it takes two to tango: entrepreneurship and … takes two to tango: entrepreneurship and creativity...

It Takes Two to Tango:

Entrepreneurship and Creativity in Troubled

Times – Vietnam 2012

Dang Le Nguyen Vu, Nancy K. Napier and Vuong Quan

Hoang The primary objective of this study focuses on perceived values of entrepreneurship and

creativity in business conducted within a turbulent environment. Our initial hypothesis is

that a typical entrepreneurial process carries with it “creativity-enabling elements.” In a

normal situation, when businesses focus more on optimizing their resources for

commercial gains, perceptions about values of entrepreneurial creativity are usually

vague. However, in difficult times and harsh competition, the difference between survival

and failure may be creativity. This paper also examines many previous findings on both

entrepreneurship and creativity and suggests a highly possible “organic growth” of

creativity in an entrepreneurial environment and reinforcing value of entrepreneurship

when creativity power is present. In other words, we see each idea reinforcing the other.

We use data from a survey of sample Vietnamese firms during the chaotic economic year

2012 to learn about the ‘entrepreneurship-creativity nexus.’

Strikingly, most literature suggests that market competition will push firms to take

creativity/innovation seriously as matter of death or survival. Using the data, we

examined creativity methods (Napier and Nilsson, 2008; Napier, 2010) in conjunction

with three influential cultural values – namely risk tolerance, relationship, and

dependence on resources – to assess how they influence decisions of entrepreneurs.

A data set of 137 responses qualified for a statistical examination was obtained from an

online survey, which started on February 16 and ended May 24, 2012, sent to local

entrepreneurs and corporate managers using social networks. The authors employed

categorical data analysis (Agresti, 2002; Azen & Walker, 2011).

Statistical analyses confirm that for business operation, the creativity and entrepreneurial

spirit could hardly be separate; and, this is not only correct with entrepreneurial firm, but

also well established companies.

The single most important factor before business startup and during early

implementation in Vietnam is what we call “connection/relationship.” However,

businesspeople are increasingly aware of the need of creativity/innovation. In fact, we

suggest that creativity and entrepreneurial spirit cannot be separated in entrepreneurial

firms as well as established companies.

JEL Classifications: C42; M13; O31; P27

Keywords: Creativity; Entrepreneurship; Economic Transition; Vietnam

CEB Working Paper N° 12/022

2012

Université Libre de Bruxelles - Solvay Brussels School of Economics and Management Centre Emile Bernheim

ULB CP114/03 50, avenue F.D. Roosevelt 1050 Brussels BELGIUM e-mail: [email protected] Tel. : +32 (0)2/650.48.64 Fax : +32 (0)2/650.41.88

© 2012 – Dang Le Nguyen Vu, Nancy K. Napier, Vuong Quan Hoang

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It Takes Two to Tango:

Entrepreneurship and Creativity in Troubled Times – Vietnam 2012

Dang Le Nguyen Vu [email protected]

Chairman and CEO, Trung Nguyen Coffee Group 82-84 Bui Thi Xuan Street, District 1, Ho Chi Minh City, Vietnam

Nancy K. Napier [email protected]

Professor, Boise State University 1910 University Drive, Boise, ID 83725-1600, USA

Vuong Quan Hoang [email protected]

Researcher, Centre Emile Bernheim, Université Libre de Bruxelles 50 Ave. F.D. Roosevelt, Brussels 1050, Belgium

mailto:[email protected]�




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* Abstract

Strikingly, most literature suggests that market competition will push firms to take creativity/innovation seriously as matter of death or survival. Using the data, we examined creativity methods (Napier and Nilsson, 2008; Napier, 2010) in conjunction with three influential cultural values – namely risk tolerance, relationship, and dependence on resources – to assess how they influence decisions of entrepreneurs.

: The primary objective of this study focuses on perceived values of entrepreneurship and creativity in business conducted within a turbulent environment. Our initial hypothesis is that a typical entrepreneurial process carries with it “creativity-enabling elements.” In a normal situation, when businesses focus more on optimizing their resources for commercial gains, perceptions about values of entrepreneurial creativity are usually vague. However, in difficult times and harsh competition, the difference between survival and failure may be creativity. This paper also examines many previous findings on both entrepreneurship and creativity and suggests a highly possible “organic growth” of creativity in an entrepreneurial environment and reinforcing value of entrepreneurship when creativity power is present. In other words, we see each idea reinforcing the other. We use data from a survey of sample Vietnamese firms during the chaotic economic year 2012 to learn about the ‘entrepreneurship-creativity nexus.’

A data set of 137 responses qualified for a statistical examination was obtained from an online survey, which started on February 16 and ended May 24, 2012, sent to local entrepreneurs and corporate managers using social networks. The authors employed categorical data analysis (Agresti, 2002; Azen & Walker, 2011). Statistical analyses confirm that for business operation, the creativity and entrepreneurial spirit could hardly be separate; and, this is not only correct with entrepreneurial firm, but also well established companies. The single most important factor before business startup and during early implementation in Vietnam is what we call “connection/relationship.” However, businesspeople are increasingly aware of the need of creativity/innovation. In fact, we suggest that creativity and entrepreneurial spirit cannot be separated in entrepreneurial firms as well as established companies.

* Keyword

: Creativity; Entrepreneurship; Economic Transition; Vietnam

* JEL Code

: C42; M13; O31; P27


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© Copyright 2012 by the Authors. All rights reserved. No part of this working paper may be reproduced without written permission from the Authors. Data, analysis and discussion of this paper could be reused, in part, provided that proper citation is made as credit to the Authors. This working paper is preliminary work in progress that is posted to stimulate discussion and critical comment. The analysis and conclusion set forth are those of the Authors. Evaluation of the material is the sole responsibility of the user. Initially, this working paper appeared electronically on the Institutional Repository System of the Centre Emile Bernheim, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles. Address: CP 145/01 ULB, 19-21 Avenue Franklin Delano Roosevelt, Bruxelles B-1050, Belgium. Version tracking: August 19, 2012.


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It Takes Two to Tango: Entrepreneurship and Creativity in Troubled Times – Vietnam 2012

The paper has four parts. First, it reviews economic history of Vietnam from 1986, when her economic reforms began. Then it moves on with the literature review on both creativity/innovation and entrepreneurship to establish a link between the two, which gives rise to research question of this paper. The data and analysis part deals with a survey data from Vietnam, which enables us to empirically verify the link and several propositions relating to these two management research fields. 1. Background It is well established that entrepreneurship is important, not only evidenced by a large volume of worldwide research conducted over the past few decades but also through value that it brings to nations’ development, such as much needed income-generating jobs, industrial and service outputs, and competition that drives markets to become dynamic and beneficial to economies. In addition, we know that entrepreneurs, who wish to survive and succeed in tough market competition, must be creative in some way. But who has time for creativity? We suggest that perhaps in turbulent times, the notions of entrepreneurship and creativity should be combined and leveraged even more so. To not take the time to do both could be even more dangerous than ever. Vietnam is an emerging market economy with 90 million people and exhibits many relevant properties of a transition system. It allows for examination of values and modus operandi of and some basic conditions for entrepreneurship and creativity that could serve the business sector and positive economic reforms. More importantly, economic problems facing the Vietnamese economy, especially the 2007-2012 period, have pushed it to a decisive moment when revisiting theoretical issues of entrepreneurship and creativity becomes critical. The post-Doi Moi good times… The genuine process of economic reforms in Vietnam that aimed toward developing a full-functioning market economy started in 1995, also when the United States and Vietnam reestablished diplomatic relations. The national economy grew 1996-2000 at an average growth rate (stated in terms of GDP) of 6.9% per annum. This momentum continued in the 2001-2005 period, with annual GDP growth rate accelerating to approximately 7.5% p.a. (Nguyen 2006). During the 10-year period, Vietnam also saw many meaningful developments for a full-fledged market economy to take off. Also during 2001-2005, Vietnam received commitments of official development aid from donor countries – mostly from developed nations – worth $14.7 billion, of which about $7 billion was disbursed into the economy.

Figure 1 Vietnam’s output in millions of US dollars1

1 Authors compiled data from Index Mundi < http://indexmundi.com/facts/vietnam/gdp>, Wikipedia <http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29> and CIA Factbook <http://cia.gov/>.


