Entrepreneurs’ Sense-making of their Ecosystem: Consequences for Self-Determination towards Innovation

In recognising the transformational opportunity for social, economic and environmental sustainability within the small businesses sector, the author attempts to identify potential barriers and facilitators to entrepreneurs’ self-determination towards innovation. Thus, this study explores how entrepreneurs in Sao Paulo – the financial capital of Brazil – make sense of their ecosystem and how it influences their behaviour. In total, 15 small business owners, from different segments within the service sector, took part in a semi-structured interview. Throughout the interview, the researcher investigated their experiences of being an entrepreneur and their attitudes towards innovating. The data gathered was subject of Interpretative Phenomenological Analysis (IPA; Smith et al, 2009) and the outcomes interpreted in the light of Self-Determination Theory (SDT; Deci & Ryan, 2000). The results show that the existing intellectual support contributes to entrepreneurs’ experiences of autonomy and competence, which may have a positive influence on their self-determination towards innovation and sustainability. On the other hand, onerous procedures for receiving financial support, high employment costs, labour turn over and corruption constrain innovative initiatives and encourage clandestine operations. All participants seemed unaware of their social, economic and environmental impact. Moreover, their attitude towards owning a business was generally negative, and most participants expressed that being an employee is more advantageous. According to their narratives, innovation was a result of market pressures only. In Brazil, small enterprises constitute the vast majority of businesses and accounts for 52% of employment in the country. Thus, entrepreneurs’ sense-making have implications at many levels. For instance, in addition to economic and tangible social consequences, business owner’s experiences may also impact their health; a dimension often overlooked in the political arena. This presentation intends to highlight psychological dynamics involved in entrepreneurs’ self-determination and incentivise transdisciplinary efforts in the field. The content has implications for academics, policy-makers and practitioners dealing with small businesses.