Title

Entrepreneurial firm creation: Mapping the processes

Date of Award

1987

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Social Sciences

Advisor(s)

John Rees

Keywords

Upstate New York, business concept

Subject Categories

Economics | Growth and Development

Abstract

The purpose of this dissertation is to understand how entrepreneurs create new firms and thereby contribute to economic growth. How do entrepreneurs recognize and pursue business opportunities? What are the key stages in the firm creation process? What factors influence the process and how? Such questions are addressed in this exploratory study.

The study is based on case data obtained through in-depth interviews with business owners in Upstate New York. The twenty-seven firms selected for study comprise the following four categories, and firms in three of the four categories are in advanced services or in new technology based fields: (1) Computer-based Advanced Services; (2) Electronics and Technology-based Design and Manufacturing; (3) Management Consulting and Financial Services; (4) Trade and Distribution Businesses.

The entrepreneurial process involves transforming a recognized business opportunity into a product, and selling that product in the market at a profit. In new firm creation, the progression from a business concept through to the market is a part of a larger, circular process. There is continuous feedback from the market and the environment into the business concept, BC. Usually the feedback signal, BC*, reinforces the business concept, BC, or requires that BC be marginally modified. Under certain circumstances, BC* can be radically at variance with BC. What are the circumstances when this occurs and, further, with what frequency?

I discuss the strategic issues involved in timing a start-up, especially when technologies are changing, when products introduced to the market are unfamiliar to users, and when markets have to be "created." The marketing challenges an entrepreneur faces when the product leads or lags the market are also examined. All concepts discussed are illustrated with examples from interviews.

Finally, I discuss how the entrepreneurial firm creation process is regenerative and contributes to economic growth. Economic growth through new firm creation is, of course, only one kind of economic growth. I explore the role of public policy in fostering such growth, the limited analytical significance of firm size, and suggest directions for further research. In conclusion, I show how the concepts developed in the dissertation can be applied to analyze recent developments in superconductivity research.

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