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Data for the 2006-2010 period show that the economy continued to grow substantially, although the average annual growth rate of real GDP for this period was 7.01%, lower than the prior 7.5% p.a. for the 2001-2005 (GSO 2011). The export-led growth economic model meant expanding exports markets worldwide, including with the U.S. and Japan, especially after Vietnam’s accession to WTO in January 2007. In 2010, Vietnam’s total export revenues reached US$71.6 billion, up 25.5% from 2009, and continued to grow almost 34% in 2011, pushing total exports value to $96.3 billion. Foreign direct investments (FDI) also soared. As of 2011 year end, 13,667 FDI projects were on going, with a commitment of $198 billion. Exports by FDI enterprises accounted for 59% total exports from Vietnam in the year. In early 2012, new commitments of FDI capital slowed to $6.4bn, but it is expected that disbursement from previous commitments will likely bring the total during FY2012 to about $10 billion. … And bad Despite the good news picture, the party may be drawing to a close. Chronic economic problems recurred in the 2006-2011 period appeared to prove this. Vietnam has been a net importer throughout its reform period, since 1986. However, the 2006-2010 period experienced a severe trade deficit, about $12.5 billion per year, or roughly 22% of total exports revenue. This is a non-trivial increase from the 17.3% ratio of the 2001-2005 period, especially since exports grew faster than the economy’s output expansion. The emerging economy of Vietnam proved to be inefficient, with wasteful use of physical and capital resources through an indicator called the “Investment-to-GDP” ratio. The higher the ratio is, the less efficient the output productivity of the economy becomes. In fact, this ratio has gone up over three critical phases: 34.9% (1996-2000) to 39.1% (2001-2005) 43.5% (2006-2010), before falling to 34.6% in the crisis year of 2011. The conclusion: the country had to use more scarce resources to finance and support its growth.

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But growth rate dropped too. Vietnam’s total output – measured by GDP – grew more slowly over time. It dropped to an annual growth rate of 5.9% in 2011, down from 6.8% in 2010. Even the critical year 2009, amid the global economic downturn, the growth rate was still 5.3%. Another way to assess how wasteful the economy has become is the measure ICOR (incremental capital to output ratio). It measureshow many more units of capital investment the economy requires to produce one more unit of economic output. The answer is dismal. Vietnam’s ICOR was around 5:1 during 1996-2005, but increased to around 6:1 from 2006 to 2011. The result: Vietnam’s growth engine demands 6% increase in input resources to return 1% growth in gross domestic product, while the rest of the East Asian region requires only 3% input increase from the same 1% growth. Logically, statistics also show that productivity per capita in Vietnam is very low compared to other countries in East Asia, only $2,072/person (in 2010), while that same measure for Japan is $80,307, South Korea $33,638, Thailand $4,854, China $4,087, the Philippines $3,324, and Indonesia $2,859 (VPC 2010). Vietnam’s credit supply in 2010 was13.7 times that of 2000, while its GDP doubled in the same 10-year period. By the end of 2011, total outstanding balance of credit was equivalent to 125% of GDP, unnerving the law-makers of Vietnam. Most law-makers voiced their concern about privileges granted to SOEs in acquiring scarce financial (bank credits, subsidy programs, bad debt “restructuring” and even cash injection) and physical assets (land, housing, mines, and other monopolistic pecuniary rights in doing businesses), citing total officially registered borrowings by SOE reaching VND 1,300 trillion ($62.2billion) while their total assets were only $87.7 billion (Vietnamica 2011). Total value of equity in these SOEs – held by the state – is estimated at only VND 683 trillion ($32.68 billion). In the first half of 2012H1, Vietnam’s economy further slowed with expansion of output at a mediocre 4.31% year-on-year. Although optimistic about the chance the economy could be back on track in 2012H2, the World Bank and donors’ community advocated a more cautious growth target of 5.7% for FY2012 (VNPlus 2011).

Figure 2 – Vietnam’s Annual Consumer Price Index


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Clearly, there are serious problems facing the Vietnamese economy. Over the first half of 2012, local media constantly reported alarming statistics on worsening economic/business environment in Vietnam with many experts focusing on declining output and tough conditions in which enterprises have been living. To review, the problems facing the Vietnamese economy include: i) frozen bank credit market, which showed negative growth rate in H1; ii) free fall of real estate market in both prices and scale of transactions; iii) deterioration of the already poor performing SOE sector; and iv) sky-rocketing doubtful debts in the economy (Vietnamica 2012). … Then, adverse impacts on the business sector In June 2012, Vietnam’s General Statistics Office (GSO 2012) conducted a nationwide survey on 9,331 business firms of different ownerships (state-owned enterprise and private-sector enterprise; SOE, PSE and FDI) over the past 15 months in operation, ending May 16, 2012 to investigate the economic realities within the business sector, which was released in June 2012. The results show that 8.4% of the surveyed enterprises went bankrupt or shut down. Domestic private sector enterprises show the ugliest picture encountering the current economic turbulence with 9.1% failing, followed by SOE 2.7% and FDI enterprises 2.4%. The most serious problems that had led to the failures according to this business survey are: a) Financial losses due to poor performance: 69.9%; b) Shortage of capital 28.20%; and, c) Inability to compete in the marketplace: 14.70%. Several major problems that hinder business efficiency according to the surveyed businesspeople are: i) Expensive cost of borrowings (27.2%); ii) Higher costs of business due to inflation (19.5%); iii) Limited access to bank loans (17.4%); iv) Increasing transports cost (9.7%); v) Unreliable electricity supply (7%); and vi) Abrupt changes of policies (7%). Business failures continued to hamper the economic recovery process. Official statistics said that there are nearly 623,000 businesses formally registered by the end of 2011, of which 79,000 went bankrupt and closed, according to a report by World Bank and VCCI on March 14, 2012

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(Phap Luat TP.HCM 2012). However, tax records tell a different story. Only about 400,000 enterprises continue to operate, since all firms in operation should maintain their monthly tax declaration and transactions with local tax division. Most recently, in June 2012, a poll by the most read local online newspaper unveils the fact that an overriding portion of surveyed people – almost 85% – feel the economy is still in troubled times in 2012Q2, after a very turbulent 2011.2

What do experts say about entrepreneurship and creativity? Reviews of statistics, comments by experts, businesspeople and policy makers in the news, reveal a notable lack of discussion about entrepreneurship and creativity. It appears that the business community has a simple view toward these critically important elements in a capitalist system: entrepreneurship is equal to “start-up” and creativity is beyond the scope of activities of most Vietnamese firms. Thus, the story of entrepreneurship and creativity just stops right when they admit: “Yes, they are important,” implying that once the importance is known and recognized they are no longer part of our concern. In fact, most small private firms surviving this economic storm have practiced some kind of creative activity and reinforced their entrepreneurial process in their own ways, without being aware of the terminology used in the research literature. 2. A Literature Review This section lays a cornerstone for our analysis in the next section. We explore connections between the literatures on entrepreneurship and creativity but also examine disconnections and gaps. The review seeks to shed light on the roles of entrepreneurship and innovation in transition economies, the conditions that encourage them to be recognized and implemented successfully, and on the inevitable path that an emerging market economy like Vietnam must pursue. On entrepreneurship and creativity/innovation in economic progress The seminal work on both entrepreneurship and innovations was that by Schumpeter (1942), where he first coined the now famous term “creative destruction,” characterizing the nature of capitalism evolution through market and competition, which makes him among the first connecting the two important fields of research together with a clear view about economic development. In late 1950s and early 1960s, scholars continued to examine creativity and entrepreneurship in business and economic development, and started to research these arenas. Silberman (1956) discussed various aspects of entrepreneurship in the context of post-WWII economic recovery.Silberman posed such concepts as “nationalism as second language of entrepreneurship” and “industrialization as the principal content of entrepreneurship.” LaterTaylor (1960) defined creative thinking with a narrow view toward new products, and suggested that his view did not conflict with the key ideas of novelty and worth. Taylor saw 2 This poll was performed by VNexpress.net starting from June 16, 2012. We extracted resultant data on June 25, when 15,263 responses were counted, of which 12,961 said the economy was still in ‘extreme difficulty.’


