Different Entrepreneurial Ventures for Greater Societal Value

Date01 December 2016
Published date01 December 2016
ABX673949 546..560 Article
The Antitrust Bulletin
2016, Vol. 61(4) 546-560
Different Entrepreneurial
ª The Author(s) 2016
Reprints and permission:
Ventures for Greater Societal
DOI: 10.1177/0003603X16673949
Value: A Portfolio Approach
to Assist Public Policy
Donald F. Kuratko*
Although the importance of entrepreneurship is evident and interest continues to grow, high-growth
ventures tend to be featured because they produce a significant amount of job and wealth creation in
the United States. Some have argued that the focus of public policy should be on these ventures, while
others argue for a more diverse approach to effective public policy and entrepreneurship. This article
offers a ‘‘portfolio approach’’ to public policy that focuses on the types of entrepreneurial ventures that
demonstrate the epitome of competition and provide the greatest societal value. The types of ventures
may be classified in terms of size (microenterprise, small/lifestyle, medium size, and gazelle) and growth
rate (low, managed, or fast growth). Each type has different needs and makes unique contributions to
the economic vitality and value of society.
typology, ventures, public policy, gazelles, microenterprises, ecosystems, pivots, entrepreneurial
pathways, framework
I. Introduction
Whether entrepreneurial or small, new ventures contribute to higher levels of competition, create value
for customers, employ people, pay taxes, and otherwise contribute to societal economic well-being,1
New Firms: Societal Contribution Versus Survival Potential, 2 J. BUS. VENTURING 231 (1987); D. J. STOREY, UNDERSTANDING
THE SMALL BUSINESS SECTOR (1994); A. R. Thurik & S. Wennekers, Entrepreneurship, Small Business and Economic Growth,
11 J. SMALL BUS. & ENTERPRISE DEV. 140 (2004).
*The Kelley School of Business, Indiana University–Bloomington, Bloomington, IN, USA
Corresponding Author:
Donald F. Kuratko, The Kelley School of Business, Indiana University–Bloomington, Bloomington, IN 47405, USA.
Email: dkuratko@indiana.edu

which is why so many economic development experts and public policy officials believe that entre-
preneurial activity is good and should be encouraged.2
Entrepreneurship will continue to lead economic growth in several ways. Entrepreneurs enter and
expand existing markets, thereby increasing competition and economic efficiency. Entrepreneurs
also create entirely new markets by offering innovative products. These new markets present profit
opportunities to others, further spurring economic growth. However, because most new ventures
start small and many times stay small with a strong likelihood of failing,3 some argue that public
policy that encourages more people to become entrepreneurs is bad public policy.4 They argue that
the exclusive focus of our public policy should be high-growth, high-potential ventures that intro-
duce major product and process innovations. Yet to discourage all other types of ventures actually
harms the longer-term economic well-being of society. Robbins et al. found that, in the United
States, those states with higher proportions of very small businesses (fewer than twenty employees)
experience higher levels of productivity growth and lower inflation and unemployment rates.5 A
reliance on bootstrapping, bricolage, resource leveraging, and guerrilla tactics can enable a new firm
to do far more with relatively few resources.6
In that vein, Morris, Neumeyer, Jang, and Kuratko introduced a typology of entrepreneurial
ventures to better define the new venture landscape.7 Acknowledging the importance of different
types of ventures, Morris, Neumeyer, and Kuratko developed specific arguments regarding the
central economic importance of each type of venture.8 Based on these arguments, as well as the
frameworks developed by Kuratko, Morris, and Schindehutte,9 the concept of a portfolio approach
to understanding new ventures is presented with implications for public policy efforts aimed at
encouraging entrepreneurial activity that benefits society. As noted by Kuratko, Morris, and Schin-
dehutte, ‘‘More than ever, there is a pressing need to develop a comprehensive understanding of the
dynamic nature of entrepreneurship—the forms it takes, the process involved, the entrepreneur
himself/herself, the venture itself, and the outcomes that derive from its occurrence.’’10
2. ENTREPRENEURSHIP, GROWTH, AND PUBLIC POLICY (Z. J. Acs, D. B. Audretsch, & R. J. Strom eds., 2009); Z. J. ACS & R. R.
Lazear, Entrepreneurship, 23 J. LAB. ECON. 649 (2005); M. H. MORRIS, D. F. KURATKO, & J. R. CORNWALL, ENTREPRENEURSHIP
3. M. Carree & A. R. Thurik, The Impact of Entrepreneurship on Economic Growth, in HANDBOOK OF ENTREPRENEURSHIP
RESEARCH 557 (Z. J. Acs & D. B. Audretsch eds., 2010).
4. Z. J. Acs & P. Mueller, Employment Effects of Business Dynamics: Mice, Gazelles and Elephants, 30 SMALL BUS. ECON. 85
(2008); S. Shane, Why Encouraging More People to Become Entrepreneurs Is Bad Public Policy, 33 SMALL BUS. ECON. 141
(2009); J. Lerner, The Future of Public Efforts to Boost Entrepreneurship and Venture Capital, 35 SMALL BUS. ECON. 255
5. D. K. Robbins, L. J. Pantuosco, D. F. Parker, & B. K. Fuller, An Empirical Assessment of the Contribution of Small Business
Employment to U.S. State Economic Performance, 15 SMALL BUS. ECON. 293 (2000).
6. T. Baker & R. E. Nelson, Creating Something from Nothing: Resource Construction Through Entrepreneurial Bricolage, 50
ADMIN. SCI. Q. 329 (2005); J. Winborg & H. Landstrom, Financial Bootstrapping in Small Businesses: Examining Small
Business Managers’ Resource Acquisition Behaviors, 16 J. BUS. VENTURING 235 (2001).
7. M. H. Morris, X. Neumeyer, Y. Jang, & D. F. Kuratko, Distinguishing Types of Entrepreneurial Ventures: An Identity-
Based Perspective, J. SMALL BUS. MGMT. (forthcoming 2017).
8. M. H. Morris, X. Neumeyer, & D. F. Kuratko, A Portfolio Perspective on Entrepreneurship and Economic Development, 45
SMALL BUS. ECON. 713 (2015).
9. D. F. Kuratko, M. H. Morris, & M. Schindehutte, Understanding the Dynamics of Entrepreneurship Through Framework
Approaches, 45 SMALL BUS. ECON. 1 (2015).
10. Id. at 10.

