Entrepreneurial Readiness Of Youth To Perceive Opportunities And Threats In Small Business

Abstract

Indicators of entrepreneur’s readiness to perceive potential innovations and threats to the strategic development of small business, as the foundation of Russia's economic well-being, are based on the ontology “entrepreneurship”, “readiness for entrepreneurship”, “stress tolerance”, “stress tolerance to the perception of potential innovations”, “stress tolerance to threats”, “ digital transformation conditions. ” Indicative approach to diagnosing youth’s readiness in order to perceive opportunities and threats in small business as a sphere of entrepreneurship suggests identifying intentions and preparing for facing risks and opportunities in the context of digital transformation. The structure of the personality orientation in modern research includes needs, desires, interests, drives, self-esteem, worldview, inclinations, ideals, value orientations, beliefs and principles, attitudes and emotional experiences, social roles. Many approaches to the ontology of entrepreneurial orientation include motives and acmeological orientation in professional activity, highlighting the motivational activity orientation of an individual; worldview orientation of an individual; motivational and semantic orientation of an individual.

Keywords: Indicatorsindicative approachdiagnosissmall business

Introduction

The study shows that a person can be born with the aptitude of a leader, but whether he will be a middle or senior manager as an employee, or organize his own business in the form of small, medium and large business depends on many factors surrounding him. The process of forming and developing of personal internal determinants correlates with the conditions of his or her life in society and the external environment.

The factors of the external environment are usually marked as geographical, social environment, methods of education, traditions, national culture, religion. In any case, the choice of new types of entrepreneurial activity in the conditions of technological transformation will be carried out in the field of its cognitive and mental understanding of reality. Consequently, it reveals the ontology of indicators of the entrepreneur’s readiness to perceive potential innovations and threats in the context of digital transformation, while taking into account the orientation of the personality, where the motives of choice and the need for success become key.

Discussions

It should be noted that the strategic development of small businesses is correlated with a willingness to do business in the face of uncertainty and risk, but in each case the study has its own ambiguous route and various indicators. A person’s readiness for entrepreneurship is represented as a systematic education and is structured into a dynamic psychological education, including: 1) a situational (state) component; 2) a stable (personal) component. The structure of readiness for entrepreneurial activity as a unity of the following components: psychological, communicative, active, managerial, vocational guidance, economic is a subject of a certain interest (Barsukova, 2018).

The core component of education is interpreted as the motivational component of readiness to conduct any activity where learning skills and knowledge is not possible to conduct “outside of motive and meaning” (Sandzhaeva, 1997). There are the situational component (accumulates resources for mobilizing the psychophysiological systems of an individual in the process of solving a problem through action) and the constant component (personality attitudes). Leontiev (2011) considers constant and situational motives as mandatory in the process of forming readiness for a person to take actions.

Materials and methods

To test the proposed hypothesis, statistical analysis and synthesis of ontological approaches to innovation and investment policy are used. The study shows that the key factor in entrepreneurial intentions of the individual is a need for economic independence.

The research part

Assessment of readiness involves a study of the ontology of indicators if a person is ready to perceive potential innovations and threats to the organization and to the process of operating the business (Figure 1 ).

Figure 1: Indicators of entrepreneur readiness to perceive potential innovations and threats in the context of digital transformation
Indicators of entrepreneur readiness to perceive potential innovations and threats in the context of digital transformation
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1. The first and the key indicator, according to the authors, is meaningful development of a person. Such development includes components which show person’s qualities from the point of determinism principle. Determinism as a theory of the connection and interdependence of reality phenomena states:

1) the causes and patterns of interaction between society and nature;

2) the driving forces of social development;

3) the processes of society's influence on moral standards;

4) areas of scientific development and art in society;

5) ways of human’s formation and actions.

The choice of such an indicator as “meaningful development of a person” is especially relevant for Russia, where the process of forming readiness for doing business is complicated by the lack of a “historical memory of entrepreneurship” in Russian society.

