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The Sport Industry and Entrepreneurship 2

2.1 Introduction

Sport is one of the largest and fastest growing industries in the world. Most aspects

of sport from changes to challenges affecting the industry can be studied as forms of

entrepreneurship. Phan et al. (2010: 175) states that “in the business disciplines,

research in entrepreneurship distinguishes itself by its concern with the interactions

between individuals, processes and institutions in the emergence of new

organizations, and new organizational forms that create economic wealth”. Sports

can be classified as mainstream or non-mainstream according to its popularity and

also newness. Mainstream sports are better known amongst the public for the teams

and athletes that are involved in the games. Typical mainstream sports include

football and tennis as they have been played for a long time and are usually popular

regardless of geographic location. In addition, mainstream sports have players that

can become celebrities due to their skills in the game and popularity off the field.

Non-mainstream sports are typically less accessible due to the costs involved or

knowledge about the sport. This has meant that there is a degree of edginess

towards non-mainstream sports as they are played in a different way or involve a

different demographic group.

Entrepreneurship is embedded in this history and evolution of the sport industry.

To understand the future of sport there needs to be more attention placed on

entrepreneurship. This includes improving the incentives for sports entrepreneur-

ship. In addition, sport provides a valuable way for entrepreneurship to be applied,

which this chapter will discuss. Sport entrepreneurs are often motivated by lifestyle

reasons such as improved quality of life and the pursuit of personal happiness.

However, the sport industry in terms of its structure influences the way lifestyle

entrepreneurs form businesses as a way to earn a comfortable living but in line with

their personal beliefs.

This chapter will discuss the uniqueness of the sport industry and its develop-

ment in terms of entrepreneurship. The history and review of the sport industry is

motivated by there being a lack of understanding about what impacts sport as an

entrepreneurial endeavour. Current work on sports entrepreneurship is fragmented

# Springer International Publishing AG 2018 V. Ratten, Sport Entrepreneurship, Management for Professionals, https://doi.org/10.1007/978-3-319-73010-3_2

19

and lacking in rich discussion about how it contributes to the more general

entrepreneurship theory. Thus, there is a need for more clarity about what is

distinctive about sports entrepreneurship as a way to move the field forward.

More scholars need to focus on how the sport industry influences entrepreneurship

as way to identify how it is a unifying framework for both sport and entrepreneur-

ship scholars. This will help to establish the distinctiveness of the sport entre-

preneurship discipline.

2.2 Sport

Sport is different to a game as it normally involves some degree of physical activity

and overcoming another opponent. This means that physical fitness and ability is

important in sport and helps to distinguish it from other activities. In sport, there is

deliberate physical action that enables an athlete to manipulate themselves to win a

game. This helps in terms of rewarding physical skill to transfer it from being a

leisure activity to a sport. It helps to maintain skills in both a strategic and tactical

sense in order to play sport. Strategic skill is seeing what the other opponent is

doing and beating them at a game.

Some strategies will depend on the type of sport such as the ability to foresee

plays being important in football but having knowledge of the water necessary in

surfing. For team sports the strategies will differ and often they are planned before

the game. Strategies can be physical or psychological depending on the type of

sport. For endurance sports such as long distance running the physical strategies

might include limiting one’s energy until the end of the race or when it is most

needed. The psychological strategies will be more in terms of staying positive in

times of hardship and pushing oneself towards a goal.

Sport psychology is an interesting part of the game and has become more

important in recent times. This has meant that athletes are using visualization and

other techniques to see where they want to be in terms of performance. The term

sporting intelligence refers to how athletes utilize their skills but also knowledge to

make the best performance. Sometimes perseverance rather than skill is important

in obtaining the greatest result. Thus, preempting their moves and thinking about

future courses of action are important ways of being the best in sport. Some sports

people have utilized their sporting intelligence both as a player but also as a coach.

This is reflected in many previous tennis stars becoming coaches because of the

psychological edge they give players. The sporting intelligence also includes

creativity on the field that enables the winning of the game. This can include

problem solving skills that allow for athletes or teams to come up with ways to

win in times of hardship and success. Thus, both physical skill and strategy are

important in sports games.

The most popular sports such as football tend to use physical features such as

height and weight as part of the game. In the United States, football is a contact

sport and players were protective clothing. However, recently there has been

attention placed on head injuries in football and the resulting long term damage.

