Entrepreneurship:Past, Present and Future

Shaker A. ZahraCarlson School of Management

University of Minnesota

Some General Observations

Progress has been startling, with greater acceptance and diffusion of entrepreneurship programs & centers.

Newcomers from outside the field have enriched the field and redefined it.

Theory development has been slow, whereas methodological rigor has increased.

Attention to public policy issues is growing.

Some General Observations

The production of entrepreneurship knowledge and scholarship is a worldwide enterprise, with prominent scholars and centers located around the globe.

This is compelling us to reflect on the relativity of entrepreneurial processes, motives and outcomes.

Agenda

Key shifts in entrepreneurship research:

– Milestones & major transitions– Where are we?

Some emerging issues that are likely to redefine What and How we study entrepreneurship.

– Persistent debates– Promising directions

Studying Entrepreneurship

Clinical Tradition

Case studyLimited theoretical

grounding

Field/ Surveys

Use of theory developed elsewhere

Multivariate Focus

Use of Archival dataEconometric

Disciplinary Focus…………………………

Qualitative MethodsTheory Building Focus

Studying Entrepreneurship

Ivy League

Big 10 Large State/Middle Tier

Balanced Missions

Disciplinary Focus

***** ***** ** Very little theory

Industry Focus

***** ***** **

Archival *** ***** *

Field ** * ****

Surveys **** ****

Case Study Theory building

Teaching Teaching

Experimental

* *

Econometrics

***** **** **

The Way We Were

The “Babson” Clinical Tradition

– Phenomenon driven– Descriptive– Process oriented (without the formality of a unified

framework)– Action Based– The entrepreneur as hero

• Lack of theoretical grounding, combined with poor empiricism, drew criticism from within and outside the field.

Where We Are!

A shift occurred with the creation of:

– The Babson Research Conference– Academy of Management: Entrepreneurship Division– Entrepreneurship: Theory and Practice – Journal of Business Ventures

Greater attention to large scale surveys

– The debate about the distinctive domain of entrepreneurship

– Greater attention to the “whats” of entrepreneurship

Going Beyond Individual Entrepreneurship

The recognition of corporate entrepreneurship as an integral part of the field:

– What is it?– Who does it?– How to foster it?– When does it pay off?– Forms of benefit from corporate entrepreneurship:

• Knowledge and learning• Strategic Variety and flexibility• Opportunities• Financial performance

– Relationship between corporate and individual entrepreneurship

Opportunity Evaluation

Opportunity Discovery

Opportunity Exploitati

on

Opportunity

Evaluation

Redefining the Field around Opportunity

Context

Where Are We?

Hard to tell

Fragmentation is commonplace

– Gartner: We are in different tents

Entrepreneurship: A field of Dreams

Some Promising Developments

Questioning how we count things. Rediscovery of the Entrepreneur Greater attention to context From Entrepreneurial Orientation to

Capability Formal vs. Informal Entrepreneurship Social Impact: Social Ventures &

Sustainability Focus on Exploitation National Policy

Micro-foundations

Studying Entrepreneurship

Rediscovery of Entrepreneur

From traits to intangibles

– Cognition– Identity– Passion– Persistence– Learning/ Experience Effects– Managing & surviving failures

• Gendering the field?• Ethnics/ Race• Immigrant

Dimensions of Context

Dimensions What does it Mean?

Spatial The physical setting or location of event, text, relationship.

Time Sequencing of the text in relation to other texts or events.

Practice Locating text (event) in a domain of related ideas, values and modes of operating.

Change Arena where concept is deployed, altered, etc. to give new meaning

[Leitch & Palmer, 2010; Thornoton, 1999]

Concerns about Contextualization

Theory-free research

Generalizability is sacrificed. There is a belief that context-free theories/studies are more scientific than context-specific studies.

Context: An over-used concept that has become a “conceptual garbage can” [Akman, 2000:754]

Subjectivity in defining and invoking context [Dilley, 1999]

What are the dimensions of the “context”?

There is the possibility that context is the key source of “study-to-study variations” [Johns, 2006:389]

So, How do the Differences look like?

VariablesEntrepreneurship Research

Current Practice Contextualized

Treatment of context

Control for it Is part of the story; sometimes it is the story

Role of Researcher

Distant, detached Heavily engaged.

Scope (of propositions)

Broad Bounded.

Phenomenon Defined a priori •Defined by context• Meaning & boundaries often evolve as research progresses

Questions Relevance Generalizability

Entrepreneurial Orientation

EO as a reflection of

– Proactiveness– Innovativeness– Risk Taking– Autonomy

Entrepreneurial Orientation

We need to reassess the value added of investing resources into the study of EO.

If we are going to continue to study EO, we need:

– Better conceptualization & contextualization of EO research.

– Cleverer measures of EO

– Examining the dysfunctional consequences of EO.

Entrepreneurial (dis)Orienation

EO: a mishmash of many constructs.

Disposition to be entrepreneurial does not really mean action, behavior (i.e., being entrepreneurial):

– Whose orientation?• Firm• TMT• Employees

What is entrepreneurial about the E in EO?

From EO to Capability?

Capabilities are closer to managerial action.

We can gauge multiple capabilities.

WE can look into different attributes of a given capability (e.g., novelty).

Their effect on performance is not automatic.

RateHetero

gen

eity

Radicalness

What Passes for Entrepreneurship?

