Tracking the Entrepreneurial Process With the Panel Study of Entrepreneurial Dynamics (PSED) Protocol
This is an advance summary of a forthcoming article in the Oxford Research Encyclopedia of Business and Management. Please check back later for the full article.
In the early 1990s, business creation was receiving a great deal of attention, once it was clear that new firms were a major source of job creation. There was not, however, reliable data on the prevalence of persons participating in firm creation, what they would do to implement new ventures, or the proportion of start-up efforts that become profitable businesses. This hiatus led to the development of longitudinal studies of the entrepreneurial process, which have now been implemented in 14 countries, including twice in the United States.
The Panel Study of Entrepreneurial Dynamics (PSED) protocol was designed to provide estimates of the prevalence of individuals involved in business creation and the presence of pre-profit, start-up ventures; to deliver data on the major activities undertaken to implement a new firm; and to track the proportion that completed the transition from start-up to profitable new firm. A number of challenges were involved in implementing the research program, including the development of efficient procedures for identifying representative samples of nascent entrepreneurs and criteria for determining the dates of entry into the start-up process, the transition to a profitable business, and disengagement from the initiative.
Data collection is a three-stage process. The initial stage is identifying nascent entrepreneurs in a representative sample of adults, followed by a detailed interview on the start-up team and activity related to creating a new venture. The third stage is follow-up interviews, completed to determine the outcome of the start-up efforts. A large number of scholars have been involved in development of the interview schedules, and some data sets have considerable information on the perspectives, activities, and strategies of those involved in the start-up process.
Since the initial data sets were made public 15 years ago, there has been considerable research utilizing PSED data sets. One major finding, however, is that the firm creation process is much more diverse and complicated than had been expected. There are substantial research opportunities to be explored. A review of the major features of the PSED protocol and a summary of the existing data sets provides background that will facilitate additional analysis of the firm creation process. Four data sets [Australia, Sweden, and U.S. PSED I & II) are now in the public domain. Critical features of the start-up process have been consolidated and harmonized in a five-cohort, four-country data set that is also available.