1. 1
An Investigation into the Entrepreneurial Climate and
Determinants underlying Warwick District’s Vibrant Start-Up
Activity during the 2008-2015 Economic Depression
Laurence Langstone
Word Count: 10,307
Student Number: 130293989
March 2016

2. 2
Abstract
The global financial crisis of 2008/09 immersed the UK in a ‘Great Recession’ which lasted
for six quarters, and GDP only returned to pre-recession levels in mid-2014 constituting a
six year economic depression. Warwick District, UK, has long performed well with regard
to start-up performance and this continued throughout the depression. In light of the growing
significance of the region within economic geography and a lack of empirical research into
start-up activity during economic depressions this study aims to provide a holistic analysis
of the entrepreneurial climate that has been so conducive to start-up activity in Warwick
District and of the entrepreneurs’ determinants and profiles which have instigated such start-
up activity.
The study employs inductive reasoning and primary research consisting of surveys and
questionnaires collected from a sample of 50 entrepreneurs in order to gain insightful data
on start-up experiences and interviews conducted with 3 senior institutional leaders to
provide an understanding of local start-up patterns and support.
The study predominantly finds that the area benefits from informal institutions and an
entrepreneurial culture which maintained an environment conducive to start-up activity
throughout the depression. Furthermore, it is found that start-up activity was fuelled by
nascent entrepreneurs with the necessary wealth and experience to start a new business, and
these factors meant most businesses were started out of opportunity.
Because entrepreneurship is a spatially uneven process, the paper calls for future
comparative studies to add to the case study based findings of this study and for more
research into transitions of redundant individuals into entrepreneurship.
Key words: nascent entrepreneur, start-up, start-up determinants, entrepreneurship,
recession, recovery, economic depression, Warwick.

3. 3
Acknowledgements
First of all I would like to thank my dissertation mentor Danny Mackinnon for providing
guidance and advice throughout the process of this project. Furthermore, this project could
not have gone on without the contributions made by all research participants, including every
individual that willingly gave up their time for my research by either completing
questionnaires and surveys or engaging in interviews.
I would also like to thank Fiona Clark, a family friend who provided me with important leads
for my data collection process, and put me in contact with a few key individuals.
I must show my appreciation for my flatmates who have put up with my being boring and
absence from many social activities over the past few months, I promise to be more fun from
now on.
Finally, I would like to thank my family for their support and belief in me over the years. In
particular, I cannot appreciate how lucky I am to have the dreamy environment in France
provided by my parents which I have been able to peacefully retreat to throughout my time
at university. Similarly, this research project would have been far more difficult to conduct
had my grandparents not happily put me up whenever I have returned back home – I am ever
so grateful!

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Contents
Abstract 2
Acknowledgements 3
List of Figures 6
List of Appendices 6
Abbreviations and Acronyms 6
1. Introduction 7
1.1 Research questions 11
1.2 Structure 11
2. Literature Review 12
2.1 Approaches in entrepreneurship research 12
2.2 Start-up determinants and nascent entrepreneur profiles 13
2.2.1 Individual start-up determinants 13
2.2.2 Nascent entrepreneur profiles 15
2.2.3 Informal institutions and entrepreneurial cultures 16
2.3 Finance and support for start-ups 16
2.3.1 Financing start-ups 16
2.3.2 Support for start-ups 17
3. Methodology 19
3.1 Surveys and questionnaires 20
3.2 Semi-structured interviews 21
3.3 Secondary data 22
3.4 Ethical issues 22
4. Transitions to self-employment: determinants of start-up activity and
nascent entrepreneur profiles in Warwick District
23
4.1 What has been the role of pull factors and opportunity in start-ups? 23
4.2 What has been the role of push factors and necessity in start-ups? 26
4.3 What were the profiles of entrepreneurs who started new businesses? 28
4.4 What has been the role of informal institutions and an entrepreneurial culture? 30
4.5 Conclusion 32
5. Translating interest into action: fuelling start-ups in Warwick District 33
5.1 What has been the degree of self-financing in start-ups? 33
5.2 Support for start-ups 35
5.3 Conclusion 39

5. 5
6. Conclusion 41
6.1 Summary of research and analysis of aims 41
6.2 Limitations of research 44
6.3 Future areas of research 44
Bibliography 46
Appendices 55

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List of Figures
Figure 1 Location of Warwick District 7
Figure 2 Profile of UK recessions and recoveries 8
Figure 3 Warwickshire and England Enterprise Statistics 10
Figure 4 How significant were pull factors in the start-up decision? 23
Figure 5 How significant were the discouraging circumstances of the depression
in the start-up decision?
25
Figure 6 How significant were push factors in the start-up decision? 27
Figure 7 Percentage of UK nascent entrepreneurs who have reported ever using a
type of funding for business, 2007 to 2014
33
Figure 8 How difficult was it to acquire the necessary start-up capital? 34
Figure 9 Percentage of UK nascent entrepreneurs who have reported being
refused funding by type of funding refused, 2008 to 2014
35
Figure 10 How do you rate the level of ‘hard’ institutional support for start-ups? 36
Figure 11 How do you rate the level of ‘soft’ institutional support for start-ups? 37
List of Appendices
Appendix 1 Example of opening e-mails sent to potential entrepreneur
participants
55
Appendix 2 List of businesses that completed surveys/questionnaires 56
Appendix 3 Copy of survey completed by entrepreneurs 59
Appendix 4 Copy of questionnaire completed by entrepreneurs 60
Appendix 5 Compiled survey results 62
Appendix 6 List of individuals/institutions interviewed 63
Appendix 7 Bank of interview themes/questions 63
Appendix 8 Example of transcribed interview 64
Appendix 9 Risk Assessment Form 70
Appendix 10 Mentor Meeting Sheets 74
Abbreviations and Acronyms
Depression Economic depression
GDP Gross Domestic Product
GEM Global Entrepreneurship Monitor
NIESR National Institute of Economic and Social Research
ONS Office for National Statistics
UK United Kingdom

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1. Introduction
Research on entrepreneurship has increased dramatically in recent years due to its
importance for economic development (Dawson, Henley and Latreille, 2009; Tӧdtling,
2011). The growing significance of subnational spatial levels in the development of
economic growth (Huggins and Williams, 2012) has prompted a departure from the
dominant reference to the national level as a standard scale, which has been so prevalent in
entrepreneurship research (Wagner and Sternberg, 2004).
Instead, academics have argued for greater attention to the region, exploring the multiple
legal, economic, institutional and social forces influencing the capacity of local economies
to generate start-up activity (Audretsch and Peña-Legazkue, 2012). Such proponents believe
that entrepreneurship can be best understood within its context(s), types of which refer to
the social and spatial worlds of nascent entrepreneurs – defined as individuals trying to start-
up (Wagner, 2004) – which provide them with opportunities and boundaries (Welter, 2012).
This study, therefore, aims to provide a holistic empirical case study analysis of
entrepreneurship in the six year period of economic depression in the UK prompted by the
2008/09 recession, focusing on start-up activity in Warwick District, Warwickshire, UK (see
figure 1).
Figure 1: Location of Warwick District
Source: Nilfanion (2011, online)

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The global financial crisis of 2008/09 immersed much of the developed world in deep
recession, which is associated with two consecutive quarters of declining GDP. By this
definition, according to the ONS the UK’s ‘Great Recession’ lasted for six quarters from
2008 Q2 to 2009 Q3 (Allen, 2010, online). Figure 2 illustrates the lasting effects of what is
considered the worst recession in the UK since the 1930s (Townsend and Champion, 2014),
with GDP only returning to pre-recession levels in mid-2014, constituting a six year
economic depression, which is defined by NIESR as ‘a period when output is depressed
below its previous peak’ (Meaning, 2014, online).
Figure 2: Profile of UK recessions and recoveries
Source: NIESR May 2014 GDP Estimate (Meaning, 2014, online)
Understanding the effects of recessions on start-up activity is important due to the
relationship between start-up activity and regional economic development, which has been
found to be highly positive in numerous studies (Acs and Storey, 2004; Fritsch, 2008;
Reynolds, Storey and Westhead, 1994).
Academics such as Townsend, Busenitz and Arthurs (2010) increasingly raise the question
as to why individuals persist to start new businesses despite recognising that the odds of
success are against them. These odds are recognisably heightened during depressions due to
additional start-up barriers including reduced wealth and consumer demand, and greater
difficulties in acquiring (formal external) finance (Robertson, Collins, Medeira and Slater,
2003). Theories of start-up determinants are well documented, the most prominent of which

