In this topic we will look at the different intrinsic motivations that drive entrepreneurs and the global perspectives in different countries that may encourage entrepreneurship. As part of entrepreneurial motivation, we can consider internal factors that may drive an individual, such as wanting to do something independently that you can be proud of or find personally rewarding. We can also consider external factors both in terms of their positive impact and the challenges they create. For example, the social, cultural, political or financial climate within the country we operate in affects our entrepreneurial ventures. Any government assistance or support in the form of funding, mentorship or networking can positively effect and encourage entrepreneurship.
Welcome to Topic 6: Global Perspective on Entrepreneurial Motivation. In this topic, you will learn about:
- The evolution of entrepreneurship
- Defining entrepreneurship
- Understanding different entrepreneurial approaches.
These relate to the Subject Learning Outcomes:
- Discuss a global perspective on how entrepreneurial motivation varies according to circumstances, particularly the economic environment.
- Review the myriad of motivations of entrepreneurs and reflect on personal motivations.
Welcome to your pre-seminar learning tasks for this week. Please ensure you complete these prior to attending your scheduled seminar with your lecturer.
Click on each of the following headings to read more about what is required for each of your pre-seminar learning tasks.
The following video features entrepreneurs who explain what motivates them, especially when it gets hard. Pay attention to what motivates them and the shared experience of difficulties that need to be tackled.
Kunwar, P 2019, What motivates entrepreneurs when times get tough?, streaming video, YouTube.
Task: Watch the video and note down your three (3) main observations in your reflective journal. You can access the reflective journal by clicking on ‘Journal’ in the navigation bar for this subject.
Within your own country (region and city), find mentoring and industry associations that help entrepreneurs and start-ups network and learn from one another.
In a post in Topic 6: Forum activity 1, share what you have found and explain one (1) thing you could do right now, as a student, to get involved with these networks.
You can also navigate to the forum by clicking on 'ENT100 Subject Forum' in the navigation bar for this subject.
By looking at individual differences between countries and religious and cultural aspects and any government-led incentive programs, we can judge the attractiveness of entrepreneurship.
- Select a country.
- Look at what stage of economic development they are positioned in, based on the table set out in the following LMS content.
- Look up what the Global Entrepreneurship Monitor report 2021 says about them and look at country-specific entrepreneurship information. You will find that the report sets out economic company profiles and a series of tables that ranks all countries in terms of entrepreneurial motivation, the impact of the pandemic on household income and a range of other indicators.
Task: Explain your findings in your reflective journal for discussion with your lecturer.
Assessment 2 – Develop a draft for your case study assessment. Prepare any questions you may have for discussion with your lecturer in the consultation session.
Based on the task we brainstormed for as part of the previous topic, you will be provided with an investment amount this week. Work on your investment opportunity as a group. Remember that we will continue to work on this across four weeks, so this is week 4 of 4. The aim is to create the biggest increase in your initial investment.
Reflect on investment activity completed over the last four (4) weeks and share your reflection in Topic 6: Forum activity 2.
Read through the topic content.
Different stages of development around the world
We have previously looked at the Global Entrepreneurship Monitor and their reporting, which provides annual data from countries worldwide in terms of how their national climate encourages entrepreneurship. We will now look at the different stages of economic development for countries worldwide and consider how these stages impact entrepreneurship.
Countries are positioned in one of the following three (3) stages or indicated as transitioning between two (2) consecutive economic stages. The stages are:
- Factor driven economies
- Efficiency driven economies
- Innovation driven economies.
How the stages affect entrepreneurship
So, how do these distinct stages affect entrepreneurship? What we can see is that there are different attitudes in these different stages of economic development. For example, in factor-driven economies (Stage one) more people expressed a positive attitude towards entrepreneurship. In other words, they were more attuned to perceiving opportunities for starting a venture as well as having the capabilities to do so. On the other hand, the fear of failure is highest in Stage three – innovation-driven economies.
Cultural and religious differences also impact attitudes towards entrepreneurship. African economies rated highest in terms of perceiving opportunities as well as identifying entrepreneurial skills, alongside the lowest fear of failure. Due to this, the highest level of entrepreneurial intentions was identified in African economies. By contrast, the ex-socialist economies were found to have the lowest level of entrepreneurial intentions (Frederick et al. 2018).
