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Human capital and the decision to exploit innovative opportunity

Human capital and the decision to exploit innovative opportunity PurposeThe main purpose of this study is to examine the direct and interaction effect of individuals’ human capital input and human capital output in the form of entrepreneurial self- confidence on the decision to exploit innovative opportunities.Design/methodology/approachUsing a strategic entrepreneurship perspective, we suggest that when individuals with high human capital decide to exploit opportunities they do so by thinking and acting strategically. Strategic action(s) involves pursuing competitive advantages that enable a new venture to get a foothold in the market.We argue that such competitive advantages arise from the exploitation of innovative opportunities and individuals with high human capital are more likely to exploit innovative opportunities when they develop entrepreneurial self-confidence. Our empirical analysis is based on a random sample of individuals from the adult population who are in the process of creating a new venture. FindingsOur results suggest that although human capital inputs and human capital output in the form of entrepreneurial self-confidence are significant factors in influencing the decision to exploit innovative opportunities, human capital inputs interact in different ways with human capital output in influencing this decision.Research limitations/implicationsThe main limitation of our study is the use of single item measures as indicators of innovative opportunity and human capital output (entrepreneurial self-confidence).Practical implicationsFrom a macro perspective, the main implication of our study is that it is possible to assess the quality of entrepreneurship in an economy through individuals’ human capital and the proportion of innovative opportunities in the economy. Moreover, because not all types of human capital inputs influences the exploitation of innovative opportunities, policy makers can be selective in their policy interventions in spawning quality entrepreneurship in their economy. Originality/valueBased on population level data our study provides empirical evidence of the nature of entrepreneurial decisions being at the earliest phases of the entrepreneurial process. Our study shows the importance of founders’ human capital inputs and outputs in influencing the quality of entrepreneurship in an economy. Moreover, our study extends the understanding the individual-opportunity nexus in promoting innovative entrepreneurship in an economy. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Management Decision Emerald Publishing

Human capital and the decision to exploit innovative opportunity

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0025-1747
DOI
10.1108/MD-04-2015-0130
Publisher site
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Abstract

PurposeThe main purpose of this study is to examine the direct and interaction effect of individuals’ human capital input and human capital output in the form of entrepreneurial self- confidence on the decision to exploit innovative opportunities.Design/methodology/approachUsing a strategic entrepreneurship perspective, we suggest that when individuals with high human capital decide to exploit opportunities they do so by thinking and acting strategically. Strategic action(s) involves pursuing competitive advantages that enable a new venture to get a foothold in the market.We argue that such competitive advantages arise from the exploitation of innovative opportunities and individuals with high human capital are more likely to exploit innovative opportunities when they develop entrepreneurial self-confidence. Our empirical analysis is based on a random sample of individuals from the adult population who are in the process of creating a new venture. FindingsOur results suggest that although human capital inputs and human capital output in the form of entrepreneurial self-confidence are significant factors in influencing the decision to exploit innovative opportunities, human capital inputs interact in different ways with human capital output in influencing this decision.Research limitations/implicationsThe main limitation of our study is the use of single item measures as indicators of innovative opportunity and human capital output (entrepreneurial self-confidence).Practical implicationsFrom a macro perspective, the main implication of our study is that it is possible to assess the quality of entrepreneurship in an economy through individuals’ human capital and the proportion of innovative opportunities in the economy. Moreover, because not all types of human capital inputs influences the exploitation of innovative opportunities, policy makers can be selective in their policy interventions in spawning quality entrepreneurship in their economy. Originality/valueBased on population level data our study provides empirical evidence of the nature of entrepreneurial decisions being at the earliest phases of the entrepreneurial process. Our study shows the importance of founders’ human capital inputs and outputs in influencing the quality of entrepreneurship in an economy. Moreover, our study extends the understanding the individual-opportunity nexus in promoting innovative entrepreneurship in an economy.

Journal

Management Decision – Emerald Publishing

Published: Aug 15, 2016

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