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creativity as a complex undertaking, and included many variables, from products, processes, people, tasks, to environment as well as their interaction. In early 1980s, Greenfield & Strickon (1981) and Klein (1982), for example, further developed the concepts. They viewed entrepreneurship as “the mechanism by means of which society at one stage was transformed to another.” Entrepreneurs should be in the center of this analytical paradigm because their outstanding characteristics are their uniqueness and creativity. In the creativity research realm, Klein (1982) described characteristics of people who exhibit creative behaviors as: a) Maximizing options, meaning their process of choosing from alternatives is independent of their perceptions about those alternatives, thus, nothing is irrelevant; b) Being open to different ideas and concepts; c) Focusing on growth generation, not remaining tied to old values or well established patterns of behavior; d) Seeking freedom, which helps set them free from convention, habits and prejudice; d) Being ready to venture beyond the comfort zone and safe boundaries; e) Having good understandings about their true wishes, pursuits, and goals, in terms of the way as well as the cultural milieu and ethos they are living in or will live in; f) Being responsible and responsive; and g) Having significant risk tolerance. Thus, we do not see much linkage between these two anymore. Entrepreneurship – as an economic pillar of capitalist model – was even submerged at one point into the economic literature, although it was a key theme by the Austrian Economics School, as stated in Leff (1979). But it is clear that entrepreneurs pursue their innovation processes while venturing on new startups. What if the processes extended to society at large? Baumol (1990) proposed that rather than trying to change entrepreneurs, perhaps socieities should adopt entrepreneurial ways of thinking and operating. Interesting, Baumol quoted THE English historian (and also businessman) Eric J.E. Hobsbawm in saying, “It is often assumed that an economy of private enterprise has an automatic bias towards innovation, but this is not so. It has a bias only towards profit,” in his Bandits (1969), as the starting point of his thesis. In Baumol’s reasoning, the separation between productive entrepreneurship – i.e. undertaking of useful and constructive activities by entrepreneurs such as technology and management innovations – and destructive entrepreneurial activities – such as those of rent seeking or organized crime – is valid and relevant, because the allocation of effort between these types is related to the relative payoffs offered to such efforts. Therefore, government policy should be able to influence efficiency of entrepreneurship more effectively by re-allocation of entrepreneurial undertakings toward ‘constructive entrepreneurship’ than trying to change the goals and behaviors of destructive ones. Also, Drucker (1993) revisited the connection entrepreneurship and creativity/innovation put forward by Schumpeter in early 1940s, in his book, Innovation and Entrepreneurship: Practice and Principles. But we see not much outside the Austrian circle, except in Sternberg & Lubart (1993) where authors tend to buy major entrepreneurship concepts from the Austrian School, too. Day (1995) also discussed entrepreneurship and innovation. He stressed the importance of ‘economic creation’ to managerial systems, at the heart of which are the elements of invention, innovation and diffusion. Entrepreneurs and entrepreneurial managers need imagination with


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‘bounded rationality’ to project their future scenarios, and invent creative endeavors. Both inventors and entrepreneurs have to imagine new things that do not exist, and also formulate operational steps, which enable them to successfully implement creative ideas and produce useful innovations. Their acts – i.e., imagination, innovation and imitation – transform societies. The co-existence of management, entrepreneurship and act of imitation proves the bounded rationality on one of the key functions of any economic system, which is an economical allocation of resources. Day (1995) argued that that the logic of necessity of entrepreneurship rests with rigidity created within established corporations, and also social institution and authorities, by applying rules, and requesting people to “obey the rules.” Economizing the increasingly complex systems naturally leads to adoption of the so-caled ‘standard operating procedures’ that institutionalize habit and inertia, thus add inflexibility and reduce responsiveness. As a consequence, the creativity exercise is further confined to a somewhat rational choices existing in a limited scope. Thus, by building inertia to stabilize an enterprise, rules at the same time hamper creative and inventive acts, and cause the scarcity of imagination, hence intelligence. Entrepreneurship is a useful apparatus for liberating creative activities from rigid bonds of overdeveloped infrastructure, the same way capitalism did to the feudal system. Through entrepreneurial endeavors, entrepreneurs can stimulate a radical change in invention and innovation, and simultaneously destabilize forms and substance of an existing economic system, pushing it to a more radical transformation. Further, entrepreneurial efforts could only work effectively in an environment where the market mechanism exists and its price system helps coordinate economic activities in ways so that existing market participants can reasonably attain their commercial benefits above their costs. When this happens, prospective entrepreneurs should be able to enter likely profitable ventures. Of course, economic competition should drive loss-making (i.e. inefficient and uncapable) entities out of the market, too. The takeover of resources and profits in the market game typically exemplifies entrepreneurial pressures caused by asymmetric rewards and punishments in a market system. Other scholars, likeAmabile (1996) also suggested that entrepreneurship is typically defined in terms of innovations but still others, includinig Kirzner (1973) defined them in terms of being alert to an unexploited or new opportunity in the marketplace, and have the kind of risk appetite that allows them to go ahead with that venture pursuit, like pointed out in Kirzner (1973). The turn of New Millenium has proven to show also a remarkable turn to a natural nexus between creativity/innovation and entrepreneurship (e.g., Brown, Davidsson & Wiklund,2001; Kaufmann, 2004; Gilson & Shalley, 2004; Miron, Erez & Naveh, 2004; McAdam & Keogh, 2004). Brown, Davidsson and Wiklund (2001) emphasized the need for empirically verifiable strategies to further advance the proposition stating that “Entrepreneurial management, defined as a set of opportunity-based management practices, can help firms remain vital and contribute to firm and societal level value creation.” Practically, their operationalizing paradigm is not ready for an empirical implementation. Their contribution is in pointing out issues in translating theoretical propositions and conceptual frameworks into more practical insights – and perhaps preferably applicable to managers, which bolsters the need of empirical evidence toward practicality in management settings and real-world business operations.


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More recent literature continues to refine the concepts and links. Kaufmann (2004) advocated a distinction between reactive and proactive creativity because their diference in style is consistent and methodologically and empirically proven as against the adaptor-innovator theory of creativity. Gilson & Shalley (2004) proposed an interesting insight that team members who perceive their job as one that demands high creativity, high interdependence and shared goals tend to value participative problem-solving and a climate supportive of creativity. As a matter of fact, those creative team members have tendency to spend more time and effort socializing with each other. If such attitudes emerge from an entrepreneurial workplace setting, perhaps they could be extended to other settings, such as in economic development, which the paper addresses in the the last subsection. Miron, Erez & Naveh (2004) added more insight about how personal creativity capability and cultural values promote innovation, quality and efficiency. They show that although critically important to organization’s innovations, creativity alone does not suffice to achieve innovative performance. Creative figures are not necessarily the most innovative ones in terms of performance, partly because innovative behaviors are influenced greatly by the degree of supportiveness that specific organizational culture values exhibit. Work by Peters (2009) helps explain the previous point by Miron, Erez & Naveh (2004) by dealing with the so-called ‘economy of passions’ in a close relationship with education and creativity. Peters (2009) confirms that human creativity is the ultimate resource for economic development. However, the ‘personal anarcho-aesthetics’ traits of creativity – believed to have emerged from German idealism and Romanticism – tend to advocate a generally accepted hypothesis that sources of creativity power emerge from deep subconscious processes, involving imaginations, are deeply rooted in personal passions. They could hardly be directed or controlled by others and even the creative person herself. Properties of such as a person naturally fit well with an opening business settings, where constructive brainstorming, open strategic planning and entrepreneurial risk-taking capability are accepted and encouraged. Entrepreneurship – with startup cultural traits remain in the business – that promotes cultures of lower power distance, better risk tolerance and higher individualism, should naturally foster the novelty of business ideas, and production/service methods. Going deeper into the advances of creativity research, from McAdam & Keogh (2004) further elaboration on implementability of creativity and innovation in business conducting, we recognize the following process model (shown in Fig. 2), representing a complex mix of elements constituting the so-called ‘transitional dynamics’ from creativity to innovations.

