Entrepreneurial Syndrome and ADDship

Inc. magazine has an interesting interview with Aaron Blackledge, a medical doctor and entrepreneur. While his achievements are both inspiring and awesome, what is striking about this interview is how he sees the “entrepreneurial mind.”

There has been plenty of research trying to map out what are the “entrepreneurial traits” and the psychological characteristics of successful entrepreneurs. This type of research can undoubtedly help us understand people and humanity, but I am not convinced it is helpful in terms of entrepreneurship research. After all, entrepreneurship is primarily a market function, and as such the mental or physical state of the person exercising entrepreneurship is at best of secondary importance.

This said, a great many successful innovator-entrepreneurs seem to be overly (annoyingly?) energetic, crazily risk-loving (or -unaffected), and perhaps with lacking rationality in terms of the consequences of one’s actions. That Blackledge seems to have identified that the “hyper-creatives” are also those who would be diagnosed with and treated for ADD, is hardly surprising. Who would expect the not-so-energetic, dull, and in-the-box-thinking to be successful and innovative entrepreneurs?

From a political or social-engineering point of view, it may seem beneficial to categorize and identify the would-be entrepreneurs and, perhaps, give them a push to start companies or produce art. The problem, of course, is that if the would-be entrepreneurs are identified and we aim to “make the most” out of this, then we face two major problems: we have a situation where (1) government has already created two classes of citizens and would tend to favor one over the other, and (2) in order to incentivize this class to become “real” entrepreneurs, government would need to redistribute resources and wealth (broadly defined) from already existing successful entrepreneurs. I can see all kinds of not-so-very-nice problems coming from both of these points.

The other side of the coin, however, is to learn from what is revealed in this interview about the hyper-creatives. And the perhaps most revealing is the question, “so everyone’s on Adderall these days?” Diagnosing and treating the hyper-creatives as though there is something wrong with them simply because they are hyper might not be a very productive approach. If they are indeed an important part of what is the entrepreneurial function, perhaps we shouldn’t medicate them en masse and virtually put the market process to a halt…?

CFP: “Effects of Alternative Investments on Entrepreneurship, Innovation, and Growth”

Along with Don Siegel, Nick Wilson, and Mike Wright, I am guest editing a special issue of Managerial and Decision Economics on ”Effects of Alternative Investments on Entrepreneurship, Innovation, and Growth.” Proposals are due 15 June 2011. We will also hold a special issue conference for developing the papers 29 October 2011 at the SUNY Global Center in Manhattan. The conference is jointly sponsored by the McQuinn Center, the SUNY-Albany School of Business, and the Centre for Private Equity Research at Imperial College Business School. Further details and submission guidelines are below the fold.

Entrepreneurship Posts at O&M

Three recent entrepreneurship theory/history posts at our sister site, Organizations and Markets:

Charles Dickens, Capitalist

Perceptions of Opportunities – Part 1

Finance and the Nature of the Firm

 

Entrepreneurship Lessons from Woody Allen

• Wake up early
• Avoid distractions
• Work three to five hours a day and then enjoy the rest of the day
• Be as perfectionist as you can, knowing that imperfection will still rule
• Have the confidence to be magical and stretch the boundaries of your medium.
• Combine the tools of the medium itself with the message you want to convey
• Don’t get stuck in the same rut – move forward, experiment, but with the confidence built up over experience.

Not sure about the third, but these are all worth pondering. See James Altucher’s analysis here.

Definition Begging Questions

A recent article in Inc. Magazine discusses what they term “the best entrepreneurship definition ever.” While the promise is perhaps overly cocky, entrepreneurship is a concept desperately in need of a definition. It seems applicable on almost everything, and comes in many shapes and colors and types: structural, occupational, functional or otherwise. This makes entrepreneurship about as suitable for scientific study as the Scarlet Pimpernel (you know, that “damned elusive” guy).

The “best ever” definition reads as follows:

Entrepreneurship is the pursuit of opportunity without regard to resources currently controlled.

While it is stated in the article that “people often need to say it out loud 50 or 100 times before they really understand what it means” – which admittedly this author has not – it seems to be a pseudo-Kirznerian definition, or at least a definition that heavily draws on Kirzner (1973, 1979). But just as Kirzner’s definition, it begs a number of questions about what it really means and how it is relevant to understanding the real economy.

Kirzner’s entrepreneur is not an owner of resources and therefore never puts them at risk, which to Rothbard makes such entrepreneurship “mere parlor games.” While the “best ever” definition is more ambiguous on whether the entrepreneur owns anything – here only the pursuit is made without regard to resources – the implication is the same. Does not an entrepreneur consider what he has at hand, what he might get his hands on, or what can be procured in the market? (Goodbye Frank Knight – your definition doesn’t cut it.)

But then where are all the entrepreneurs pursuing the opportunity to sell cheap 5-minute direct flights to all-inclusive beach resorts on the planet Mars? I, for one, would be a potential customer!

Strom on the Value of Academic Entrepreneurship Research

Kauffman Research and Policy Director (and former MU economics professor) Bob Strom on the value of academic entrepreneurship research for public policy:

While the influence of academia on public policy is not often observed directly, academics studying entrepreneurship contribute practical information and real insights that shape and support policy discussions. At the most basic level, university research on entrepreneurship deepens policymakers’ understanding of the phenomenon and its importance, giving them the information they need to consider the effects of proposed legislation and existing policies on entrepreneurial activity.

Economists at universities, for example, have highlighted for policymakers the role of new businesses in job creation and economic growth; identified obstacles to new business creation; elucidated the economic and institutional environments in which entrepreneurship flourishes; and pointed to some unintended consequences of existing legislation for entrepreneurs.

But the academic influence on entrepreneurship policy goes beyond analysis and writing. Academics also are deeply involved in improving the sources of data for the study of entrepreneurship. In addition to finding flaws in government data collection and calling for better data collection efforts at the federal level, academics have played important roles in creating independent surveys of new businesses that will allow for more robust databases.

Rural Entrepreneurship During Recession

A new paper by three of our University of Missouri colleagues:

Rural Entrepreneurship in a Time of Recession

María Figueroa-Armijos, Brian Dabson, Thomas G. Johnson

Economic recessions increase costs, risk, stress, uncertainty, and business failures while decreasing the availability of employment. Individuals who seek to become self-employed in recessionary times, whether out of need or for opportunity reasons, face difficult and unique circumstances. We use cross-section repeated-measures rare events logistic regression to model the effects that living in rural America and changes in the economy have on the probability of individuals engaging in necessity or opportunity entrepreneurial activities both before the recession (2005–2007) and during the recession (2008–2010). Key findings indicate that before the recession, individuals living in rural metro and nonmetro counties were more likely to engage in opportunity-driven entrepreneurial activities when compared to individuals living in more urban counties. Positive employment growth rates before the recession also increased the probability that individuals in rural areas would engage in opportunity entrepreneurship. The recession marked a shift in the motivation of individuals in rural America to become self-employed. There is a clear decline in opportunity entrepreneurship and an increase in necessity entrepreneurship. In all rural and mixed-rural counties, college education positively predicts opportunity entrepreneurship, whereas individuals with incomes below $50,000 or working in a part-time job are more likely to engage in entrepreneurship driven by need.

Maybe the University of Missouri Isn’t for You

From the frequently entertaining Failbook:

Seriously, though, I am a big fan of DeVry and others like it. Their product is quite different from that offered by the University of Missouri and other traditional educational institutions, but “education” isn’t a homogeneous good, and I’m happy to see it offered on the market in many shapes, colors, and sizes.