I believe the owners/managers of SMEs are experts themselves for the following reasons.

1. Employing experts are resource-intensive and SMEs are resource crunch.

2. The owner does everything while initiating a new venture. All activities such as production operations, marketing, finance, and HR are executed and monitored by the entrepreneurs. Which is not possible without expertise. The new employee training is also conducted by the entrepreneur.

3. Socalled 'Experts' may not fit into the context of every specific SME. Thus, the scope of expertise and matching to the specific needs of SME has serious gaps.

The willingness of SMEs to take experts and lower level of SME mentoring mechanism is an indicator of lack of fitment.

4. SME is a specific resource combination or value proposition. Thus, each SME is unique, though apparently looks similar. Otherwise, the economies of scale argument would have eliminated all SMEs. If each is a unique set of resources combination, value proposition, and market acceptance, then a wider definition of the expertise of 'Experts' is questionable.

5. Absymal ability of Bankers (An Expert) to select a profitable enterprise can indicate the failure of expertise.

Thank you

In summary i think its the knowledge, determination and even socio economic conditions. Especially from a developing country perspective where employment can be limited, one is forced to become self employed to provide for themseves and their families. However, knowledge in terms of knowing what to sell, how to make a profit, and how to tap into the market space etc is pertinent.

Expert knowledge on, inter alia, determinants of the effective functioning of economic entities in the SME sector can be very helpful in establishing, running and developing a company, startup, enterprise and, consequently, also in the development of entrepreneurship in the economy. However, in order to achieve large, spectacular business success, expert knowledge alone may not be sufficient. Expert knowledge is helpful for the effective management of a company, enterprise, etc., but not always 100%. big business success. In addition, in order for expert knowledge to be significantly helpful in the long term of running a business, it should be constantly updated and enriched with new knowledge resulting from changes in the conditions of running a business, changes in developing economic systems, technological progress, the emergence of new, innovative technologies and logistic improvements to the conducted business activity, etc. helps with

Best regards,

Dariusz Prokopowicz

There is a strong interlink between knowledge and risk - like which risk is a person willing to take having a certain knowledge? As long as you don’t know that fire is burning hot you are tended to touch flames. As long as an SME sees chances and does not know the associated risks it’s more tended to go for the chance. As risks are quantified typically with probabilities, there is "always" a chance to succeed. That is what successful SMEs do. If risk and its probability combine in a bad manner, the SME might fail. Here comes the human factor: if the founder of the SME agrees to take more risk eventually, the success might be bigger - everybody knows the saying: “No risk - no fun”. So I vote for a good mixture of entrepreneurial and knowledge not of a single founder but a team. It’s not entrepreneurial vs. knowledge but its about the best mixture/combination of entrepreneurial and knowledge.

Hi Biljana,

Interesting and relevant question. Thanks!

Research by Herbert Simon (2009) on successful German mid-sized firms (often between 1 - 500 staff), indicated that such "Hidden Champions" have a technology strategy and a deep knowledge of their international niche markets. They use de-centralised decision-making (Mear & Werner, 2021) in combination with dedicated (loyal) and experienced management. They often have conservative management and are family-owned.

Hidden champions are entrepreneurial in their approach, and persistent. These firms successfully combine the expert role and the role of the entrepreneur / top manager.

Entrepreneurial orientation includes pro-active behaviour, risk-taking and innovativeness (Dess & Lumpkin, etc). However, to accurately assess risks one needs expert knowledge, especially in a predictable environment (tame problems, Rittel & Webber, 1973).

In a more wicked world, or even in a super-wicked world (Levin ea, 2012), risks are (much) less predictable and have different & conflicting perspectives. Here the intuition and multi-disciplinary skills of the entrepreneur play a more important role.

The startup entrepreneur can afford to know all & do all. When the startup grows, the entrepreneur needs to involve experts and managers. Either the entrepreneur can make and stimulate this transmission (Levie & Lichternstein, 2010), or will fail or will be put aside.