Figure 3 – A Process Model of Creativity and Innovation3

3 This diagram is adapted from McAdam & Keogh (2004), pg. 128.


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McAdam and Keogh (2004) also suggested that innovation cannot be seen as obvious even in those highly creative organizations, with talented and creative people. Innovations are not events taking place at separate points in time, but instead should be regarded as outcome of a constant change management process, where creative ideas serve as an important input in the first place only. However, evidence from Egan (2005) suggests that creative people belong to a rare breed, and thus innovations are the scarce ultimate resources, which explain why firms have to spend a lot of money to acquire. There is evidence confirming the proposition that creativity tends to be enhanced with positive role-modeling, noncontrolling feedback behavior, and supported by people’s perceptions that creativity is valued. In short, when creativity and innovations become a strategic goal, they could at the same time become values and resources in appropriate settings. Also the diagram from McAdam and Keogh (2004) should be combined with West (2002) to show conditions for successful implementation of innovations from initial creative ideas, namely: Characteristics of task, knowledge and skill diversity, external demands, integrating group processes and intragroup safety. In West’s examinvation, although diversity of knowledge and skills is a powerful predictor of innovation, processes employed by groups and core competency are factors that determine the success of innovation. Amabile et al. (2005) also explored how affect relates to creativity at work. Their results suggest that affect correlates positively to creativity within organizations and that positive affect could represent antecedent of creative thoughts with some time lag for the so-called ‘incubation period.’ Regarding the psychology at work, Probst et al. (2007) looked at productivity, counterproductivity and creativity through the lens of ‘job insecurity’ to conclude that job insecurity can possibly hamper personnel’s creative power. However, since insecurity may have some moderately beneficial effects on productivity, the balancing between negative effect on creativity and somewhat positive on productivity should be relevant to a business operation, especially in entrepreneurial stage of growth and in turbulent economic changes. De Dreu (2010) draws on a representation of C(reativity) = N(ovelty)×U(sefulness) to postulate that for creativity to take place, both novelty and usefulness are needed. More interesting, Dreu’s work stresses an implementable analysis of possible cultural influences on creativity, leading to the remark that culture may influence the assessment of novelty, of usefulness, or both. The reasons for that critical role by culture are because “individuals have strong incentives to stick to the status quo, to engage in habituated action, to follow the well-trodden path, and to conform to the views and perspectives of the majority.” Therefore, it is logical that businesses have little


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choice but to nurture factors that could exert their own ‘exogenous influences’ on innovative capacity of an organization, namely organizational structures, group pressures and normative social influences relevant to cultural backgrounds of individuals. Unsworth & Clegg (2010) examined the motivation for people to undertake creative actions at work: “… General work motivation, creativity requirements, cultural support for creativity, time resources, and autonomy were all used as cues in deciding whether undertaking creative action would be worthwhile via judgmental processes of expectancy and instrumentality.” This finding is useful because it can be seen as a bold step toward practicality and usability of creative forces at work, from the previous seminal work by Unsworth (2001) “Unpacking Creativity.” In Unsworth (2001) the assumption of creativity as a homogenous construct is challenged by proposing dimensions of ‘Why engage in creativity?’ and ‘What is the initial state of the trigger?’ to construct a matrix of creativity types, where main types of creativity provided – namely responsive, expected, contributory, and proactive – gives rise to our re-consideration of practiciality of creativity/innovations in workplace. Barczak, Lassk and Mulki (2010) surveyed a group of 82 student teams at a large American university and yield findings that suggest that team emotional intelligence promotes team trust. Trust, in turn, fosters a collaborative culture which enhances the creativity of the team. In Chiu and Kwan (2010), a process model is examined to shed light on influence between cultures and creativity. They point out that cultures have profound impact on real-world knowledge creations. In addition, culture is the key factor that helps explain the complex creativity-culture relationship. Erez and Nouri (2010) examine the influence of cultural, social and work contexts to creativity of individuals and organizations. Since creativity could be viewed as having one of the two or both key components of idea novelty and usefulness, they suggest that depending on what cultural milieu one lives in, he/she could have tendency toward one type of creativity or another. Bissola and Imperatori (2011) showed that creativity is not only about creative genius. Enhancing creativity requires, of course, creative skills, and also team dynamics and organizational solutions. An organization’s collective performance that produces creativity and innovations should be an interaction between the above key elements. Most recently, viewing creativity/innovations as methodological process, Vuong, Napier and Tran (2012) suggested that there is a relationship between culture, creativity and business development stage. Empirical evidence from a business survey supports the idea that creativity plays a critical role in the ‘entrepreneurial stage’ of a business lifecycle, when cultural values and entrepreneurship pursuit in specific contexts help determine goals, plans and methods to implement. To a certain extent, this complements well to Vuong et al. (2011), which the authors developed a framework considering political decisions of major changes as an ‘entrepreneurial process’ that adopts useful new ideas of economic management, builds foundations and lines up for political supports, which help lead Vietnam’s then centrally planned economy to trigger the 1986 reform ‘big bang’ for vibrant transformation toward the currently mixed market economy, with market components assuming increasingly important roles for development.


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“Perfect storm” that stirs up economic transition As Greenfield and Strickon (1981) argued, the entrepreneurial mechanism can transform a society from one stage to another. Entrepreneurs possess unique characteristics of risk appetite, alertness to new opportunities, and creativity/innovation capacity to turn them into lucrative commercialization. In addition, Sternberg andLubart (1993) add more insights in their work titled “Investing in Creativity,” in which they propose a way of thinking that is very close to our entrepreneurship-creativity nexus. They suggested that “when making any kind of investment, including creative investment, people should ‘buy low and sell high.’… The greatest creative contributions can generally be made in areas or with ideas that at a given time are undervalued...” They describe six resources as intelligence, knowledge, thinking styles, personality, motivation and environment, which when combined together could yield the desired creative performance. Societies that are in bad need of economic development may be contrained by lack of creative performance, and not coincidentally also a lack of entrepreneurial forces that could bring about significant changes to productivity, innovations and positive developmental impacts such as jobs and income to masses. Creative performance has been elusive due to the common confusion of adaption and origination concepts, and that is why Udwadua (1990) focuses on “3P” aspects of creativity, namely process, person and product. Udwadua explicitly states creativity as the production of novel/original ideas of useful value, which shows the tendency of associating creativity with innovation capability. Udwadua’s view that creativity can be regarded as a basic element in a model of generating innovations in a broader macro-level consideration – where one can see contributions of each aspect of creativity to the innovation process. It ties to Lumpkin and Dess’s (1996) idea of establishing connection between the entrepreneurial orientation (EO) to firm-level performance. They link the EO to firm performance through clarifying its construct and propose different dimensions of the EO, namely Autonomy, Innovativeness, Risk Taking, Proactiveness, Competitive Aggressiveness. A typical EO construct is one that represents a new venture, but not limited to that. An EO can serve as a source of competitive advantage not only for an entrepreneurial firm, but also established businesses. The authors suggest that no universal relationship should be articulated between an EO and firm’s performance, and such relationship has to been observed in specific context. Also the above-mentioned EO dimensions are not equally important or equally influential across phases and places of business, but vary in different contexts. Human creativity embedded in entrepreneurial spirit can become a basic element of a perfect storm that helps transform a society in a large scale, as what described in Birzer (1999). Brizner discusses suggests that the legendary American West’s entrepreneurship – well known through Hollywood’s movies such as those directed by Clint Eastwood – can be seen as an expansion of the ‘creative destruction power’ through entrepreneurial acts performed by a vast number of Americans, which became one of the most pervasive activities that people undertake. Clearly, private commercial gains from market transactions are behind all these risk-taking behaviors and most of entrepreneurs were not concerned with ideologies whatsoever when committed to pursuing business opportunities.


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In Asia, the importance of entrepreneurship manifests itself through an economic phenomenon called ‘SMEs,’ whose population accounts for 90% of the total number of firms on Asian economies collectively, and employ up 32 to 84% of employment in APEC economies, as reported by the Asia Pacific Economic Cooperation Survey in 1994 (Faustino 2005). The increasing economic power of East Asia – especially that possessed by China – is doubtless a logical consequence of a staggering explosion of entrepreneurial endeavors by hundreds of millions of people. Changes that entrepreneurship brings about do not stop with influences within the startup and venture circles, but trigger a contagion to the community of well established corporations, including MNC’s, through the notion of ‘international entrepreneurship’ reported by McDougall and Oviatt (2000). In addition, Ahuja andLampert (2001) deals with such important, and highly practical, issues of whether and how established corporations could make breakthrough innovations occur, by relying on the concept of ‘entrepreneurial corporation.’ When successful firms re-establish the entrepreneurial spirit, thus enhancing creativity capability, they work hard to avoid the so-called familiarity trap, maturity trap and propinquity trap. These traps have been along the earlier successes of accomplished businesses and inhibit the activating of entrepreneurship inside corporations, thus impede creative breakthroughs from happening, when and where they are most needed. It is not hard to see that historically cultural differences played a significant role in defining the deviation of progress and prosperity between the East and the West. If Birzner (1999) tells us about the entrepreneurial spirit embedded in even system value of both society and government of the U.S., Worris and Leung (2010) showcases that differences in creativity between the East and the West do exist and could be examined based on cultural differences and society’s stress more on novelty/originality or usefulness/appropriateness when dealing with creativity matter. Social norms and actual contexts also help predict cultural differences. Looking back upon the late nineteen century’s colonialization of East Asian countries (e.g., China, Vietnam, South Korea, lower ranking of entrepreneurial classes in the socities exhibit a key difference, which hinders entrepreneurial undertaking and impedes innovations, even adaption of existing innovations, from occurring. Vibrant transition taking place in then more powerful East Asian economies, such as Japan, in fact benefits from an ideological change of the elite circle, whose senior members recognized values of entrepreneurship and tried to institutionalize a civil society where innovations and creative performance were desired. The analytical basis of this can be found in Isaksen and Ekvall (2010). In the case of Vietnam and China, embarking on the economic transition requires more than a political will by the elite circle to make changes toward more entrepreneurship-enabling environment. These are communist societies employing doctrines of distinguishing social classes, and the coherent notion of ‘class struggle.’ Therefore, there are more things to be fixed, and one of such big fixes is the established SOEs – officially announced as economic pillar of the government’s economic strength. These SOEs are adequately financed by the government in order to undertake the so-called ‘political tasks’ and entitled to privileges and special pecuniary rights. They together form large systems, with strong institutional rigidity, and are regarded as having dominant roles in the society. Thus, they produce anti-entrepreneur climate and this


