Intellectual Foundations of
Entrepreneurship Research
ESU Conference 2011
Seville, 14 September 2011
Hans Landström
[email protected]
Sten K. Johnson Centre for Entrepreneurship
Lund University, Sweden
Small Business Management and Entrepreneurship
Vienna University School of Economics & Business, Austria
Agenda
History matters in entrepreneurship research!
1.
Evolution of entrepreneurship as a research field
2.
Challenge for the future
3.
Some learning experiences
Agenda
History matters in entrepreneurship research!
1.
Evolution of entrepreneurship as a research field
2.
Challenge for the future
3.
Some learning experiences
Three eras of
entrepreneurship research
1870-1940
Economics Era
- Knightian view
- Schumpeterian view
- Kirznerian (Austrian) view
1870
1900
1940-1970
Social Science
Era
1970 Management
Studies Era
- Historical/
sociologist view
- Psychologist/
sociologist view
1950
2000
The economics era
American tradition
(eg. Walker, Hawley,
and Clark)
Frank Knight
Occupational choice models
(Lucas, Kihlstrom & Laffont)
Karl Marx
Leon Walras
German Historical
School (eg. Smoller)
Austrian School of
Economics (eg. Menger
Wieser, and BöhmBawerk)
Joseph Schumpeter
Hayek/Mises
Research Center in
Entrepreneurial
History
Israel Kirzner
Knightian tradition
Knight, F.H. (1916/1921), Risk, uncertainty and Profit,
Boston: Houghton Mifflin.
Three types of uncertainty:
1.
Risk
2.
Uncertainty
3.
”True” uncertainty
Entrepreneurship is mainly characterized by true uncertainty, i.e. entrepreneurs
receives a return for making decisions under conditions of non-insurable
uncertainty.
Schumpeterian tradition
1st edition 1912, 2nd edition 1926, English edition
1934 (based on 2nd edition), but the 1st and 2nd
editions are different.
Chapter 2 ”The fundamental phenomenon of
economic development”
1.
2.
3.
The basic assumption was that economic growth
resulted from innovations or ”new combinations”.
Innovations in the form of new products, new production methods, new raw
material, new markets, and new organizational structure in industry.
Innovation implemented by entrepreneurs with a specific personality:
driven by a desire to found a private kingdom (power and independence),
the will to conquer (succeed), and the joy of creating (getting things done).
Kirznerian tradition

The entrepreneurial function involves the coordination
of information, which is based on identifying the gap
between supply and demand, as well as acting as the
broker between supply and demand, making it possible
to earn money from the difference.
Thus, the entrepreneur tries to discover profit opportunities
(entrepreneurial alertness) and helps to restore equilibrium on the
market by acting on these opportunities.
How is entrepreneurship defined –
economics view?

What happens on the market when the entrepreneur
acts? – a market focus

Schumpeterian definition (1934)
The entrepreneur is an innovator introducing new combinations
of resources, creating a disequilibrium on the market.
Prod A
Schumpeter
Kirzner
Prod B

Kirznerian definition (1973)
Entrepreneurs are alert to identify and act upon profit-making
opportunities based on an identification of the gap between supply and
demand.
Three eras of
entrepreneurship research
1870-1940
Economics Era
- Knightian view
- Schumpeterian view
- Kirznerian (Austrian) view
1870
1900
1940-1970
Social Science
Era
1970 Management
Studies Era
- Historical/
sociologist view
- Psychologist/
sociologist view
1950
2000
From economic to social science …
Around the Second World War …

The economic science focused more and more strongly on
equilibrium models and models in economics became increasingly
mathematic oriented.
Baumol (1968) made clear that within the framework of market
equilibrium, there was no room for the entrepreneurial function.
 Entrepreneurship and economics have never been good ’travelling
companions’.
The social sciences era
Center for Research in
Entrepreneurial History
Arthur Cole
Joseph Schumpeter
Innovation and
creative destruction
Historical approach
Jenks and Cochran
Modernization of
societies around the
world (eg. Cochran,
Landes, Jenks,
Gerschenkron, etc.)
Sociologist psychologist
approach
McClelland and Hagen
Psychologists
- Traits
- Categories of
entrepreneurs
Sociologists
- Ethnicity
- Culture
- Networks
David McClelland:
The Achieving Society (1961)
Research question: Why do certain societies develop more dynamically than
others?
Hypothesis: The values that prevail in a given society,
particularly with regard to the need for achievement
(nACH), are of vital importance for the economic
development of the society.
Result: Economically better developed nations are
characterized by lower focus on institutional norms, and
greater focus on openness towards other people and a higher nACH in society.
Entrepreneur: Major driving force in the development – transform a
country’s level of achievement to economic growth.
Characteristics: nACH, moderate risk taker, self-confidence, individual problem
solving, etc.
Traits and categories






Need for Achievement
Risk-taker
Locus of control
Over-optimism
Desire for autonomy
etc.
Managers – Entrepreneur (Collins & Moore & Unwalla, 1964)
Craftsman entrepreneur – Opportunistic entrepreneur (Smith,
1967)
Artisan – Classical – Manager (Stanworth & Curran, 1973)
How is entrepreneurship defined –
social sciences view?