Free entrepreneurship was banned in the USSR for about seventy years and had a negative connotation in the household name "speculator." In the days of the USSR, entrepreneurial activity was a form of crime which was supposed to be punished.

In a market economy entrepreneurship is associated with providing services and production of goods for profit. Due to the need to make his or her own decisions, entrepreneur as a business active person is associated with independent management of material and human resources. Entrepreneurship is not only profit-making activity, but also the activity of managing public organizations and state institutions (Poznyakov, & Zhuravleva, 2008).

2. The second indicator is defined as special personality characteristics. Entrepreneurship is correlated with special traits of personality, where the inherent character is manifested: the behavioral dominant of initiative, innovation and risk in economic activity (Gerber, 2008; Gryadov, 2007; Pshenichnikova, 1996; Schumpeter, 1982; Tokarenko, 1998; Zhuravlev & Kupreychenko, 2012).

An interesting point of view is that the distinguishing feature of entrepreneurship is not the ability to end a routine, create a new one, but the ability to see opportunities unnoticed by others (Kirtsner & Romanova, 2001).

3. The third indicator is an attitude of the individual to the substantive essence of the definition of “entrepreneurship”. There should be noted the controversy and ambiguity in understanding the essence of the definition of "entrepreneurship" and its differences from the definition of "business". The study shows that the identification of these concepts does not correspond to their semantic meaning (Klein, 2001; Raizberg, 2012).

Entrepreneurship, which has common features with “business,” is the concept based on production, consumption, exchange, distribution, profit, etc. It is distinguished by specific features from reproductive options. In this sense, entrepreneurship is associated with innovation, which implies new results accompanied by high risk and personal responsibility (Smith, 2016). The study shows that entrepreneurship as a term has wider boundaries of ontology, including the development of new projects, ideas, technologies, which allows creating new products that have not only monetary value, but also social value.

Consequently, the result of entrepreneurial activity is manifested in creating (inventing) of new business forms. It is assumed that a business entity becomes a creator in the design and practice activity of the individual to create new sources of material resources, which is done at his or her own peril and risk. Various interpretations of the essence of the entrepreneur as the key characteristics of the personality and its behavior find a variety of options for modeling the personality of the entrepreneur.

The third indicator identifies seven models that reflect the substantive essence of entrepreneurship (Figure 2 ).

3.1. The economic model of REMM (“resourceful, evaluative, maximizing man”) as a substantive essence of entrepreneurship according to its author A. Smith reflects the most essential features of human behavior in the economic space (Veblen, 2006). However, M. Weber introduced the concept of a “sociological” person, relying in his or her actions on the rational construction of a goal, where the reaction to the expected suffering or pleasure (which are external incentives) is. The central dogma of these theories is the dogma of hedonistic calculation (Lazarev, 2003).

Figure 2: Models of the substantive essence of entrepreneurship as a willingness to act in conditions of uncertainty
Models of the substantive essence of entrepreneurship as a willingness to act in conditions of uncertainty
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3.2. Sociological models of SRSM (“a socialized person” playing a social role, who is a subject to sanctions and is controlled by society) OSAM (“a receptive” person with his own opinion about the different aspects of the world around him and acting in accordance with it) according to Lazarev (2003) also belong to the class of sociological models of a person as a subject of economic behaviour.

3.3. The compromise model “socioeconomic man” as an essential entity of entrepreneurship disclosed by Radaev (1997) is a combined version of economic and sociological models, which removes the limitations of the interpretation of a person as homo economico (selfish, independent, rational and informed) or homo socialis (altruistic, subordinate to society, behaving irrationally).