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attitude persists, according Jackson and Rodkey (1994), who investigated attitudinal climate that when taken collectively would enable and support creative act. They cited four elements characterizing this climate: i) The willingness to take risks and accept the possibility of failure; ii) The perceived difficulty of starting a venture; iii) The importance and respect accorded to new and small firms and their owners; and, iv) The socialization children are likely to receive from their parents.They found that, typically, large organizations and regions dominated by large firms tend to produce an environment that shows lower pro-entrepreneurial attitudes, even in entrepreneurial firms. In this discussion of relevant theoretical issues, we want to emphasize the entrepreneurial spirit-creativity helps constitute a genuine socio-economic transition toward a more prosperous market economy. In short, like Vuong et al (2011) point out, political entrepreneurs and entrepreneurial undertaking managerial innovations, even in a very harsh economic reality, could be prerequisites for a reform in Vietnam. Given the chaotic economic climate, perhaps a perfect storm brings all of the key points together and stirs up the whole process of transition. On the inevitable transition For a transition economy like Vietnam, the transition path should be geared toward a higher added-value entrepreneurial society, using better efficient innovation systems, as Silberman (1956) suggested when he examined entrepreneurship in the context of post-WWII economic recovery. Silberman proposed “industrialization as the principal content of entrepreneurship.” A more modern concept of comparative entrepreneurship framework comes from Baker, Gedajlovic andLubatkin (2005). They offer insights on cross-national variation in different processes of their entrepreneurship framework, namely (i) discovery, (ii) evaluation and (iii) exploitation of entrepreneurial opportunities, based on their ‘Comparative Discovery, Evaluation and Exploitation’ model (CDEE). The CDEE considers ‘who discovers what’ in the process (i), which employs the concept of labor division. Process (ii) relates to the ‘why” questions while evaluating a new opportunity, and focusing on opportunity costs, appropriability of returns. And, the last process deals with the ‘how’s’ analyzing whether resource availability and specificity are supportive of exploiting that opportunity. These authors stress the importance of social context in understanding why enterprising individuals and entrepreneurial opportunities relate to each other. This nexus could also be dominated by social structures, sometimes. At a societal level, Bohm (1968) raises the question of what may prevent the vast majority of people in a country from being creative: “The creative possibilities of the mind are generally dormant” as a result of a widespread confusion between ‘the creative’ and ‘the mechanical.’ In his thought, this confusion is so persistent and deep that one could hardly perceive one’s lack of creativity. Awakening that entrepreneurial power requires creative performance of entrepreneurs. Perhaps a transition economy in such chaotic period like Vietnam from 2007 to 2012 may take lessons from the history of more advanced economies like the United States (Perkins, 1989). Perkins (1989) portrays the entrepreneurial spirit of America as the foundations of modern business originated in the colonial times, starting with entrepreneurial attitudes and pervasive strategies for upward economic mobility in the first two centuries of European settlement. Interestingly, the author states that these entrepreneurial attributes are not only shared among merchants, but also by artisans, farmers and even a few exceptional slaves in the urban self-hire


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market. The outcome was the revolutionary character of the American economic system. Inheriting from this depth of business values within the society, the U.S. socio-economic and political system are heavily imbrued with entrepreneurial values, and promotes positive attitudes toward the accumulation of wealth. Perkins’s portraits of the entrepreneurial spirit of the U.S. contrast with Leff (1979) where entrepreneurship is regarded as somewhat outdated and outside mainstream economics. Leff (1979) articulates that for less developed countries (LDC’s), the pursuit of economic development has largely overlooked the importance of entrepreneurship, although the lack of it has for long been identified as a serious barrier for development. Entrepreneurs may – and to a large extent does – act as the promoter and catalyst that seize a new and risky investment opportunity, which is otherwise rejected by a typical non-entrepreneur investor. This is exactly why entrepreneurship is so important for economic development and is even termed as ‘a fourth factor of production.’ But, in conclusion, Leff disagrees with the indispensability of entrepreneurship in LDC’s by even going as extreme as saying that “… In an ideal-type market system, without uncertainty, factor-market imperfections, and externalities, entrepreneurship would not be necessary. These conditions are clearly not satisfied in the LDC’s. But government interventionism… emerged to substitute both for a perfect market and for pure entrepreneurship…” However, the economic conditions and analytical paradigms for understanding entrepreneurship have both changed significantly, making most of Leff’s conclusions no longer relevant. Of course, later both arguments from Perkins (1989) and Birzner (1999), and a great many more, nullify Leff’s assertion of irrelevance of entrepreneurship amid the wave of the increasing influence of the postwar Keynesian interventionism. Entering the fast-changing period of the global economy, scholars also keep coming back to basic ideas and concepts such as those developed by Adam Smith. Rothschild (1992) discusses Adam Smith’s perception that free trade should help prevent famine and scarcity, and freedom is much less cruel for the poor than the policies of an oppressive government. In her view, Smith missed the distinction between economic freedom as an end and political freedom as a means in his entire thesis, although he asserted that freedom was good for prosperity. As to Rothschild’s observation, our view is that entrepreneurship exists even in the toughest business environment, although its creative power and risk appetite could be limited greatly by an unfavorable setting and distorted by negative cultural influence as described in Vuong and Tran (2009). In fact, the strict rules on private-sector economy directed at private SMEs in large urban areas such as Saigon and Hanoi, propagated by the Vietnamese senior politicians in the post-American war period from 1976-1985, never stopped entrepreneurial undertaking within the society, although they did adversely affect the business life. The entrepreneurial spirit that persisted within the populace seemed to wait for the rules to be relaxed to turn societal resources into economic progress. It appears to be happening in Vietnam now (Vuong et al., 2011). Of course, there are issues with quality and even ethics of entrepreneurship in harsh conditions as argued in Hannafey (2003), who suggested that entrepreneurial effort may instinctually lead to organizational ethics not significantly different from generally accepted ones. However, entrepreneurs’ perceptions and practices of business ethics could be complicated within harsh entrepreneurial realities. Another relevant issue for our discussion of the inevitable transition of Vietnam’s economy toward one filled with “entrepreneurial-creativity particles” is raised by Thornton (1999).


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Thornton classifies the entrepreneurship literature into two schools of supply-side and demand-side perspective, where the former stresses the availability of entrepreneurs to undertake the roles, and the latter focuses on universal roles (and their nature) that some entrepreneurs are willing and able to assume. Freedom in what Rothschild (1992) discusses has something to deal with Thornton’s idea of classification and the practicality in the Vietnamese transition. Without freedom, both supply-side and demand-side aspects of Thornton are difficult to be determined, or even observed. Also, Peng andShekshnia (2001) proposed that the starting point for the entrepreneurship rationale to appear in pre-transition communist societies such as China, Russia, and Vietnam, is the continued deterioration of the state sector, following which the failure of SOEs has served as a ‘push factor.’ The capitalist model, which we could consider a ‘pull factor’ (Peng andShekshnia, 2001) is first presented through job employment and income generation by entrepreneurial firms. When entrepreneurship forces prove that they could offset negative impacts of the state sector’s economic drawbacks, they quietly emerge to become the backbone of most transition economies. In fact, turbulence caused by environmental complexity and unpredictability can serve as a major catalyst for entrepreneurial undertaking, or as Peng andShekshnia (2001) assert “the more dynamic, hostile, and complex the environment, the higher the level of innovation, risk-taking, and proactivity among the most successful entrepreneurial firms.” Examples of this could be observed easily in the Vietnamese economy, too. Entrepreneurship – as in their alternative forms and ownerships, superior efficiency – challenges and gradually kills the state-owned economic sector. Entrepreneurs do all this naturally through their competition, innovations for private gains, and are only guided by the market’s invisible hand. When critical mass appears, entrepreneurs collectively can be a key engine for a sweeping reform within transition economies, which helps speed up the transition process and build on a more enabling environment for both innovations and entrepreneurial undertakings in the future. Innovations at private entrepreneurship firms as shown in history should occur only in the right environment, where private ownership of properties is fully recognized and markets exist to allow for real competition. The Chinese aned Vietnamese realities about entrepreneurship are also discussed in McMillan and Woodruff (2002). Going back to the early days of private entrepreneurship in Vietnam’s economic reform, right in the critical phase of crisis from 1988 to 1992 – indeed on the verge of a devastating collapse – private-sector employment, then mostly entrepreneurial firms in micro-scale, added 6.4 million jobs to the economy (jumping from 3.8 to 10.2 million), while the state sector shed 1.1 million jobs (from 4.1 to 3.0 million), and state-managed cooperative sector slashed 2.1 million jobs (from 20.7 to 18.6 million). In the subsequent period from 1992 to 1995, 2.4 million jobs were further created by Vietnamese private SMEs. With respect of job insecurity, we can learn some useful insights from Probst et al. (2007) who look at productivity, counterproductivity and creativity through the lens of ‘job insecurity’ to conclude that job insecurity can possibly hamper personnel’s creative power. However, since insecurity may have some moderately beneficial effects on productivity, the balancing between negative effect on creativity and somewhat positive on productivity should be relevant to a business operation, especially in entrepreneurial stage of growth and in turbulent economic changes.