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emphasising economic cycles – the ‘prosperity-pull’ and ‘recession-push’ hypotheses
(Dawson et al, 2009) – yet Dawson and Henley (2012) identify a lack of empirical research
into the actual reasons individuals cite for choosing to start a new business.
The most crucial aspect of the start-up process is funding, deemed ‘one of the most
fundamental questions of enterprise research’ (Cassar, 2004, p.262). Personal savings and
loans from financial institutions are the most common and traditional sources of start-up
capital. However, the weightings of the two were significantly altered by the 2008 ‘credit
crunch’, defined as ‘general conditions of constrained supply of affordable finance’
(Kitching, Smallbone and Xheneti, 2009, p.3), increasing the start-up barriers for nascent
entrepreneurs.
Accompanied by the growing prominence of indigenous approaches to local and regional
development, which are ‘based upon the naturally occurring sources of economic potential
growing from within localities and regions’ (Pike, Rodríguez-Pose and Tomaney, 2006,
p.155), start-up support has however notably increased over recent decades. Local and
regional resilience during depressions requires a sufficient entrepreneurial propensity
(Krueger and Brazeal, 1994), and indigenous approaches are a means of nurturing such
‘home-grown’, locally and regionally embedded assets and resources (Pike et al, 2006). As
illustrated by figure 3, Warwick District has long performed well with regards to start-up
performance (Hill, 2010, online) and despite the ONS finding the West Midlands region to
have experienced the largest rise in unemployment in the UK during the course of the
recession (Campos, Dent, Fry and Reid, 2011), this start-up performance continued
throughout the depression.
As Veciana (2007) recognises, the dominant theory used to provide the conceptual
framework in empirical research on entrepreneurship is institutional theory, developed by
North (1990). Here, institutions are ‘the set of rules that articulate and organise economic,
social and political interactions between individuals and social groups’ (Ribeiro-Soriano and
Galindo-Martín, 2012, p.861). Proponents of evolutionary economics adopt these
institutionalist ideas with regard to processes of ‘path-dependency’, which conceptualises
that ‘the ways in which economic actors respond to wider processes of economic change are
shaped and informed by past decisions and experiences’ (Mackinnon and Cumbers, 2011,

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p.38). Such processes help to form a strong enterprise culture in localities (Lam, 2010) and
although the 2011 economic assessment remains the most recent – and individual statistics
on Warwick District are unavailable/inaccessible – figure 3 illustrates the developing of such
a culture in Warwickshire. Thus, the conceptual bases of institutional and evolutionary
theories are well suited to investigating the local social and economic ‘milieu’ that has been
so conducive to start-up activity in Warwick District.
Figure 3: Warwickshire and England Enterprise Statistics
Source: Data compiled from Coventry & Warwickshire Economic Assessment 2011
(Coventry City Council, Warwickshire County Council and Working for Warwickshire,
2011, online)
Overall, this study aims to make a useful contribution to the literature in light of an evident
lack of empirical research into start-up activity during economic depressions. It aims to
provide a holistic analysis of the entrepreneurial climate that has been so conducive to start-
up activity in Warwick District and of the entrepreneurs’ determinants and profiles which
have instigated such start-up activity.
In order to deliver a holistic analysis, the study employs triangulation methodologies
comprised of questionnaires and surveys of entrepreneurs, interviews with key senior leaders
of local institutions, and secondary data obtained from the GEM. Using these methods, the
following research questions will be answered in order to meet the aims of the study.

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1.1 Researchquestions
During the economic depression in Warwick District:
1. What were the start-up determinants and entrepreneur profiles?
b. What was the role of informal institutions and an entrepreneurial culture in
fostering start-up activity?
2. How did nascent entrepreneurs fund their start-ups?
3. What hard and soft support was available for start-ups?
1.2 Structure
Following the introduction, chapter 2 will discuss key debates and concepts on areas within
this study from previous academic literature, evaluating the strengths and weaknesses of past
research and fitting the study within identified gaps. Accompanied by a brief evaluation of
ethics, chapter 3 will detail, justify and evaluate the data collection techniques and analytical
methods used in this study. Chapter 4 and 5 provide the data discussion and analysis in
relation to the research questions, with the former focusing on the determinants of start-up
activity and entrepreneur profiles and the latter focusing on the process of starting-up with
regard to funding and support. Finally, chapter 6 provides a conclusion to the study,
evaluating the findings and limitations and suggesting areas for future research.

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2. Literature Review
This chapter aims to deliver a critical review of previous literature on entrepreneurship, and
provide an understanding of how the study’s research questions have emerged. Through this
process, key theories, concepts and debates within the field of entrepreneurship research will
be addressed to situate the study in its academic context.
The chapter will begin with a review of approaches in entrepreneurship research. Thereafter,
the chapter follows through the order of the research questions, entailing a sequential ladder
in the start-up process.
2.1 Approaches in entrepreneurship research
Entrepreneurship research in the 1970s and 1980s was dominated by a personality approach,
however since Gartner’s two seminal papers (1989a; 1989b), in which he argued for research
to stop exploring who entrepreneurs were and instead explore what they did,
entrepreneurship research and theory has diversified significantly (Pittaway, 2012).
Researchers now consider the milieu and multiple contexts within which entrepreneurial
activity occurs (Pittaway, 2012). But, as many academics have argued (e.g. Gedeon, 2010;
Hölzl, 2010; Low and MacMillan, 1988; Smith and Anderson, 2007), entrepreneurship
remains a very poorly defined concept. Hölzl (2010) attributes this to the fact that
entrepreneurship is a multidimensional concept, where Acs (2006) distinguishes between
two meanings of entrepreneurship: 1) owning and managing a business, and 2)
entrepreneurial behaviour in the sense of seizing an economic opportunity, the coupling of
which has sparked a new focus in the literature which considers start-ups the ‘hallmark of
entrepreneurship’ (p.17).
Studies on entrepreneurship have been conducted at different levels, which Low and
MacMillan (1988) identify as the individual, group, organisational, industrial and societal.
They alert to the issue that much research is conducted at a single level of analysis, and
emphasise that the success of individual start-up activity will be impacted upon by factors
that can only be observed at different levels of analysis (1988). Furthermore, Wagner and
Sternberg (2004) add that many theoretical analyses still operate from a quasi ‘spaceless

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wonderland’ (p.222), detaching completely from spatial analysis and embracing a somewhat
neo-classical perspective. Stam (2010) notes the issue in this, emphasising that
entrepreneurship is a ‘distinctly spatially uneven process’ (p.139).
Thus there is a need for a more holistic approach to entrepreneurship research, which
considers the multiple factors involved in start-up activity and incorporates different levels
of analysis. This prompts the study to incorporate the individual, institutional and spatial
levels in the analysis of Warwick District.
Regarding data collection, previous studies on entrepreneurship have largely been based on
readily available secondary data sets, and a study by Short, Ketchen, Combs and Ireland
(2010) indicated that on the qualitative side there is great potential to gain insights into the
minds of entrepreneurs and the start-up process. This links strongly with Rae’s (2007)
criticism of seeing the entrepreneurial world only in a cause and effect way, which is
emblematic of positivist thinking. Rae (2007) explains that the situation is likely to be more
complex and dynamic that a simple causal analysis can demonstrate, and that instead there
are multiple interpretations of every situation. Therefore, by employing qualitative methods
to do so, the study of start-ups in Warwick District offers an opportunity to gain an insight
into the experiences of entrepreneurs who started their new businesses during the depression.
2.2 Start-up determinants and nascent entrepreneur profiles
2.2.1 Individual start-up determinants
Ashcroft, Holden and Low (2009) emphasise the importance of academic research into
individual start-up determinants due to growing policy interest in entrepreneurship. A
distinction is often made between ‘opportunity/necessity’ entrepreneurship, and ‘push/pull’
factors. Opportunity entrepreneurs start-up voluntarily, attracted by pull factors such as
independence, wealth, satisfaction, and personal motivations (Dawson et al, 2009).
Oppositely, necessity entrepreneurs are pushed into self-employment due to negative
external forces, such as redundancy and/or a lack of alternative job opportunities (Dawson
et al, 2009).

