The Place of Entrepreneurship Competence in Business Success and National Development
“Entrepreneurship is the fastest way to get growth and innovation. It’s the only sustainable competitive advantage.”
– Sam Palmisano, Former CEO of IBM
The purpose of this article is to explore the place that entrepreneurship competence holds in business success and national development. This article will consider what ‘entrepreneurship competence’ means, how it can be developed at the personal, company, and national levels, how it contributes towards long-term economic prosperity for a nation. Finally, recommendations will be made regarding future research directions while some conclusions about entrepreneurship competence principles will be drawn.
What is Entrepreneurship Competence?
According to Shane (2009), entrepreneurship is “the individual act of doing something new or different.” As such, entrepreneurship competence can be seen as the skills and knowledge involved in undertaking an entrepreneurial venture. Entrepreneurial ventures include but are not limited to self-employment initiatives or setting up a small business either independently or within an organization; innovation projects within established organizations; product development; all forms of corporate venturing (e.g. buyouts, licensing, etc.) and the acquisition of other companies by means of mergers and acquisitions (M&A).
Why Develop Competence?
It has been suggested that success is “…a matter of mastering certain key learnable mental skills that would enable anyone to perform at their best.” This suggests that it is possible for individuals to develop competence through learning what works and what doesn’t. This theory ties in with Drucker’s (1985) statement that success “…is a matter of competence – knowing what you’re doing and doing it well.” In order to succeed, it has been suggested that entrepreneurs need to possess certain key skills such as creativity, innovation, the ability to acquire knowledge quickly and also, courage. These skills are brought about by means of developing entrepreneurship competence. The idea here is for individuals or organizations to gain an advantage over their competitors by being more innovative and creative than those around them which will enable them not only to survive but also thrive within a competitive environment.
Another reason why companies want competent employees is that they can search less for people who have needed competencies rather than hiring ‘almost competent’ employees and training them. Furthermore, it is recognized by some researchers that developing competence creates long-term benefits for companies.
This idea of developing competence ties in with entrepreneurship research suggesting that businesses need to continuously change and develop in order to remain competitive (Veugelers & Cassiman, 2010; Shane 2009; Startup Genome Report 2011; Shaver et al. 2004) As such, the development of entrepreneurs at both the personal and national levels can be seen as one way of ensuring economic growth within a country’s economy.
How is Entrepreneurship Competence Developed?
Entrance requirements for entrepreneurial ventures include business acumen which involves having knowledge about business/marketing basics, product knowledge, and industry-specific knowledge (Loasby, 1991). This is supported by the Startup Genome Report which emphasizes how skills such as marketing, sales, and storytelling are key to entrepreneurial success. Other important skills include an understanding of finances/capital management with the ability to obtain capital is crucial for all types of entrepreneurs (Kerr et al., 2010; Shane 2009). Furthermore, entrepreneurship competence also requires a number of additional abilities such as creativity and innovation. Although these attributes can be brought about through training programs or education courses they are generally developed over time through experience within the field in question. It may therefore be necessary for individuals to undertake a period of self-employment before embarking on other ventures in order to build up their existing competence.
The development of entrepreneurship requires individuals not only to possess necessary skills but also to immerse themselves in an entrepreneurial learning environment. This includes being exposed to resources that are supportive of entrepreneurship, self-efficacy coaching, and the experience of working with mentors who have experience within this field.
There has been a debate about whether entrepreneurship competence is innate or developed over time through developing competencies related to existing fields/areas. For example, an individual may have worked as a manager for several years before starting their own business so therefore possesses knowledge applicable to succeeding in either area. Can someone be both competent at their current workplace and also entrepreneurial? It has been suggested that entrepreneurship competence can be built upon previous experiences but it still needs to be developed independently.
Although training courses have been developed in order to provide people with essential knowledge and skills related to being entrepreneurial, it has been suggested that not enough emphasis is currently placed on entrepreneurship competence (Thompson et al., 2006; Startup Genome Report 2011; Zimmerman, 2000). However, it can be argued that building entrepreneurship competence takes time, and therefore for this reason the focus should be more on helping people to become entrepreneurial rather than trying to change them through long training courses.
Conclusion
There has been debate about whether entrepreneurship competence is innate or developed over time. This will remain an ongoing discussion but research suggests that there needs to be greater emphasis placed upon developing this area of expertise in order to improve business performance nationally. This ties into theories related to self-efficacy which suggest that those with both a high level of confidence in their abilities and also high levels of competence in certain areas are more likely to be motivated to succeed. Entrepreneurship competence is therefore vital for encouraging business success, which ties back into previous research highlighting the importance of businesses supporting themselves through developing an adaptive capacity if they want to survive in today’s economy.
“Entrepreneurship is the fastest way to get growth and innovation. It’s the only sustainable competitive advantage.” – Sam Palmisano, Former CEO of IBM The purpose of this article is to explore the place that entrepreneurship competence holds in business success and national development. This article will consider what ‘entrepreneurship competence’ means, how it can be…