20 2 The Sport Industry and Entrepreneurship

Football in other countries can also be a contact sport such as that played in

Australia but the rules and conduct of the game are different to elsewhere in the

world. Football can also mean soccer in many countries and is a non-contact sport

depending on the geographic location. It is interesting though that various forms of

football such as rugby and soccer are played differently according to country setting

and these different forms of the game have tended not to be internationalized. Other

sports such as basketball have globalized but distinct forms of football are still

largely culturally biased.

Entrepreneurs are praised in the sporting community for their contribution to the

development of new products and services. This has led to more business and

government attention about how to promote entrepreneurship in sport. Some

policies have been introduced that focus on knowledge collaboration as a way to

increase innovation and help develop businesses. However, it can be hard to

determine the effects of entrepreneurship on sport as there may be a time lag

between the development of ideas and the successful implementation of the

innovation. This means that there needs to be a continual stream of innovations in

sport that lead to more entrepreneurial business ventures to emerge. Most of the

benefits of sport entrepreneurship are generated by a small number of highly

innovative firms and individuals. This is linked to what Schumpeter (1934) first

coined as creative destruction, which occurs with the constant birth and death of

new firms. This creative destruction is seen in sport as there is experimentation that

occurs naturally from the playing of the game and in some cases enables new ideas.

Sport is usually played in a regular season with weekly games. There are a large

number of different sports that range in how they are played to the number of

players involved in the competition. Sport is generally defined as a system of

activities that involves some form of physical excursion or mental activity. In

addition, there are normally customs or standards of behavior that exist in sport,

which affect how it is played. This means that there is a degree of subjectivity about

appropriate moral behavior about what is right in the sports context. There are rules

in sport but this is supplemented by codes of conduct, which reflect appropriate

behavior.

Sport normally has objective measures of performance in terms of scoring a goal

or having the best performance. Although these measures can be subjective as there

is a degree of artistic evaluation in how they are judged. This artistry is becoming

more evident in new sports that have grown in conjunction with lifestyle events

such as surfing. In most sports the performance is determined by the highest score,

which is an objective evaluation. However, this can be influenced by technical

indicators that are combined with artistic ability, which occurs in the case of

gymnastics.

Sport is one of the oldest pastimes in society and is critical to the healthy

functioning of a society. In the past sport was considered a leisure activity and

there were more amateurs than professionals although this is changing in society.

The term sport is sometimes referred to as leisure or recreational activities

depending on the environment. The main characteristic of sport is in the competi-

tion as players challenge each other in order to have the best performance. Sport can

2.2 Sport 21

utilize individual physical activity or forms of technology for competition. This

includes the use of cars or animals as part of the sport. Car racing is a popular sport,

which is dependent on the technological innovations of the motor racing industry.

Horse racing is also popular in addition to greyhound racing that uses animals.

The key benefits of sport are in the physical activity but also mental well-being.

In the past there was more manual labour but this has changed with the service

economy so people in sedentary or office jobs utilize sport in a different way. Social

relationships are a key part of sport and this is a form of networking that helps build

better community spirits. However, there are more individual sports that have

become popular in recent years due to the more individualistic nature of society.

This includes aerobics and yoga, which are conducted in groups but focus on

individual performance. In addition, some sports have different categories

according to gender and weight that make competition a more even playing field.

This is reflected in some sports being based on the best performance or be judged

through a committee who decides who was the best player. This occurs in sports

such as boxing and gymnastics that has scores for performance from a number of

people on the judging committee.

Sport is global but there is a degree of sentimentality around local, regional and

national teams. This has resulted in people having a passion for specific teams based

on their nationality or location. This is seen in the popularity of sportswear for these

teams but also the flow on effects of the participation. Sport has become more

professionalized in recent years with more athletes solely focusing on their sports

career. This is particularly evident in well-known sports such as football and tennis

that have a high degree of prize money that enables players to live off their

winnings. Other sports are less professional and this is usually due to smaller

sized prize money being offered. Some sports have age restrictions that impact on

the time a player becomes a professional athlete. This is seen in the National

Football League in the United States, with many athletes playing collegiate football

then going into the professional league.

