The capabilities of new Chinese entrepreneurs in China

Abstract

This paper explores the clusters of capabilities in Chinese entrepreneurs and the relationships between entrepreneurial capability and regional socio-economic and GDP level in terms of the development of the new enterprise. In October 2007, 38,875 participants from a randomly selected sample of 50,000 entrepreneurs (response rate of 77.8%) from 31 provinces in China completed a survey on entrepreneurial capability. Eight major areas of entrepreneurial capabilities were measured, including opportunity identification, interpersonal skills, conceptualisation, organising, strategies, commitment, learning and emotional control. Cluster analysis was used to classify the entrepreneurs into three types: learning based, basic capability based and opportunity focused. Multilevel analysis was used to analyse further the relationship between clustered capabilities and area socioeconomic and GDP level, while other variables were controlled in the analysis. The findings suggest that learning-based entrepreneurs have higher abilities in emotional control, learning, organising and conceptual skills than do opportunity-focused or basic capability-based entrepreneurs. Opportunity-focused entrepreneurs were found to be stronger in opportunity taking, interpersonal skills, commitment and strategic capabilities than the other entrepreneurial types. Basic capability-based entrepreneurs were found to have the lowest capabilities across all measures. The significant differences in capabilities between the three clusters of entrepreneurs highlight the importance of the desire to learn and seize opportunities as success factors in start-up businesses, and the need for education and training for a comprehensive range of capabilities to run businesses successfully. The capabilities were found to be significantly related to area socioeconomic and GDP level.