R&P số 9 - Competencies for VIetnames emtrepreneurs (Nguyen Quoc Tuan, 2021)

COMPETENCIES FOR VIETNAMESE ENTRERPRENEURS

Nguyen Quoc Tuan

University of Economics - The University of Danang

1. Introduction

Entrepreneurship is an activity that creates economic efficiency, increases the competitiveness of the economy, creates new business values, and has a positive and creative approach to solving employment problems related social issues.

The desire of entrepreneurs, especially young startups, who have enthusiasm and entrepreneurial spirit but have not been experienced, is that they need to be aware, what conditions, especially in particular, entrepreneurs need to have start-up capabilities, ie what competencies and qualities to start a successful business.

For education and training institutions, the determination of entrepreneurial competencies is the basis for designing appropriate training programs to develop a future entrepreneurs.

There have been studies around the world on the factors affecting the success of startups (Hardeep Kaur and Anupama, 2013; Morteza RezaeidZadeh, 2016; Thomas et al., 2008; Rosemary Fissher et al., 2014), thereby identifying the core competencies for startup success. Studies have identified the key competencies for startup success such as problem solving, creativity, motivation, and leadership, which are the basis for designing training programs for managers and start-ups.

In Vietnam, there have been studies to determine the factors affecting entrepreneurship and to serve as a basis for training entrepreneurship in universities of economics and business administration in Vietnam (Nguyen Son Tung, 2019; Pham Quang Tin, 2021; Nguyen Quoc Tuan & Ngo Xuan Thuy, 2019). These studies contribute to determining the factors affecting the intention to start a business and the contents that need to be considered when designing training programs in universities of economics and business administration in Vietnam, but not yet focuses on answering the question, how the competence factors that the training programs on business administration and entrepreneurship, really affect career success. Therefore, the author conducts research to determine, among the competencies trained for current business administration programs in Vietnam, which factors are the influencing factors for startup success. The research results help designers of business administration training programs and training and competntence development institutions identify the content that needs to be designed for training entrepreneurs.

2. Theoretical framework

Competence
The concept of competence today has become a topical and practical topic in social and life activities and is a topic of interest to human resource management theorists, popular when it comes to jobs  recruitment, performance appraisal, staff promotion.

David Dubois and William Rothwwell (2004) define competencies as "characteristics that an individual possesses and uses in an appropriate manner to achieve desired results. These characteristics include knowledge, skills, self-perception, personal characteristics, motivations, conception patterns, and ways of thinking, feeling, and acting”. Vo Xuan Tien (2010) said that the competence of the employee "is reflected in the knowledge, skills, behavior and attitude of that employee and for each job goal, a certain type of capacity is needed".

There are different definitions of competence, but the most common one is defined as a combination of knowledge, skills, qualities, attitudes and appropriate personal characteristics for an individual to be effective and excel in getting the job done. The concept of competence can refer to a specific type of competence such as creativity, communication, entrepreneurial spirit.

Entrepreneurs
In the training program of the Faculty of Business Administration, University of Economics, graduates can work professionally and advance as a business administrator in business organizations and programs as well designed so that graduates can pursue a career path by starting a business, i.e. becoming an entrepreneur. A startup is a person who stands up on his own or in conjunction with other startups to organize and carry out business activities. In order to fully understand the concept of an entrepreneur, it is necessary to consider not only the fact that they are the ones who do start-up activities, but also define them as people who have the ability to start a business and are motivated. Entrepreneurial drive, determination for entrepreneurship, as defined by Albadri and Nasereddin (2019), entrepreneurs are people with ambition, strong determination, innovative spirit, creativity and dare to take risks to start a business.

Entrepreneurial competence
Hardeep Kaur and Anupama (2013) define entrepreneurial competence as the personal characteristics of entrepreneurs. The proceeding of the Scientific Seminar on Small and Medium Enterprises in Mexico (2018) states that entrepreneurship is a combination of creativity, a sense of initiative, problem solving, the ability to mobilize resources and tecnological knowledge.

In this study, the author defines entrepreneurial competence based on the firstly from the concept of competence, secondly expanding the concept to refer to the characteristics of the entrepreneur and thirdly, that is entrepreneurship refers to the successful start-up, achieving the desired results of the entrepreneur. Thus, entrepreneurship is defined as any ability factors and personal characteristics for an entrepreneur to achieve success in starting and developing a business.

Morteza RezaeidZadeh and authors (2016), based on a study in Ireland and Iran, identified four core competencies for successful startups, namely, interpersonal skills, and motivation, productive thinking and leadership. Thomas et al. (2008) have identified a portfolio of successful entrepreneurial competencies, demonstrating its correlation to factors measuring business success. Entrepreneurial competencies are defined as analytical thinking, innovation, human resource competency, strategic thinking, learning and operational competencies.

Successful start-up
Research on entrepreneurship needs to pay attention to two main aspects, which are the factors of entrepreneurial competence or related from the perspective of the entrepreneur as well as factors from the enterprise, from the business environment, technology and the second is from the perspective of concepts and ways for businesses to operate effectively, which is called a successful startup.

Start-up success can be understood as the success of a start-up business, through financial indicators such as investment efficiency, sales, productivity, or market indicators that the entrepreneur has desire in business. However, business and entrepreneurship can be different in that the entrepreneur's point of view of success may not only be the efficiency of the business but in other aspects from the entrepreneur's assessment. Therefore, Rosemary Fissher and the authors (2014) have developed the scales according to the cognitive approach of entrepreneurs, which is about personal satisfaction in life and business; get what you want in life and business; continuously develop personal business and to achieve goals in at least one business area.

