In The Handbook of Economic Sociology, Howard E. Aldrich has a good summary and evaluation of various definitions of entrepreneurship, most of which have also been alluded to on this blog already. According to Aldrich, there are four competing definitions of entrepreneurship:
- The setting up of high-growth and high-capitalisation firms (as opposed to low-growth and low-capitalisation ‘lifestyle’ businesses);
- Innovation and innovativeness leading to new products and new markets (the Schumpeterian tradition);
- Opportunity recognition (the Kirznerian tradition);
- The creation of new organisations.
According to Aldrich there are problems with all four of these definitions. There is a strong selection bias with the first two. Whether a firm has high growth and had introduced an innovation can only be established retrospectively and high capitalisation is no guarantee of high growth or innovativeness. I would add that the political consequences of these definitions are also far-reaching, as they may lead to government policies favouring firms that are already in a privileged position, rather than provide support where it’s more needed.
The second and third definition according to Aldrich also suffers from the problem of being applicable to a wide range of situations, with entrepreneurship just being one. The effect of that is most evident e.g. in the afterlife of Schumpeter’s concept, which became more popular in the theory of the firm as a way of describing the R&D function, corporate venturing and intrapreneurship, than new venture formation in entrepreneurship studies. According to Aldrich, entrepreneurship studies had forgotten Schumpeter.
The adoption of Kirzner’s notion of “opportunity recognition” also had a particular disciplinary effect: because “opportunity recognition” has to do with an entrepreneur’s alertness and alertness seems to be a something that happens in the mind, this stream of research turned entrepreneurship into a problem of cognitive psychology, preoccupied with the figure – but especially the mind – of the entrepreneur.
The problem with the fourth definition according to Aldrich is that it is difficult to delineate when actually new organisations emerge as new social entities. It is both a philosophical problem and a methodological problem. Nevertheless, this last definition has been gaining support in entrepreneurship studies and Aldrich also picks it as the one to zoom in on in the rest of his chapter.
What can we make of these rival definitions and corresponding theories and their consequences from an STS/ANT perspective? The problem of selection bias in the first two definitions makes them interesting candidates for considering the political consequences of those theories, and the current work-in-progress UK government policy of channelling support away from ‘lifestyle’ firms to those perceived as ‘high-growth’ firms provides an excellent case study.
At the same time Schumpeter’s theory of innovation/entrepreneurship as “the creation of new combinations” deserves renewed attention. An argument could be made for disentangling these two concepts and clarifying their relationship, bringing into the picture those new firms as well that adopt the “new combination” but in themselves may not fit the “high-growth” and “innovative” label. In effect I’m arguing about establishing a link between definitions 2 and 4 that would not be subject to the selection bias (i.e. empirical work would focus not only on the innovating firm that is already in a high-growth stage with its innovation in diffusion but on any enterprise that participates in some form in the adoption or distribution of the innovation, even if it’s a low-growth ‘lifestyle’ firm and therefore seemingly only a consumer or repeater of the innovation). The Schumpeterian concept of “new combinations of resources” also offers an opportunity to examine the nature and origin of those resources (both human and nonhuman) that are being combined, as well as the very activities and practices that are needed for creating a new combination.
Kirzner’s thoughts on entrepreneurship could also be revisited from a ‘new’ new economic sociology perspective. However, rather than focusing on the thought processes of the entrepreneur, it might be more interesting to focus on the aspect of Kirzner’s theory that deals with the relationship between the entrepreneur and the market and considers the entrepreneur as a market participant.
