Measuring Entrepreneurship Propensity and New Venture Creation Potential
We have developed an effective method through which to measure entrepreneurship propensity and determine new venture creation potential, which is based on several years of research on the entrepreneurship phenomenon. The development of our Entrepreneurship Propensity Index (EPI) was based on a comprehensive study of the relevant literature and seminal research in the field of entrepreneurship and in relation to the key characteristics, competencies and behaviours required by successful entrepreneurs. Our research has shown that an individual’s sense of purpose and personal characteristics (personality profile), along with other extrinsic determinants (enabling conditions and financial resources), enable the attainment of entrepreneurship skills and experience. The measurement of one’s entrepreneurial mindset and entrepreneurial intentions which are seen as the core dimensions for the measurement of their entrepreneurship propensity personality profile. Our EPI is underpinned by theories such as the human motivation theory1, Rotter’s locus of control and social learning theory2 and the Big Five personality traits.3 Through the use of our EPI we are able to measure the opportunity-driven behaviour required of successful entrepreneurs4,5, while guiding the development of segment-specific entrepreneurship development interventions based on classification theories considering low and high EPI scores.
We believe that at the genesis of entrepreneurship propensity lies one’s entrepreneurial mindset (optimism, commitment, determination, motivation and need to achieve) and their entrepreneurial intentions are underpinned by (sense of purpose, self-efficacy, opportunity identification and action orientation). Entrepreneurship propensity (mindset and intentions) lead to the attainment of entrepreneurial skills and experience through the process of new venture creation. An entrepreneur’s skills and experience continue to grow as they continue along their entrepreneurial journey, creating a compounding effect which results in entrepreneurial mastery.
1McClland (1961), 2Schjoedt and Shaver (2012), 3McCrae and Costa (1987), 4Karadeniz and Ozdemir (2009), 5Williams and Round (2009)
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