The role of business competitions on entrepreneurial intent

Entrepreneurship has proven as an important catalyst for economic growth. This study aims to study the impact of business competitions in promoting entrepreneurial intent and actual behaviors. The study also looks at the role of locus of control on entrepreneurial behavior.

Business plan competitions are used around the world as means to stimulate entrepreneurial activity and ultimately create new jobs. The number of business competitions is increasing yearly. Business plan competitions have begun to increase at an average growth rate of 22 percent from 2004 to 2009 in the USA (Ross and Byrd 2011). Many developing countries are also experimenting with different formats of business plan competitions to achieve job-creation and economic development goals.

Literature Review

A study of the impact of a major business plan competition in Nigeria done by the world bank found that ”winners were 37 percentage points more likely than the control group to be operating a business and 23 percentage points more likely to have a firm with 10 or more workers [three years after competition]” and that “the business plan competition was successful in both attracting [entrepreneurs with the ability to grow their businesses beyond a small scale], and in helping them overcome their constraints” (Meckenzy, 2015, p. 3).

Recent studies are showing evidence of the importance of status and new firms in job creation. It is also important to note that for effective contribution in substantial job creation it is not the number of new small business that matter, but more importantly, the type of businesses started in terms of innovation and potential for growth. “High-growth entrepreneurs or high-impact firms represent a tiny fraction of the overall firm population, but make a disproportionally large contribution to job growth.” Morris (2011) finds that 4 percent of entrepreneurs in the Global Entrepreneurship Monitor surveys account for close to 40 percent of all jobs created.

While the Nigeria World Bank Study focused on those who received the competitive grants to measure impact, other studies have also looked at the impact of just participating in a business plan competition. These studies show that business plan competitions act as entrepreneurship support programs and provide a platform to the participants to enhance their entrepreneurial skill sets and increase their self-confidence (Russell et al. 2008). They also increase the desire and intent within the participants to become businessmen someday in the future (Russell et al. 2008).

Business plan competition emphasizes Business Plan Exploration or “the initial conception and further development of a venture idea” (Farmer et al. 2011, p. 255). A study measuring the impact of a business plan competition in Pakistan found that “the business plan exploration had a positive impact on both psychological characteristics and the intellectual capital of a person.”

The study objective is to check entrepreneurial intent in Yemen settings. The study looked at an actual intervention and checked how the entrepreneurial intent can be associated with actual performance. The methodology included quantitative and qualitative approaches to inform the findings.