2.3 Sports Industry

The sports industry has stimulated the growth of many small businesses including

those in related areas such as tourism and hospitality. There are a number of reasons

for the high number of small businesses in the sport industry including: (1) the low

overall capital required to start a business, (2) the lack of lengthy training and

educational requirements and (3) flexibility of hours and time worked. There is also

a trend towards more people becoming professional trainers and lifestyle choices in

the sport area. This is due to an increased interest in work/life balance and the desire

to be involved in health activity. In addition, there has been the emergence of

professional sports training courses because of the desire of more people to be in

this business. Most of the training is on coaching styles and less on business

ventures, which has created a gap in the industry.

22 2 The Sport Industry and Entrepreneurship

There are three major components of the sport industry: direct suppliers, support

services and development agencies. Direct suppliers involve those that are visible in

the sport industry and are considered essential elements of the economic ecosystem.

This includes sport clubs, clothing companies and television networks. Support

services are those that link to direct suppliers by offering additional business. For

example, sport magazines, online gaming and food companies. The development

agencies are normally related to government service providers or involve educa-

tional institutions.

There has been a significant increased interest in the sport and associated

industries such as health and fitness. This provides good opportunities but also

potential for sport businesses to generate additional income by acting entrepreneur-

ially. There are a number of supporting sectors of the sport industry that are

dependent on the entrepreneurial business ventures coming from sport. Thus,

more time and energy needs to be spent on entrepreneurial activity. This is due to

there being both push and pull factors that influence people to start a business

(Glancey and Pettigrew 1997). The push factors include individuals requiring work

due to unemployment so they create their own businesses. Jafar et al. (2011: 829)

states there are multiple pull factors for starting a business and these include

“providing employment for family members, generating additional income,

meeting the need of the market, companionship with guests, fulfilling their interest

or hobby, and providing employment to communities”. In many countries after

financial crises individuals start businesses as a form of income but also as a

necessity in times of economic hardship. The pull factors include lifestyle reasons

and desire to control one’s own destiny. This means that many individuals start

businesses due to opportunities they perceive in the marketplace.

Sport entrepreneurs utilize the instability of the industry to identify emerging

trends. This requires a change in thinking about potential business opportunities as

a way to evolve the sports industry. Sport entrepreneurs can be described as those

who see an opportunity to develop a related business venture. This means that there

is a need to be creative in order to utilize environmental changes as a way to

develop sport entrepreneurship. The key attribute of a sports entrepreneur is in their

ability to take risks and see new trends. Sometimes this requires a period of

hardship whilst the business is growing in order to develop key skills in this area.

Most sport entrepreneurs need to have confidence that what they are doing is

correct and will have a benefit in the long-term. Some sport business owners have

not been receptive to future trends and avoided entrepreneurial endeavours due to

the perception of risk. This has meant that the sport entrepreneurs that tend to do

well recognize failure is part of business but that they can learn from experience.

Thus, more sport business owners have been willing to engage in calculated risks as

a way to understand potential opportunities.

The sport industry has generally been supportive of entrepreneurship as it

provides a way to move the field forward. The culture in sport can be considered

entrepreneurial due to the positive attitudes towards innovation and change. Sport

entrepreneurs act as agents of change to build creativity within an industry

renowned for its competitiveness. The sport industry attracts entrepreneurship

2.3 Sports Industry 23

due to the low barriers to entry and ability to contribute to performance. There are

sport industry specific entrepreneurial behaviors that impact investment. This is

related to the cultural context of sport that is dependent on organizational behavior.

Often sport entrepreneurs mix business and personal objectives to derive business

ideas.

There are specific sport industry characteristics that play a role in the develop-

ment of businesses, thus, it is crucial that more attention be placed on how to

recognize and nurture sport entrepreneurship. In the sports industry, there tends to

be more social capital due to the connection between individuals and business

owners in partnership with government entities. There is also a perception in the

sport industry that it is desirable to be entrepreneurial due to the need for a

progression of ideas and innovation. In addition, in a sport context, entrepreneur-

ship is often a strategic objective due to its ability to exploit opportunities within

different industries.