3.4. The behavioral model as a substantive essence of entrepreneurship was involved as an alternative purely economic model of entrepreneurial activity of an individual. Limitations of the scope of purely economic models were established in both domestic and foreign science. However, the attempts to explain the effect of theoretical models of the exchange of personality behavior were also unsuccessful, if there was no external reward. Psychological analysis showed that a positive experience from the process of doing work is compensated by such a phenomenon as “self-reward” for fulfilling a social mission and achieving difficult goals. The entrepreneur’s behavior is realized in conditions of “unwarranted”, “nonequivalent” or asymmetric exchange. Entrepreneurial behavior involves unselfishness, dedication, gratitude in the absence of expectation from other people of the same return that a person seeks from himself or herself. In particular, H. Hekhausen argued that it is difficult to determine personal contribution (exchange) in such cases by the quantitative incomparability of personal parameters, the individuality and uniqueness of personal meanings, and the interchangeability of individual needs (as cited in Radaev, 1997).

3.5. The psychological model as a substantive essence of entrepreneurship is interpreted from the position of “value-semantic rationality”, the authors of which are Zhuravlev and Kupreychenko (2012). This model focuses on the universal regulator of the economic activity of the individual - a reflecting, independent and responsible subject. “Economic interest” is only a special case of such rationality as applied to situations where life goals and values are inextricably linked in the human mind with material goods and economic sources. It is believed that the subject of economic activity is configured to make their own decisions and act in a certain way in the economic environment in accordance with the most significant values, principles, ideals, meanings, relevant goals and claims.

3.6. An ethno-cultural model as a substantive essence of entrepreneurship is based on the ethno-confessional and cultural-historical traditions of the individual and his social type. The ethno-cultural model is determined by a specific culture, where the entrepreneur is stable only in this organic environment for him (Paramonov, 2004).

3.7. The organizational model as a substantive essence of entrepreneurship becomes the basic characteristic of its personal readiness to involve a certain number of people (small, medium and large entrepreneurship are distinguished), which determines that entrepreneurs accept voluntary personal responsibility for themselves, their business, for their employees and their living conditions.

The study shows that the main criteria of readiness for entrepreneurial activity are individual psychological characteristics of the person, which allow to become a successful entrepreneur in the face of uncertainty and cyclical transformations. It means that entrepreneurship has a complex external-internal determination, which can be selective in nature due to individual personality characteristics. Drawing conclusions on the personal perception of the possibility of doing business, one should pay attention to the fact that an entrepreneur cannot be in the “comfort zone” due to the complexity and risky specific activity. The absence of a “comfort zone” is manifested in a high level of responsibility, which is determined by constant anxiety or fear to break the rules. While agreeing with the positions in terms of forming a person’s readiness to conduct entrepreneurial activity, the principle of a positive emotional attitude through a motivational value component should be established. The external dominant will be popularization of entrepreneurship. Popularization will play a key role in the process of preparing human resources for the choice of entrepreneurial activity. It is obvious that respect in the family, school, and media for entrepreneurial activity as a social phenomenon will raise credibility and also form an understanding of the level of responsibility in the management and decision-making structure.