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Ever since Oxenfeldt (1943) linked self-employment to unemployment, numerous studies
have provided evidence of a positive relationship between the two variables (e.g. Blau, 1987;
Evans and Leighton, 1990; Farber, 1999). The key academic argument for this is that
increasing levels of unemployment, coupled with reduced prospects of finding paid
employment, either pushes people into self-employment as expected returns from
entrepreneurship become more attractive or in some cases forces them due to an urgent need
for income (Dawson et al, 2009; Morrison, 1998; Taylor, 1996). Alternatively, in reviewing
the literature, Parker (2009) cited many studies which illustrate negative relationships, and
zero relationships. Fairlie (2013) however emphasises that these studies do not include the
time period covered by the recent ‘Great Recession’, and here this study can contribute.
The recession-push hypothesis developed from previous studies and proposes a counter-
cyclical relationship between self-employment and economic conditions, where the
recession pushes individuals into self-employment (Ghatak, Morelli and Sjöström, 2007;
Parker, 2009; Roman, Congregado and Millán, 2013). In addition to unemployment and
reduced job opportunities, recessions are suggested to increase self-employment due to
lower production costs, particularly rent and labour, increasing potential entrepreneurial
earnings and a foreseeably lower opportunity cost of capital (Fairlie, 2013; Parker,
Congregado and Golpe, 2012).
However, many academics also acknowledge the suppressive effects of recessions on
entrepreneurship. Fairlie (2013) attributes these effects to lower demand for start-up
products and services – which decrease potential entrepreneurial earnings – in addition to
reduced wealth and greater difficulty in acquiring financing. Much research also emphasises
the impact of credit and liquidity constraints (e.g. Burke, FitzRoy and Nolan, 2000; Holts-
Eakin, Joulfaian and Rosen, 1994; Taylor, 2001).
To date, empirical research on self-employment reasons has mostly been limited to more
favourable economic conditions (e.g. Dawson et al, 2009; Hughes, 2003; Smeaton, 2003;
Taylor, 1996). For example, studying self-employment determinants in the UK between
1999 and 2001, Dawson et al (2009) found push factors to be highly insignificant. However,
the UK unemployment rate during this period averaged only around 6%, and Dawson et al
(2009) themselves question whether their conclusion would be as robust during the

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depression, calling for further analysis. Blanchflower and Shadforth (2007) assert that
factors other than the economic cycle are likely to have more significance in the decision to
start-up, a view supported by Verheul, Thurik, Hessels and van der Zwan (2010) who argue
specifically that the desire for independence is dominant. With such debates persisting within
the literature, this study can illuminate the effects of the recession on the start-up transitions
of entrepreneurs in Warwick District.
2.2.2 Nascent entrepreneur profiles
Klandt (1993) emphasises that in different stages of an individual’s career, entrepreneurship
has very different meanings. This is attributed to changes in an individual’s social
environment and financial position, which both influence ones freedom of choice and
patterns of behaviour (Klandt, 1993). One key and much debated factor in nascent
entrepreneur profiles is the role of wealth in regard to the decision of individuals to start-up
(Elston and Audretsch, 2010). Georgellis, Sessions and Tsitsianis (2005) explore numerous
studies to illuminate this debate, finding the relationship between wealth and start-ups to be
negative on 7 studies – which suggest that low paid workers are more likely to become self-
employed – and positive in 11 studies – which suggest that higher paid workers are more
likely to become self-employed. Studies that have found a negative relationship (e.g.
Blanchflower and Meyer, 1994; Holtz-Eakin, Joulfaian and Rosen, 1993 and 1994;
Johansson, 2000; Meyer, 1990; Min, 1984) argue that high earnings depress the likelihood
of becoming self-employed because the risk to the individual is deemed greater as they have
more to lose (Georgellis et al, 2005). However, many studies find otherwise (e.g. Elston and
Audretsch, 2010; Evans and Jovanovic, 1989; Kan and Tsai, 2006). Evans and Jovanovic
(1989), for example, found that wealth increases an individual’s likelihood of becoming an
entrepreneur due to greater funding sufficiencies. Cressy (2000) adds that their results can
be explained by the influence of wealth on attitudes to risk, arguing that as an individual’s
wealth increases, risk aversion decreases as the expected marginal utility of self-employment
relative to that from their current job increases. Such debates offer scope in research to assess
the significance of wealth in the start-up transition and process of entrepreneurs in Warwick
District during the depression.

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2.2.3 Informal institutions and entrepreneurial cultures
Pike et al (2006) emphasise that places often have deeply-embedded legacies and traditions
which ‘shape people’s attitudes and beliefs, influencing their disposition towards starting
new firms’ (p.160). Sautet and Kirzner (Cited in Huggins and Williams, 2012) recognise that
it is effective informal institutions like these, and a culture supportive of entrepreneurship
that enable nascent entrepreneurs to capitalise on perceived opportunities.
Considering the above, Huggins and Williams (2012) argue that entrepreneurship can be
considered self-reinforcing in nature and therewith can concentrate geographically, and this
evolutionary cycle means specific localities can influence entrepreneurial cycles via a shared
culture or set of formal and informal rules. Thus, local traditions of business start-up and
toleration of failure encourages others and has the potential to attract entrepreneurs from
outside the locality (Pike et al, 2006).
In addition to such informal institutions and evolutionary cycles, McQuaid (1996) adds the
importance of social support networks in supporting an entrepreneurial culture conducive to
start-up activity, arguing that much of the research into start-ups focuses solely on the
individual entrepreneur whilst ignoring many of the key influences on their behaviour.
Wagner and Sternberg (2004) add that ‘entrepreneurship must be explained with recourse to
the social capital concept and the actor networks related to it, which create positive
externalities’ (p.222). This study, therefore, can analyse whether the strong start-up rates in
Warwick District in recent decades has contributed to the development of informal
institutions and an entrepreneurial culture conducive to start-up activity during the
depression.
2.3 Finance and support for start-ups
2.3.1 Financing start-ups
The required initial financing of the fundamental elements of premises, equipment,
materials, staff and working capital provide the largest barrier to start-ups (Pike et al, 2006),
especially during periods of depression.

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Kitching et al (2009) note that if nascent entrepreneurs rely greatly or exclusively on personal
wealth then the credit crunch would have exerted little influence on start-up financing.
Furthermore, Lam (2010) draws on evidence which suggests that unfavourable
environments for raising external finance, such as the economic depression studied in this
paper, ‘do not seem to deter entrepreneurs from working towards starting up their own
business’ (p.284). Furthermore, she asserts that the majority of start-up capital is self-
financed. In reviewing sources of start-up capital however, Elston and Audretsch (2010)
assert that there is ‘little empirical evidence on the degree of self-financing of entrepreneurs’
(p.83). The degree of self-financing in Warwick District start-ups during the depression is
expected to be high. Nonetheless, empirical research can tend to this expectation.
Alternatively, a common assumption in the literature is that formal external finance is critical
to the start-up process (Lam, 2010). With reduced household wealth in the depression
making it harder for entrepreneurs to finance start-ups (Vaitilingam, 2010, online), the
importance of formal external finance is likely to be greater and this can be investigated in
this study.
2.3.2 Support for start-ups
Papaoikonomou, Segarra and Li (2012) assert that local and regional economic growth
depends ‘not only on the individual and collective efforts of entrepreneurs, but also on the
support they receive from institutions’ (p.117). Many academics, such as Arshed, Carter and
Mason (2014), recognise that the level of direct government support for start-ups has
increased significantly in recent decades, now consisting of a variety of financial measures
known as ‘hard’ support, such as loans and grants, and ‘soft’ support, such as advice and
guidance. There is an opportunity to investigate whether both forms of support were
sufficiently available for and influential in start-up activity in Warwick District.
Although policy cannot influence all the determinants of start-ups, it is widely agreed that
regional policies are needed to stimulate interest in entrepreneurial start-ups and to assist in
the translation of this interest into action (Ashcroft et al, 2009). Papaoikonomou et al (2012)
assert that establishing assistance policies for business creation, especially during
depressions, is a predominant strategic objective of public institutions. A common

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conceptual framework used within the literature to understand the influences of policies on
entrepreneurial activity is that of institutional theory, focusing on formal institutions. Amin
and Thrift (1995) coined the phrase ‘institutional thickness’ which, in addition to informal
institutions discussed previously, emphasises the value of a vibrant set of organisations and
networks to local and regional development. Here, effective governance is seen as an
imperative prerequisite to support and stimulate entrepreneurial activity which would have
positive impacts on economic growth (Ribeiro-Soriano and Galindo-Martín, 2012).
Governance refers to the ‘processes of interaction and decision-making among the actors
involved in a collective problem’ (Hufty, 2011, online, p.405), which in this case is fostering
start-up activity during the depression. As a result of the significant devolution which has
taken place in the UK over the last few decades, regional institutions have taken a leading
role in regional development strategies (Dawson, Henley and Latreille, 2014). The
investigation into Warwick District can illuminate the effects of this devolution and formal
institutions on start-up activity during the depression.