A lot of entrepreneurs then transform into small business owners, and do not grow beyond a certain point. (Reboud / Mazzarol, 2011). For growth, entrepreneurs need collaboration with external partners (Jarillos, 1988; Das & Teng, 2000) and they try all kinds of new combination of resources to realise growth (Furlan ea 2014).

Thanks again. Will keenly follow this discussion!

BR Anne Staal - AUT

First, you need to see attitude to uncertainty through three lenses, and not Kirzner's alone. Please compare Schumpeter, Kirzner, and Knight to find your answer.

Second, the research and public discourse entirely build on success stories. An entrepreneurship trajectory is not about success: it is about the approach to failure. Unfortunately, no one tracks the desire to fail. Why do gamblers want to take the risk, for instance? Why do the flying (rocket man) jump from the mountains?

Third, entrepreneurship research is about the notion, domain, and mechanisms of apprehension—nothing else.

Since we emulate the rest, I am sure no one is going to explore the innate reasons in favor of extrinsic pressure. We want to publish, so we want to appear like others. Thus, the story revolves around success, because, among 50 people who jumped (1 or 2 survived), and we forget the 48 ones.

I am not trying to distract you, but in the heat of the moment, I thought I should add something maverick that I am.

Cheers

Thank you Brajaballav Kar for your significant contribution!

I agree with you in the context that the majority of owners and managers of SMEs must be experts themselves, especially due to the severe resource constraints to employ (hire) expert knowledge, as well as, the variety of activities they must do successfully at the beginning only to start (and then successfully operate) a new venture.

I am not sure I understand your statement that SMEs may be unwilling to take an expert? We could assume that SMEs would be eager to take an expert (and their knowledge), but the question is if experts are actually willing to work for SMEs? Or, due to their expertise, are they eager to pursue greater opportunities (higher salaries) in large organizations?

Thank you once again for your answers!

Kind regards,

Sachin Suknunan - I agree that SMEs are usually founded by entrepreneurs who have a certain amount of knowledge about goods or services they tend to offer at the market. But such knowledge and skills that are certainly required to manage a business seem to be related (once again) only to entrepreneurial knowledge (and not the expertise itself).

Does it mean that owners and managers of SMEs do not need the expert knowledge and the expertise itself to start their business activities and successfully carry them forward?

Thank you very much for your thoughts.

Dariusz Prokopowicz - Of course, I absolutely agree that the best-case scenario is the combination of the two (entrepreneurial and expert knowledge), especially since neither one alone seems to be sufficient for the continuous success of SMEs.

The question still remains - what knowledge exists in SMEs (held by owners/managers) and what knowledge shall be acquired from the external source(s)?

Thank you very much for your answers.

Check https://www.oecd.org/cfe/leed/Cooney_entrepreneurship_skills_HGF.pdf

Interesting topic.

Jan Loeschner - I absolutely agree!

Thank you for an interesting association between knowledge and risk, it certainly makes sense that organizational knowledge (as a combination of entrepreneurial knowledge and expert knowledge) not individual knowledge may be crucial for sustained success.

Anne Staal - thank you very much for your thoughts.

Similarly, Haksever (1996) argued that - most small businesses start small and stay that way. SMEs are usually founded by entrepreneurs who have a certain knowledge about the goods or services they offer at the market. The same author stated that most SMEs are owned by the entrepreneurs, the management is independent, usually, the owner is the manager and reports to no one, or other members of the family’’ (Haksever, 1996).

However, I am not sure if startup entrepreneurs can afford to know all & do all? :)

According to Desouza & Awazu (2006) - ‘’as an organization grows, areas of specialization emerge, such as finance or operations, and knowledge in these domains get concentrated around the areas of specialization’’. This certainly is true for most SMEs, and entrepreneurs would certainly need to involve experts and managers.

The questions are -

Are they aware of it?

Do they know how to delegate?

Do they understand the complexity of running a business?

Feel free to share your thoughts ...

Tariq H. Malik - thank you for the other perspective! :)

I agree it's not all about success, we must tend the modes of failure in small and medium enterprises to understand the complexity of all these challenges. Thank you for suggesting to compare Schumpeter, Kirzner, and Knight this might be quite interesting.

