Defining the new entrepreneurship: how it’s different from the current one
A gap between entrepreneurship and art has arisen over past industrial revolutions. New entrepreneurship aims to close the gap. It is imbued with entrepreneurialism, transplanting into the socio-economic sphere Brunelleschi’s Renaissance perspective in the art world.
Current entrepreneurship is in the STEM field, following the Fordist production environment, characterised by the bureaucracy of the 20th century. Know How To Do now has to be Knowing How To Think, Imagine and Understand. This requires familiarity with the Arts. STEM changes to STEAM. In the new entrepreneurship mode, innovationists take over from incrementalists.
Digitisation joins science and engineering with design and arts, enabling creativity in human-centred uses of technology. The arts are catalysts in converting technological knowledge into new processes, products, and services. Techno-humanist entrepreneurship means encouraging the generation of ideas and ones that feed start-ups generating new values –requiring continuous learning and willingness to explore the unknown.
…and why it’s necessary today
By combining the “4 Knowings”, new entrepreneurship provides opportunity to aspire to more enriching work. Students of today need to become multi-faceted hunters of ideas. A combination between varied stories, artistic creations, and constructions of things configures the path of work. This shows a different horizon from occupations that exhaust people.
Managers should take courage
New entrepreneurship brings turbulence to management because it shows many facets of work, as Peter Drucker (1909-2005) observed. No longer the operator following unambiguous messages. For current entrepreneurship, managers are increasingly expecting automation to be the key to success. As a result, tomorrow’s work would not differ from today. Whereas new entrepreneurship urges managers to take on the role of Renaissance man, appreciating experiences that move towards an unpredictable future.
Entrepreneurialism: a cultural movement
Exorcising unemployment has been a prime driver of economic success. However, transition to the knowledge-based society has brought creators who ignore that push but embrace the pull of Entrepreneurialism. That is what will describe progressing communities and those in retreat.
Research is exploration escaping the knowledge map of past discoveries. Entrepreneurialism is the territory, not the map, it is Innovation after Research. It is leadership; not management. Also Innovation is not confined by rationality.
Entrepreneurialism – the mind and creative faculty for entrepreneurial actions, and underlying Entrepreneurship, the process of designing and starting a business – has the purpose of changing resources to create new wealth. Entrepreneurialism is not synonymous with Business. Unlike Business, Entrepreneurialism is not just about material prosperity. Entrepreneurialism and Entrepreneurship are ways of perceiving the world that contribute to the broader design of society, feeding a social movement that challenges the model of Business that sees the creation of value for shareholders as a fixed point, around which the company revolves.
Entrepreneurialism is not built to defined standards. That is a managerial function. Instead, it is an art form that, opening doors to the future, imagines its transformation into an entity called ‘Company’. It flourishes when experimenters meet and interact in informal groups, amateurs and pragmatists, not just academics.
There have always been social innovators, like the Lunar Society of Birmingham, who met between 1765 and 1813. Curious about the natural world, the Lunar men created many Innovation and Entrepreneurialism results, such as the discovery of oxygen (Joseph Priestley, 1733-1804), the steam engine (James Watt, 1736-1819) and the commercialization of pottery (Josiah Wedgwood, 1730-1795). Their achievements extended to fossil classification, telescope manufacture, and the creation of electricity. They lived art in its broadest meaning, encompassing the natural world. As Jenny Uglow (2002) brilliantly recounts, >.
The imagination of Entrepreneurialism is unlimited, while Business moves within the confines of known knowledge. Entrepreneurialism has an organic basis, which often is at odds with that of Business, predicated on efficiencies at scale.
Entrepreneurialism as social utility
Entrepreneurialism has principles that are both utilitarian and pleasurable – pursuing one’s dreams and developing one’s potential. It also embraces utilitarianism preached by British philosopher and economist John Stuart Mill (1806-1873). That is, the pursuit of personal happiness is not at the expense of social happiness. Entrepreneurialism is less individualistic than is commonly believed. Depending on its culture and the way in which social and economic life is conducted, a country, a region or a community can act as an entrepreneur. That is how Joseph Schumpeter (1883-1950) expressed it.