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Steer and Taussig (2002) emphasize the role of continuous reform that could help strengthen the entrepreneurial process of a transition economy like Vietnam, when citing the number of newborn entrepreneurial firms reaching -- 35,440 for just two years since the implementation of the new Enterprise Law in 2000. In fact, employment by the formal private sector in Vietnam doubled in the 1996-2000 period, despite facing major obstacles such as limited access to capital, overwhelming competition from SOEs – who are funded and enjoy policy supports from the government – and limited quality human capital. Or as Heberer and Kohl (2005) see it “entrepreneurship brings about changes in the value system,” and these mean a lot to the whole process of transitioning toward a full-functioning market model. However, the economic triumph of entrepreneurship – i.e., innovations, efficiency, job creation and social foundations – as described above should not be taken for granted, even if it is strongly supported by all-powerful political leader. During China’s Great Leap Forward period, for example, Mao Zedong himself publicly announced his support for small industries, even in micro scale at households, through the state propaganda. Even so, entrepreneurship and innovation did not occur (Riskin 1971). In fact, as pointed out by Naughton and Lardy (1996), in the re-emergence of China itself as a prospective trading nations, entrepreneurs have played a critically important roles in making the reform succeed, starting with foreign entrepreneurs investing in the Chinese economy and local entrepreneurs taking part in a vast array of trade activities. This is what Mao did not have when he sought to stimulate entrepreneurial activities within his socialist model of small industries in early 1960s. In China, significant growth could be observed only after the 1978 reform (4 modernizations), and the foremost achievement should be 1.76 million private SMEs and 311 million households participating in all sorts of business at the turn of the millennium (Faustino 2005). We also learn from OECD (2005) publication that SMEs (comprising of entrepreneurship, innovative small firms) are confirmed to be capable of becoming superior in tersm of economic performance. Their share of contribution to incremental employment and productivity could well be the comparative advantages that societies should take up. These form today’s generally accepted agreement that entrepreneurial SMEs are an extremely important source of dynamism and innovations, not only in developing countries, but also advanced economies of the West. In simple terms, entrepreneurship is an action or process by which business goal setting, alertness to unexploited opportunities, creativity/innovation, and risk-taking help shape the determination of the entrepreneur to pursue a specific path of business conducting. But entrepreneurial behaviors can also occur within well-established (even highly accomplished) organizations, and thus are not just limited to start-up firms or early-stage SMEs. Systemization of innovations and commercialization of opportunities are key concern of not only SMEs but also larger and established firms. And these are also at the heart of what we normatively view as what an entrepreneurial process should be. Li, Feng and Jiang (2006) discuss ‘institutional entrepreneurs’ as those that help destroy institutional barriers so as to build newborn market institutions. Their argument could be particularly correct with emerging market economy like Vietnam, especially in vibrant phases of transition with more chaotic properties induced by abrupt changes and government failures like in the 2008-2012 period. In addition, Zhou and Shu (2010) observe that creativity refers to the


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generation of new and useful ideas. They point to the fact that social contexts of organizational relationships – leaders, supervisors, coworkers, and professional networks - have profound influences on employees’ creativity. And this is relevant since entrepreneurial firms can possess cultural traits that enable creativity and innovations. In addition, different cultures’ economic prosperity and social development depend on the creative expression of individuals in those cultures, especially managers and employees. This transition tends to lead to the so-called knowledge society, which should inherit from the idea of Murphy (2005) that the arts and the sciences serve to be the basis for the notion of “Knowledge Capitalism,” where the role of creativity and intelligencein is essential to modes of production built upon intellectual capital. Entrepreneurs have to play an important role, following their innovations as major contribution and due to their boundless influence, as the entrepreneurial spirit is not limited in the form of startup ventures. To this end, Stevenson and Jarillo (1990) emphasizes the management aspect of entrepreneurship that goes beyond the meaning of corporate venturing. By nature, it represents the quest for growth through innovations, with both technological and managerial inventions being a means. In light of this whether the pursuit of a new opportunity for growth is done through a corporate form or not does not matter much, but the path to the end itself already constitutes the core of entrepreneurship. An implication of this integrated review on both entrepreneurship and creativity/innovations is an unavoidable embarking on the transition process to a better functioning market economy, equipped with competitive entrepreneurship sector and better creative performance, if Vietnam is set to get out of the vicious circle of macro imbalances-budget deficit-crowding out entrepreneurial finance-wasteful use of scarce resources-macro imbalances. And this implication gives rise to the next discussion of data and analysis on perceptions about entrepreneurship and creativity/innovations in troubled times, using survey data collected and compiled in June 2012. 3. Survey of Vietnam’s Business Sector in 2012: Data and Analysis This section has two subsections, one on the surveying process and data presentation, and the other reporting some key insights obtained from the data treatment. Presentation of the data set The data set was obtained from an online survey, sent to local entrepreneurs and corporate managers using social networks, such as Facebook, Linkedin, and through emails. The surveying process started on February 16, 2012 and ended May 24, 2012. As shown in Fig. 4, most responses were collected within the first six weeks of the survey. At the end, 137 responses qualified for a statistical examination.

Figure 4 – Data reponse pattern


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Respondents also offered suggestions and opinions about both entrepreneurship and creativity, some quite lengthy, showing their interest in the topic. Among the 137 respondents, 41 are female and 96 male.

Figure 5 – Years in operations of surveyed firms

Fig. 5 provides a histogram of ‘years in operation’ for companies, whose managers/entrepreneurs participate in the survey. Most companies are young, less than 20 years. This information is relevant since the first private companies only came into existence in early 1990s. In fact, most firms participating in the survey have less than 10 years history, and this fact is suggestive because Vietnam’s new Enterprise Law, which streamlines setup and administrative procedures for startup firms, was only effective from the year 2000. Basic understandings from the survey data First off, it is noticeable that 68% of respondents noted that innovations taking place in the Vietnamese economy are the key driver for increasing Vietnamese per capita income by 10 times during the past years of reform. This majority agreement supports the idea of an entrepreneurship-innovation nexus as a key development engine. Among the respondents, 72% (98/137) confirm that their business operations can survive this turbulent period. Further, 66% of respondents say an enterprise has better creative performance in the entrepreneurial phase,

0

10

20

30

40

50

1 to 2 3 to 4 5 to 9 10 to 19 20+

Surveyed firms by years in operation


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while the other 34% observe that only established firms with sufficient financial and human resources are able to pursue innovations. Some 80% of managers say that sufficiency of resources, namely financial capital, physical resources such as land and equipment, and human resource, would determine the entrepreneur’s creative performance. Table 1 reports on how Vietnamese managers perceive creative performance of Vietnamese enterprises, compared to other ASEAN member nations.

Table 1 – Perceptions about Vietnamese creative performance Performance Responses Proportion

Superior 15 11% Average 85 62% Inferior 31 23% Don’t care 6 4%

With respect to the answers provided in Table 1, 68% of respondents believe they have evidence and information that support their assessment of comparative Vietnamese firms’ creative performance, and 32% say they do not. In exploring further perceptions about value-generating capacity of Vietnamese companies among sources proposed in Vuong et al. (2012), namely 3-D, Serendipity and Aha!Moment, the frequency distribution of responses is provided in Table 2.

