Human capital and entrepreneurial success: A meta-analytical review

Abstract

The study meta-analytically integrates results from three decades of human capital research in entrepreneurship. Based on 70 independent samples (N = 24,733), we found a significant but small relationship between human capital and success (r c = .098). We examined theoretically derived moderators of this relationship referring to conceptualizations of human capital, to context, and to measurement of success. The relationship was higher for outcomes of human capital investments (knowledge/skills) than for human capital investments (education/ experience), for human capital with high task-relatedness compared to low task-relatedness, for young businesses compared to old businesses, and for the dependent variable size compared to growth or profitability. Findings are relevant for practitioners (lenders, policy makers, educators) and for future research. Our findings show that future research should pursue moderator approaches to study the effects of human capital on success. Further, human capital is most important if it is task-related and if it consists of outcomes of human capital investments rather than human capital investments; this suggests that research should overcome a static view of human capital and should rather investigate the processes of learning, knowledge acquisition, and the transfer of knowledge to entrepreneurial tasks.

“To have and have not”: founders’ human capital and university start-up survival

“…By disentangling different types of human capital, we claim to provide a necessary contribution to understand the specific effect of founders' human capital on firm survival in the case of USU, answering to Unger et al (2011) call for more studies that investigate survival appropriately by linking it to founders' specific human capital.…”

“…Mixed results are usually found when founders' human capital is considered as a determinant of venture survival or failure (Unger et al 2011). This may derive from a lack of theoretical specification to such relationship.…”

How human capital interacts with the early development of academic spin-offs

“…Human capital refers to an individual's knowledge, skills, abilities and experiences, which increase knowledge accumulation and business acumen (Schultz 1961;Kaasa 2009;Unger et al 2011). Human capital can be increased through education, training, and other experiences (Schultz 1961;Gimeno et al 1997;Kaasa 2009).…”

Balanced skills among nascent entrepreneurs

“…All suspected high-potential nascent projects were rated by a combination of criteria related to a) human capital of the entrepreneurs (management experience, start-up experience and starting as team), b) sophistication level of the project (e.g., scientist sample: relation of the idea to own research; others: novelty of the product / service, or production process, or methods of promotion and selling), and c) belonging to a growth-friendly industry (e.g., sample of young companies: operating in a growing market; specific industries). Note that these criteria are usually considered as important drivers of (new) venture growth (e.g., Eisenhard and Schoonhoven 1990; Unger et al 2011) and have been successfully applied in prior attempts to construct datasets of high-potential firms ). The projects were coded for each criterion as 1 for low, 2 for medium, and 3 for high level.…”

“…However, a recent meta-analytical study reports low correlations between traditional human capital variables and entrepreneurial success in general (Unger et al 2011). For nascent entrepreneurship in particular there is also no strong link between traditional human capital and outcomes (Davidsson and Gordon in press).…”