4. The fourth indicator reflects the activity of the individual as a process of committing certain actions, integrates with the phenomenon of orientation. Orientation becomes the vector for choice of professional actions, allowing a person to realize his or her ideas based on relations to the profession, to see yourself in this profession. Orientation of the personality is the motivational basis of readiness for doing business. A significant number of typologies of personality orientation, which determine its various aspects, have been identified in psychological science. Key typologies reflect the attitude of a person to the world, to himself, to activity, determining the focus on business and on other people (Osnitsky, 2007). The basis of the professional orientation is the need of the individual for creation, orientation to consumption or destruction. There are such types of orientation as humanistic, selfish, depressive, altruistic, communicative studied in psychology, (Egorycheva, 1999). It is clear that with any orientation of the personality, there are those typologies manifested that will allow a person assert himself or herself, achieve self-realization and self-sufficiency. Many approaches to the ontology of entrepreneurial orientation include motives and acmeological orientation in professional activity, highlighting the motivational activity orientation of an individual; worldview orientation of an individual; motivational and semantic orientation of an individual (Manoilov, 2004). The orientation of an individual is manifested as a systemic formation that can be stable at a certain point in time and independent of situations occurring around the personality. It is only activated when there is a motivating component. However, relative stability and independence of orientation is the subject of dynamic development. The dynamic development of the personality orientation, which determines the main line of behavior, is transformed in the process of life under the change of social and technological structures and economic cycles. It is necessary to highlight the routes that allow us to consider the orientation of an individual as a stable determinant in the formation of readiness for professional activity: a stable system of predominant motives; hierarchical structure of component orientation. At the same time, the professional orientation of an individual as a system of personality motivation in professional activity is actively studied and clarified. It can be stated that in a significant analysis of types of orientation there is no significant interpretation of the concept of professional orientation, structure of orientation, types, particular manifestations. And therefore, the concept of the personal orientation of the entrepreneur remains undeveloped. Today it becomes interesting to define the orientation as a positive attitude to entrepreneurial activity (Gorodetskaya, 1998). The ontology of indicators of the entrepreneur’s readiness to perceive potential innovations and threats in the context of digital transformation determines the personal reasons for opening a business, where profit is not indicated as the main motive. The key motives for choosing an entrepreneurial career are manifested in the possibility of creative self-realization, the disclosure of creative potential (Gorodetskaya, 1998), the desire to control their own future as a harmonious whole (work and personal life); the realization of one’s own way of life in the sphere of activity (Samoukin & Samoukina, 1992), one’s own social attitudes as the presence of “a social character”. The orientation of the individual organizes an entrepreneurial orientation as an inner motivation for entrepreneurial activity to make sense. The personal focus on the expediency of doing business correlates with the ontology of "entrepreneurial ability." That is why the internal motivational basis of entrepreneurship, the entrepreneurial orientation of the individual is the basis for the disclosure and practical implementation of entrepreneurial abilities.

5. The fifth indicator of the entrepreneur’s willingness to perceive potential innovations and threats in the context of digital transformation reflects external positive motivation. Depending on how susceptible an individual is to external positive motivations allows us to adequately reveal the "I-concept" for realizing entrepreneurial abilities. Orientation of the individual to entrepreneurial activity will not be manifested if positive self-esteem towards oneself as a business entity is not included. Currently in Russia external motives and the environment cannot be characterized as favorable for revealing a personality of an entrepreneur. Adverse environmental conditions towards forming personal background for entrepreneurship do not allow to accurately determine the level of readiness of an individual to conduct entrepreneurial activity. In addition, it is important to state that there was carried out a list of personality predictors identified by domestic and foreign psychologists in the personality of the successful entrepreneur (Deineka, 2000; Dobrynina et al., 2015):

emotionally stable;

achievement motivation;

high efficiency;

independence in decision making;

high level of discipline;

diligence in business;

intuition as a proactive activity;

punctuality;

radicalism;

self-confidence;

open to change;

high level of communication;

desire for independence;

ready for development;

extraversion as a concentration of interests on external objects.

The ontology of entrepreneurs' readiness indicators determines a general mechanism of actions for new types of business on the basis of recognition of potential innovations and a threat from the point of social and personal significance, manifested in the main functions:

1) acceptance of information;

2) processing and analysis of incoming data;

3) the formation of the information core for decision making;

4) decision making process;

5) implementation of the decision;

6) analysis of the decision results;

7) adjustment of subsequent actions.