Table 2 – Frequency distribution of creativity by method Method Responses Proportion

3-D 18 13% Aha!Moment 24 18% Serendipity 95 69%

In terms of the entrepreneurship-creativity nexus, 56% Vietnamese managers believe that creativity/innovations would lead to entrepreneurial opportunities, 31% say entrepreneurial settings enable creativity and innovations to occur. Only 12% do not believe in this nexus. Adapting from the idea that both appropriate cultural dimensions and creativity sources could become entrepreneurial resources, we use 7 categories of ‘resource’ including 3 cultural, 3 creativity sources and 1 ‘other’ to measure the tendency of the respondents in viewing business values, and tabulate the result in Table 3.


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Table 3 – One most important factor leading to a new venture decision Source (method) Responses Proportion

Creativity 43 31% 3-D 3 2%

Aha!Moment 12 9% Serendipity 28 20%

Cultural Dimension 88 65% Capital resource 23 17%

Relationship/Connection 53 39% Appropriate risk appetite 12 9%

Other factor 6 4% Note that Table 3 records assessments of managers about the most important perceived factor for an entrepreneurship decision before it occurs. However, business realities may change the entrepreneur’s mind, so we provide in Table 4 assessments about the single most important factor the entrepreneur realizes ‘during their actual implementation of business pursuit.’

Table 4 – One most important factor during actual implementation Source (method) Responses Proportion

Creativity 64 47% 3-D 3 2%


Cultural Dimension 73 53% Capital resource 15 11%


Other factor 0 0% Most heavily re-invested factor when firms start reaping some financial payoffs is provided in Table 5, where we observe most have tendency to invest in improving creative performance, using funds generated from business operation.

Table 5 – One most heavily re-invested factor Source (method) Responses Proportion

Creativity 85 3-D 13 9%


Cultural Dimension 42 Capital resource 7 5%


Other factor 10 7%


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However, not all investments produce the same results, in managers’ assessment. About the efficiency of the re-investment reflected through one factor that improve most after the reinvestment (we drop the ‘other factor’ choice):

Table 6 – Efficiency of re-investment Source (method) Responses Proportion

Creativity 3-D 8 6%


Cultural Dimension Capital resource 38 28%


Last but not least, we provide in Table 7 a summary of opinions that may characterize SOEs versus PSEs through maximally 3 factors belonging to 3 groups of dimension, namely creativity sources (3 categories), cultural values (3), and operation emphasis (2).

Table 7 – 3 most typical traits of SOEs vs. PSEs over the past years in transition Factors SOE PSE

Creativity 3-D 24 11

Aha!Moment 23 71 Serendipity 99 86

Cultural Dimension Capital resource 72 64

Relationship/Connection 101 32 Appropriate risk appetite 12 90

Operations Strategic vision 15 34

Efficient business process 31 26 Overall, distribution of responses over broader groups of dimension appears to be quite similar between SOEs and PSEs, especially in terms of proportion comparison. However, we can later examine in details to see if there is evidence of significant difference between some subgroup of categories which are meaningful to our understanding. Some propositions and statistical examination During the survey, when discussing purpose of this research with prospective respondents, we frequently encounter a relevant question (to the scope of our study) that if entrepreneur’s creativity is bounded by her limited access to required resources (which should not be taken for granted), then should there be a relation between that “bounded rationality” to whether creative performance tends to appear in entrepreneurial phase or only in established operation. Although


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the logic appears to be “yes,” we and the questioners are not quite confident. Thus we construct the following 2×2 table presented in A1. For this particular question, we perform an analysis on the above frequency distribution, to see a possibility of association (relation) between these two categorical variables. The odds-ratio of those who believe without necessary resources the entrepreneur’s creative performance is constrained to the odds-ratio of those who do not believe so is 1.6, with 95% confidence interval [0.6-4.0]. This interval cannot confirm that this odds ratio is significantly greater than 1, thus we cannot decisively agree with the previous prediction of association (see A1.Q1). The second hypothesis raised by many practitioners in different businesses, as well as the public, is that if creativity is the decisive factor for a drive to entrepreneurship (or else, sufficiency of business resources) then creative performance should appear right in the entrepreneurial stage of the development (or else). Our data treatment with the response leads to the 2×2 contingency table provided in Appendix A1.Q2. Again, through our statistical examination, this data input has rejected the hypothesis since our statistical check reports the odds ratio of 0.75 while 95% confidence interval is [0.35, 1.6]. With odds ratio being smaller 1 and the reported 95% interval, our survey data cannot support the hypothesis. Next, we move to consider our own propositions that – if supported – would enhance our understanding about the “entrepreneurship-creativity tango” whereas the previously encountered questions are rejected. We propose issues that are relevant to both the entrepreneurship-innovation concerns and the transition of the Vietnamese economy, reflected in three propositions presented below. * Proposition 1

: If creativity/innovation is a critical driver for household income growth, a confirmed relationship between the belief in value of creativity/innovations and the concern of “entrepreneurial creativity bounded by resource limits” makes creativity/innovation effort by the entrepreneur a self-fulfilling prophecy.

* Proposition 2

: If a causal relationship exists between Entrepreneurship and Creativity – one direction or another –then in a new venture, such a relationship is associated with the most important factor making the venture happen, if that factor is classified into either creativity or cultural values category.

* Proposition 3

: If a causal relationship between Entrepreneurship and Creativity exists, one direction or another, then that relationship is closely associated with both stages of business development, namely entrepreneurial (E) and established business (B).

The data treatment for Proposition 1 to 3 are provided in Appendixes A2.H3 to A2.H5, each with a contingency table (with count data) and an estimation, which is performed to examine the statistical significance of the relationship stated in each Proposition. Technical details for this type of data analysis could be consulted with Agresti (2002); and Azen and Walker (2011) also provide a practical guide with ready-to-use SAS commands. For a


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similar treatment of data on related topics, see also Vuong, Napier andTran (2012). Estimates provided in Table 8 are just a very short summary of different estimations, using SAS.

Table 8 – Reported statistics for testing Proposition 1-3. 𝑮𝟐~𝝌𝟐

(𝒅𝒇 = 𝟏) p-Value Fisher’s

p-Value Sample

size Association (alternative)

Proposition 1 5.7 0.017 0.021 137 Confirmed Proposition 2 135.8 <0.001 <0.001 106 Confirmed Proposition 3 149.8 <0.001 <0.001 120 Confirmed Note: Fisher’s p-Value is two-tailed. Sample size varies between estimations due to removing responses that do not fall into relevant categories in our consideration.

The main statistic for our testing the validity of the null hypothesis – with these propositions being “independence” – is the likelihood ratio test statistic 𝐺2~𝜒2 with one degree of freedom (𝑑𝑓 = 1). Results reported in Table 8 say that, our survey data have supported the Propositions from 3 to 5 stating about likelihood of relational associations between entrepreneurship and creativity. While our propositions are purely theoretical, the reported statistics are positive evidence confirmed by observed data. All the associations seen in Table 8 are significant at any conventional level, except only Proposition 1, where estimation shows a 5% significance level. 4. Concluding Remarks We also notice that 94% respondents agree that market competition will rise and push firms to take the creativity/innovation seriously as matter of life and death. Through our consideration of our data set on Vietnam’s business sector in chaotic year 2012, and in line with a thorough literature survey, we realize that creativity methods as described in Napier and Nilsson (2008), Napier (2010) together with three most common and influential cultural values of the Vietnamese business community capture well most important factors that drive the decision to become entrepreneur. The single most important factor before the startup and during the implementation process is “connection/relationship.” However, businesspeople are increasingly aware of the need of creavity/innovation. The last three propositions are meaningful because we now confirm that for business operation, the creativity and entrepreneurial spirit could hardly be separate; and from our survey data, this is not only correct with entrepreneurial firm, but also well established companies. So, we can safely say: “It takes two to tango.” * Acknowledgement: The research is partly supported by Trung Nguyen Research Foundation and the Centre for Creativity and Innovation (Boise State University). We would like to thank Tran Tri Dung and Nguyen T.C. Ha (DHVP Research) for assistance in preparing research data and literature.


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APPENDIXES A1. Question 1

Phase B E

Entrepreneur Creativity limited by resources avail.

