Measuring Barriers to Entry and Small Business Graduation
Abstract
This proposed research effort seeks to garner information crucial to understanding economic growth for new entrants and small businesses in various markets across the economy. While U.S. government small business policy aims to promote the establishment of small businesses in both commercial and federal markets, obstacles for small businesses and other new entrants persist throughout the economy. Namely, market barriers to entry and the challenge of growing beyond small business status. To further understand the issues that build these obstacles, the Center for Strategic and International Studies (CSIS) offers this proposal to study the research problem of barriers to the entrances, exits, and status changes among commercial and federal venders with the objective of measuring the magnitude of challenges for small businesses compared to bigger ones, and challenges to of vendors of all sizes to enter markets and grow. To achieve the aforementioned goals, the study team’s technical approach will first seek to identify the specific sectors of both commercial and federal markets most useful for analysis. Second, the study team will seek to develop metrics for measuring small businesses, such as measures of small business graduation and when small businesses are bought out by bigger ones. Third, the study team will focus on determining how many new entities become commercial and federal contractors, whether they are able to sustain their business in their respective market sectors, and how this changes across sectors and federal departments. Measuring these market trends over time should allow the study team to evaluate the magnitude of challenges facing small businesses such as market barriers to entry and growing beyond small business status. Fourth, this research effort will seek to identify the different market characteristics that affect new entrants’ ability to achieve success or those characteristics that affect business success and growth in new markets at all. The anticipated outcome of this research should allow for the comparison of sustainment and growth rates across different sectors of the market to empirically evaluate the different magnitudes of barriers to entry across sectors. No substantial involvement by the Government is required. This research seeks to further enhance understanding of economics, organizational theory, and the effects of government policy on industry. Implications of this research can inform private sector decisions about market strategy and business model selection. Additionally, this research will illuminate further understanding of barriers to entry confronting firms considering the federal contracting sector. The federal contracting sector constitutes a significant share of the economy and is of direct interest to current and potential federal contractors. While the existence of barriers to entry is acknowledged, the differences between sectors and the likelihood of success for new businesses are not well understood. Finally, both public and private sector organizations pursue policies intended to expand their supplier base and to access innovation. This study will examine if characteristics, such as degree of competition or contract size, incentivize new entrants.
Document Details
- Document Type
- DoD Grant Award
- Publication Date
- Mar 09, 2017
- Source ID
- N002441710018
Entities
People
- Andrew Hunter
Organizations
- Center for Strategic and International Studies
- United States Department of Defense