The Antitrust Bulletin 61(4)
II. Entrepreneurship as an Economic Force
Entrepreneurship has surged forward throughout the world as one of the most potent and positive
economic forces ever seen. Entrepreneurs in the twenty-first century are considered the heroes of free
enterprise. Many of them have used innovation and creativity to build hugely successful enterprises
from fledgling businesses—some in less than a decade! Some of the more recent extreme examples
include Facebook, Twitter, LinkedIn, and YouTube. These and many other entrepreneurial ventures of
various sizes and success levels have created new products and services and employed thousands of
people. Many people now regard entrepreneurship as ‘‘pioneership’’ on the frontier of business.11
However, scholars warn that a complete understanding of entrepreneurship can be elusive.12 The
impact of entrepreneurial activity is felt in all sectors and at all levels of society, especially as it
relates to innovation, competitiveness, productivity, wealth generation, job creation, and formation of
new industry.13
For example, the Global Entrepreneurship Monitor (GEM) survey, which includes over seventy-
three economies and one hundred countries that account for over 72% of the world’s population and
90% of the world’s gross domestic product, shows that 250 million people were involved in early stage
entrepreneurial activity in 2013. Out of these individuals, an estimated 63 million people expected to
hire at least five employees over the next five years, and 27 million of these individuals anticipated
hiring twenty or more employees in five years. The latest GEM analyses show that the growth
expectations and aspirations of early-stage entrepreneurs represent a key dimension of potential
entrepreneurial impact and may be linked directly to many first-priority policy objectives around the
world, demonstrating the contribution of entrepreneurship to job growth across the globe.14
Kuratko, Morris, and Schindehutte discussed the unprecedented amount of attention from scholars
and educators that entrepreneurship has been given over the last three decades noting some of the
major themes that characterize recent research about entrepreneurs and new venture creation.15 These
themes included:
Venture financing, including both venture capital and angel capital financing as well as other
innovative financing techniques;16
Corporate entrepreneurship, innovative actions within large organizations, and the need for
entrepreneurial cultures;17
Social entrepreneurship and sustainability, applying traditional, private sector entrepreneurship
to transformational social problem solving;18
12. D. B. Audretsch, D. F. Kuratko & A. N. Link, Making Sense of the Elusive Paradigm of Entrepreneurship, 45 SMALL BUS.
ECON. 703 (2015).
13. KURATKO, ENTREPRENEURSHIP, supra note 11, at 15–19.
14. J. E. AMOROS & N. BOSMA, 2013 GLOBAL REPORT (2014), http://www.babson.edu/academics/centers/blank-center/global-

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