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3. Methodology
Having reviewed the literature on areas within this study, and provided an understanding for
the formulation of the research questions, this chapter will detail the data collection
techniques and analytical methods used in order to answer them. Justification will be
provided for the use of particular methods, detailing their positive and negative elements and
what this means for the quality of data.
The study primarily used inductive reasoning, meaning that ‘the patterns, themes, and
categories of analysis… emerge out of [the] data rather than being decided prior to data
collection and analysis’ (Patton, 1987, p.150). The issue with positivist deductive reasoning
is that, as Kuhn (Cited in Dana and Dana, 2005) explains, ‘hypotheses are value-laden, and
this limits research findings’ (p.82). Instead, inductive reasoning relies on naturalistic
inquiry, meaning ‘the research setting is naturally occurring with no manipulation by the
researcher’ (Dana and Dana, 2005, p.82), which is best suited to this study’s context and
aim.
Neergaard and Ulhøi (2007) recognise that ‘the phenomenon of entrepreneurship is too
dynamic and complex to be captured by a single method’ (p.4) and therefore this project
uses a mixture of methods and information sources in order to maximise understanding of
the research questions, which is a technique known as triangulation (Clifford, French and
Valentine, 2010).
Both qualitative and quantitative methods were used as ‘both… [are] helpful for gaining
insight into entrepreneurship’ (Davidsson, 2005, p.55). In order to highlight quantities and
distribution of start-up phenomena, extensive quantitative research in the form of close-
ended surveys and secondary statistical datasets was carried out, whilst intensive qualitative
research through interviews and open-ended questionnaires was undertaken to shed light on
the causal processes and mechanisms behind start-ups. Qualitative data was deemed
particularly beneficial to the study as it enables a richer understanding of entrepreneurship
in the context of its environment and, although external validity is limited with such
qualitative emphasis, internal validity is high, which is more important for this contextual
case study (Dana and Dana, 2005).

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3.1 Surveys and questionnaires
The original plan was to conduct around 8-10 interviews with local entrepreneurs who
started businesses from 2008 onwards, however it proved extremely difficult to find relevant
entrepreneurs who were willing to give up their time. This prompted a shift towards surveys
and questionnaires which, being relatively short and non-interactive, would allow for a
greater response rate and larger sample size (Dana and Dana, 2005). Close-ended surveys,
which ‘allow researchers to count up differing kinds of responses to questions’ (Cloke, Cook,
Crang, Goodwin, Painter and Philo, 2004, p.149), were used to offer quantitative data on
start-up experiences and opinions, unearthing the overall themes and patterns of the sample.
Qualitative open-ended questionnaires were applied to provide the detail and richness on
individual start-up experiences and opinions not offered by the close-ended surveys,
allowing participants to craft their own responses (McLafferty, 2010).
Sampling is a crucial process of research design, and has ‘a profound effect on the ultimate
assessment of quality in the research findings’ (Neergaard, 2007, p.253). Suggestions from
friends and family provided one source of potential participants but extensive scrolling
through online business directories provided the main source. E-mails were used as a low-
cost option for contacting potential participants, using a ‘standardised introductory statement
to attempt to put the respondent at ease’ (Parfitt, 2005, p.89) (see appendix 1). However, the
enormous growth of unwanted junk e-mail, a justifiable suspicion of viruses, and a general
public reluctance to spend time filling out surveys and questionnaires leads to low response
rates (Parfitt, 2005; Phillips and Johns, 2012), which proved a particular issue for data
collection.
Having initially sent out both the surveys and questionnaires together and having received
40 responses, additional close-ended survey responses were collected to ensure the
quantitative sample size was not too small. Over 50 close-ended surveys were acquired (see
appendix 2 for list of participants), however some less relevant responses were excluded
from the analysis so as to have 25 businesses that started in 2008-2010 (not including 2010),
and 25 that started in 2010-2015 (not including 2015). This binary was sought because the
depression can be divided into the recession period, which technically lasted until the end of
2009, and the recovery period, which lasted till mid-2014, as illustrated in chapter 1.

21. 21
Understanding that extensive content and lack of interaction can lead to quick boredom in
respondents (Kitchin and Tate, 2000), the surveys and questionnaires were designed to cover
all the key questions of interest yet take no longer than 10 minutes to complete (see
appendices 3 and 4). Data from close-ended surveys was combined in Microsoft Excel (see
appendix 5) to produce visual charts, whilst open-ended questionnaires were coded which
involved identifying and organising themes and categories (Kitchin and Tate, 2000),
enabling direct quotations to be used for analysis.
One limitation of the research is that the surveys were not sufficiently piloted, meaning that
opportunities for improvements to be made prior to the main data construction process were
not fully capitalised upon (Cloke et al, 2004). Another limitation is that surveys and
questionnaires ‘run the risk of obtaining socially desirable responding’ (Dana and Dana,
2005, p.83), which can contaminate research findings.
3.2 Semi-structured interviews
The other source of primary data was semi-structured interviews which are ‘organized
around ordered but flexible questioning’ (Dunn, 2000, p.110) and ‘unfold in a conversational
manner’ (Longhurst, 2010, p.103). This enables both the researcher and informant to have a
‘far more wide-ranging discussion than a questionnaire would allow’ (Valentine, 2005,
p.111), which was necessary for the particular data that was sought through this method.
Semi-structured interviews were used to gain insightful data from senior leaders in local
institutions in order to gain a ‘deeper’ picture into local and regional start-up support and
patterns during the depression (Silverman, 2006). Individuals working for government
organisations are often well networked, and therefore a family friend working for Warwick
County Council acted as a gatekeeper – a ‘contact who can provide access to key people in
a specific setting’ (Phillips and Johns, 2012, p.150). Despite liaising with the gatekeeper, a
significantly low response rate to emails meant that it proved difficult to secure interviews
with relevant individuals. This, combined with time and logistic constraints, meant only
three interviews were secured (see appendix 6 for details of interviewees). Nonetheless, as
Cloke et al (2004) recognise, sometimes ‘researchers have to work with the interviews they
can get’ (p.175).

22. 22
Prior to the interviews, a list of key themes and questions were developed, and both the
interviewer and interviewees were fully briefed on the topic. The interviews were conducted
in the offices of the interviewees in a relaxed and comfortable manner, each lasting between
20-40 minutes. With permission, the interviews were voice recorded through a smartphone
application, facilitating full engagement in the conversations, and allowing the researcher to
transcribe and better analyse the interviews after (Valentine, 2005).
3.3 Secondary data
As White (2010) recognises, ‘too many student projects discuss a particular situation in
detail without ever providing a wider context’ (p.68). Thus, secondary data from the GEM
was acquired to provide a wider context of start-up statistics for parts of the analysis.
Generally, secondary data, particularly that from government, tend to have been collected
by means that are more robust than those available to individual researchers (White, 2010),
and is readily available and therefore quicker and cheaper to acquire than primary data
(Clark, 2005).
3.4 Ethical issues
Authors who discuss ethical research practice advocate a professional approach, focusing
upon issues such as privacy, confidentiality and anonymity (Kitchin and Tate, 2000). These
issues were considered and discussed with all participants, and all informants were fully
informed about the research format and intentions prior to completing questionnaires and
surveys, or participating in interviews. The three primary research methods were designed
to avoid encroachment, and requests to record interviews were made prior to their
conduction.

23. 23
4. Transitions to self-employment: determinants of start-up activityand nascent
entrepreneur profiles in Warwick District
This chapter begins the presentation and discussion of the project’s research findings, and
aims to analyse the initial transition to starting-up, focusing on patterns of
opportunity/necessity entrepreneurship followed by analysis on nascent entrepreneur
profiles and the role of informal institutions and an entrepreneurial culture.
4.1 What has been the role of pull factors and opportunity in start-ups?
It has been argued that pull factors are dominant in the decision to start-up (Blanchflower
and Shadworth, 2007; Verheul et al, 2010). The results from the survey conducted in
Warwick District align strongly with this argument, with pull factors emerging as the most
significant among the entrepreneur sample. Figure 4 illustrates this, with 39 of the 50
entrepreneurs noting pull factors to be ‘Very’ significant in their start-up decision,
accounting for 78% of the sample.
Figure 4
Source: Questionnaire responses of entrepreneurs in Warwick District
1
10
39
0
5
10
15
20
25
30
35
40
45
Not at all Somewhat Very
Entrepreneurs
How significant were pull factors in the start-
up decision?

