Due to their knowledge gap in entrepreneurship skills, new entrepreneurs who are highly educated are most likely to benefit from new venture accelerator programmes.
The study, conducted by Dr Farzana Chowdhury, Professor of Entrepreneurship in our Management and Marketing Department, alongside her colleague Professor David Bruce Audretsch, Indiana University, sought to explore whether all ventures benefitted equally from participating in accelerator programmes.
The researchers analysed new venture accelerator programmes in over 100 different countries – both developed and developing. Venture performance in accelerator programmes was measured by; social impact upon education and health and quasi-innovation of patents and trademarks.
By also analysing the founders’ characteristics, such as their highest level of education, their entrepreneurial experience, and their industry experience, the researchers were able to analyse the impact a founder’s profile had on whether their venture benefitted from an accelerator programme, and how much difference this made.
The results revealed that founders with higher education levels are still able to learn business-related knowledge from these programmes in order to build successful ventures. However, often those entrepreneurs that already have business experience and industry experience do not benefit from the knowledge learned at accelerator programmes.
Interestingly, the researchers also found that there was no difference between solo founders and co-founders, too, with all ventures experiencing the same effects of accelerator programmes, clearly showing it is the knowledge and experience that has an impact, not the number of people involved.
Dr Chowdhury says,
“Accelerator programmes are a great support system for entrepreneurs. They can be an essential means to access physical resources, office spaces, and networking services and act as intermediaries by providing support services to new ventures.
And it’s clear to see from our research that those with a greater experience in education, and a lesser experience in entrepreneurship and industry gain more from these accelerator programme benefits, as opposed to experienced individuals who’ve likely built this knowledge and these networks already”.
Many of these accelerator programmes in emerging markets are modelled after the programmes in developed countries without taking into consideration local or regional factors. The researchers suggest that a one-size-fits-all approach to accelerator schemes is not the most effective route to fast-tracking new ventures to succeed if you are looking at boosting ventures from founders with varied backgrounds. Instead, greater consideration should be paid to the people behind the business ideas rather than the ideas themselves, and support should be tailored accordingly to best fit their needs.
Whilst for corporate managers engaged in intrapreneurship projects, employees with industry and entrepreneurial experience can be a great resource, and human resource managers can help with recruiting these individuals.
The researchers also state that policymakers should pay close attention to younger firms since they are vulnerable, as well as ventures where the founder has a high level of education, as accelerator programmes can complement their lack of industry and entrepreneurial experience.