2.4 Entrepreneurship in Sport

Entrepreneurship is significantly influenced by the extent of innovation and crea-

tivity within an industry environment (Anggadwita et al. 2016). For entrepreneur-

ship to develop it needs to be sustained through the continual education and

feedback of important information. This involves consistently developing a good

environment for creativity so that organizations feel confident in the entrepreneur-

ship process. For some it may involve sport managers improvising on required

resources until they are available. This can include an orientation towards entre-

preneurship as part of company life. Moreover, there needs to be a realization that

some industries have more expectations about entrepreneurship. In the sport indus-

try, there is usually a significant amount of government funding that can help with

the acquisition and allocation of resources. To help build entrepreneurship sport

managers need to institute appropriate practices that encourage novel ideas and

procedures such as forecasting future trends and brainstorming about potential

products and services.

Entrepreneurship is a way to enhance growth and thus create more prosperous

sport businesses and organizations. Entrepreneurship provides a way to facilitate

technological development that is often the source of competitive advantage in

sport. To maintain the competitive advantage of businesses in sport there needs to

be a constant lookout for ways of being entrepreneurial that enable increased

economic performance. This means involving entrepreneurs who are responsible

for producing change and innovation in sport. However, entrepreneurship can also

be embedded in the economic and social ecosystem of sport and it enables

co-creation and facilitates change.

Entrepreneurship usually involves the creation of a business entity but can also

be involved in the opening of new markets, reorganizing of existing organizational

structures and the production of new goods. For this reason, it is important that sport

entities focus on how they can access new ideas that enable better resource usage of

24 2 The Sport Industry and Entrepreneurship

materials for innovative purposes. Entrepreneurship in sport can take a variety of

processes from within firms, to between institutions and government bodies that

alter the way innovation develops. There are also the policy sides of entrepreneur-

ship that provide important guidelines for how innovation is produced in a sport

context. Thus, it is important to understand how entrepreneurship is embedded in

the processes of sport by providing knowledge that can help future policy makers

and practitioners. Moreover, there is also entrepreneurship within sport derived

from the experiences people have about the role of change in a sporting context.

This helps to gain knowledge about the meanings of sport entrepreneurship in terms

of how it is evolving as a business discipline.

More studies about sport are realizing that the process of sport is entrepreneurial.

This has meant that there is now more research on how entrepreneurship can be

applied to sports. Consequently, the concepts of sport and entrepreneurship have

gained an increased attention in the literature. Entrepreneurship often takes place in

sports organizations as spin offs from marketing and sponsorship activities. This is

due to the specific role entrepreneurship has in the sports ecosystem.

There is little accumulated knowledge about the role of sport and entrepreneur-

ship due to the relative newness of the field. Sport entrepreneurship is an inter-

disciplinary subject that can be studied from a number of different disciplines and

perspectives. This makes sport entrepreneurship research an important emerging

research area that bridges the gap between practice and theory. However, the

research has considerable heterogeneity due to the large number of different

types of entrepreneurship in sport. The main ways entrepreneurship is embedded

in sport is as an output, process or discourse. As an output it means new businesses,

products, services or technologies that are developed in the sport context. As a

process it involves coming up with new ways to get services to consumers and as a

discourse it involves discussion about potential future products.

The contribution of sport to the economy cannot be ignored as it is part of the

social fabric of society. Entrepreneurship is still largely disregarded in sport

business research and there is a gap in the field. Sport is mostly presented in the

literature as an activity that involves physical use of the human body or in an

electronic way as a form of competition. Entrepreneurship influences sport

organizations through their vision and strategy. Thus, a new understanding of

sport entrepreneurship interactions is needed to address emerging research areas.

The existing literature about entrepreneurship tends to view it as a profit or

non-profit form without stressing the industry context of the process. This has

meant entrepreneurship specifically dealing with sport has been left behind as

more studies focus on the type of entrepreneurship rather than the industry. In

sport there are a number of possible ways entrepreneurship can be utilized in terms

of understanding both individual, firm and industry behavior. Typically

entrepreneurs in sport are considered as outside entities that go into the sport

context rather than being embedded in the industry ecosystem. This has undermined

the existing and potential contribution that athletes, players, coaches and fans have

made to the way entrepreneurship develops in a sports context.