24. 24
The questionnaires carried out in Warwick District illuminated the nature of these pull
factors, with many entrepreneurs emphasising a desire for autonomy and control of their
career. For example, one entrepreneur stated:
‘The recession was irrelevant in our decision making process. My wife and I gave
up our security to try take control of our work lives.’
(Product/service) Creative imaging
agency, (Date founded) 2009
Similarly, another stated:
‘The economic downturn did not put me off, I just got on with it as I needed a
change. A major stimulus was a big desire within myself to make my own
money.’
Photography agency, 2012
The desire to do enjoyable work was also widely noted. For example one entrepreneur, who
began a business in 2012, stated that he had already been offered a job with a ‘decent’
company upon his graduation, but that he was very passionate about his business idea of a
sustainable ethical clothing brand and simply felt it was what he wanted to pursue. Similarly,
another entrepreneur who created a game developing company stated that, ‘despite earning
over £100k a year’, he was ‘willing to take a huge cut financially’ as he had long desired to
run his own company. Another entrepreneur noted a similar experience:
‘Whilst I was concerned about giving up a six figure salary, I really wanted to
focus on the one thing that I had always enjoyed.’
Business and personal coaching, 2012
Such accounts oppose the arguments made by many (e.g. Blanchflower and Meyer, 1994;
Johansson, 2000; Meyer, 1990), which suggest that high earnings depress the likelihood of
becoming self-employed due to greater risks. Such themes of wealth however will be further
discussed in later chapters.
What is also interesting in the above examples is that the circumstances of the economic
depression – such as general lower levels of wealth, credit and liquidity constraints and lack

25. 25
of capital – are largely being shunned with the attitude of ‘just getting on with it’ being a
key theme, as seen in the last statement. This attitude offers a partial explanation to the
question asked by Townsend et al (2010), indicating why many individuals in Warwick
District continued to start new businesses during the depression. Figure 5 lends support to
this idea of attitude, showing that for 32 of the entrepreneurs, accounting for 64% of the
sample, the discouraging circumstances of the recession were insignificant in their decision
to start-up.
Figure 5
Source: Questionnaire responses of entrepreneurs in Warwick District
Although the tough circumstances of the depression may affect some people greater than
others, what can be discerned from the data is that mentality plays a key role in the translation
of interest into action. One entrepreneur even stated:
‘I have always held the mentality be fearful when others are greedy and be greedy
when others are fearful.’
Home accessories, 2013
In this account the circumstances of the recession were in fact perceived as an opportunity,
evidencing the potential for depressions to increase opportunity entrepreneurship.
32
15
3
0
5
10
15
20
25
30
35
Not at all Somewhat Very
Entrepreneurs
How significant were the discouraging
circumstances ofthe depressionin the start-up
decision?

26. 26
Another interesting insight arising from the research is the role of redundancies in the start-
up process. An interview with the Managing Director at the Regional Growth Hub shed light
on an interesting theme:
“A common theme is that people have long had ideas for a new business, but
have never had the time or the money to progress the idea. Redundancy has given
them the opportunity to develop their idea; it has allowed people to follow a
dream they had a while ago.”
This scenario was evident among two entrepreneurs in the sample. Both had been made
redundant and noted push factors to be of no significance, but pull factors to be very
significant. This was simply down to the redundancy packages offering them both the
opportunity to fund and the time to pursue their start-up desires. This is interesting as
redundancy is predominantly associated with push factors and necessity entrepreneurship
(Robertson et al, 2003), however here an alternative interpretation to the assumptions within
the literature is possible. These redundancies experienced in the depression served to
promote opportunity entrepreneurship and pull redundant individuals into starting new
businesses. This scenario suggests that there is scope for regional assistance policies to
convert high redundancy rates into start-up activity.
4.2 What has been the role of push factors and necessity in start-ups?
In contrast to the great attribution of pull factors in the start-up decision, which 78% of the
sample entrepreneurs noted to be ‘Very’ significant, figure 6 (found on following page)
shows that push factors were noted to be much less significant, with 33 entrepreneurs noting
push factors to be ‘Not at all’ significant, accounting for 66% of the sample.
Again, this supports the arguments of Blanchflower and Shadworth (2007) and Verheul et
al (2010), which assert that pull factors are likely to be more significant than push factors in
the decision to start-up. However, care must be taken when interpreting the results due to
the potential for ‘socially desirable responding’ (Dana and Dana, 2005, p.83) in surveys and
questionnaires.

27. 27
Figure 6
Source: Questionnaire responses of entrepreneurs in Warwick District
Nonetheless, 34% of the sample noted push factors to be of some significance in their
decision to start-up. Here, in an attempt to contribute to the literature on the recession-push
hypothesis, it would be tempting yet inaccurate to make an assumption of its role in the start-
up determinants of the above entrepreneurs. The data is weak in this regard, and would be
more insightful if the survey offered a follow up question regarding recession-push factors,
which could have been implemented had the surveys been piloted more substantially.
What is interesting however, is that a greater number of entrepreneurs who started businesses
in the recovery period noted push factors to be ‘Very’ significant in the start-up decision
than those who started new businesses in the recession period, with 28% of the 25 businesses
that started in 2010-2015 noting this significance, compared to 8% of those that started in
2008-2010. This, alternatively, does align with the recession-push hypothesis supported by
numerous studies (e.g. Evans and Leighton, 1990; Farber, 1999), as for those who lost jobs
as a result of the recession, it likely took some time to conclude that starting a new business
was the best/only option in the face of a lack of alternative job opportunities. The Chief
Executive of the Warwick District Council discussed the recession-push effect at the
regional level in an interview:
19
4
2
14
4
7
0
2
4
6
8
10
12
14
16
18
20
Not at all Somewhat Very
Entrepreneurs How significant were push factors in the start-
up decision?
2008-2010 2010-2015

28. 28
“Warwickshire lost a huge amount of jobs in the recession through traditional
manufacturing. As this sector contracted there have been little opportunities for
those displaced workers to find other jobs in these sectors, so there has been a
level of attrition where people left that sector and decided they could not find
another job and instead became self-employed.”
Therefore, there is evidence of the recession-push effect manifesting with increasing levels
of unemployment twinned with reduced employment opportunities pushing people into
starting new businesses due to a lack of alternative options and a need for income (Dawson
et al, 2009). However, overall the data aligns with Dawson et al’s findings in their 2009
study on self-employment determinants in the UK between 1999 and 2001, which found pull
factors to be dominant, and push factors comparatively insignificant.
4.3 What were the profiles of entrepreneurs who started new businesses?
Upon questioning the reasons behind positive local start-up rates, part of the Deputy
Executive of the Warwick District Councils reasoning was:
“If you look at the population, it’s very well educated. Therefore, you have the
educational know-how. It’s also very prosperous, so there’s money about.”
The questionnaire data complied with this significantly. It was found that many of the
entrepreneurs had valuable past experience in rewarding positions, enabling them to gain
both the necessary experience and savings required to start-up. The following are a few
examples concerning past experience:
‘We did not require support as the three of us had good financial planning
experience from previous jobs.’
Consultancy services, 2008
‘My wife and I had long worked in senior roles within our individual industries
before.’
Creative imaging agency, 2009
‘I previously worked in banking, and therefore have a good business head so
needed no support.’

29. 29
Home acupuncture clinic, 2009
‘I had spent over 40 years in banking. Given my experience in banking and the
corporate sector, I was well versed in what I needed to do.’
Business and personal coaching, 2010
‘I do not think I could have done it without the previous 20 years of experience,
having worked with some great people who I learnt an awful lot from. Effectively
I had a 20 year apprenticeship.’
Game developing, 2013
These findings link strongly with the proposition advanced by Georgellis et al (2005),
which proposes that individuals who earn high wages, and who are thus likely to have high
levels of experience, have a higher chance of discovering and achieving profitable self-
employment opportunities. In addition, the finding that experience was a key factor among
many of the successful entrepreneurs in the Warwick District sample lends support to the
argument presented by Ashcroft et al (2009), which asserts that there is an urgent need for
start-up policy to ‘provide compensation for a lack of experience in running a business’
(p.1088).
Regarding personal wealth, one entrepreneur disclosed that he was earning ‘£100k a year’
prior to starting his new business, and although it must be acknowledged that there is
potential for individuals to exaggerate, this theme of high earnings was frequent throughout
the questionnaire data. Findings from Evans and Jovanovic (1989) suggest that wealth
increases an individual’s likelihood of becoming an entrepreneur due to greater funding
sufficiencies, and the insights from the data suggest this to be true in Warwick District. The
following is another example:
‘I had a high disposable income which allowed me to save money and invest in
the launch of the business largely risk-free.’
Environmentally friendly home and
giftware retailer, 2009
This offers reasoning for the positive relationship between wealth and start-ups given by
Cressy (2000), which emphasised the influence of wealth on attitudes to risk, arguing that