Another interesting fact is how a successful entrepreneur is perceived. For example, in northern American and African economies, a successful entrepreneur is provided with a high status. This indicates entrepreneurship is seen in a positive light and that these economies enjoy an entrepreneurial culture (Frederick et al. 2018).
Total early-stage Entrepreneurial Activity
The Global Entrepreneurship Monitor measures Total early-stage Entrepreneurial Activity (TEA). TEA measures the number of adults either starting a venture or running a new business that is less than three and a half years old, as a proportion of the total adult population. Interestingly the TEA measure is highest in factor-driven economies and tends to decline in stage two and three economies where there is a higher GDP per capita (Global Entrepreneurship Monitor 2021).
Another way to understand a country's entrepreneurial climate is to look at motivation and the degree to which necessity or the desire for improvement of goods and services available drives the creation of new ventures. In stage one and stage two economies, necessity is often a driver behind new start-ups. Whereas in stage three economies, improvement tends to motivate innovative new ventures.
Economic stages
Read the following descriptions of each of the three stages of economies, adapted from World Economic Forum, 2015 Global Competitiveness report, WEForum. Click on each of the headings to see the countries that fall into each stage as well as those transitioning into the next stage.
Stage 1 – Factor driven economies
Description of Stage: These first stage economies compete based on the factors they are endowed with – mainly unskilled labour and natural resources.
| Bangladesh Burkina Faso Burundi Cambodia Cameroon Chad Côte d’Ivoire Ethiopia Gambia |
Ghana Guinea Haïti India Kenya Lesotho Madagascar Malawi Mali |
Mauritania Mozambique Myanmar Nepal Nicaragua Nigeria Pakistan Rwanda Senegal |
Sierra Leone Tajikistan Tanzania Uganda Vietnam Yemen Zambia Zimbabwe |
| Algeria Angola Azerbaijan Bhutan |
Bolivia Botswana Gabon Honduras |
Iran Kuwait Libya Moldova |
Mongolia Philippines Saudi Arabia Venezuela |
Stage 2– Efficiency driven economies
Description of Stage: These second stage economies develop more efficient production processes and improve product quality. They mainly compete on higher education, efficient goods and labour markets, developed financial markets and the ability to utilise existing technologies and market size.
| Albania Armenia Bulgaria Cape Verde China Columbia Dominican Republic Egypt |
El Salvador Georgia Guatemala Guyana Indonesia Jamaica Jordan Macedonia |
Montenegro Morocco Namibia Paraguay Peru Romania Serbia South Africa |
Sri Lanka Swaziland Thailand Timor Tunisia Ukraine |
| Argentina Bahrain Barbados Brazil Chile Costa Rica |
Hungary Kazakhstan Latvia Lebanon Lithuania Malaysia |
Mauritius Mexico Oman Panama Poland Russia |
Seychelles Surinam Turkey United Arab Emirates Uruguay |
Stage 3– Innovation driven economies
Description of Stage: Moving beyond basic requirements and efficiency, these third stage economies focus on producing new and different goods, utilising sophisticated production processes and innovation.
| Australia Austria Belgium Canada Cyprus Czech Republic Denmark Estonia Finland France |
Germany Greece Hong Kong Iceland Ireland Israel Italy Japan Korea |
Luxembourg Malta the Netherlands New Zealand Norway Portugal Puerto Rico Qatar Singapore |
Slovakia Slovenia Spain Sweden Switzerland Taiwan Trinidad and Tobago United Kingdom United States |
Understanding what motivates entrepreneurial activity
There is no single event, characteristic or trait that has been identified as the motivator for individuals to choose an entrepreneurial path (Frederick et al. 2018).
Starting an entrepreneurial venture is an individual decision. Our preferences, expectations, dreams and hopes feed into this decision-making process. However, the social, cultural, political, and economic context we operate within, also affects that decision as well as the ability for the new venture to be set up, thrive and endure.
The social-cultural, political and economic context and its impact on entrepreneurship is captured in the Entrepreneurial Framework Condition (EFC) scores. While Qatar, for example, scores sufficiently across all EFC indicators, they fall short in terms of ease of entry due to market burdens and regulations. In contrast, India is seen as meeting the minimum requirements in all indicators, while scoring particularly well in the ease of entry in terms of market dynamics and physical infrastructure (Global Entrepreneurship Monitor 2021).
