The world needs more jobs to meet United Nations Sustainable Development Goal 8 and to keep up with expected population growth. Policymakers stimulate start-ups due to their expected job-generating effect. Despite the increased number of solo self-employed, percentages on graduation from small to larger enterprises are low. This study focuses on entrepreneurs who create jobs, and have passed ‘the one-employee threshold’. What are the considerations of the solo self-employed when making the decision to hire their first employee? 27 Interviews were conducted with entrepreneurs in developed and developing countries. The analysis shows that solo self-employed have considerations about time, skills, trust and opportunities when hiring their first employee. The study finds evidence of effectual behaviour. Trust is important: trust in others (the first employee) and trust in yourself (becoming an employer). To stimulate job creation, policymakers should stimulate effectual behavior that enhances the self-efficacy of the solo self-employed. This is a draft chapter/article. The final version is available in Unlocking Regional Innovation and Entrepreneurship edited by Iréne Bernhard, PhD, Urban Gråsjö, PhD, School of Business, Economics and IT, University West and Charlie Karlsson, Professor Emeritus, Jönköping University and Blekinge Institute of Technology, Sweden, published in 2021, Edward Elgar Publishing Ltd https://doi.org/10.4337/9781800371248
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Why is it that we know and still act as if we do not know? SMEs are considered engines of job creation and therefore growth and generation of income but is it really true that the solo self-employed and micro entrepreneurs will become small or medium entrepreneurs, e.g. graduate? We knew in the 80’s that this assumption needed to be looked at critically. Research revealed that graduation hardly existed. Practitioners in MSME support and development programmes entertain few illusions about their programmes actually leading to graduation, while NGO and Government policy officers, from behind their desks, often presume that graduation occurs frequently. Actual graduation rates and the extent to which they can be attributed to interventions remain an unresolved and important issue. After more than three decades it is justified to the question whether it is still true that graduation hardly exists? If that is the case one needs to take a critical look into prevailing policies and programs in support of the SME sector.
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