2.2 Phase Two: Survey Data
In Phase Two, respondents were also required to meet Luger and Koo’s (2005) “new” and “active” criteria. Selection of suitable research participants was carried out using purposive sampling (Shaughnessy & Zechmeister, 1997) to ensure that all the research participants met the research criteria. This led to the creation of a theoretically relevant sample which is deemed most appropriate in entrepreneurial research (Davidsson, 2004).

Since the second phase of this study was quantitative in nature, it required a larger research sample than the qualitative first phase. A sampling frame of “active” enterprises was compiled from the Made in Malta Business Directory and ICT Business Directory published by Malta Enterprise, and from the Trade Directory published by the Malta Chamber of Commerce. Since enterprises appearing on these directories were publicly advertising their products or services, it could be safely deduced that they were involved in commercial activity. This eliminated the selection of companies that may have been dormant or existed only as ‘paper companies’.

Each entry in these directories was looked up on the online Malta Registry of Companies to determine their registration number and their year of incorporation. Those companies registered during the last five years were considered to fit the “new” criterion and therefore included in this research sample, which also included the participants from the first phase of the research, other enterprises based at the local business incubation centre, and further personal contacts. The lengthy selection process yielded a sampling frame of 152 “new” and “active” enterprises. The entire sampling frame was contacted, out of which 90 entrepreneurs agreed to participate in the study. This response rate of 59.2% is attributed to the hectic schedule that is typical of many entrepreneurs of successful start-ups, which leaves them with little time to participate in research.


This second phase of data collection sought to substantiate the findings of the first phase of research concerning how entrepreneurs tap into their creativity and innovation, and to explore ways in which this is reflected in their start-ups. Since research on creativity is typically carried out in large organizations, a tailor-made structured interview schedule was constructed for the purpose of this second phase of the study. The construction of this interview schedule was based on the main findings of Phase One and on a number of standardized instruments dealing with organizational creativity. These include Goodman’s Organizational Creativity Audit (1995), Ekvall’s Creative Climate Questionnaire (1987), the Harvard Business Essentials’ Workplace Assessment Checklist and Psychological Environment Checklist (2003), and the Advanced Practical Thinking Training Inc.’s Innovation Index (2001).

The final interview schedule contained items representing indicators of organizational creativity and innovation (product, service and process innovation), together with indicators of the psychological and physical environment of the start-ups under investigation. All the items in this part of the interview schedule were selected entirely on the basis of the literature reviewed and the instruments mentioned above. Replies required simple ‘yes’ or ‘no’ answers.

The interview schedule also gathered general information about the respondents and their start-ups, including the industry sector they formed part of, the year when their enterprise was set up, the number of employees, and the entrepreneur’s previous managerial and start-up experience. The data gathered from this part of the interview was later used to classify and profile respondents.
The survey interviews in Phase Two were all administered over the telephone. This survey method was selected because of its non-intrusive nature, and because it was permitted by the relative simplicity of the research instrument (Frankfort-Nachmias & Nachmias, 1996). Interviews were conducted in English or Maltese during office hours or at such times as requested by respondents, and lasted approximately six minutes each. Answers were recorded on the interview schedule sheets which were then used by the author for analysis.


3. Results
Out of the thirteen entrepreneurs who participated in the first phase of this study, four had started up their enterprise in 2002, two in 2003, five in 2005, and two in 2006. Ten respondents were male and three were female while two were foreign and eleven were of Maltese nationality. One respondent was aged 25 or under, five were aged between 26 and 35, five were aged between 36 and 45, and two were aged 46 or over. All respondents in Phase One had completed tertiary level of education. Nine respondents had no previous start-up experience but eleven had formerly been employed in managerial positions.

In Phase Two, telephone interviews were conducted with 90 entrepreneurs whose enterprise had been registered with the relevant authorities in the last five years. All startups in this research sample fell into the SME category as defined by the EU. Micro and small enterprises together made up 96.7% (n = 87) of the sample. This is comparable to the population of enterprises in Malta, where micro and small enterprises together account for 99.3% of all Maltese businesses (National Statistics Office, 2006a & b). Out of the 90 respondents, 83.3% (n = 75) were male and 16.7% (n = 15) were female. When compared to the gender distribution of the population of self-employed with employees, females were over-represented in this sample. No data is publicly available on the gender distribution of new enterprise owners. Respondents with managerial experience constituted 81.1% (n = 73) of the sample, while those with experience starting up and running their own enterprise made up 38.9% (n = 35) of the sample. In addition, enterprises forming part of the ICT sector were highly represented in this phase of the research, constituting 25.6% (n = 23) of the sample. The start-ups with the second highest frequency in the sector variable were those which offer some kind of consultancy services, making up 8.9% (n = 8) of the sample. This was followed by those in the financial services sector, of which there were 6.7% (n = 6). Other sectors, including manufacturing, retail, import/export, hospitality, education and culture, media and entertainment, biotech, health, environment and energy were all represented by between one and four start-ups, making this a highly heterogeneous sample in terms of industry sector representation.