The fourth definition is of course naturally attractive to an STS-inclined researcher, considering that the emergence of new entities has always been a core interest of STS and ANT studies. When it comes to entrepreneurship however, it would be important to consider the same point as with the Schumpeterian theory, namely that the role of seemingly repetitive or imitative venture creations should not be disregarded in favour of the highly innovative or controversial ones. Perhaps a Gabriel Tarde quote can be helpful here:
The problem can be summed up as follows: to grasp as closely as possible the genesis of inventions and the laws of imitations. Economic progress supposes two things: on the one hand, a growing number of different desires, for without a difference in desires, no exchange is possible, and, with the appearance of each new, different desire, the life of exchange is kindled. On the other hand, a growing number of similar exemplars of each desire taken separately, for, without similitude, no industry is possible, and, the more this similitude expands or prolongs itself, the more production is widened or reinforced. (Psychologie économique, cited in Latour and Lépinay, p. 35)
The 25th RENT (Research in Entrepreneurship and Small Business) Conference coming up in Bodø, Norway on 16-18 November 2011 has also decided to focus on the social dimensions of entrepreneurship:
Entrepreneurship, Business and Society
The 25th RENT-conference will highlight the interplay between the entrepreneur, the entrepreneurial firm and the society. We will emphasize how new firms are a result of entrepreneurs interacting with stakeholders in their environment, not only in the market but also with interest groups and government institutions. In addition to business entrepreneurship we will highlight community and social entrepreneurship where the entrepreneur is working at community level to create social change and welfare, where success is measured in terms of the effect on the society. Submissions of any aspect of entrepreneurship and small business development are welcome, but preferably concerning the following issues:
- Entrepreneurship & growth
- Corporate and Strategic Entrepreneurship
- The role of universities in fostering entrepreneurship
- Spin off processes and knowledge transfer
- Entrepreneurial finance and venture capital
- Innovation and technological entrepreneurship
- Entrepreneurship and regional development
- Entrepreneurship and governmental support
- Social and community entrepreneurship
- Green entrepreneurship
- Entrepreneurial culture
- Entrepreneurship and gender
- Entrepreneurial learning and communities of practice
- Studies of new businesses
- Studies of business survival
- Entrepreneurship and ethnic minorities
- International entrepreneurship
The deadline for abstracts has just been extended to 30 May 2011.
A friend from Cambridge wrote to remind me that Latour also uses the term “new combinations” on p. 38 of Pandora’s Hope. When I looked it up I realised that I did have that passage marked but I totally forgot about it. It comes at an important moment in Latour’s “Circulating Reference” chapter, where he is describing the process of scientific innovation, the moment when the botanist ‘translates’ specimens of plants into scientific reference, which she can only do because the specimens have become “mobile and recombinable” (which is of course itself a reference to Latour’s notion of “immutable and combinable mobiles” in Science in Action):
Hardly surprising, then, that in the calm and cool office the botanist who patiently arranges the leaves is able to discern emerging patterns that no predecessor could see. The contrary would be much more surprising. Innovations in knowledge naturally emerge from the collection deployed on the table (Eisenstein 1979). In the forest, in the same world but with all of its trees, plants, roots, soil, and worms, the botanist could not calmly arrange the pieces of her jigsaw puzzle on her card table. Scattered through time and space, these leaves would never have met without her redistributing their traits into new combinations [my emphasis].
This concept of innovation as the creation of new combinations is thus very similar to that of Schumpeter (for whom entrepreneurship is “the carrying out of new combinations”). However, the problem with both conceptions is that they tend to equate innovation with entrepreneurship (in fact Schumpeter subsumes both in his overall concept of ‘economic development’). To be fair to both Schumpeter and especially Latour, they both make the crucial point that invention does not equal innovation, meaning that innovation requires “getting things done” (says Schumpeter), or “translation” (in Latour’s lingo). Still, even if we account for the energy required to disseminate the initial invention or innovation and we will call this dissemination ‘entrepreneurship,’ this inevitably creates a distinction between the type of entrepreneurship which comes up with original innovation that gets disseminated on a global scale, and the type of entrepreneurship which is merely a local adoption of this global innovation or a repetition of some older business model. Another way to put that distinction is high-growth businesses (which are turning the initial new combination into a global network) versus lifestyle businesses, mom-and-pop shops or SMEs that remain ‘local’ repetitions of a more or less stable size. On the one hand you have the likes of Google (the initial “new combination” or innovation that turned into a high-growth global enterprise), on the other hand you have the vast army of SMEs that stay small for ever and in the above sense can’t be considered “entrepreneurial” because their particular “new combinations” never turn into global networks.