30. 30
risk aversion decreases as wealth increases. There is enough evidence from the primary data
to emphasise the role of individual wealth in enabling nascent entrepreneurs to start-up
during the depression. A quote obtained through the questionnaire data summarises this
usefully:
‘Throughout my careers in banking I was able to acquire some assets such as
property and antiques which has given me access to capital which I have used to
fund my business ideas. It seems those with assets/property/cash are able to
borrow and expand and start in business where as those without are being left
further behind.’
Home accessories, 2013
The second sentence of this quote summarises the findings of this section well, which
overall support Evans and Jovanovic’s (1989) argument that ‘… capital is essential for
starting a business, and liquidity constraints tend to exclude those with insufficient funds at
their disposal’ (p.808).
4.4 What has been the role of informal institutions and an entrepreneurial culture?
What is particularly interesting in regards to the strong start-up rates in Warwick District,
is the emphasis on the ‘clustering factor’ of various characteristics put forth by the Chief
and Deputy Executives of the District Council. Upon asking why the area performs well in
start-up activity, the Deputy Executive stated:
“If you look at the population, it’s very well educated. Therefore, you have the
educational know-how. It’s also very prosperous, so there’s money about. It’s
got a great quality of environment and a great quality of life. So really, why
would you not start a business here?”
This data reflects the assertion by Pike et al (2006), which states that ‘prosperous… areas
offer large and potentially diverse markets for goods and services, supporting a diversity of
opportunities for new business establishment’ (p.159).
The Chief Executive added:
“Leamington is perceived as arty, slightly bohemian, and it has a large student
population from Warwick University, which has a history of people setting up

31. 31
their own businesses. Furthermore, if you are creative, entrepreneurial and
thinking of a business idea, my feeling is that you’re more likely to find more
like-minded folk and nice cafes and outside areas to bounce ideas around. This
has an element of the clustering factor.”
Here, start-up activity is explained with recourse to the social capital concept which was
deemed essential to entrepreneurship research by Wagner and Sternberg (2004). In
Warwick District during the depression, it is evident that start-ups were significantly
promoted by informal institutions, which maintain a high level of social capital in the area.
Such informal institutions include micro-social structures, which Estrin, Korosteleva and
Mickiewicz (2013) note to be potentially significant determinants of entrepreneurial
activity. These structures include an amalgam of university students, creative people, and
(nascent) entrepreneurs, and extend towards local business networks, which Estrin et al
(2013) assert to be of benefit in assisting entrepreneurs seeking the resources and advice
required to start a business. This was noted by one entrepreneur:
‘I have had a lot of support from other local business owners, seeking their help
directly with certain matters.’
Menswear, 2013
Through this process of communication and support between local entrepreneurs, social
capital in Warwick District is built up. These characteristics are aligned with Johannisson’s
(2000) argument that entrepreneurship is ‘generically social, a collective phenomenon’
(p.306).
In all, the area benefits from an institutionalised creative and entrepreneurial culture, which
Lam (2010) argues ‘shapes the way individuals make sense and enact their environment to
create new ventures’ (p.285). The entrepreneurial culture is well illustrated by the
Leamington Business Awards, identified as ‘For the town, by the town, about the town’
(LBA, 2015, online). Leamington Spa is the main town within Warwick District, and these
awards are held annually and voluntarily by local business people as ‘a celebration of the
incredible place that we [residents of Leamington Spa] live and work’ (LBA, 2015, online).
Contenders for the awards are all local businesses, predominantly those that were actually
founded in the area.

32. 32
These insights evidence how institutional factors in specific localities such as Warwick
District influence entrepreneurial cycles, and it is possible to draw out evolutionary
processes in regard to the self-reinforcing nature of entrepreneurship (Huggins and
Williams, 2012). As Pike et al (2006) emphasise, it is such embedded legacies and traditions
discussed in this section that have served to shape local attitudes and beliefs towards
entrepreneurship and have upheld local dispositions towards starting new businesses
throughout the depression.
4.5 Conclusion
This section concludes that, based on the study’s sample of entrepreneurs, start-ups formed
in Warwick District during the depression were predominantly fuelled by opportunity rather
than necessity, with a particularly interesting finding being the potential for redundancies
to promote opportunity, not just necessity, entrepreneurship, although this requires more
substantial future research.
There is a clear link however between the dominance of opportunity entrepreneurship,
nascent entrepreneurial profiles and the local environment with regards to informal
institutions and an entrepreneurial culture. Interview and questionnaire data illustrated the
role of prosperity in the area. Valuable past experience in rewarding positions equipped
local individuals with the necessary experience and capital for starting new businesses,
aligning with the arguments of Evans and Jovanovic (1989) and Georgellis et al (2005)
which suggest that high earnings increase the likelihood of becoming self-employed.
The local informal institutions and entrepreneurial culture conducive to start-up activity
provided the perfect environment for such factors of wealth and experience to capitalise on,
and it is for these reasons that most businesses were started out of opportunity.

33. 33
5. Translating interest into action: fuelling start-ups in Warwick District
With funding being arguably the most crucial aspect of business start-ups, and how it is
achieved being ‘one of the most fundamental questions of enterprise research’ (Cassar, 2004,
p.262), this section will look to contribute to this question by analysing how start-ups were
funded in Warwick District during the depression. The chapter will also analyse and discuss
the availability and influence of hard and soft support.
5.1 What was the degree of self-financing in start-ups?
Figure 7 shows that little external funding was reported by nascent entrepreneurs to have
been used across all the various types, with the reported use of all funding types reducing a
significant amount from 2008 to 2013. Thus, a large portion of overall start-up funding must
have been financed from personal savings, as is suggested to be the case by Lam (2010).
Figure 7: Percentage of UK nascent entrepreneurs who have reported everusing a
type of funding for a business, 2007 to 2014
Source: GEM United Kingdom 2014 Report (Hart, Levie, Bonner and Drews, 2015, p.47,
online)
The impacts of the 2008 credit crunch are evident, with the use of unsecured bank loans and
bank overdrafts falling from 18% and 27.2% in 2008, to 4.2% and 9.6% in 2013 respectively.

34. 34
However, as Kitching et al (2009) note, if nascent entrepreneurs rely greatly or exclusively
on personal wealth, then the credit crunch would have exerted little influence on start-up
financing. Thus, these interpretations give leverage to disprove the common assumption in
the literature Lam (2010) highlighted, which is that formal external finance is critical to the
start-up process.
Regarding difficulty in acquiring the necessary start-up capital, figure 8 shows that 23
entrepreneurs found it ‘Not at all’ difficult, accounting for 46% of the sample.
Figure 8
Source: Questionnaire responses of entrepreneurs in Warwick District
This statistic was replicated in the number of entrepreneurs who found it ‘Somewhat’
difficult, whilst only 4 entrepreneurs, accounting for 8% of the sample, found it ‘Very’
difficult. What became evident through the observation of the primary data was that the
majority of the entrepreneurs who reported it ‘Not at all’ difficult to acquire the necessary
capital were those who noted having previous high incomes that provided the savings
required for capital investment and those who had been made redundant and used the
redundancy money for funding. Thus, as one would expect, it were the entrepreneurs with
less personal wealth and/or less experience that found it harder to acquire the necessary start-
up capital, a difficulty which was heightened as a result of the credit crunch. The Chief
Executive of the Warwick District Council summarised the above analyses well, stating that:
23 23
4
0
5
10
15
20
25
Not at all Somewhat Very
Entrepreneurs
How difficult was it to acquire the necessary
start-up capital?