3.1 Phase One: Personal Interviews
The majority of entrepreneurs who participated in Phase One of this research claim that creativity and innovation play a crucial role in their start-up. Most entrepreneurs claimed that they are in some way creative and that their start-up is innovative as a function of their creativity. Sometimes they were able to specify ways in which they were creative and innovative; other times they were not.

For example, one respondent described his “creative approach”. He explained that he begins a new project “with a tabula rasa, a clean slate … just get rid of all your rules, just throw everything out of the window and start afresh”. On the other hand, another respondent stated that he thinks he is “a bit creative” but does not know “how or what”. He thinks it must be “something to do with character”. Another entrepreneur claimed to have so many creative ideas that, were he to live another seven lifetimes, it would still not be enough for him to put them all into action. This same respondent explained that, when he puts these creative ideas into action, he often finds that his products are too advanced for the market.

This concern about products or services that were so innovative that the market was not yet ready for them was voiced by three other respondents. Six other respondents stated that they introduced products or services that were new to the Maltese market but which had been available abroad. For some, this innovation gave their start-up competitive advantage: “It was innovative for Malta … that was our competitive advantage, that we harnessed technology … That made us save a lot of money which was also an advantage to our customer”.

Others voiced similar concerns regarding a market that was not ready for innovation: “it was new for Malta, but not for overseas … and first we started to make the market aware of our products which sort of the Maltese market was not ready yet for them”. Only one respondent admitted that his start-up simply offered “more of the same”. Yet even he claimed to be “always trying to design new products … always trying to create something new”.

Creativity and innovation were deemed important for initial survival and for continued growth and success, with frequent references to initial innovative business ideas, a subsequent flow of new ideas for products or services, creative solutions to problems and innovative business processes. When asked about the main reason behind the success of his start-up, a respondent answered that he had: “the idea which is unique so that helped a lot”. He also claimed that “the only way to keep ahead *of the competition+ is to add new services, new ideas”. Having an innovative business idea was also cited by another respondent as being an important factor in the success of her start-up. Another respondent claimed that an innovative product helped to “penetrate the market” with a high quality product with a considerable price tag attached. He believed this was only possible because customers knew their product was not a “me too” product but something very different, and it was one of the major reasons why his start-up was successful. Another respondent believes that the only way to succeed is to stand out by being unique, different and original. “Having new ideas is extremely important”, he explained, “if you’re going to be like everyone else, you’re just going to fall in with the rest of the crowd”. He believes that his “creative approach” ensures that his products are always innovative and that this is one of the major reasons why he has been so successful.

3.2 Phase Two: Survey Data
The results from the qualitative research in Phase One were enhanced with the quantitative research in Phase Two. This involved the computation of frequency counts and percentages for the items in part two of the telephone interview. Since these variables represent indicators of creativity and innovation, the statistics provide a general indication of entrepreneurial creativity and innovation and provide further depth in understanding how this is reflected in Maltese start-ups.

Well over half the owner-mangers in this study reported having launched products or services that were new to the Maltese market, while just over a quarter of these products or services were also new to the international market. This adds up to 16.7% (n = 15) of the total sample launching products or services that were brand new at the time of start-up. The majority (89.5%) of these entrepreneurs reported that their new-to-market products or services had been a success. Most entrepreneurs (71.1%, n = 64) reported that, as time passed, they added new products or services to their range, made improvements to existing products or services, and upgraded methods of production or delivery, all of which are indicators of product, service or process innovation.

The majority of start-ups in this study reportedly enjoy extensive generation and implementation of new ideas, both by the entrepreneurs and by employees. A considerable 94.4% (n = 85) of entrepreneurs personally generate and develop ideas for their start-ups, and 83.3% (n = 75) also encourage employees to come up with new ideas. Only two respondents had never implemented ideas proposed by their employees. Furthermore, only three of the entrepreneurs who did implement employees’ ideas had witnessed no improvement in some aspect of their start-up.


To be continued...

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