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Where do international growth intentions come from? (Part I)

Growth entrepreneurship is very much on policy makers' minds and everyone wants us to have more of them. Therefore the first post of this blog looks at Finnish software firms' intentions to internationalize from day one. Armed with our surveys and statistical software, we have been chasing this issue for some time now.

Some of the known growth factors we have examined thus far are not too complex. One of them is growth motivation; firms that simply have decided to grow also have more success in doing so. So in order to get an idea which firms will become rapidly growing international players, we just need to ask them if that is what they are trying to accomplish - simple as that.

To examine this issue, we asked CEOs of Finnish software firms about their agreement to the following statement: "Our firm has targeted international markets from its founding" on a five-point scale. We then plotted the questionnaire results with the ages of the companies' CEOs in the year the companies were founded. With a little leap of faith, the founding teams are probably about as old as the CEO, at least on average. This plot therefore gives an idea of the typical age of the people who decide to go into international business by starting their own company. Voilà, the image below (N=75):

The red line represents and average "do not agree or disagree" level, i.e. neutrality toward the statement. Everything above it thus means internationalization from day one was to some degree pursued. (The scale is cropped, but "2" would mean "disagree" and "4" would mean "agree.)

Overall, it seems that it is less common to start companies with global markets in mind than aiming to be local players. The camels back curve shows that people most likely to do so are in their early thirties. Interest drops steadily until about age 45, and then starts to surge again.

The local orientation of those under 30 seems worrying since the process of becoming the next Bill Gates or Mark Zuckerberg statrts at an early age. Not jumping into too heavy conclusions, the curve might be pushed more to the right by the typically old age of Finnish university graduates.

Therefore my two cents to the debate on the apparently low levels of growth entrepreneurship in Finland are that free university education and benefits to some extent discourage high tech entrepreneurship and lead potential serial entrepreneurs off their optimal learning curve. Since the serial entrepreneurs we are growing start off later, they will have less time to create firms and create less jobs. Even the willingness to take over the world in the Harley Davidson age would not shake this conclusion. 

I end this post with the typical words of a researcher: "More studies on this topic are called upon."

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