3. Research method

On the basis of synthesizing research materials, identify the competencies and develop the definition and description of the required competencies for successful start-ups and describe the concept of successful start-ups by statements and next steps conduct a survey to evaluate startups. Entrepreneurs in this study included people who started their own businesses or invested in a business.

Survey data, through the level of competence and start-up success, measure the correlation coefficient between the variables measuring the competence with the variable measuring the start-up success, determining the group of competencies that have the potential to be successful more effective, thereby identifying the core competencies for startup success.

The total number of respondents is 122 entrepreneurs, including 62 men (50.8%), 60 women (49.2%), with different fields of activity (Table 1).

Table 1. Survey object's business field

Source: survey’s data

The analysis techniques are performed through the techniques and commands of the data analysis software R 3.3.3. Specifically, through data statistics and correlation analysis and reliability analysis, the key competencies for startup success have been identified. Analytical data is used as a basis for evaluating and proposing practical solutions in developing entrepreneurial competence.

4. Analysis and research results

The study used the entrepreneurial competence framework, which includes four types of competencies, including professional competence, behavioral competence, English language competence, and technology and information competence.

The professional competencies include the core competencies applied in training programs, summarized and described by the author as shown in Table 2. According to the discussion done at the step of identifying competencies for startups, so that respondents have a concept for each professional competence, because in fact, there are respondents who have not participated in training programs on business administration, the author has added a description to the content of the components of professional competence.

Table 2. Professional competencies for entrepreneuship

Source: Author’s Defination & Survey’s data

The competencies for start-ups are called the competence subscale of the competence scale, which is measured as the average of the professional competencies with the variable name PROFESSIONAL_COMPETENCE.

Behavioral competencies were identified as creativity (variable name: creative), communication (communication), teamwork, time management (time_management), critical thinking, self-motivation, entrepreneurial spirit, and leadership. The above behavioral competencies are the component of competence (competence subscale) forming the common behavioral competence (competence scale) with the variable name used as BEHAVIORAL_COMPETENCE (Table 3).

Table 3. Behavioral competencies for entrepreneuship

Source: Survey’s data

The English language and information technology competencies are called the competence scale with the corresponding variable names ENGLISH, ITC (Table 4).

Table 4. English and ICT

Source: Survey’s data

Successful start-up (SUCCESS) - dependent variable, called a common variable and defined by 4 component variables (items) as success1, success2, success3, success4 (Table 5).

Table 5. Items of susseccfull start-up

Source: Rosemary Fissher (2014) & Survey’s data

The mean and variance of the scale variables and subscale variables of the analyzed data are shown in Table 2,3,4,5.

Successful entrepreneurial competence must be competencies that play a role in creating career success, that is, they must first have a standard validity, as measured by a coefficient that correlates with career success. Analyzed by visual model of correlation data by pairs.panels()/R, the results of correlation analysis between common competency variables and between them and successful startups are shown in Figure 1 below.

The competencies are correlated with each other and with the above start-up success at an average or higher level (mostly above 0.4), only the correlation between “professional competence” and “English” is still low. (0,36). Among the four analyzed competencies, “professional competence” and “behavioral competence” are highly correlated (r = 0.7) and have a good correlation with “career success” (r>0, 5), while “English” ability has a low correlation with “professional competence” (r=0.36) and has a medium correlation with “professional success” (0.4 < r < 0.5), so it is possible to identify two key competencies for successful start-ups, namely “professional competence” and “behavioral competence”.

Figure 1.  Correclation between of competencies and successful start-up

Source: Outputs of pairs.panels()/R

Analyzing the correlation between the components of professional competence and career success (Figure 2), we have identified four essential components of professional competence that are production management (r=0. ,41), human resource management (0.43), strategy (r=0.51) and entrepreneurship (r-0.52).

Figure 2.  Correclation between the components of professional competence and successful start-up

Source: Outputs of pairs.panels()/R

Analyzing the correlation between the components of behavioral competence and career success (Figure 3), identified four essential components of behavioral competence that are creativity (r=0.39) ), communication (0.49), self-motivation (r=0.41) and entrepreneurial spirit (r-0.42).

Figure 3.  Correclation between the components of behavioral competence and successful start-up

Source: Outputs of pairs.panels()/R

To determine the reliability of the general capabilities (professional competence, behavioral competence) as well as the common variable of startup success, the Cronbach alpha reliability is performed through the alpha() function of the psych library of R and gives reliable results for these common variables (Table 6) with values between 7.6 and 8.1.

Table 5. Cronbach alpha of competencies and susseccfull start-up

Source: Outputs of alpha()/R

Thus correlation and reliability analysis results help identify the key competencies for career success (Table 6) that help develop competencies for entrepreneurs.

Table 6. Competencies for entrepreneurs

5. Conclusion

Startup success must first meet the goals of the entrepreneur, and the degree of success is influenced by the entrepreneur, important in that is the critical competence for entrepreneurial success.

Research has identified two key general competencies for success: professional competence and behavioral competence. The components of the identified professional competencies are production management, human resource management, strategy and entrepreneuship. The component of behavioral competencies are creativity, communication, creativity, entrepreneurial spirit and leadership.

The identification of competencies and components of successful entrepreneurship helps to design and practice the effective program of development of competencies for Vietnammese entrepreneurs.

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