While Schumpeter sees the entrepreneur as a single-handed change-maker and innovator; Kirzner makes a clear distinction between the entrepreneurial and capitalist doctrines, as he believes, people only earn profits when they are “pure entrepreneurs”. On the contrary, in the Knightian ideology, both the SME owner and venture capitalist are entrepreneurs, who innovate under uncertainty.

Expert knowledge contains declarative and procedural domains. By practice and pragmatics, it is not a mandatory prerequisite to use expert knowledge to be an entrepreneur, but it is always best to hold expertise and wisdom.

Dear All... I hope everybody is doing well.

Very good discussion proposed by Biljana Tosic .

In my point of view, we should take a broader perspective, it means, it is not only expertise nor knowledge. They may be influenced by other external factors.

I'm finishing a paper in which, under the entrepreneurial bricolage (Baker & Nelson, 2005) lens, I found that beyond expertise or knowledge, the entrepreneur takes a personal challenge, evaluate the business attractiveness and establish a support network to start up the business.

So, in my point of view, 'owners or managers of SMEs, are by themselves, experts’. But first, they have to take a personal challenge and after evaluating if a business is attractive, will establish a support network to start up a business.

Expert knowledge alone might not make a person an entrepreneur but it can be a substrate for one but for an entrepreneurial mindset coupled with innovation and ideation, the individual is good to go assuming the calculated risks and other factor inputs can be handled and the outputs returns will brake even at worst and at the positive, bring in profit no matter how little.

Intersting discussion

Following

Nusrat Hafiz - thank you for your comparisons of Schumpeter and Kirzner.

This seems to be crucial for understanding the main differences between entrepreneurial and expert knowledge. Also, I agree that one does not always need to be an expert to become an entrepreneur, but it would be beneficial for an entrepreneur, do you agree? :)

Arnaldo Di Petta - thank you for an interesting point of view!

I like the behavioral theory of the entrepreneurial bricolage!

Your opinion that entrepreneurs actually are experts seems to be right here - but does it mean that they would need both the entrepreneurial knowledge (of taking the personal challenge, evaluating business attractiveness, and establishing support network) and the expert knowledge latter for achieving sustained success?

Feel free to share your thoughts ...

Johnson Olusola Olaosebikan - I absolutely agree!

Moreover - entrepreneurial knowledge alone does not make a person an expert, as well as, expert knowledge does not make a person an entrepreneur. The question is do they (entrepreneurs) need to hire expert knowledge (e.g. external experts) or are they by themselves experts in a specific field ready or eager to be entrepreneurs, as well?

Feel free to share your thoughts ...

El conocimiento emprendedor es la experiencia, gracias a los lanzamientos de productos o servicios, con la creatividad y innovación. con actitudes activas y el conocimiento experto en las Pymes es la gestión del conocimiento, pero se sabe muchos emprendedores nacen y otros por la experiencia y necesidades (crisis) se hacen emprendedores, actualmente es un elemento esencial empresarial. En consecuencia en la actualidad la ciencia es el insumo para el emprendedor y para los expertos en las pymes, porque la ciencia avanza, necesita actualización y ambos se necesitan,..

Hi Biljana Tosic

Thanks for your comment and for your recommendation. It's great to talk to you again.

Objectively answering your question, yes. And to keep our discussion as broad as possible, I'd like to cite El-Sawad, Arnold, and Cohen’s (2004) and their notion of doublethink. They argue "that doublethink provides a means of containing contradiction such that it is neither acknowledged as contradiction nor experienced as uncomfortable".

That said, I provoke: why not choose both sides of the dilemma rather than normalizing one (Berglund, Gaddefors, and Lindgren 2016)?

All entrepreneurs are not experts and all experts are not entrepreneurs but experts can become entrepreneurs and entrepreneurs need to be experts at least in some aspects to be successful. All experts are not expert in all aspects including entrepreneurship.

This distinction is particularly relevant in project management where the SMEs are generally the experts and not necessarily entrepreneurs.

