Entrepreneurship

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Entrepreneurship

• Professor Josef Mittlemann
• Brown University

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A Brief History of Entrepreneurship

• Break activity into two camps Leaders and
  Followers. Entrepreneurship camp
• Leader Camp Royalty - Military
• Entrepreneur Camp Merchants - Adventurers
• Mid 18th Century
• A zero sum game- ones gain anothers loss
• This resulted in Negative connotations for the
  business person

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Differences between the Capitalist vs. Merchant

• Capitalist
• No risk to Life and limb
• Favored by Laws of usury

• Adventurer
• Actively trading and voyaging, resulted in
• Development of Skills
• Was forced to survive. Use of new tools and skills

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The word Entrepreneur
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Richard Cantillon

• LEssai sur la nature du commerce en general
  published 1755 first clear definition of an
  entrepreneur
• Market as a place vs.market as Mechanisms
• An equilibrating mechanism
• The entrepreneur is a key player -Market Maker

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Cantillon continued

• Focuses on function Risk is confronted in search
  of Profit
• Broke population down into Fixed vs Variable
  Income earners.
• Product emphasis versus marketing

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Later 18th 19th Century France

• Quesnay, Baudeau and Turgot in mid 18th Century
  France Focused on
• The ability of the entrepreneur to Innovate and
  Organize
• J.B Say in late 18th and early 19th said
• Entrepreneur is not a force in invention but
  rather the Commercializer of the Invention
• Thus the planner for its production

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Adam Smith

• Inquiry into the Nature and Causes of the Wealth
  of Nations (1776)
• Capital is the Driver of Profit
• People are naturally Industrious versus
  entrepreneurial
• The Entrepreneur lost standing

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Early 20th Century

• Francis Walker, Frederick Hawley, and John Clark
• Resurrected the entrepreneurs role
• Individual versus source of capital

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Joseph Schumpeter in the early 30s-50s
resurrected more completely the entrepreneur.

• Saw the Entrepreneur as Combining existing goods
• He referred to the Entrepreneurs as Creative
  destroyers.
• Disrupters of equilibrium.

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Later 20th Century

• Entrepreneur is viewed as a Change Agent
• Leaders as Change Makers
• Entrepreneurship as Process

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Entrepreneurship as Process

• Concept encouraged in U.S. by T.W. Schultz in
  1970s
• Entrepreneurial activity goes beyond the borders
  of business.
• Education can be a source of entrepreneurial
  learning.
• Entrepreneurs a somewhat scarce and limited
  resource.

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General Consensus on Entrepreneur

• Creative
• Innovative
• Promoter and marketer
• Assumes risk which others see as greater than
  they do.

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Entrepreneur

• Decision maker
• Organizer but special type of Manager
• Re-allocator or accessor of various resources.
• Both Leader and Proprietor

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Entrepreneurship Myths
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Myth no. 1 is that an entrepreneur is one who
Starts and Runs a Business.

• Versus Plan for Growth and Expansion

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Myth 2 Entrepreneurship Happens at one given
point in time,

• The phenomenon is not Fixed
• and takes place as a Process over Time

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Next myth is that You are or you are not an
entrepreneur.

• I think it more generous to say that the
  Entrepreneur enters Periods of dormancy
• In the long run, it can be an on/off phenomenon
• But not really an either or phenomenon.

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Here is a popular one, the E is a BIG Risk Taker

• My experience is that while any innovation is
  somewhat risky, the Entrepreneur takes his or her
  Analysis quite carefully
• does research, and
• manages the risk, through
• experience,
• special knowledge or
• enlisting the aid of others

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An entrepreneur is Born to Be

• Popularization of a Cult Concept
• Richard Branson, or
• Ted Turner, also enlists the arguments found in
  the
• Nature vs. nurture discussion.
• Our Environment plays a large role

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So too, that the entrepreneur is in it Only For
Moneys Sake

• Entrepreneurs are excited by acting as Change
  agents and
• Are motivated as much if not more by Achievement
  than money.

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Its only about the Individual

• I think it fair to say that the notion of
  individual success in todays global economy is
  bankrupt if not romantic.
• Teams can and do exhibit the entrepreneurial
  spirit.
• While the entrepreneur is a potentially dynamic
  leader- but short of teamwork, the innovation of
  ideas will fall flat.

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It Only Exists in Business

• Suffice it to say that entrepreneurial activity
  is showing up everywhere.
• Even now in social work where there are some
  cities that are investigating entrepreneurship
  class requirements for their workers.

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It Takes Luck and Money

• No more than any other endeavor, perhaps we can
  say that the resource here is idea and
  opportunity generated not capitally generated.
• Of course there is an abundant measure of Hard
  Work and Application of Skills

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And finally, is the world of the E. Unstructured
and Chaotic

• The world is Chaotic
• The Entrepreneur usually finds opportunity in
  that arena and is quite good at dealing with
  uncertainty.