Challenges in the Era of Globalization - iaabd

Proceedings of the 12th Annual Conference © 2011 IAABD
two forms of entrepreneurship; necessity and opportunity as common in developing and developed
countries respectively; Zoltan and Audretsch (2003) as highlighted in the next sub-section.
Necessity Vs Opportunity entrepreneurship
Contrary to the perception that individuals choose to become entrepreneurs, the two types of
entrepreneurship are defined through their purpose of existence Zoltan (2006); one triggered by
opportunity and the other emerges from necessity. Necessity is when high unemployment triggers new
business start-ups which are involuntary ventures (Evans and Leighton, 1990). In a developing nation’s
context, entrepreneurial activities act as a push effect on growth and employment creation. This implies
that increased unemployment leads to new business start-ups, Blanchflower and Mayer (1994) but others
show that high unemployment will lead to low entrepreneurial activities as a result of limited
entrepreneurial skills and lower human capital endowment (Jovanovic, 1982). This is in contrast with
views that economic growth influence entrepreneurial activities (Audretsch, 1995).
Ingesting the impact of policy on economic development requires an understanding of social and cultural
dynamics within a region: More importantly those responsible for increasing entrepreneurial activities
(Barrett et al. 2001). One of the challenges is to understand that involuntary venture can lead to situation
where individual’s ability and skills are under question. Therefore finding it challenging when required to
start-up high risk businesses.
Why use Policy?
Entrepreneurial skills gap can be solved by effective policy that target specific activities; most of
entrepreneurial initiatives in developing nations emerge out of necessity rather than design. Arguably,
policy has the ability to exponent the process of business growth in countries with lower levels of
technological advancement; According to Reynolds et al. (2000) this encourages scholars to research
more on the extent to which policy can raise the levels of entrepreneurial activities.
The government can also incorporate fiscal policy linked to taxation since it is the commonest policy tool
despite complexity in understanding tax legislations (Herbig et al. 1994). However, the implication of
each policy on entrepreneurial growth varies hence a target policy approach will be needed. Some of the
possible policy tools include the provision of business start-up requirement.
The ability to use policy to encourage entrepreneurship should encourage academicians to contribute
towards more research, identifying challenges facing policy drafting. As argued by Siegel et al. (2007),
policy makers are not necessarily better placed in drafting policy that encourage entrepreneurship as
compared to scholars who consider various aspects of risk associated with a particular policy. They
suggest a redefine of policy maker’s roles to resemble that of scholars. Policy is therefore instrumental in
promoting business success rates.
What factors affect entrepreneurship levels?
The growth of entrepreneurship does not entirely depend on Policy (Zoltan and Laszlo Szerb, 2007).It can
be argued that the context of entrepreneurship is complex requiring that background variables be put into
consideration (Zoltan and Laszlo Szerb, 2007). Understanding the variable that distorts entrepreneurial
growth requires address the following questions: Does age and education of entrepreneurs count? What is
the role of endowment? (Family and geographical) and what form of entrepreneurship?
Age of entrepreneurs
Previous studies have shown a link between age and entrepreneurs where business success has positively
correlated to age Kautonen et al. 2008; Levesqué and Minniti (2006), though the older entrepreneurs tend
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