Oliver Bright - Exactly!

Since entrepreneurs (usually) are not experts - they need to hire experts to support them.

The question is are they aware of that need or do they think their entrepreneurial knowledge, skills, and competence shall be enough for sustained success?

Feel free to share your thoughts ...

Hi Biljana Tosic and Colleagues

In my point of view this need (to hire experts to support them) depends on the expectations the entrepreneur has regarding his own business.

You know that there are two types of entrepreneurial bricolage (Baker & Nelson, 2005): the selective, that serves as a foundation to star up, develop and grow the business and the parallel, in which, somehow, the entrepreneur is happy with the initial stage and has no plans to grow his business in the future.

What is your perspective?

Keep in touch.

Madam Biljana Tošić, Yes. The political environment play a vital role in deciding the entrepreneurial success.

Arnaldo Di Petta - I agree, small business owners/managers are usually quite content where they are. Mazzerol and Rebound (2020), might explain the main reasons for that ...

''In terms of their skills and capabilities, the small business owners interviewed by Hankinson (2000) were predominately technical experts with limited expertise in areas such as marketing, general management, finance, leadership, languages, and human resources management. They generally felt their management skills to be adequate while their other managerial skills were deficient, but they had taken little action to build up these skills. The most common approach to the management of their firms was for them to be the center of action surrounded by their staff with little or no delegation or structure. However, all had some form of deputy manager who usually had technical skills rather than sales or management skills. Little or no use was made of external consultants''.

These interviews were done in late 2000 but seem to be adequate today, as well.

What do you think?

Looking forward to hearing from you.

I have asked a similar question regarding the existence of expertise in standardization in SMEs (e.g. using standards (implementing standards such as ISO 9001, ISO 14001, ISO 27001, etc.) and developing standards (participating in technical committees) -

https://www.researchgate.net/post/Does_expertise_in_standardization_exist_in_SMEs

I would like to hear your thoughts!

Hi Biljana Tosic

It's my pleasure to keep discussing with you.

Regarding the subject that "entrepreneurs were predominately technical experts with limited expertise in areas..." Hankinson (2000), I feel that this statement keeps true after more than 20 years.

… at least in Brazil, where I live. And I think the reason is that entrepreneurship still appears spontaneously, not as a result of education or technical preparation. Despite many efforts of entrepreneurship offices in last 20 years, it seems to me that entrepreneurship education has not yet formed and prepared entrepreneurs enough.

Usually, we know that a cultural change depends on around 40 years to became true… so, who knows that in 2040 we will have entrepreneurs that, beyond having ‘entrepreneur spirit’, will be also prepared in all management areas.

Keep in touch.

Hi Biljana Tosic,

in my experience, in Kazakhstan business, I see both examples when experts become entrepreneurs open business in their experts' area; and entrepreneurs hire experts for key positions.

Now the socio-political environment and socio-economical policies must be conducive for any business particularly for SME's sustainability

Becoming an entrepreneur should be the goal of everyone whether as an expert or whatever not necessarily as a solo business operative but can also be in conjunction with others as a sought of investment. It is a way of making money or your resources work for you rather than you working for the money.

Entrepreneurs require variety of experts to set systems for smooth running of business. Because entrepreneurs may have requirements of starting but with limited knowledge.

please see

https://www.elsevier.es/en-revista-european-journal-management-business-economics-487-articulo-knowledge-acquisition-for-smes-first-S1019683815000554

Are project managers entrepreneurs then who recognize the value of expert knowledge in both themselves and others for successful completion of complex projects?

Require knowldge experiences is nesserly to realise a good business for owners or managers

https://core.ac.uk/download/pdf/1555404.pdf

I think that both are important in assembling the expert, on the one hand, the expert has empirical knowledge and the SME entrepreneurs have the experience gained through years of work, consequently the former can act as a facilitator and the entrepreneurs give him the assessment of greater competitiveness and guidance in achieving the objectives set in a market of risk and uncertainty.

https://core.ac.uk/download/pdf/1555404.pdf