A study of human capital development in young entrepreneurs

In recent years young entrepreneurs have attracted considerable attention from policy makers and the media, and there is evidence that increasingly many young people aspire to start their own business. However, there has been little research into how young entrepreneurs actually build their businesses, and the limited existing research about young entrepreneurs has tended to focus on participants who have struggled to achieve business survival and growth. By contrast, this thesis investigates how young entrepreneurs are able to build high performing businesses. All participants have built a business with a turnover between £1 million and £90 million or otherwise raised at least £1 million in external investment. It takes a qualitative approach, based primarily on semi-structured interviewing, to understanding the knowledge and skills 21 young entrepreneurs used to build their businesses. It uses a human capital theory framework to analyse how the young entrepreneurs developed relevant knowledge and skills prior to start-up in order to build a business. It then considers what additional human and social capital the young entrepreneurs acquired during the venture creation process itself. The findings identify three different pathways, each of which typifies the human capital used by particular young entrepreneurs, according to their educational background and the precise age at which they started their business. The study also establishes the necessary human capital which all of the young entrepreneurs developed prior to start-up or during the early stages of starting their ventures, which was important to their success in growing a business. The study finally contributes to the debate about whether general human capital or venture-specific human capital is most important to entrepreneurs, finding that for young entrepreneurs developing pre-start-up general human capital is particularly significant.