Professor Paul Steffens: Entrepreneurship is important for promoting individual welfare

The University of Southern Denmark in Kolding is known for its leading research in entrepreneurship, innovation, and business promotion.

Now the local research environment has been further strengthened as Paul Steffens visits the university with support from the Otto Mønsted Guest Professorship.

Here he will continue his close collaboration with Professor Kim Klyver to investigate the phenomena of entrepreneurship around the globe and especially the psychological aspects of entrepreneurs.

The nascent phase

You don’t have to talk long with Paul Steffens to find out that his interests - and thus his research area - span widely. It counts everything from field studies in Africa to research on religious groups and Ukrainian refugees in Europe.

The common denominators, however, are that it is often based on entrepreneurship, start-up processes, and business growth.

- I have looked at the processes that firms undergo prior to starting up. So, in academic-speak, it’s the nascent stage of firm development. We call them nascent entrepreneurs. And I have looked at a range of things in that space. Increasingly, I am looking at psychological factors and how they influence that process and progress.

- And then, the aspects of young firm growth, I’ve particularly looked at the interplay between profitability and sales growth. Probably one of my most cited papers is debunking the myth that you can sort of grow into profitability. Other than a few extreme cases like perhaps eBay or firms like that, most firms need to develop a stable profitable business before they can grow.

More than just business

For Paul Steffens, entrepreneurship is not just about businesses that grow. He is also passionate about the potential that entrepreneurship has to help disadvantaged groups in society and how it can create personal well-being for the individual.

- Entrepreneurship compared with most management and business studies focuses on the individual. Two things set entrepreneurship apart from other business disciplines. One is the role of agency. That is, the central role of individuals and what they do. And the second is, that it is focused around opportunity, he says.

Together with SDU Professor Kim Klyver, he has, for example, investigated how Ukrainian refugees have established themselves as entrepreneurs in Denmark, Norway, and Sweden after the invasion of Ukraine. Similarly, he has been to Africa several times to work with resource-limited entrepreneurs.

- Also, I have just published for the first time something around the role of religiosity and religious networks. The observation is how tight these communities are and the role they then play in fostering and assisting businesses.

Championing the underdog

The Australian professor emphasizes that he does not believe that entrepreneurship in the sense of starting a new business is for everyone. But starting a business can be a way to employment for those who are disadvantaged or excluded from the labor market for a variety of reasons, such as the example of the Ukrainian refugees.

- I used to work and research in innovation and larger businesses. And then, when I came across entrepreneurship, I understood how important this was for fostering the well-being of individuals, non-wealthy people, and smaller businesses. So, it’s championing the underdog in a way.

- Poor business performance, if you are an entrepreneur, can be very negative to an individual’s well-being. So, it’s very important that we understand what list improves the odds that the individual has better outcomes. To be honest, every particular business is so specific we couldn’t possibly say that we have the answers for everyone. But we can tell you some of the things that increase the likelihood that you will do better. Researching that and understanding that better is an important contribution, he concludes.

This article is translated with the help of Copilot