2.4 Entrepreneurship in Sport 25

Entrepreneurship is considered as being open to anyone that has an idea but

sometimes it is limited by availability of resources. This is due to time scarcity and

financial funding affecting the way ideas are progressed in sport. Many

entrepreneurs overcome these limitations due to their ambition and drive that

makes them successful in the marketplace. In recent decades there has been a

change in the number of new ideas entering the sports industry due to technological

change. This has meant that there are more opportunities for ideas to progress in

sport that integrate technology, which can help improve competitiveness.

Sport entrepreneurship involves both a process and an outcome. The process

concerns how the entrepreneurship develops by an individual or organization. The

outcome is about the results from the entrepreneurial process. It is helpful to include

both the process and outcome of sports entrepreneurship as it enables a better

explanation of the factors involved. This helps to simultaneously foster sports

entrepreneurship that can add value for all stakeholders. Sports entrepreneurship

can involve surprising ideas that seem unrealistic but work in practice. This means

that some ideas for sports entrepreneurship are dramatically different to what has

been done before. To be successful though the idea needs to work well in the sports

context otherwise it will not have market appeal. Entrepreneurship is embedded in

most sports contexts but not all.

Some sports organizations are naturally entrepreneurial but others need to work

at being considered as innovative. There may be contextual factors involved

including technology changes that make some sports organizations more entrepre-

neurial than others. Entrepreneurship does not require a special way of doing

business but is rather a mindset. There is some anecdotal evidence in the sports

industry that entrepreneurship is considered a necessity. This is due to entrepreneur-

ship being a positive attribute that increase both financial and non-financial perfor-

mance. More sports organizations are encouraging educational processes about

entrepreneurship. This means that entrepreneurship education helps build a system

that enables network building and information exchange. Sometimes there is a

hotbed of entrepreneurship in sport but it needs to be capitalized in order to be

developed.

2.5 Multidisciplinary Background for Sport Entrepreneurship

Alves et al. (2007: 30) states that a multidisciplinary and multisectoral cooperative

environment involves “settings, formal or informal, that bring together

organizations from different entrepreneurial sectors and science and technology

institutions around common goals”. Sport is a good example of a multidisciplinary

environment as there are both private and non-profit entities that contribute to the

industry. This is evident in the need to use public funds to support sports facilities

that are then staffed by private organizations. In sport there is also research and

development in terms of science and medicine that are integral parts of the industry.

As the leisure industry that incorporates sport has more attention placed on it due to

the aging population but also general increased interest in health topics there is a

26 2 The Sport Industry and Entrepreneurship

need to bridge together more stakeholders. This is important in fostering entre-

preneurship in the multidisciplinary sport environment that prides itself on its

international appeal and emotional attachment to communities. In sport there are

diverse knowledge skills needed to enable the sport system to grow and develop.

This is due to a variety of sports being played in different geographic contexts that

are important in fostering innovative behavior. This can led to creativity in terms of

how knowledge leads to the development of technological sport products and

processes. Some sports focus on technology for their competitiveness and this is

evident in the amount of money they spend on research.

Alves et al. (2007) states that cooperative multidisciplinary environments have

three core dimensions: diversity, coherence and interactivity. Diversity is in terms

of the different strengths and weaknesses of sport entities in the environment. Some

sport organizations might be better at marketing that enable the growth of a region

as a distinct place. This helps with creating both private and public sports entities

that can work on projects of a mutual interest. There will be sport entities that have

distinct competences that enable them to enter the marketplace at a faster rate,

which can enable related entities to piggyback from their success. This enables a

more level playing field that fosters entrepreneurship at the local, community,

regional and international level of sport. Coherence involves having complemen-

tary sport activities that foster mutually beneficial results. For many sports there is a

requirement of a playing field or facility that works with athletes in order to create

the right environment. This means that knowledge can be spilled over to other

sporting entities when they work in a productive manner. Interactivity involves the

cooperative relationships existing between various members of a sports commu-

nity. In professional sports there needs to be cooperation between the sports venue,

media and fans in order to bring about the best environment. This requires time and

skills in managing cooperative relationships.