Shareholder value and conflict with entrepreneurialism
As Lao Tzu (601 BC- 531 BC) might say, Entrepreneurialism is the clay that shapes the vase of Business, filled with the idol of profit, and tyrannous shareholders. Consequently, it is not Business performance that is the master; instead, accounting profits and the share price, both subject to manipulation, are, as Martin Wolf writes (2018). This is a second form of dissonance from any entrepreneurial ambition; firstly the move towards replicable systems, followed by subservience to shareholder value.
The entrepreneurial function is regenerated by always creating new combinations. This churn sets the pace for creation of entrepreneurial enterprises, generating sustainable productivity and wealth for the common good. When it takes over Entrepreneurialism, the managerial culture – as Peter Drucker regretted –makes it difficult for people to work.
When Business increases the concentration of power and wealth in the hands of top management it sets a moral compass, reproducing the Golden Age of capitalism – an era of major social problems, satirised by the American sociologist Thorstein Veblen (1857-1929) in The Theory of the Leisure Class (1899). This is self-destruction on a grand scale. Dinosaurs of business marching towards the abyss as business models and mores of acceptable behaviour change around them.
Should large enterprises think small?
Across the big business spectrum are exemplars like Paul Polman of Unilever, apparently as a paragon of purpose for the company and its employees. Yet, he defends the advertisement for Unilever’s skin lightening cream in India because if Unilever didn’t do it, somebody else would. Whatever his individual views, as the CEO of a global company, he is still bound by shareholder value. Is there is more honesty in the small business sector, and a more effective social conscience? Perhaps so, but they are populated by the same Homo Sapiens. We can all be grasping, self-centered and downright bad. But small business owners and team are more likely to be confronted by their customers and suppliers. There are fewer layers of management and making it difficult to separate self-interest from the implications on people you know. In this sense their entrepreneurial activities may have a more social impact on their environment.
Effective speaks to Agile
Effective entrepreneurial activity still exists in large corporations, though. The market capitalizations of Facebook, Microsoft, Amazon, Apple and Google are now over $2trillion. All have adopted a small business mindset, otherwise called Agile, described by Steve Denning (2018). Close to customer, no internal markets, fast to innovate – all entrepreneurial activities and all have, with exceptions, provided value to the world at scale, whilst generating exceptional shareholder returns.
Humanism begets opportunities
By placing the person at the centre and affirming their dignity and autonomy, Entrepreneurialism embodies a new Renaissance humanism. By investing primarily in the value of man’s creative autonomy, the entrepreneurial enterprise focuses on the dynamism of co-creators and entrepreneurs rather than on the static nature of jobs. Knowledge professionals abandon incremental innovations to explore uncertainties to discover non-consumption opportunities. Coexistence and cognitive conflicts between different talents make the enterprise a place where opposing opinions creates opportunities.
Independence leads to community
Freed from bureaucracy, Entrepreneurialism acquires the independence necessary for innovation, creating economic growth together with well-being. Hence, Entrepreneurialism is a cultural movement. It is the community that is entrepreneurial, and the goal of Entrepreneurialism is the fulfilment of community needs.
This article is inspired by the Manifesto “ECONAISSANCE:
Economic knowledge in progress (and looking ahead)”, now being drawn up by a group of scholars from different countries coedited by Piero Formica and Nick Hixson
About the authors:
Piero Formica is Professor, Senior Research Fellow, Innovation Value Institute, Maynooth University, Ireland and Winner of the Innovation Luminary Award 2017
Nick Hixson is an entrepreneur, business enabler based in the South of England, and Drucker Associate.
Denning, S. (2018), The Age of Agile: How Smart Companies Are Transforming the Way Work Gets Done, American Management Association
Drucker, P. F. (1993), Post-capitalist Society, Peter F. Drucker
Hurst, D. K. (2018) unpublished Thesis and (2014) The New Ecology Of Leadership, Columbia University Press
Skidelski, R. (1992), John Maynard Keynes, II: The Economist as Saviour, 1920-1937, Macmillan London
Uglow J (2002) The Lunar Men: Five Friends Whose Curiosity Changed the World. Faber and Faber, London
Veblen, T. (1899), The Theory of the Leisure Class: An Economic Study in the Evolution of Institutions, Macmillan, New York (1a ed. it.: La teoria della classe agiata: studio economico sulle istituzioni, Einaudi, Torino, 1943)
Wolf, M. (2018), “We must rethink the purpose of the corporation. The idea that businesses only pursue profits leads to dire outcomes”, Financial Times, December 11