Research Assumptions and Hypothesis

Dr Ishiguro and Matthew Radich have been developing their entrepreneurship research project. They have clarified their assumptions and hypothesis.

Assumptions

Our assumptions about business generation and entrepreneurship in general have been simplified to encompass the following three points. We believe these factors determine an individual's choice in starting their own venture:

1. Risk assessment:
   perceived risks of a new business venture versus other courses of action open to the individual—this includes a person's ability to accurately judge the levels of relative risk, as well us their own aversion to it.
2. Motivation:
   an individual's drive, initiative and will—the tension between internal and external goals and motivations.
3. Values and customs:
   cultural value of entrpreneurship—individualism and self-made success or being part of the group.

Hypothesis

The shape of policy initiatives and organised support for entrepreneurship depends on which of the assumed factors outlined above are most influential in determining an individual's choice.

1. Risk assessment:
   (a)  Risk aversion: Risk can be managed and reduced by offering financial and educational (For instance, case studies of success and failure) support. In addition, the presence of a safety net for failed entrepreneurs would mitigate the dangers of going out on your own. A supportive culture which focusses on success is essential.
   (b)  Risk ignorance: Teaching, mentor programmes and education can help business people and potential entrepreneurs make more informed decisions and mitigates imperfect information.
2. Motivation:
   (a)  Helping people find the right idea creates desire for individual success and new business creation. Good business design not only gives people drive, but also engenders the confidence required to build a new business.
   (b)  Publicising successful cases will illustrate the possible gains to be won and create greater incentive for business generation.
3. Values and customs: 
   Mental and social barriers to starting a new business can be reduced by encouraging a variety of values in society.

These assumptions and hypotheses lead us to three essential patterns of policy support to increase new business generation:

1. Increased government (both state and local) support: financial aid; freely available business services; and education.
2. Freedom of information: an inclusive, open environment of shared ideas and knowledge rather than exclusive, competitive culture.
3. Building relationships and networks domestically and internationally.