A process perspective to understanding sport entrepreneurship is needed to

advance the research on this area. This enables a broader perspective about entre-

preneurship in sport as a way to legitimize sports entrepreneurship. It is helpful to

understand the processes of sport entrepreneurship in order to reproduce and add

new insights. Some entrepreneurship in sport has remained invisible due to fast

changing nature of the sport industry. Much of the entrepreneurship in sport is

assumed rather than planned, which makes it difficult to ascertain. For this reason,

sport is a highly entrepreneurial industry and is a both a source and consequence of

the competitiveness.

Existing research on entrepreneurship is not sufficient to explain the processes in

sport. This means that there is a need to understand the processes of entrepreneurship

in sport in order to increase theory development and encourage more empirical

research. Some entrepreneurship is a result of social expectations in sport that

facilitate communication and dissemination of information. This means that the

socialization process in sport will encourage more entrepreneurship that leads to

change. Furthermore, entrepreneurship in sport should be explored more by under-

standing the different process perspectives. It is important that there is more

2.5 Multidisciplinary Background for Sport Entrepreneurship 27

awareness of the entrepreneurship in sport. This is due to entrepreneurship being

needed to optimize resources usage and to increase the innovation capability of sport.

Entrepreneurship involves purposeful change normally associated with new

businesses but can also involve adoption of innovative ideas (Farinha et al. 2017).

Sport entrepreneurship is associated with an attitude to imagine something different

to what is currently being conducted. This involves new ideas that optimize better

delivery of services or produce more efficient outputs. This is a result of sport

entrepreneurship involving disrupting current behavior by progressing new ideas.

Often this includes changing entrenched patterns to increase better outputs.

Sport entrepreneurship is a philosophy that can be utilized to progress new ideas

within the industry. The entrepreneurial climate in the sport industry is growing and

becoming a stimulant for business activity. However, there can be some negative

aspects of the sport industry that hinder the development of an entrepreneurial

climate. This includes a culture of teams and consensus decision making rather than

individual freedom. There is also a reliance on government funding to support sport

that means there is a lack of incentive to be independently funded. In addition, there

can be a reliance on institutional structures rather than the focusing on new linkages

and interests.

The contextual embeddedness of sports entrepreneurship provides a way to

understand its development. There needs to be new direction in sport entrepreneur-

ship research to advance current thinking and to solidify its position within business

management studies. This includes appreciating the cultural background of sport,

which encourages a move towards new ways of thinking about sport entrepreneur-

ship. Entrepreneurship has been studied from a range of disciplines but only

recently from a sports perspective. Most studies on entrepreneurship focus on

businesses in the manufacturing sector with less emphasis on the sport industry.

The process of entrepreneurship in sport is complex and involves launching new

businesses through the introduction of innovation (Ratten 2012). Normally entre-

preneurship will begin with the recognition of an opportunity, which then requires

an evaluation of the resources to implement the idea. The resources include venture

capital and start up financing, which need to be conducted before the idea moves

into the commercialization phase (Ratten 2013). The sport industry is fragmented

into different types of businesses. There are special circumstances in sport that

drive entrepreneurship. This includes location, governance structure and type of

sport so it is important to highlight the importance of entrepreneurship in sport by

assuming it is a natural occurrence. Entrepreneurship is a mechanism that increases

the competitiveness of the sport industry. The competitive environment of sport can

help explain the incidence and prevalence of entrepreneurship.

The discovery process in entrepreneurship involves the formation of beliefs that a

gap exists in the marketplace (Phan et al. 2010). This means that resources need to be

devoted to the process of making the discovery a reality. New insights and creativity

are part of the discovery process, which influences new business ventures (Ratten

2014). Creativity in a business setting is different to that occurring in an artistic

environment due to the need for both novelty and usefulness (Phan et al. 2010). In

business, creativity needs to have a practical value in order for it to be significant.

28 2 The Sport Industry and Entrepreneurship

Sport entrepreneurs are motivated to establish new ventures based on their

economic and social context. This means that to be a successful entrepreneur

there needs to be decisions made based on knowledge about market potential

(Ratten 2014). In the sports context there is often a strong bond amongst members

of the entrepreneur’s social network. This means there are some business

obligations based on being a member of a social network. Normally more trust

develops when there is a reciprocity in exchange relationships (Ratten and Dana

2017). Sport entrepreneurs can use their social networks as a source of information

in terms of building their entrepreneurial success. In addition, there is more

information that can be exchanged through these social networks that leads to

better entrepreneurial performance. This means that the more an entrepreneur can

coordinate their networks the better the likely result (Ratten and Tajeddini 2017). It

is important to have a consensus about the role of entrepreneurship in sport as it

helps to build knowledge. The government has a role in triggering entrepreneurship

as it helps to create new jobs and economic opportunities (Ratten 2017).

