What Entrepreneurship Boils Down To

While entrepreneurship is hardly a “dismal science,” it often appears as a motley concoction of different theoretical frameworks, differing perspectives, and varying definitions. This makes it very difficult to master the entrepreneurship field of study and the extensive literature on all those shapes and forms and functions that have little in common but the word “entrepreneurship.”

As one would expect from the title, all or many of the definitions of and approaches to entrepreneurship are covered in the recently published volume Historical Foundations of Entrepreneurship Research (ed. H. Landström, F. Lohrke; Edward Elgar, 2011). Read more of this post

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Short Interview with Yours Truly

Luis Eduardo Barrueto of the Universidad Francisco Marroquín asks my views on the entrepreneurial function and the relationship between entrepreneurship and capitalism.

Entrepreneurship Defined?

These days entrepreneurship can be pretty much anything. In empirical research, start-ups are often used as proxies for entrepreneurship where starting a firm is assumed to be entrepreneurial. But even though this is often the definition used in daily conversation, this definition may not be very valuable from a research perspective. For instance, are the creation of a new organization dedicated to the production of a previously unseen innovation and opening another McDonald’s franchise equally entrepreneurial? Read more of this post

Real-political Entrepreneurship

The Economist discusses how Sweden is doing better than most Western countries at the moment. The article focuses on the great shape of the economy thanks to the policies of the recent (since 2006) non-socialist government, which has pushed down public spending (as a fraction of GDP; the debt level has decreased only a little in real terms) and lowered taxes. This is undoubtedly an important part of the story, since Sweden’s welfare system has been restructured to provide sound incentives and put focus on productive work.

But the origin of the sound finances can be found in the severe recession that culminated 1992. Read more of this post

Necessity Entrepreneurship or Desperation

Few would claim that living beyond one’s means is an entrepreneurial move, because it cannot last forever. Eventually, things are bound to go very wrong as reality catches up. But such a situation of crisis may impel a sort of ingenuity in the form of necessity entrepreneurship: a radical change of behavior to make the best out of the situation. CNN Money reports on such changed behavior in the housing market. Many homeowners who defaulted on their mortgages still live in their (too expensive) homes – years after their last payments – awaiting (or fighting) foreclosure.

While this may not be an advisable strategy, some of these people have discovered and are exploiting the “opportunity” to live at virtually no cost. Their cases were referred by the bank to lawyers for foreclosure actions a long time ago, but these things take a lot of time – on average 565 days and sometimes several years. During that time “nothing” happens, so the people living there stay put – and pay nothing. Of course, this existence is subject to exaggerated uncertainty – especially for families with small children – but these previous homeowners may have no real alternatives.

The question for entrepreneurship scholars is, of course, whether this can at all be called entrepreneurship. This new kind of behavior may be but desperate actions taken by desperate people.

Good News for Missouri Entrepreneurs

A new Mercatus Center study of US states ranks Missouri #5 in Personal and Economic Freedom. “This project develops an index of economic and personal freedom in the American states. Specifically, it examines state and local government intervention across a wide range of public policies, from income taxation to gun control, from homeschooling regulation to drug policy.” As the map shows, Missouri ranks much higher than most of its neighbors (Illinois in particular).

There is a substantial body of research linking entrepreneurship to economic freedom (for state-level studies, see, for example, here and here). The Mercatus index is broader, including both personal and economic freedom, but I would expect a high score to be a good proxy for a favorable climate for entrepreneurship.

Academic Entrepreneurship: Startups

While most likely a less frequent phenomenon than in the business world, there are cases of entrepreneurship also in academia. The rather unique (and criticized) focus on affordability and quantity through online education at the University of Phoenix is an excellent example of this. And there are others – even promising startups.

The New College of the Humanities is a newly started private higher education institution in London. Rather than competing with traditional institutions on quantity and cost (their perhaps greatest shortcomings, from a business perspective), the NCH is to compete using the more traditional measures of educational excellence: high(est)-quality education with famous faculty and small classes. And the strategy is to provide education based on “traditional lectures, seminars, teamwork and tutorials, independent study and online work.”

The NCH makes some minor attempts of educational innovation, such as increased flexibility and opportunities for specialization and self-study. But overall, this new private university in London aims to out-compete Oxford University in their own backyard: traditional university education. Quality is the overall rule of thumb, it seems, for this cocky upstart that is not afraid to take on the old and great academic institutions.

Professor A.C. Gayling explains what’s special with the NCH in this YouTube video. Other founding faculty include Richard Dawkins, Ronald Dworkin, Steven Pinker, Peter Singer, and Niall Ferguson. The line-up is undoubtedly impressive.

HT: Jake Roundtree.

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