entrepreneurship professor josef mittlemann brown university
TRANSCRIPT
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Entrepreneurship
Professor Josef Mittlemann
Brown University
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• Break activity into two camps: Leaders and Followers. Entrepreneurship camp = – Leader Camp: Royalty - Military – Entrepreneur Camp: Merchants - Adventurers
• Mid 18th Century – A zero sum game- ones gain another’s lossThis resulted in Negative connotations for
the business person
A Brief History of Entrepreneurship
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Differences between the Capitalist vs. Merchant
• Capitalist:• No risk to Life and
limb
• Favored by Laws of usury
• Adventurer
Actively trading and voyaging, resulted in
Development of Skills • Was forced to
survive. Use of new tools and skills
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The word “Entrepreneur”
Definitions
Dictionary in France (1723)“one undertaking a project, a manufacturer, a master builder”
England (18th Century)An “adventurer, projector, or undertaker”
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Richard Cantillon• “L’Essai sur la nature du commerce en
general” – published 1755 first clear definition of an entrepreneur
• Market as a place vs.market as Mechanisms
• An equilibrating mechanism
• The entrepreneur is a key player -Market Maker
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Cantillon continued
• Focuses on function: Risk is confronted in search of Profit
• Broke population down into Fixed vs Variable Income earners.
• Product emphasis versus marketing
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Later 18th &19th Century France
• Quesnay, Baudeau and Turgot in mid 18th Century France: Focused on:
–The ability of the entrepreneur to Innovate and Organize
• J.B Say in late 18th and early 19th said:
–Entrepreneur is not a force in invention but rather the Commercializer of the Invention
–Thus the planner for its production
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Adam Smith
“Inquiry into the Nature and Causes of the Wealth of Nations” (1776)
• Capital is the Driver of Profit
• People are naturally Industrious versus entrepreneurial
• The Entrepreneur lost standing
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Early 20th Century
• Francis Walker, Frederick Hawley, and John Clark
• Resurrected the entrepreneur’s role
• Individual versus source of capital
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Joseph Schumpeter in the early 30’s-50’s resurrected more completely the entrepreneur.
• Saw the Entrepreneur as Combining existing goods
• He referred to the Entrepreneurs as “Creative destroyers.”
• Disrupters of equilibrium.
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Later 20th Century
• Entrepreneur is viewed as a Change Agent
• Leaders as Change Makers
• Entrepreneurship as Process
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Entrepreneurship as Process• Concept encouraged in U.S. by T.W.
Schultz in 1970’s
• Entrepreneurial activity goes beyond the borders of business.
• Education can be a source of entrepreneurial learning.
• Entrepreneurs: a somewhat scarce and limited resource.
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General Consensus on Entrepreneur
• Creative
• Innovative
• Promoter and marketer
• Assumes risk which others see as greater than they do.
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Entrepreneur
• Decision maker
• Organizer but special type of Manager
• Re-allocator or accessor of various resources.
• Both Leader and Proprietor
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Entrepreneurship Myths
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Myth no. 1 is that an entrepreneur is one who Starts and Runs a
Business.
Versus: Plan for Growth and Expansion
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Myth 2: Entrepreneurship Happens at one given point in time,
The phenomenon is not Fixed
and takes place as a Process over Time
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Next myth is that You are or you are not an entrepreneur.
• I think it more generous to say that the Entrepreneur enters Periods of dormancy
• In the long run, it can be an on/off phenomenon
• But not really an either or phenomenon.
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Here is a popular one, the E is a BIG Risk Taker
• My experience is that while any innovation is somewhat risky, the Entrepreneur takes his or her Analysis quite carefully:
–does research, and
–manages the risk, through
• experience,
• special knowledge or
• enlisting the aid of others
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An entrepreneur is Born to Be
• Popularization of a Cult Concept:– Richard Branson, or – Ted Turner, also enlists the arguments found
in the
• Nature vs. nurture discussion.
• Our Environment plays a large role
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So too, that the entrepreneur is in it Only For Money’s Sake
Entrepreneurs are excited by acting as Change agents and
Are motivated as much if not more by Achievement than money.
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It’s only about the Individual
• I think it fair to say that the notion of individual success in today’s global economy is bankrupt if not romantic.
• Teams can and do exhibit the entrepreneurial spirit.
• While the entrepreneur is a potentially dynamic leader- but short of teamwork, the innovation of ideas will fall flat.
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It Only Exists in Business
• Suffice it to say that entrepreneurial activity is showing up everywhere.
• Even now in social work where there are some cities that are investigating entrepreneurship class requirements for their workers.
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It Takes Luck and Money
• No more than any other endeavor, perhaps we can say that the resource here is idea and opportunity generated not capitally generated.
• Of course there is an abundant measure of Hard Work and Application of Skills
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And finally, is the world of the E. Unstructured and Chaotic
• The world is Chaotic
• The Entrepreneur usually finds opportunity in that arena and is quite good at dealing with uncertainty.