Sports entrepreneurship is a specific type of entrepreneurship whose participants

are motivated by conducting business related to sport and is multi-layered because

it involves different dimensions from social, technological and international. Entre-

preneurship is a wide concept dominated by cultural, economic and social

dimensions that are embedded in an environmental context. Gaining an understand-

ing of sport entrepreneurship has important implications for policy and practice.

This is due to sport entrepreneurs having direct implications on other industry

segments.

Entrepreneurship involves “the act of directing resources (financial and physi-

cal) in new ways for the generation of profit” (Shinde 2010: 524). The core

characteristics of sport entrepreneurs are having initiative and wanting to create a

business. Behavioral attitudes are also important for the growth of sport

entrepreneurs who combine their managerial capabilities in a creative way. For

entrepreneurship to grow there needs to be a supportive environment that expects

positive outcomes (Ratten et al. 2017).

The articulation of entrepreneurship in sport can be difficult due to the lack of

direct consensus about what is innovative. This means that sports entrepreneurship

is modified based on cultural conditions. It is known that sport entrepreneurship is

increasing due to technological advances and a general global trend towards health

and wellness activities. Entrepreneurship is affecting most aspects of the sport

industry especially in related sectors such as leisure and tourism. There are

innovations in sport occurring at a rapid rate that were previously not considered

as viable. Examples of these innovations include online sports technology startups

or apps that interact with customers. These sport apps give users scores and

statistics about their performance enabling them more access to knowledge.

Some consider sport as entrepreneurship as it involves people working on a

specific purpose in a competitive environment. This means that being part of the

sport industry is helpful in maintaining an entrepreneurial mindset. Sport like

business is about the creation and maintenance of relationships for a specific

2.5 Multidisciplinary Background for Sport Entrepreneurship 29

purpose. These relationships involve people working on different aspects of the

business from playing a sport to refereeing the game to being a spectator.

There is a passion in sport that differentiates it from other industries. Thus, there

is ample opportunity for entrepreneurship in different segments of the sport industry

from equipment manufacturing to the development of new online services. Some of

the highest growth sports businesses have been around digital and social media.

This is due to the desire for people to experience sport in new ways based on

technological advancements. More people are seeing sport not just as a form of

physical activity but also as a mental stimulation due to the increased usage of

electronic games. Gaining an understanding of sport entrepreneurship has impor-

tant implications for managers. This is due to sports entrepreneurship being a

combination of innovation, risk taking and foresight that needs persistence to

achieve its outcomes. A useful way to understand sports entrepreneurship is to

separate it into sport and entrepreneurship.

A sport entrepreneur is a person who shows creativity in bringing together

resources in a new way that creates a business venture. Some sport entrepreneurs

are interested solely in financial profits but others see themselves as part of the

community and have social goals. In addition, there has been a new climate

emerging in sport due to the search for new objectives based around new trends.

New technology has fuelled entrepreneurship in sport due to the business

implications. This technological change has helped revive some sports that were

going out of fashion by providing new playing methods. It has also transformed

sports by providing additional virtual places that sport can be played.

2.6 Foresight and Sport

Konnola et al. (2007: 608) states “foresight activities have often provided support

for objectives such as priority-setting, networking and consensual vision-building”.

Foresight is important in evaluating potential opportunities around sports entre-

preneurship. In the sport industry, there is sometimes a high level of uncertainty

caused by new technological innovations entering the marketplace. This means that

foresight can help with making ideas more action-orientated so that they have a

better potential of being used in the marketplace. This enables sports organizations

to stay focused on potential innovations that will have a positive contribution to

their industry. Often a way to encourage better foresight is to have a group of ideas

that can be used as a form of portfolio management. This means the acknowledge-

ment that some ideas will be successful but not others depending on how they

progress. Ideas need to be generated in the sport industry to encourage new ways of

thinking to emerge. However, these ideas need to be revised based on feedback and

iterations until they have been implemented into the marketplace. It is useful to use

new ideas about sport as a way to encourage the development of entrepreneurial

strategies.