35. 35
“The impact of the recession may have been that people are having to use their
own funds as it is difficult to acquire external funding in this period.”
This brings the chapter onto the next discussion, which is hard and soft support for start-
ups.
5.2 Support for start-ups
Figure 9 again shows the impact of the credit crunch, illustrating the increased difficulty in
acquiring financial support from banks, with the reported refusal of unsecured bank loans
and bank overdrafts by nascent entrepreneurs both increasing more than two-fold from 2008
to 2010.
Figure 9: Percentage of UK nascent entrepreneurs who have reported being refused
funding, by type of funding refused, 2008 to 2014
Source: GEM United Kingdom 2014 Report (Hart et al, 2015, p.30, online)

36. 36
One entrepreneur noted his experience in the questionnaire:
‘Banks have been terrible not lending, and if they did then there is a very high
interest on overdraft fees.’
Domestic and commercial soundproofing,
2010
This expression was common throughout the sample, and shows that constrained bank
lending significantly limited the opportunity for external formal financing for start-ups
during the depression, and reinforces the previously discussed advantage that those with
the required savings hold in starting new businesses during depressions.
Having established the decreased availability of external funding through GEM datasets,
the primary data from Warwick District offers insights into the views and experiences of
the entrepreneur sample on matters of support. Figure 10 shows that 20 of the entrepreneurs,
accounting for 40% of the sample, found the level of hard support to be ‘Poor’, whilst only
9, accounting for 18% of the sample, deemed it to be ‘Good’ or ‘Excellent’.
Figure 10
Source: Questionnaire responses of entrepreneurs in Warwick District
Caution must be taken when interpreting these statistics, as the survey does not give detail
about the reasons why entrepreneurs deemed the level of hard support to be poor, nor
whether they even sought it. Thus, it is always possible for respondents to note an opinion
14
9
2
7
11
5
2
0
2
4
6
8
10
12
14
16
N/A Poor Good Excellent
Entrepreneurs
How do you rate the level of 'hard'
institutional support for start-ups?
2008-2010 2010-2015

37. 37
without having actually attempted to acquire hard support, and this can lead to inaccurate
representations. The same limitation applies to figure 11 and soft support.
Nonetheless, these statistics do indicate difficulties and a lack of opportunities experienced
by entrepreneurs with regards to acquiring hard support. But these 20 entrepreneurs did still
manage to start-up in this period, adding to the argument against the literature that formal
external finance is not critical to the start-up process (Lam, 2010). It must however be said,
having illustrated this in chapter 5, that being a prosperous area with high levels of wealth
and educational know-how, the need for hard support is likely to be less in Warwick District
than in other regions.
Alternatively, soft support can be a most valuable resource in the start-up process. Looking
at figure 11, it is evident that soft support was deemed much more effective than its
counterpart, with 21 of the 50 entrepreneurs, accounting for 42% of the sample, noting it to
be ‘Good’ or ‘Excellent’.
Figure 11
Source: Questionnaire responses of entrepreneurs in Warwick District
8
11
5
1
4
6
12
3
0
2
4
6
8
10
12
14
N/A Poor Good Excellent
Entrepreneurs
How do you rate the level of 'soft' institutional
support for start-ups?
2008-2010 2010-2015

38. 38
The questionnaires provided greater depth to this area, and below are a few examples:
‘I found that there was no financial help available, however I benefited from
advice from the local Chamber of Commerce.’
Dressmaking and embroidery services,
2008
‘Before I started I attended a few StartUp Britain events, which were very helpful
in terms of individual advice and networking with other young entrepreneurs.’
Sustainable ethical clothing, 2013
‘Senior leaders of the District and County Councils consistently pay visits to us,
and are always supporting us with advice and guidance.’
Game developers, 2013
‘We have received local enterprise support in the form of advice and contacts.’
Retailer of high quality art materials,
2013
What is interesting however is the stark contrast in opinions between those who started
businesses in 2008-2010, and those who started in 2010-2015. Of those who started in 2010-
2015, 15 rated soft support to be ‘Good’ or ‘Excellent’, whilst only 6 entrepreneurs who
started in 2008-2010 noted these opinions. This is likely to be a reflection of an increased
focus on regional assistance policies for start-ups from 2011 onwards, as from thereon it is
evident that promoting start-up activity became a clearer focus of government policy
through devolved regional administrations and development agencies (Dawon et al, 2014).
Examples include the 2011 introduction of the New Enterprise Allowance and the Local
Enterprise Partnership – the latter providing devolved governments with substantial
enterprise assistance budgets – and the Start Up Loan scheme in 2012.
Relative to Warwick District, the Coventry & Warwickshire Regional Growth Hub was
introduced in 2014 in order to improve the institutional support available to businesses,
including start-ups. Its Managing Director pointed out that prior to its inception nascent
entrepreneurs found the availability of institutional support unclear, confusing and

39. 39
complicated. This experience was reflected in much of the questionnaire data, the following
being an example:
‘I found I didn’t know where I could receive any business/start-up support, I had
no idea where to look and what I was eligible for.’
Creative film agency, 2011
The Managing Director of the Growth Hub emphasised the fact that in April 2014 there
were 125 business support programmes run by 61 different organisations in Coventry &
Warwickshire alone. Therefore it is clear, at the regional level of Coventry & Warwickshire
at least, that although there were many support programmes available for start-ups, the
support was crowded and the Regional Growth Hub was formed to provide a ‘giant
signposting centre’ (Chief and Deputy Executives of Warwick District Council, 2015) to
allow a clearer path through for business support:
“As an entrepreneur, if you come to the Regional Growth Hub, we have such a
good network and we can find all of the things you need which you would have
to do on your own if we were not here.”
Managing Director, Coventry &
Warwickshire Regional Growth Hub
At this regional level, it seems that institutional support for start-ups was not the most
efficient or effective. The examples of soft support that entrepreneurs did receive shown in
the questionnaires, in addition to the example of the Regional Growth Hub, highlight the
benefit of effective governance in indigenous local and regional development approaches
in supporting entrepreneurial activity, and the value of ‘institutional thickness’ in promoting
inter-institutional interactions and networks conducive to start-up activity (Amin and Thrift,
1995).
5.3 Conclusion
This chapter has illustrated that hard support was largely inaccessible during the economic
depression at both the national level through GEM datasets, and in Warwick District
through primary data. However, as Kitching et al (2009) noted, if nascent entrepreneurs
rely greatly on personal wealth, then the restricted availability of hard support caused by

40. 40
the credit crunch would exert little impact, and this was evidently the case among the
entrepreneur sample in Warwick District, where the degree of self-financing was high. This
links strongly with the findings of chapter 4 that emphasised the role of past rewarding
incomes in providing local nascent entrepreneurs with the required capital for starting new
businesses.
The level of hard support was deemed very poor by the entrepreneur sample, which suggests
that local and regional start-up levels would benefit significantly from improved provision
of hard support. Alternatively however, soft start-up support, especially during the recovery
period, was deemed much more effective throughout the depression by the sample, which
reflects the benefits of increasing both the focus on regional assistance policies, and the
promotion of regional development agencies and inter-institutional interactions and
networks for supporting start-up activity.

41. 41
6. Conclusion
This chapter will summarise the study’s findings in relation to the research questions set in
chapter 1, and evaluate the extent to which these findings have met the aims of the study.
The limitations of the research will then be discussed before ending with suggestions for
future research.
6.1 Summary of research and analysis of aims
The research in this study was prompted in light of a lack of empirical research into start-
up activity during economic depressions. The findings from the stipulated research
questions will now be summarised and evaluated, followed by a brief evaluation of the
extent to which these have met the aim of the study, which was to provide a holistic analysis
of the entrepreneurial climate that has been so conducive to start-up activity in Warwick
District and of the entrepreneurs’ determinants and profiles which have instigated such
start-up activity.
1. What were the start-up determinants and entrepreneur profiles?
What was clear from the survey and questionnaire data was that, within the sample of 50
entrepreneurs, pull factors were dominant in the decision to start-up during the depression,
aligning with the findings of other studies (e.g. Dawson et al, 2009; Verheul et al, 2010).
Questionnaire data illustrated a widespread desire for autonomy and control and to do
enjoyable work and thus start-up activity in Warwick District was mostly fuelled by
opportunity, despite the West Midlands region having the highest unemployment rate in the
UK during the recession.
What became clear through the analysis of entrepreneur profiles however, was that this
dominance of opportunity entrepreneurship and pull factors in start-up activity was
significantly attributed to local factors of wealth and experience. Interview data emphasised
the ‘prosperity’ and ‘educational know-how’ of the area, which was confirmed and given
further depth by other primary data.
Survey data indicated that for the majority of the entrepreneur sample, the discouraging
factors of the economic depression were not significant and questionnaire data gave reason

42. 42
for this, illustrating significant patterns of past experience in rewarding positions which
equipped individuals with the necessary experience and capital to start-up. Thus, these
findings contribute to the debates over wealth in the literature, supporting the argument by
Georgellis et al (2005) and Evans and Jovanovic (1989) that high wages and levels of
experience increase an individual’s likelihood of becoming an entrepreneur.
Another interesting finding from this question regards redundancies, which are
predominantly associated with necessity entrepreneurship within the literature. Primary
research data illustrated the potential for redundancies, experienced widely as a result of the
recession, to fuel opportunity entrepreneurship by giving individuals the time and money to
progress an idea/dream they have had. This offers great potential for redundant individuals
in regards to opening up start-up opportunities as a positive alternative to seeking another
job, rather than starting-up being just a negative forced transition. Furthermore, during
periods of high redundancy such as the recent depression, regional policy-makers can assist
in the translation of interest from such individuals into action, as there is great potential to
ameliorate the economic impacts of redundancy through its conversion to start-up activity.
b. What was the role of informal institutions and an entrepreneurial culture in
fostering start-up activity?
Primary data illustrated that informal institutions and an entrepreneurial culture played a key
role in fostering start-up activity in Warwick District during the depression. The continuity
of the strong past start-up performance of Warwick District into the economic depression,
evidenced in chapter 1, illustrates the self-reinforcing nature of entrepreneurship (Huggins
and Williams, 2012). The Chief and Deputy Executives of the Warwick District Council
emphasised the entrepreneurial culture prevalent in the area, with informal institutions and
an institutionalised creative maintaining a high level of social capital conducive to start-up
activity. Ultimately, the area’s embedded legacies and traditions towards entrepreneurship
have shaped and maintained local attitudes and beliefs towards entrepreneurship, and local
dispositions towards starting new businesses throughout the depression.

