepreneurial desire to be ones
own boss with the realization that successful
entrepreneurs cannot do it alone.
10Lichtenstein and Lyons 1996, 2001
- The focus of entrepreneurial development should
be shifted from programs to development of
individual entrepreneurial skills. - They proposed a comprehensive needs assessment
approach, - To build on each of the existing programs in the
community, and - Identify additional training services required
11The Proposed System
- Expand the population of entrepreneurs, not just
the right ones. - Entrepreneurs need continuous assistance with
many of the skills needed to move through the
stages of business development. - This suggests an ongoing mentoring program
coupled with networking with others who have
already been through the process themselves.
12Truly creating an entrepreneurial community.
- Bringing together, in a developmentally focused
system, persons with entrepreneurial skills at
various stages of development to share these
skills - Persons who help each other develop these skills,
and - Persons who will assist others in recognizing new
opportunities for innovation in the community.
13Table 1 The four entrepreneurial skill categories
and 17 skill dimensions
- 1) Technical skills Operational the skills
necessary to produce the product or service
Supplies/raw materials the skills to obtain
them, as necessary Office or production space
the skills to match needs and availability
Equipment/plant/technology the skills to
identify and obtain
14Table 1 The four entrepreneurial skill categories
and 17 skill dimensions
- 2) Managerial skills Management planning,
organising, supervising, directing, networking
Marketing/Sales identifying customers,
distribution channels, supply chain Financial
managing financial resources, accounting,
budgeting Legal organisation form, risk
management, privacy and security
Administrative people relations, advisory board
relations Higher-order learning,
problem-solving
15Table 1 The four entrepreneurial skill categories
and 17 skill dimensions
- 3) Entrepreneurial skills Business concept
business plan, presentation skills
Environmental scanning recognize market gap,
exploit market opportunity Advisory board and
networking balance independence with seeking
assistance
16Table 1 The four entrepreneurial skill categories
and 17 skill dimensions
- 4) Personal maturity skills Self-Awareness
ability to reflect and be introspective
Accountability ability to take responsibility
for resolving a problem Emotional Coping
emotional ability to cope with a problem
Creativity ability to produce a creative
solution to a problem
17Volunteer Entrepreneur Corps (VEC) mentoring
program
- A volunteer group to be formed in the community
(region) who offer their experience to provide
assistance in their specialties to other
entrepreneurs, for the betterment of the
entrepreneurial community. - Share their experience using a skill with others
rated medium on that skill. - Annual volunteer recognition/citations
18Evaluation (p. 1 of 6)
- Motivation of rural entrepreneurs There is a
significant difference in motivation between
rural entrepreneurs and their urban counterparts.
All the adaptations have been made with this
issue in mind, and they will be regularly
reviewed to assure compliance.
19Evaluation (p. 2 of 6)
- Culture Rural culture has multiple and
conflicting personalities it is anything goes
and can do on the one hand, and very
conservative overtones on the other, that often
discourage risk-taking and inhibit
entrepreneurial activity. The networking and
mentoring process will be built on this
dichotomy, with continuous attention to making it
a strength, not a weakness.
20Evaluation (p. 3 of 6)
- Networks Networks are even more important to
rural entrepreneurs. In fact, they are essential
to entrepreneurial success but providing
adequate forums to share experiences, explore new
opportunities, and seek reinforcement are the
biggest challenges to promoting entrepreneurship
in rural America. Networking is at the heart of
the proposed system. Providing the correct
forums, the best mentors, and the most effective
balance of outside trainers and experienced
entrepreneurs to provide guidance and skills
development to less experienced entrepreneurs
will be critical to success of the system.
21Evaluation (p. 4 of 6)
- Capital and deal flow There is both a lack of
equity capital and a lack of capital literacy
in rural areas. Skills related to understanding
and obtaining appropriate funding are integral to
the skills development system proposed. New
funding sources will be available based on recent
legislation in the state.
22Evaluation (p. 5 of 6)
- Workforce Both skilled workers and management
skills are often miles away. Identifying ways to
access these skills is a continuing challenge.
This identification and matching to the benefit
of area entrepreneurs is the reason for the
creation of the proposed system. Skills not
available will be created, brought in, or
otherwise made available as an integral part of
the entire entrepreneurial development system
processes.
23Evaluation (p. 6 of 6)
- Youth Rural Americas most significant export
has been its children which are recognized by
community leaders as among the greatest threats
to the viability of many rural communities. Rural
entrepreneurship can address the aging of rural
communities in two ways - 1) Discussion with rural youth about the value of
closeness to their rural hometowns and finding
ways to allow them to remain. - 2) Promoting rural communities as attractive to
youth and young families with a
pro-entrepreneurship environment.
24Action Steps, 1 2
- Enhancements of entrepreneurial education at all
levels are already under way through closely
coordinated efforts of related programs of the
university and other educational entities. - An AgriTourism initiative is being undertaken in
the region which will provide mutually beneficial
activities and increased opportunities for
entrepreneurial tendencies to act upon.
25Action Steps, 3 4
- Implementation will require wide political and
social cooperation among a broad spectrum of
service providers, governmental units, and
members of the general community. - Appropriate information sharing and input from
interested members of the public in general will
be critical to successful system implementation.
26Action Steps, 5, 6 7
- Organize the Volunteer Entrepreneur Corps (VEC)
and begin the networking process - Create the needs assessment process by
validating the Skills Sets to be measured and the
process of measuring them. - Support the infrastructure to allow this
systematic process to be sustained over time.
27Conclusion
- From the conclusion section of Lichtenstein and
Lyons 2001, a great quote H. L. Mencken once
said that for every complex problem there is an
easy answer, and it is wrong. Community-wide
enterprise development is a complex problem
therefore, any useful solution is bound to be so
as well. p.17