The creation and evolution of new business ventures: an activity theory perspective

The paper seeks to draw on the work of Engeström to set out an activity theory framework for the analysis of entrepreneurs engaged in the creation of new business ventures (NBVs). Adopting an activity‐based approach involves analysing the actions of individual and groups that are mediated through a range of devices, including language and physical artefacts.

The empirical data are based on a small sample of “scholars” taking part in a UK government‐sponsored initiative to promote enterprise: the New Entrepreneur Scholarship (NES). The data were collected by means of semi‐structured interviews with the entrepreneurs. NVivo software was then used to systemise the data according to the six dimensions of the activity theory triangle.

The cases illustrate the contradictions and tensions that confront nascent entrepreneurs as they consider the horizon of possibilities associated with their business idea. The paper demonstrates that the new business actually emerges from a contested set of relationships within which the entrepreneur plays a critical, creative, but far from solitary, role.

The use of activity theory helps provide a better understanding of how entrepreneurs engaged in relatively mundane business start‐ups actually identify and develop “new” opportunities. This is in contrast to many studies of entrepreneurial activity which focus on “high‐tech” or fast‐growing firms.

This is an exploratory study which utilises the activity theory framework to understand the difficulties and rewards for individuals with limited human and social capital to create successful new firms.