Consequently, the structure of readiness consists of the motivational component affecting the fact how ready the person is to act and the desire to engage in it, that is to have an idea and to be involved. High motivation for achievement determines a creative approach, which is enhanced by the guidelines for strategic and tactical aspects of activity in a market economy (Liventseva, 2002). The psychological readiness of an entrepreneur for activities in the face of uncertainty is a complex personal formation that allows for self-realization in modern socio-economic conditions, which are a unity of behavioral, motivational, individual components (Serebrovskaya, 2016). Studies show that there is a synthesis of the presented components (determinants) of the indicators’ ontology of entrepreneur willingness to perceive potential innovations and threats to the strategic development of small businesses. Due to the digital transformation it allows us to distinguish the following groups of indicators:

competence-orientational readiness (COR):

COR_fiscal;

COR_of market demand;

COR_of market competition;

COR_inflation-resistant;

COR_financially sustainable;

2) informational subject readiness (ISR):

ISR_information;

ISR_resource;

ISR_credit-financial;

ISR_partnership;

ISR_financial security;

3) motivational status readiness (MSR):

MSR_property;

MSR_administratively responsible;

MSR_fiscally responsible;

MSR_logic-administrative;

MSR_populistic;

4) communicative hierarchical readiness (CHR):

CHR_administrative;

CHR_electronic-digital;

CHR_protective;

CHR_control-administrative;

CHR_innovation and investment.

It should be noted that the study and synthesis of various components of the structure of psychological readiness for entrepreneurial activity of an individual under conditions of uncertainty was reflected in indicators specified by the authors, which are disclosed in table 1 .

Table 1 -
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After the content of the concepts was distributed among the proposed groups of indicators, a pilot experiment was conducted in which 72 students of a pedagogical university participated. They showed their intention to conduct entrepreneurial activity after graduation. The authors suggested significance of the proposed indicators in the diagnosis of readiness for entrepreneurial activity and the perception of opportunities and threats (Table 2 ).

Table 2 -
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Effective part

The data of the Table 2 indicates that high readiness for threats is reflected in the indicators for the group of informational subject readiness.

It means that the respondents are aware of availability of the necessary economic information and its sources, rules of issuing loans, matters of financial security.

At the same time, the largest indicators in quantitative terms belong to the same group and appeared in terms of information and resource indicators. As the results of the pilot experiment the information is non-functional, so it does not encourage activity and initiative.

This situation, in particular, will be reflected in the indicators for the group of the lowest total marks

- motivational-status readiness.

It proves that awareness, understanding of the problems of entrepreneurship, perhaps even special training will not provide a mass influx of young people into small businesses.

Attention is drawn immediately to the fact that as the sum of average values for a group of indicators decreases, the total standard deviation indicators increase. It is an indirect evidence that the range of variation increases with the complexity of the questions presented in the questionnaire (Table 3 ).

Table 3 -
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The smallest values can be seen by a group of indicators combining motivational-status and communicative-hierarchical readiness. The indicator which has the lowest marks is protection readiness with the average value 1.94 and the average deviation of 1.6, which ranks 17th.

Conclusion

Thus, respondents who have a lot of knowledge are not aimed at communicative communication in the field of entrepreneurship since they do not have sufficient motives. Comparing all the proposed indicators with the sources studied, we can conclude that the problem can be seen in indicators’ complexity of respondents' readiness to conduct business. Studies have shown that the authors single out the motivation component, in which they include: needs; interest in the content of the activity; installation; value orientations; inner motivating factors that drive a person to act and allow him or her to effectively engage in the work.

In conclusion, it should be noted that young people should be prepared in a structured way for doing business. It will allow to activate the urgent need to ensure personal security and make competent management decisions.

Acknowledgements

The article was funded by the Russian Foundation for Basic Research “Cognitive approach to theoretical and methodological foundations of strategic development of small businesses in the digital economy system taking drift risks into account” No. 18-010-01210 – A.

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08 March 2021

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Melnikova, Y. V., Shokhnekh, A., & Gamayunova, T. M. (2021). Entrepreneurial Readiness Of Youth To Perceive Opportunities And Threats In Small Business. In & N. Lomakin (Ed.), Finance, Entrepreneurship and Technologies in Digital Economy, vol 103. European Proceedings of Social and Behavioural Sciences (pp. 292-304). European Publisher. https://doi.org/10.15405/epsbs.2021.03.37