Continued Entrepreneurship : Ability, Need, and Opportunity as Determinants of Small Firm Growth

Proposes a model of determinants of individual small firm growth as a manner for measuring the occurrence and continuance of entrepreneurship. This model is based on the idea that growth motivation is a determinant of actual growth. This growth motivation is determined by perceived ability, perceived need, and perceived opportunity. Perceived ability, perceived need, and perceived opportunity are the result of an individual's selective perception of the objective variables of ability, need, and opportunity. Need, e.g., may be personal (need for additional income) or driven by the firm or market. Data used in examining this model were collected by interviews with the managers of 423 firms and questionnaires from 322 of these firms. The firms considered were in the manufacturing, repair services, and retail industries in Sweden. The objective variables of ability, need, and opportunity are shown to explain a substantial share, 25%, of the variation in actual growth. Cognitive attitude, affective attitude, and growth aspirations are used as indicators of growth motivation and able to explain 33% of its variation. For both cases, need appears to be a more important factor than ability and opportunity. Additional relationships that may affect the model are suggested but not tested. Overall, the results of the analysis support the proposed model. The work also demonstrates a valuable research approach, allowing analysis at a higher abstraction than often utilized. (SRD)