Tuesday, June 16, 2015

Reading :: Understanding Entrepreneurship

Understanding Entrepreneurship
By Bjorn Bjerke

I picked up this 2007 textbook on entrepreneurship at the UT Library to see what it had to say. It's written by a professor of entrepreneurship, and its central premise is in the title of Chapter 1: "Our New Entrepreneurial Society."

In this chapter, the author argues, based on Toffler's The Third Wave, that a new societal paradigm is developing (p.5). He associates the third wave with "our new entrepreneurial society" (p.6, his emphasis). This entrepreneurial society's characteristics include a list that I'll directly reproduce from p.7, but with later commentary appended:

  • "A new kind of change"—New changes contain genuine uncertainty (p.7)
  • "IT and other technologies play a decisive role"—He cites Castells here (p.8) and argues that IT is more pervasive, efficient, and global, and thus speeds up innovation (pp.8-9)
  • "Knowledge is central"—here, he agrees with Drucker that our society is now a knowledge society, then agrees with Castells that we should not be paying attention to post-industrialism but to informationalism (p.9). 
  • "Business has a new content"—services and information (p.10).
  • "New kinds of organization at work"—contrasting with hierarchical, centralized ones (p.10).
  • "Relationships and networks are more important to us"—Again, he cites Castells and argues that "Our new entrepreneurial society is based on networking" (p.10).
  • "Globalization"—Citing Castells again, he argues that "Our new entrepreneurial society is global because its central activities and its components are organized globally" (p.11).
  • "A new view of distance and time"—He argues that "the limitations of physical distance on decisions and actions in our companies and organizations as well as limitations of time have, by and large, disappeared" (p.11)
  • "New types of capital"—Not just financial capital but "capital invested in, say, business knowledge, local data bases, willingness to learn, networks, contacts and so on" (p.12)
  • "Industrial boundaries are more blurred"
  • "Members of the economy are, on average, older"
  • "Words are more important"—since new actions must increasingly be based on new ideas, concepts, and understandings, we must communicate them more (p.13)
So, he argues, "We need more entrepreneurship": success comes from innnovation, not optimization (p.13). And 
What is needed today is innovation at all levels and in all camps, not only in the traditional sense of new goods and services, but in the very way in which our societies operate, in the way in which we look at ourselves, and in those mechanisms, groupings and organizations which can develop and commit our resources in the most meaningful way to changing our setup in order to start a normal, steady, and continuous innovation process (Kanter, 1983). And it is precisely those everyday innovations—which are not necessarily planned but aimed at possibilities and needs—which will keep any society, economy, industry or company flexible and in a continuous flux. (p.14)
He goes on to list three definitions of entrepreneurship (p.16), then offers what he terms a conceptualization of entrepreneurship:
Entrepreneurship = to create new user value (p.17)
And he immediately expands it in relationship with creativity and innovation:
Entrepreneurship = to come up with new applications which others can use (as well) to fill a need and/or satisfy some demand, existing or created. (p.17)
This conceptualization rules out small businesses, since these often do not create new value (p.20). (See also Schumpeter.)

Furthermore, he warns that the modern corporation has a hard time being entrepreneurial because it is built on five points, all of which are being questioned (paraphrased here):

  • The corporation is the master; employees are the servants
  • Most employees work full-time
  • Efficiency comes from bringing all activities under one roof
  • Suppliers and manufacturers have information that customers don't, so they have more market power
  • Each technology pertains to one industry and vice versa (p.27). 
Let's skip to Ch.3, where the author discusses entrepreneurship theorists. The author provides a broad characterization of economists and non-economists who have studied entrepreneurship, including the current multidisciplinary study of entrepreneurship and schools of entrepreneurship. As I said, this characterization is broad, and thus difficult to characterize in a review. 

The rest of the book was less interesting to me, so I'll call it a day here.

My review? For my purposes, the first chapter was the most interesting, although I am cautious about taking it at face value. The author's understanding of entrepreneurship is rooted in the knowledge economy literature, which I know reasonably well, but I wanted a stronger articulation between this literature and entrepreneurship as a field of study. The overview of different entrepreneurial schools was valuable and gave me a better lay of the land. And the book is engagingly written (although the author doesn't care much for parallelism). If you, like me, are trying to figure out how a rhetorical angle on entrepreneurship might fit into its general multidisciplinary study, yes, take a look. 

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