The role of human capital outcomes in generating business ideas
| DOI | https://doi.org/10.1108/VJIKMS-03-2019-0033 |
| Published date | 28 September 2019 |
| Pages | 163-183 |
| Date | 28 September 2019 |
| Author | Donata Sobakinova,Yan Zhou,Dilawar Khan Durrani |
| Subject Matter | Information & knowledge management,Knowledge management,Knowledge management systems |
The role of human capital
outcomes in generating
business ideas
Donata Sobakinova
School of Management, Harbin Institute of Technology, Harbin, China
Yan Zhou
School of Economy and Management, Harbin Institute of Technology,
Harbin, China, and
Dilawar Khan Durrani
University of Balochistan, Quetta, Pakistan
Abstract
Purpose –Despite the existence of a vast body of researchon entrepreneurship,little is known about why
some entrepreneurs are able to generate and realize more business ideas than others. This study aims to
present a prospective answer to this question by empirically examining the relationships among human
capital outcomes (entrepreneurial knowledge and skills) and the number of business ideas generated and
implemented.Additionally, the authors examined the moderating effect of the entrepreneurialself-efficacy on
the proposedrelationships.
Design/methodology/approach –A statistical analysison a sample of 340 Russian entrepreneurs was
conducted.
Findings –The results from the analysis indicated that human capital outcomes (entrepreneurial
knowledge and skills)are positively related to the number of generated and implemented ideas.Furthermore,
it was seen that entrepreneurialself-efficacy significantly moderates the relationshipbetween human capital
outcomes and the number of implemented ideas.However, self-efficacy has no significant moderating effect
on the relationships among humancapital outcomes and the number of generated ideas. Finally, the results
showed that the number of ideas generated mediatesthe relationships among human capital outcomes and
the number of ideas implemented.
Originality/value –To the best of the authors’knowledge, no previous study has investigated the
combination of such variables as entrepreneurial human capital outcomes, entrepreneurial self-efficacy and
the number of new businessideas. This paper investigates this gap in the literaturewith an empirical analysis
of the relationsbetween the mentioned variables basedon data collected from Russian entrepreneurs.
Keywords Human capital, Entrepreneurial self-efficacy, Entrepreneurial skills,
Entrepreneurial knowledge, Business idea, Russian entrepreneurs
Paper type Research paper
1. Introduction
Generation of new entrepreneurial ideas has become an essential part of the business
process because of aggressive competition and constantly changing the marketplace. In
today’s dynamically changing marketplace, generation and implementation of novel ideas
are indispensable for the long-term sustainability of a business. Novel ideas can help
entrepreneurs start or restart a businessby creating new products, markets and customers.
Entrepreneurs need to keep developing new or improved products and services that meet
Human capital
outcomes
163
Received12 March 2019
Revised25 May 2019
Accepted10 June 2019
VINEJournal of Information and
KnowledgeManagement Systems
Vol.50 No. 1, 2020
pp. 163-183
© Emerald Publishing Limited
2059-5891
DOI 10.1108/VJIKMS-03-2019-0033
The current issue and full text archive of this journal is available on Emerald Insight at:
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the changing demands of their customers (Ward,2004;Weinberger et al., 2018). The rapidly
changing need and demands of the customers in today’s technologically advanced world is
putting increased pressureon entrepreneurs to generate and implement as many novel ideas
as possible. To be a successful entrepreneur,one must be not only capable of perceiving new
ideas but also perceptive of ideas generated by others. Entrepreneurial activity is almost
always based on an entrepreneurial idea generated by the entrepreneur himself or by
someone else.
An entrepreneurial idea is a generalpicture of the potential consumer’s needs that could
be met by the entrepreneur. It is a broad picture which guides his actions as he engages in
his business activity. It is a clear conception on the entrepreneur’s part of precisely how the
potential consumer’s need can be met, what steps need to be taken towards that end, and
what will be the cost/benefit relationship of taking them (Kirzner, 2015). Researchers have
long tried to find out why some peoplegenerate more ideas than others. This study is aimed
at exploring the potentialfactors that can influence the process of business ideas generation.
Previous studies argued that an important source for the generation of new business
ideas is work experience (Shane, 2000;Politis, 2005;Shepherd and DeTienne, 2005;
Gabrielsson and Politis, 2012). However, by its definition, “experience”results in “the
knowledge or skill acquiredby a period of practical experienceof something, especially that
gained in a particular profession”(Oxford, 2019). Researchers have argued that work
experience is one of the investments in human capital, while acquiredknowledge and skills
are outcomes of human capital investment(Becker, 1964). We propose that the generation of
new business ideas is linked with human capital outcomes such as entrepreneurial
knowledge and skills gained through either experience or education. Though previous
researchers have linked business idea generation to experience, they have ignored the
important human capital outcomes of knowledge and skill that may be the main source of
business idea generationprocess.
Considering the gap in the literature, it would be interesting to analyze the relationships
among the mentioned variables, especially with regards to the specific country context of
Russia. Russian Federation was chosen as the context of this study due to its emerging
peculiarities of entrepreneurship during the past three decades. The existence of
“entrepreneurs”in Russia was legalized only in 1990 (Dickinson, 2004). In USSR, it was
forbidden even to think about starting a business. Entrepreneurship has started to play a
very important role in the economic development of Russia even though that the conceptof
entrepreneurship is quitenovel in Russia as compared to other countries. In 2018 there were
6.04 million small and medium businesses and entrepreneurs in the Russian Federation;
among them, only 4.7 per cent of citizens of workingage are nascent entrepreneurs. Among
SMEs, 53.35 per cent are individual entrepreneurs, and 46.65 per cent are legal entities.
Small and medium-sized entrepreneurship in the Russian Federation mainly consists of
micro businesses. The number of medium-sized enterprises is relatively small. An analysis
of the distribution of SMEs by category showed that90.8 per cent are micro enterprises, 8.5
per cent are small businesses and 0.7 per cent are average enterprises (Federal Tax Service
of Russia, 2018). Small businesses specialize mainly in trade and the provision of public
services. Medium-sized enterprises are more represented in areas with higher value-
addition, such as manufacturing, construction and agriculture. According to (The Global
Entrepreneurship Research Association [GERA], 2016-2017), the “level of entrepreneurial
intention”among the people aged 18 to 64 in Russia was only 2.1 per cent, which is the
lowest of all the countries participating in the project. In general, Russia is characterized by
a downward trend in the level of entrepreneurial intention. Russian Federation is still
characterized not only by a low level of entrepreneurial activity but also by the fact that
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