Yes 39 71 No 7 20

The FREQ Procedure Table of CreNRes by Phase CreNRes Phase


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Frequency | Expected | Deviation | Cell Chi-Square| Percent | Row Pct | Col Pct |B |E | Total ---------------ˆ--------ˆ--------ˆ Y | 39 | 71 | 110 | 36.934 | 73.066 | | 2.0657 | -2.066 | | 0.1155 | 0.0584 | | 28.47 | 51.82 | 80.29 | 35.45 | 64.55 | | 84.78 | 78.02 | ---------------ˆ--------ˆ--------ˆ N | 7 | 20 | 27 | 9.0657 | 17.934 | | -2.066 | 2.0657 | | 0.4707 | 0.2379 | | 5.11 | 14.60 | 19.71 | 25.93 | 74.07 | | 15.22 | 21.98 | ---------------ˆ--------ˆ--------ˆ Total 46 91 137 33.58 66.42 100.00 Statistics for Table of CreNRes by Phase Statistic DF Value Prob ------------------------------------------------------ Chi-Square 1 0.8825 0.3475 Likelihood Ratio Chi-Square 1 0.9128 0.3394 Continuity Adj. Chi-Square 1 0.5070 0.4764 Mantel-Haenszel Chi-Square 1 0.8761 0.3493 Phi Coefficient 0.0803 Contingency Coefficient 0.0800 Cramer's V 0.0803 Fisher's Exact Test ---------------------------------- Cell (1,1) Frequency (F) 39 Left-sided Pr <= F 0.8797 Right-sided Pr >= F 0.2409 Table Probability (P) 0.1207 Two-sided Pr <= P 0.4955 Estimates of the Relative Risk (Row1/Row2) Type of Study Value 95% Confidence Limits ----------------------------------------------------------------- Case-Control (Odds Ratio) 1.5694 0.6099 4.0387 Cohort (Col1 Risk) 1.3675 0.6889 2.7146 Cohort (Col2 Risk) 0.8714 0.6701 1.1331 Sample Size = 137


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A1. Question 2

Phase E B

Decisive Factor for entrepreneurship

Creativity 29 14 Resources 86 31

The FREQ Procedure Statistics for Table of EntFac by Phase Statistic DF Value Prob ------------------------------------------------------ Chi-Square 1 0.5717 0.4496 Likelihood Ratio Chi-Square 1 0.5614 0.4537 Continuity Adj. Chi-Square 1 0.3111 0.5770 Mantel-Haenszel Chi-Square 1 0.5681 0.4510 Phi Coefficient -0.0598 Contingency Coefficient 0.0597 Cramer's V -0.0598 Fisher's Exact Test ---------------------------------- Cell (1,1) Frequency (F) 29 Left-sided Pr <= F 0.2855 Right-sided Pr >= F 0.8304 Table Probability (P) 0.1159 Two-sided Pr <= P 0.5521 Estimates of the Relative Risk (Row1/Row2) Type of Study Value 95% Confidence Limits ----------------------------------------------------------------- Case-Control (Odds Ratio) 0.7467 0.3497 1.5943 Cohort (Col1 Risk) 0.9175 0.7258 1.1599 Cohort (Col2 Risk) 1.2288 0.7266 2.0783 Sample Size = 160 A2. Hypothesis 3

Income due to Innovations Yes No

Entrepreneurship Creativity needs resources

Yes 80 30 No 13 14

The FREQ Procedure Table of CreNRes by Income CreNRes Income Frequency | Expected | Deviation | Cell Chi-Square| Percent |


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Row Pct | Col Pct |Y |N | Total ---------------ˆ--------ˆ--------ˆ Y | 80 | 30 | 110 | 74.672 | 35.328 | | 5.3285 | -5.328 | | 0.3802 | 0.8037 | | 58.39 | 21.90 | 80.29 | 72.73 | 27.27 | | 86.02 | 68.18 | ---------------ˆ--------ˆ--------ˆ N | 13 | 14 | 27 | 18.328 | 8.6715 | | -5.328 | 5.3285 | | 1.5491 | 3.2742 | | 9.49 | 10.22 | 19.71 | 48.15 | 51.85 | | 13.98 | 31.82 | ---------------ˆ--------ˆ--------ˆ Total 93 44 137 67.88 32.12 100.00 The FREQ Procedure Statistics for Table of CreNRes by Income Statistic DF Value Prob ------------------------------------------------------ Chi-Square 1 6.0072 0.0142 Likelihood Ratio Chi-Square 1 5.7001 0.0170 Continuity Adj. Chi-Square 1 4.9327 0.0264 Mantel-Haenszel Chi-Square 1 5.9634 0.0146 Phi Coefficient 0.2094 Contingency Coefficient 0.2050 Cramer's V 0.2094 Fisher's Exact Test ---------------------------------- Cell (1,1) Frequency (F) 80 Left-sided Pr <= F 0.9956 Right-sided Pr >= F 0.0147 Table Probability (P) 0.0103 Two-sided Pr <= P 0.0208 Estimates of the Relative Risk (Row1/Row2) Type of Study Value 95% Confidence Limits ----------------------------------------------------------------- Case-Control (Odds Ratio) 2.8718 1.2108 6.8116 Cohort (Col1 Risk) 1.5105 1.0046 2.2711 Cohort (Col2 Risk) 0.5260 0.3272 0.8454 Sample Size = 137 A2. Hypothesis 4

Causal C to E E to C


31

Decisive Factor for entrepreneurship

Creativity 21 15 Resource 52 18

Table of EntFac by Causal EntFac Causal Frequency | Expected | Deviation | Cell Chi-Square| Percent | Row Pct | Col Pct |C2E |E2C | Total ---------------ˆ--------ˆ--------ˆ Creat | 36 | 0 | 36 | 12.226 | 23.774 | | 23.774 | -23.77 | | 46.226 | 23.774 | | 33.96 | 0.00 | 33.96 | 100.00 | 0.00 | | 100.00 | 0.00 | ---------------ˆ--------ˆ--------ˆ Res | 0 | 70 | 70 | 23.774 | 46.226 | | -23.77 | 23.774 | | 23.774 | 12.226 | | 0.00 | 66.04 | 66.04 | 0.00 | 100.00 | | 0.00 | 100.00 | ---------------ˆ--------ˆ--------ˆ Total 36 70 106 33.96 66.04 100.00 Statistics for Table of EntFac by Causal Statistic DF Value Prob ------------------------------------------------------ Chi-Square 1 106.0000 <.0001 Likelihood Ratio Chi-Square 1 135.8464 <.0001 Continuity Adj. Chi-Square 1 101.5882 <.0001 Mantel-Haenszel Chi-Square 1 105.0000 <.0001 Phi Coefficient 1.0000 Contingency Coefficient 0.7071 Cramer's V 1.0000 Fisher's Exact Test ---------------------------------- Cell (1,1) Frequency (F) 36 Left-sided Pr <= F 1.0000 Right-sided Pr >= F 3.887E-29 Table Probability (P) 9.796E-26 Two-sided Pr <= P 3.887E-29 Sample Size = 106 A2. Hypothesis 5


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Causal C to E E to C

Phase B 22 16 E 55 27

Table of Phase by Causal Phase Causal Frequency | Expected | Deviation | Cell Chi-Square| Percent | Row Pct | Col Pct |C2E |E2C | Total ---------------ˆ--------ˆ--------ˆ B | 38 | 0 | 38 | 12.033 | 25.967 | | 25.967 | -25.97 | | 56.033 | 25.967 | | 31.67 | 0.00 | 31.67 | 100.00 | 0.00 | | 100.00 | 0.00 | ---------------ˆ--------ˆ--------ˆ E | 0 | 82 | 82 | 25.967 | 56.033 | | -25.97 | 25.967 | | 25.967 | 12.033 | | 0.00 | 68.33 | 68.33 | 0.00 | 100.00 | | 0.00 | 100.00 | ---------------ˆ--------ˆ--------ˆ Total 38 82 120 31.67 68.33 100.00 Statistics for Table of Phase by Causal Statistic DF Value Prob ------------------------------------------------------ Chi-Square 1 120.0000 <.0001 Likelihood Ratio Chi-Square 1 149.8395 <.0001 Continuity Adj. Chi-Square 1 115.4232 <.0001 Mantel-Haenszel Chi-Square 1 119.0000 <.0001 Phi Coefficient 1.0000 Contingency Coefficient 0.7071 Cramer's V 1.0000 Fisher's Exact Test ---------------------------------- Cell (1,1) Frequency (F) 38 Left-sided Pr <= F 1.0000 Right-sided Pr >= F 3.717E-32 Table Probability (P) 1.158E-28 Two-sided Pr <= P 3.717E-32 Sample Size = 120

it takes two to tango: entrepreneurship and … takes two to tango: entrepreneurship and creativity...

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