
Small- Medium Enterprises (SMEs) and start-ups in Singapore account for 99% of all enterprises, employing 70% of all workers . They are thus an important source of innovation, productivity and potential growth for the nation. In a large multi-year research grant funded by Singapore National Research Foundation amounting to almost $1million SGD, we embark on a multi-method, multi-phase, multi-source research project where we collected data from more than 350 entrepreneurs who are start-up co-founders and SME directors.
We tested a research model that contains three major blocks—entrepreneurs’ decision making styles, business strategies and practices, and the start-up/SME firm performance. To test our research model, we adopted a variety of scientific methodologies and developed various assessment tool kits, including computer based simulations, survey questionnaires and interviews. The assessment tool kit was developed based on published studies in multiple disciplines, such as neuroscience, behavioral economics, entrepreneurship, organization science and strategy and management. Our research team visited each participant to administer all assessment tools face-to-face, and one-on-one, thus assuring the high quality of data collected.
Further, we organized workshops to provide training services to our participants in return for their participation in the research program. In total, we organized 7 workshops, during which we provided individualized benchmarking reports for all participants who attended. The benchmarking report contains detailed explanations on each variable we measured in the entrepreneur survey. For each company, we provided comparisons between the company and the averages of all companies in our sample.
Our research produced multiple papers that are in the process of publication. Some key findings are:
- We identified the following key challenges to innovation faced by local start-ups and SMEs:
- Lack of knowledge
- Scarce monetary resources
- Shortage of manpower
- Feasibility and technical challenges
- Market difficulties
- Unpredictability of environment
- When developing and implementing innovations, flexibility, both in adjusting the use of resources, and in changing of goals, are key to successful innovations. Four strategies used are:
- Recombining resources: Entrepreneurs need to think creatively about how they can recombine and use existing resources in new ways. Start-ups tend to be more effective at using and recombining existing resources while SMEs tend to acquire new resources when facing challenges.
- Exploiting contingencies: Effective entrepreneurs interpret and make use of contingencies, regardless of whether they are constraints or opportunities, in a favourable way.
- Willingness to “cannibalize” existing resources: Entrepreneurs need to evaluate how the decision to change the current course of actions will affect their existing investments. Entrepreneurs who are more willing to “cannibalize” existing investments are expected to be able to exploit new contingencies more effectively.
- Generating options: Entrepreneurs may develop ideas that are not immediately useful, but worth considering in future should the circumstances turn favourable. By cultivating different options, entrepreneurs keep their doors open to situations that may subsequently require the exercising of any of those options.
- Partnership is a key strategy used by firms to innovate when facing resource constraints. We examined the cooperative and trust tendencies of entrepreneurs. The results show that entrepreneurs in our study exhibited high levels of cooperative and trust propensities. Our results showed that the propensity to trust did not directly influence the extent to which firms engaged in partnerships, but instead, the propensity of trust influenced the likelihood that individuals will engage in various discovery behaviors (questioning, observing, networking and experimenting), which help entrepreneurs in opportunity identification. This highlights that entrepreneurs lacking the willingness to trust might also be reluctant to step out and pursue discovery behaviour that results in new opportunities.
Details of the research project are available at:
http://waifongboh.com/program