As sport entities are often embedded in a stakeholder network it helps to build a

common vision in order to effectively manage resources. This means that the

30 2 The Sport Industry and Entrepreneurship

entrepreneurial ecosystem in sport can develop based on the adaptability of ideas.

Konnola et al. (2007: 609) suggests that a way to encourage foresight in innovation

is through diversity, which they define as “the condition or quality of being diverse,

different or varied”. The concepts of diversity and innovation are similar as they

both acknowledge the importance of new and different ways of thinking. In

addition, the process of entrepreneurship in sport is characterized by diversity and

innovation. This helps to exploit opportunities for the potential they bring into the

marketplace. Ideas can be co-created with stakeholders in sport that bridge the gap

between theory and practice. It is important to anticipate changes in sport by

scanning the market for future trends. A way to do this is by analyzing innovative

ideas by systematically evaluating their potential. As sport combines public and

private entities it helps to have a co-creation process that builds on mutual

commenting. This enables the building of prospective ideas by exploring ways to

develop innovation. Sometimes these ideas are distributed through innovation

systems that encourage a discussion to develop.

The goal of sports entrepreneurship is to embrace change by creating new value

networks that link together previous structures with new innovation systems. To be

effective the innovation needs to prioritize goals and objectives in order to give

attention to the most effective ideas. This involves focusing on networking in sport

to utilize existing resources but also develop new capabilities. In addition, there can

be alternative ways to progress innovations in sport but this might involve chal-

lenging existing structures. This is due to there being political systems that may

favour the status quo rather than innovation. Stakeholders in sport can be proactive

about developing innovation by envisioning alternative approaches. This includes

reducing uncertainty by managing risk in an appropriate way. Some sports

innovations may need more start-up capital whilst others naturally evolve in the

market. Therefore, it is important for sports organizations to explore alternative

ways of developing ideas that have the ability to strengthen market potential.

As part of developing innovative ideas in sport, the market needs to be evaluated

for signals about approaching trends. Konnola et al. (2007: 611) suggest that weak

signals are “new, surprising, uncertain, irrational, not credible, difficult to track

down, related to a substantial time lag before maturing and becoming mainstream”.

It is sometimes hard for people to gauge early indicators of potentially lucrative

new ideas in sport. This is due to the difficulty or reluctance of people to share

information and disseminate knowledge. Some innovations are dependent on

demand by consumers but also the obtaining of regulatory approval. Other

innovations will require a substantial amount of investment that makes it necessary

to gain support from governments and business entities. Communication channels

including online social media help disseminate ideas and spread information about

potential new trends. This is due to there being a need to recognise in these

communication channels that collaboration may be required to build the

innovations. It helps to have social interaction between different stakeholders in a

sport context in order to develop concepts. Ideas to progress should be commented

on by participants as a way of elaborating potential new course of action.

2.6 Foresight and Sport 31

2.7 Conclusion

This chapter proved the importance of the sport industry context to the development

of sports entrepreneurship. As there are an abundance of small businesses in the

sport industry it is important to highlight the role of entrepreneurship. I aspire to

make several contributions to the entrepreneurship field of study by including a

sport perspective. By integrating the sport and entrepreneurship literature, I dem-

onstrate the overlapping research areas. This means that there is a need to foster

entrepreneurship in business that involves sport. Sport entrepreneurs usually have

specific characteristics that distinguish them from other types of entrepreneurs. This

includes the desire to be involved with sport due to lifestyle and emotional

attachments. To survive in the spots industry, more small business owners need

to think and act entrepreneurially. This includes reaching out to new markets but

also embracing emerging technological innovations. Many sport businesses utilize

low levels of technology whilst others are dependent on integrating knowledge

from other sources. It would be beneficial for more sport businesses to promote

entrepreneurial skills development in order to attract more funding. Governments

need to work with sport business owners in providing advice and training. This will

help them develop talent but also stay at the forefront of the sport industry. As many

sport businesses are service-orientated there also needs to be an emphasis on service

innovation. Sometimes this can include marketing of new innovations that impact

competitiveness. In conclusion, this chapter has discussed the importance of the

sport industry for the development of sport entrepreneurship.

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