Why do these Dimensions Matter?

Dimension

What does it mean? Strategic

Consequences

Example indicators

Magnitude of novelty

Extent to which activity is new (multiple vs. few dimensions)

Differentiation

Extent to which venture takes existing concept to a new market.

Extent to which venture embodies new product in new or existing markets

# of markets created over time and # of new entrants.

Why do these Dimensions Matter?

Rate

How many entrepreneurial activities are undertaken?

Over what period?

Resource accumulation

Learning

Number of start-ups or spin-offs, buyouts, and buy-ins per year or per entrepreneur

Variety of exploitation modes

Variability across actions, initiatives & ventures

Organizational form

Game change and shaping of the ecosystem.

# of knowledge sources used to identify opportunity.

Diversity of organizational forms in a market.

# & diversity of proprietary processes in a market

Formal vs. Informal Entrepreneurship

Legitimacy Formality

Formal Informal

Legitimate

1

most widely studied

3

limited attention by sociologists & economists.

Illegitimate

2

CSR and criminology

4 great attention and

growing study because of effect on

economic development

Informal Entrepreneurship

InformalEntrepreneurship

+ Effects

EmploymentTrainingExperimentationSometimes only way to render service

-Effects

CorruptionGresham’s law: Driving legitimate business out of the marketExploitation of children and other disadvantaged groups

Dark Side of Entrepreneurship

Influence, control and abuse of power.

– Corruption–Misallocation of resources

Delaying social and political change

Delaying and even suppressing technological change.

“Absolving” the state from the responsibility for public good.

Class Strife

The Social Impact of Entrepreneurship

Venture Type

Potential Impact

Positive Negative

Traditional Well Studied UnderStudied

SocialReceiving GrowingAttention

Rarely

Studied

Types of Social Innovations

SocialInnovations

Market(internet micro-financing)

Management

Political(coalition building)

Institutional

(e.g., new models)

(Brooks, 2009)

Opportunity Exploitation: Coverage in the Literature

Variable Coverage

Mode of Exploitation *****

Timing ***

Movement from Exploration to Exploitation

*

Opportunity Attributes as Antecedent

*

Structure as Antecedent **

Culture & Norms as Antecedents **

Environment as Antecedent **

What Does Exploitation Mean?

Refers to those activities that transform an opportunity into a source of value.

Opportunities are not limited to products [Foss et al., 2011] or physical goods; they involve:

– Intangibles (differentiated offering)– Intellectual (Ideas, discoveries)– Processes

• Market Creation• Industry• Intra & inter-organizational systems, routines, and

procedures

Role of National Policies

What role should the state play in promoting entrepreneurship?

What should national policies include?

– Sectors– Access– Incentives– Relationship between FDI & Entrepreneurship– Relationship between incumbents & new

ventures

Balanced ecosystems that foster growth

Studying Microfoundations

Microfoundations refer to individual cognitions, attitudes, beliefs, motivations, and behaviors that create and influence macro structures (e.g., firms, organizations, markets & networks) and other social economic activities [van de Ven, 2010].

Highlight the role of agency [Sarasvarthy, 2008] Important for reclaiming the centrality of the

entrepreneur

Micro-processes [Teece et al., 2007], which have been overlooked in entrepreneurship research [Santos & Eisenhardt, 2009]

Recognizes that economic action arises from their situated cognitions, as expressions of their beliefs [Nonaka et al., 2008]

Individual-

Level

Micro-Processes

New FirmsWith Varying degrees of

ENT

Networks

From Micro-Foundations to Macro-Structure

Studying Entrepreneurship

Clinical Tradition

Case studyLimited theoretical

grounding

Field/ Surveys

Use of theory developed elsewhere

Multivariate Focus

Use of Archival dataEconometric

Disciplinary Focus…………………………

Qualitative MethodsTheory Building Focus

Studying Entrepreneurship

Ivy League

Big 10 Large State/Middle Tier

Balanced Missions

Disciplinary Focus

***** ***** ** Very little theory

Industry Focus

***** ***** **

Archival *** ***** *

Field ** * ****

Surveys **** ****

Case Study Theory building

Teaching Teaching

Experimental

* *

Econometrics

***** **** **

Conclusion

We have come far but we continue to struggle with fundamental questions:

– Is there a unifying framework?

– Why does the field continue to borrow ideas/ theories from elsewhere? Why not develop our own theories?

• We use theories developed elsewhere but do we add to these theories?

• Are entrepreneurial phenomena distinct enough to warrant developing theory?

– How can we influence public policy?

Thank you

Social Entrepreneurship Vs. Social Innovation

Dimensions Social Entrepreneurship

Social Innovations

Focus New Firm creation Social Movement through Partnerships

Goals Money makingSolving Social issues

Solving social IssuesEmpowerment

Locus of Action

Mostly Individual Partnerships (Collective Action)

Entrepreneurship:Productive, Unproductive &

Counterproductive

Entrepreneurship:Productive, Unproductive &

CounterproductiveLocus Individual Corporate

Type

Productive Firm creation

VenturingBusiness Creation

Unproductive Exploitation of labor & environment

Empire building (MA)

Counterproductive

Bribery Illicit trade

DumpingPollution

Solutions

Traditional Philanthropy PhilanthropyCSR

Emerging SE “Bottom of the Pyramid”