Why is this distinction a problem? For one, my (work-in-progress) study of the latter type of small firms revealed that owners-managers of small firms very much think of themselves as entrepreneurs and consider their local “mere repetitions” entrepreneurial. So who is to tell them that “No, in Schumpeter’s sense you are not an entrepreneur”? Okay, one could say that that is a mere semantic point, those small business owners must be using the term entrepreneur ‘incorrectly’. The other problem is that if you observe how these micro-enterprise owner-managers assemble their firms, it does very much look like they are creating new combinations out of heterogeneous resources, it’s just that these “new combinations” are not as radically ‘new’ as let’s say Google’s algorithm and therefore are unlikely to be replicated globally. So this raises the issue of novelty (When is a combination “new”?) and also the issue of potential, as clearly some “new combinations” can effect much vaster rearrangements of the world than others. Finally, this distinction between “truly entrepreneurial” firms and “not really entrepreneurial” firms (or high-growth firms and lifestyle firms) has some important political consequences. In the UK for instance, this distinction has just been used as the reason (or excuse) to axe Business Link, the government’s enterprise support agency, whose task was to support SMEs:
The Business Link regional services, provided by the RDAs [Regional Development Agencies], have been the principal channel through which businesses have been able to access the Government’s business support offer. (…) At £154 million per annum, the costs of this support have been high and the generalist nature of these regional services means the support has often been poorly targeted, for example, towards so-called “lifestyle” businesses that have no aspiration to grow. (Local Growth White Paper [PDF], p. 41)
I am not actually saying that innovation and entrepreneurship should be thought of as totally separate. Clearly the two go hand-in-hand, and one could say, following Schumpeter’s point but especially Latour’s concept of translation, that there can’t be innovation without entrepreneurship (i.e. the putting in place of institutions that mediate the innovation). However, at the same time we should also acknowledge that even the creation of a small, lifestyle business is an entrepreneurial act: it is a new combination, even if its ‘newness’ is of a different kind. Not to mention that often it is these small lifestyle firms that end up disseminating global innovations in the first place, by adopting them: they are the network that mediates the highly original “new combination.” So that is yet another reason why we shouldn’t exclude small firms, SMEs, or lifestyle businesses from the concept of entrepreneurship.
This distinction between high-growth firms that produce original innovations and ‘lifestyle’ SMEs that are mere adopters or repeaters of innovations points to the thorny philosophical issue of how to conceptualise the relationship between difference and repetition and then how to translate that to this problem of defining what entrepreneurship is. In their 2009 pamphlet on Gabriel Tarde (The Science of Passionate Interests), Latour and Lépinay provide some interesting pointers in this regard:
Difference and Repetition is both the title of Gilles Deleuze’s thesis and Tarde’s fundamental principle. Invention produces differences; repetition allows for their diffusion; conflict is inevitable; no pre-established harmony allows for a solution (…): it is necessary to invent yet other solutions in order to temporarily generate other inventions, which, by repeating themselves, will produce other differences, and the cycle will begin again. That is the fundamental rhythm, the back beat that, alone, allows economic activity to acquire realism. (p. 39)
This passage suggests that, if we substitute Schumpeter’s “economic development” for Latour and Lépinay’s “economic activity,” then the cycle of invention, repetition, opposition and adaptation (as also described on p. 34) are all necessary for economic development to take place. New venture creation (for which we can reserve the term entrepreneurship) is necessary for all these movements to take place, hence it would make sense to distinguish it from the overall invention and innovation (network) that is being created and repeated and eventually modified.
I suppose what I’m arguing for is both a conceptual distinction between entrepreneurship and innovation and terminological discipline not to confuse the two, even though the two concepts are inherently interdependent.
Entrepreneurial learning is a field that has emerged at the intersection of entrepreneurship studies and organisational learning in the past decade. I’ve become interested in this area because my current research is partly a study of entrepreneurial peer-learning groups. While the majority of this literature considers entrepreneurial learning as a cognitive activity (see my recent literature review), there have also been attempts in recent years to consider the role of artefacts in the organisational learning of small firms, such as Jones, O., Macpherson, A., et al. (2010) “Learning in Owner-Managed Small Firms: Mediating Artefacts and Strategic Space” and Macpherson, A., Kofinas, A., et al. (2010) “Making Sense of Mediated Learning: Cases from Small Firms.”