Knowledge check
Complete the following two (2) tasks. Click the arrows to navigate between the tasks.
Key takeouts
Congratulations, we made it to the end of the topic! Some key takeouts from Topic 6:
- No one single event, characteristic or trait has been identified as the motivator for individuals to choose an entrepreneurial path.
- The Entrepreneurial Framework Condition (EFC) scores capture the social, cultural, political, and economic context and their impact on entrepreneurship. These measure how attractive a particular country is in terms of motivating entrepreneurial activity.
- Economies enjoy an entrepreneurial culture in countries where a successful entrepreneur is provided with high status and entrepreneurship is perceived positively.
- Assistance or support in the form of funding, mentorship or networking can have a positive effect and encourage entrepreneurship.
Welcome to your seminar for this topic. Your lecturer will start a video stream during your scheduled class time. You can access your scheduled class by clicking on ‘Live Sessions’ found within your navigation bar and locating the relevant day/class or by clicking on the following link and then clicking 'Join' to enter the class.
Click here to access your seminar.
The following learning tasks will be completed during the seminar with your lecturer. Should you be unable to attend, you will be able to watch the recording, which can be found via the following link or by navigating to the class through ‘Live Sessions’ via your navigation bar.
Click here to access the recording. (Please note: this will be available shortly after the live session has ended.)
In-seminar learning tasks
The in-seminar learning tasks identified below will be completed during the scheduled seminar. Your lecturer will guide you through these tasks. Click on each of the following headings to read more about the requirements for each of your in-seminar learning tasks.
As part of the seminar, you will discuss with your breakout team, the country you selected and what you think your findings indicate about the entrepreneurial climate in that country.
Your lecturer will lead a class discussion to discuss your key outcomes from breakout teams and think about these indicators. Which industries do you think might be attractive in the country you researched? Be ready to share your ideas.
As a breakout team, select one of the countries you looked at and explore this in more depth as a group. Brainstorm the kind of ventures you think would thrive or struggle in the chosen country.
Welcome to your post-seminar learning task for this week. Please ensure you complete this after attending your scheduled seminar with your lecturer. Your lecturer will advise you if any of this is to be completed during your consultation session. Click on the following heading to read more about the requirements for your post-seminar learning task.
Reflect on your learnings from this topic and contact your lecturer if you have any questions.
Each week you will have a consultation session, which will be facilitated by your lecturer. You can join in and work with your peers on activities relating to this subject. These session times and activities will be communicated to you by your lecturer each week. Your lecturer will start a video stream during your scheduled class time. You can access your scheduled class by clicking on ‘Live Sessions’ found within your navigation bar and locating the relevant day/class or by clicking on the following link and then clicking 'Join' to enter the class.
Click here to access your consultation session.
Should you be unable to attend, you will be able to watch the recording, which can be found via the following link or by navigating to the class through ‘Live Sessions’ via your navigation bar.
Click here to access the recording. (Please note: this will be available shortly after the live session has ended.)
The following additional resources can be used to extend your understanding of this topic:
- Rath, J & Kloosterman, R 2000, ‘Outsiders' business: A critical review of research on immigrant entrepreneurship’, The International Migration Review, 34(3):657-681. https://www.jstor.org/stable/2675940?seq=1
- Schwab, K & Zahidi, S 2020, The Global Competitiveness Report, World Economic Forum
References
- Frederick, H, O’Connor, A & Kuratko, DF 2018, Entrepreneurship, 5th edn., Cengage.
- Global Entrepreneurship Monitor 2021, 2020/2021 Global report, Global Entrepreneurship Monitor, https://www.gemconsortium.org/report/gem-20202021-global-report
- Kunwar, P 2019, ‘What motivates entrepreneurs when times get tough?’ streaming video, YouTube, https://youtu.be/7zs_M4qnp08
- Swanson, LA 2017, Entrepreneurship and innovation toolkit, Openpress, https://open.umn.edu/opentextbooks/textbooks/entrepreneurship-and-innovation-toolkit
- World Economic Forum, 2015 Global competitiveness report, World Economic Forum, https://reports.weforum.org/global-competitiveness-report-2014-2015/methodology/#read
