New firms face growth setbacks due to resource shortages and external dynamics
New firms in new industries often face growth setbacks due to various internal and external factors. A study of firms founded in 1990 found that continuous growth is rare, with interruptions caused by resource shortages and coordination issues. The volatile nature of emerging industries adds to the challenges, as young firms lack reserves to weather crises. However, surviving firms learn from problem-solving, which helps them develop in the future.