43. 43
2. How did nascent entrepreneurs fund their start-ups?
The data collected answered this question to a degree, but not in great depth. Findings in
relation to questions 1, 1b and 3 aided in the answering of this question. The prosperity of
Warwick District and the patterns of wealth within the questionnaire data suggests that most
start-up capital was funded by the entrepreneurs themselves. The impacts of the credit crunch
on start-up funding was therefore insignificant for the majority of the entrepreneurs in the
sample due to a high reliance on personal wealth, which was predicted to be the case by
Kitching et al (2009). However, the data is relatively thin and lacking detail, and would
benefit from more specific survey (sub-) questions with regard to how individuals funded
start-ups.
3. What hard and soft support was available for start-ups?
The general consensus of the sample of entrepreneurs was that the level of start-up support
during the depression was poor. The impacts of the credit crunch were clear, with the
availability of hard support decreasing significantly, thus reinforcing the importance of the
nascent entrepreneur’s ability to fund the start-up themselves.
Soft support, alternatively, was generally deemed better than its counterpart, with numerous
entrepreneurs emphasising the benefits they incurred from receiving advice and guidance
from local institutions. Particularly evident however were the improvements in soft support
during the recovery that could be interpreted from the survey data, which are a likely
reflection of increased attention to regional assistance policies to aid businesses and start-
ups during the recovery period in light of ineffective and insubstantial support during the
recession period. This notion was reflected in interview data from the Regional Growth Hub;
an institution which was implemented to improve the awareness of and ease of access to
support for entrepreneurs. The structure of the survey in relation to matters of hard and soft
support, however, could be better designed in order to add richer detail to this question.
Having discussed the findings of the research questions, despite some areas – such as
individual start-up determinants – having greater depth than others – such as support – a
holistic analysis has provided some insight into the combination of factors that have fostered
start-up activity in Warwick District during the depression.

44. 44
Despite the levels of support being deemed poor, they proved to be rather insignificant as
far as the sample of entrepreneurs were concerned, and this was due to individual factors of
wealth and experience, and the local informal institutions and entrepreneurial culture
conducive and supportive of start-up activity. Thus, it is for these reasons that start-up
activity remained strong in Warwick District during the economic depression.
6.2 Limitations of research
This study was limited by time, word-count and logistic constraints. Without these
restrictions, primary research could have been carried out to a greater extent and a more
rigorous analysis could have been provided, especially with regard to key concepts and
theories underlying successful local start-up rates. Furthermore, there are limitations in the
data collection process, with low response rates and an understandable respondent desire to
minimise survey and questionnaire completion time, leading to lower yields and depth in
data. The reliability and depth of the findings are also limited due to the small amount of
interviews undertaken and would benefit highly from a wider range of interviewees to enable
more and richer insights into and perspectives on local and regional start-up activity. Finally,
the research is limited by the lack of secondary data available in regard to statistics and
themes of start-up activity in Warwick District, and thus secondary data is limited to scales
beyond that of the case study area itself.
6.3 Future areas of research
Although this study has attempted to provide a holistic examination of start-up activity
during the economic depression in Warwick District and the factors involved, it captures
only one case study. As Stam (2010) emphasised, entrepreneurship is a ‘distinctly spatially
uneven process’ (p.139) and thus comparative studies must be carried out in other areas in
order to deduce stronger and more reliable conclusions. Furthermore, with devolution and
the increasing transition towards regional development policy being a fairly recent process,
there is a need for continued future research into the effectiveness of regional support
policies on start-up activity, although the scope for this is now limited in relation to this
study’s particular context due to the end of the economic depression in mid-2014. Also, this
study recommends future research into the transition of redundant individuals starting new

45. 45
businesses, as there is potential on the regional policy side to ameliorate the economic
impacts of redundancies by assisting in this transition.

46. 46
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Appendices
Appendix 1 – Example of opening e-mails sent to potential entrepreneur participants
Hello …,
I am a student at Newcastle University and am currently undertaking research for
my dissertation in which the aim is to investigate entrepreneurial start-up
opportunities after the 2008/09 recession, using Leamington Spa as a case study.
I stumbled across your business through … and it fits in well with my research,
and therefore I was hoping you may perhaps be willing to fill out a questionnaire
for my research if I was to send it over. Any information disclosed will be used
only for my dissertation project, and if you would be willing to do this it would
be very much appreciated!
If you have any questions regarding the project or the questionnaire then feel free
to ask.
Kind regards,
Laurence

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Appendix 2 – List of businesses that completed surveys/questionnaires
Name Business
Anais Hair & Beauty Hairdressing services and beauty treatments
Aspect Consultants Financial services
Arch Creatives:
- Team Lumo
Professional workspace for game developers
Game developing team
Beanprint Ltd. Short run printers
Bella Home Care Ltd Domiciliary care business
Celsius Design Specialists in evaporative cooling, natural
ventilation, factory cooling, smoke ventilation,
factory ventilation, industrial ventilation,
extraction, office air conditioning and smoke
ventilation systems.
Chapter Clothing Mens fashion retailer
Chrome Yellow Arts Ltd. Retailer of fine art and high quality art materials,
and runner of art workshops
Deeply Digital Provides planning, activation and strategies to
marketing teams
Ella’s Toy Shop Retailer of educational toys and games
Fibrecore Supplier of speciality materials and machinery to
the composites, textiles, nonwovens and
laminating industries
Foresight Health and safety consultants
Garden Farm Family history writing, gardening and dog
walking
GPSVision Specialists in Management and Leadership
Development, and Coaching and Mentoring Skills
Halex Finishing Powder coating specialists
Hamesha Furniture Retailer of imported Indian furniture and gift
items
Hush Retailer of women’s clothing and accessories
Ikarus Gardens Garden design and maintenance service

57. 57
Innovar Ltd. Reseller of planning software and associated
consultancy services
K Display Ltd. Specialist large format printing, and exhibition
stands
Kumotion Games consultancy around project management
and mobile development
LE Keux Vintage
Enterprises
Retro-inspired events and experiences
Lifeforlife Training Personal training services
Lime Recruit Catering and hospitality recruitment agency
MACs Health Fitness, nutrition and personal training
Mayridges Online home accessories brand
Now Show Up! Performance development programmes for junior
members in large corporations
Owl Events & Marketing Events and marketing for craft fayres and
markets, sports and leisure, weddings and
children’s markets
Perfectly Maid Cleaning Domestic Cleaning Service, reliable and
conscientious private cleaning business
Pillertons Ltd Supplier of Professional Workshop Equipment
PinkJelly Marketing Digital marketing agency
Positive Outlook Clothing Sustainable ethical clothing
Progressive-Imaging Ltd. Creative agency
Protect The Planet Online environmentally friendly home and
giftware retailer
Rachel Bunce Films Film creation for numerous sectors
Root Acupuncture Home clinic acupuncture
Run with Scissors Dressmaking and embroidery services
Silverstick Adventure goods company that creates high
quality, eco conscious clothing for outdoor people

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Smart Image Furniture Ltd. Retailer of office furniture and experts on space
planning, interior design, supply and install,
refurbishment, and on-going maintenance
Spaghetti Agency Social media and online marketing training and
services
Staak Creative agency
Stallfinder Stallholders, events and fundraising
Strobix Photography Corporate and commercial photographic business
Table Art Ltd. LED centrepieces
The Big Shed Second hand furniture retailer
The Cotton Nappy Company Nappy retailer
thetallone Web design for mobile, tablet and desktop
Thrills of the Emporium Retailer of vintage, retro and industrial furniture
TopSpin Communications Social media marketing services
TP Soundproofing Ltd. Domestic and commercial soundproofing
Webmoco Web and mobile design & development agency
Wideawake Training Ltd. Provider of resuscitation, regulated first aid, and
medicines management training to GP surgeries
and other venues
Wine Poole Wine merchant
Wool Warehouse Knitting and crochet retailer
Your Best Self Business and personal coaching