The Entrepreneurship Special Interest Group at the British Academy of Management is putting on a research seminar entitled “Entrepreneurial Learning and Education: From Theory to Practice,” with contributions, among others, by the above-mentioned Ossie Jones, so the above topic of the role of objects in learning is likely to come up. I’m planning to go to this one. Here are the details:
Entrepreneurial learning and education are vital enablers for enterprise and innovation. The need for universities to teach students how to be entrepreneurial, seize opportunities, and turn ideas into action is at the top of national education agenda. There is also an increasing interest in scholarly research on entrepreneurial learning in the past decade. Understanding what and how entrepreneurs learn not only helps to advance entrepreneurship as a field, but also helps us to reflect on entrepreneurial education. This seminar will seek to identify themes of past research and challenges for the future. It will also engage in the discussion and debate on how to link entrepreneurship theory with practice and experience, as well as the role of academics in entrepreneurship education.
27th May 2011, 1.30pm-5.10pm, University of Westminster, London
Two academic job adverts in the field of entrepreneurship looking for a background in STS:
Karolinska Institutet is looking for a Senior Research Fellow at the department of Learning, Informatics, Management and Ethics (LIME).
Description of the work
Assignments comprise research (70 %) and teaching (30%) including supervision of master and PhD students within the area of bioentrepreneurship and innovation. The person applying for this position should be able to conduct independent research at the unit and will also have the opportunity to shape some of the research activities within the unit.
To qualify the applicant must:
- hold a doctor’s degree or a foreign qualification deemed equivalent to a doctorate within science technology studies, business administration, economics, engineering or sociology.
- have 2-4 years post-doc research experience, primarily in entrepreneurship and innovation.
- documented pedagogical skills and commitment to supervision and teaching.
- successful grant application record.
- publications in international peer-reviewed scientific journals.
- have documented skills in qualitative as well as quantitative research methods are strong merits as well as an understanding of research, innovation and commercialization within the life science/health care areas.
Deadline: 31 May 2011
And the second one at the University of Virginia:
Job: Lecturer, STS & business/entrepreneurship, Dept. of STS, Univ. of Virginia
Lecturer STS. Non-tenure track, part-time faculty position. One year with the possibility of renewal. The salary will be $30,000 in the first year. The Department of Science, Technology, and Society (STS) in the School of Engineering and Applied Science (SEAS) at the University of Virginia seeks to hire a person with research and teaching experience in science, technology and society studies beginning Fall, 2011. We are especially interested in candidates whose interests integrate STS, business, and entrepreneurship or candidates whose work focuses on technology policy. The candidate will be expected to teach two courses in the fall and three in the spring. This teaching load will qualify the incumbent for health insurance benefits. The UVa STS Department is an interdisciplinary unit that provides undergraduate courses for engineering students and undertakes research focused on science, technology, society, ethics, and policy. All undergraduate courses have STS, communications, and ethics components. A Ph.D. in STS or a related field is preferred. Please submit a letter of application, CV and contact information for 3 references. These materials must be submitted online at https://jobs.virginia.edu under Posting Number 0607718.
Review of applications will begin on June 10, 2011 and the position will remain open until filled.
The University of Virginia is an equal opportunity/affirmative action employer. Women and minorities are encouraged to apply.
1st ECSB Summer School on ‘Entrepreneurship in High-Tech Industries’ – 25-29 July 2011
Time: 25-29 July 2011
Place: University of Beira Interior, Health Sciences Faculty, Covilhã, Portugal
The European Council for Small Business and Entrepreneurship (ECSB) is a non-profit organization whose main objective is to advance the understanding of entrepreneurship and to improve the competitiveness of SMEs in Europe. ECSB facilitates the creation and distribution of new knowledge through research, education and the open exchange of ideas between professions and across national and cultural boarders.
ECSB organises for its members high-quality conferences, such as the RENT conference in co-operation with EIASM, in order to facilitate and enhance the exchange of knowledge within the ECSB membership.
In this same line of action, the ECSB and the University of Beira Interior (UBI) will host the 1st ECSB Summer School: Entrepreneurship in High-Tech Industries, next July 25-29 at Covilhã, Portugal.
- Discussion of issues and interesting future developments in entrepreneurship research with Ph.D. students, Post-Doctoral students, junior and senior faculty
- Sharing the views and results obtained by leading scholars and researchers on entrepreneurship in high-tech industries
- Meeting young scholars of entrepreneurship, in an international environment
Application form (application deadline is June 3, 2011): http://ecsbschool.ubi.pt/?page_id=34
Further information about the event by contacting Joao Leitao at jleitao71 a gmail.com.