Who is the entrepreneur? and Why do they act?
– a individual focus

The ‘great person’ definition
The entrepreneur has an intuitive ability – a sixth sense and instincts.

Psychological trait definition
The entrepreneur is driven by some unique values, attitudes, needs and
traits (e.g. nACH, LOC, creativity, persistence, etc.).

Leadership definition
Entrepreneurs are leaders of people.
Three eras of
entrepreneurship research
1870-1940
Economics Era
- Knightian view
- Schumpeterian view
- Kirznerian (Austrian) view
1870
1900
1940-1970
Social Science
Era
1970 Management
Studies Era
- Historical/
sociologist view
- Psychologist/
sociologist view
1950
2000
The environment during
the 1950s and 1960s

Schumpeter (1942)
”… what we have got to accept is that the large-scale establishment
has come to be the most powerful engine of progress.” (p 106)

Galbraith (1967)
Argued that innovative activities as well as improvements in products
and processes were most effeciently carried out in the context of large
corporations. Therefore, economic policy should focus on large
corporations.
Social turmoil in the 1960s and 1970s
- Dynamics in society (… change in industrial structure)
- Economic problems (… unemployment)
- Change in fashion (… ”small is beautiful”)
- Increased political interest (… Keynes’ ideas questioned)
Development in society
Entrepreneurship
and
Small Business
research
David Birch:
The Job Generation Process (1979)
Birch’s contribution was that he realized that no data
were available to resolve various questions related to
job creation, and he utilized and reshaped existing data
in a way that they could be used for longitudinal analyses
(Dun & Bradstreet data base,1969-1976).



The majority of new jobs were created in firms with
20 or less employees – often independent and young
firms (thus, it was not the large firms that created new jobs).
The report (54 pages) was sold in twelve copies, but its influence was
enormous (among policy makers as well as research community).
Considerable debate, but many of the findings have proved very robust and
have been verified in many later studies (Storey, Kirchhoff, Reynolds,
Davidsson).
Take-off phase (1980s)
The pioneers of entrepreneurship research
■ Low entry field  researchers relied on concepts and theories
anchored in their home field of research
■ Diversity in research
”It was an unstructured exploration of the ’elephant’ in which
researchers discovered that the animal was different, composed of
rather unusual parts and that it was quite large.” (Churchill, 1992)
Research community
◘ Research society: small, individualistic and enthusiastic
◘ Creation of arenas for communication
◘
◘
◘
Professional organizations
Academic conferences
Scientific journals
Growth phase (1990s)
450
■ Extensive growth of the field
Migration
Mobility
■ Policy orientation
■ Ambition to understand the ’entire’
phenomenon
Highly fragmented research field
■ Building of a strong infrastructure
350
300
N of articles
◙
◙
400
Business & Management
250
Economics
Sociology
Psychology
200
133 other subfields
150
100
50
0
1950
1960
1970
1980
Publication year
1990
2000
2010
Searching for maturity (2000s)

Realization that entrepreneurship is a complex,
heterogeneous and multi-level phenomenon

Open up for broadening of entrepreneurship as a
phenomenon


Knowledge platform of its own




Economic phenomenon  societal phenomenon.
Internal orientation (citations, less influence from ‘outsiders’, etc.).
Specific and nuanced language (Karlsson, 2008).
New generation researchers (Hjorth, 2008).
The return of economics and psychology in
entrepreneurship research
How is entrepreneurship defined –
management studies view?

How is entrepreneurship developed – a process focus

Opportunities
Entrepreneurship investigates how and why some individuals (or teams)
identify (business)opportunities, evaluate them as viable, and then decide
to exploit them, whereas others do not, and, in turn, how these
opportunities result in product, firm, industry and wealth creation. (Brush et
al., 2003; Shane and Venkataraman, 2000).

Firm creation
Entrepreneurship is the creation of organizations, the process by which
new organizations come into existence. (Gartner, 1988).
Management studies era – summary
Cognitive
dimension
Take off
phase
Growth
phase
Searching for
maturity phase
Explorative driven
Phenomenon and
empirical driven
 Fragmentation
Policy
orientation
Improved
empirical
methodology
Strong links to the
topic
Social infrastructure
Stronger theory
orientation
 Hierarchical divide
Knowledge
orientation
Widening of
methodological
approaches
Strong links to the
domain
Emerging ”tribes”
Practical
orientation
Pragmatic
methodology
Social
dimension
Strong links to
society
Individualism
 Creation of
social networks
Pioneers
Growth
Institutionalization
 Migration/mobility  Legitimacy
Agenda
History matters in entrepreneurship research!
1.
Evolution of entrepreneurship as a research field
2.
Challenge for the future: Systematic theoretical works
3.
Some learning experiences
Theoretical development:
Two paths

Borrow concepts and theories from other
research fields

Create concepts and theories of its own
Borrow concepts and theories
from other research fields

Arguments




We don’t need to ‘invent the wheel’ in entrepreneurship research.
There are concepts and theories in other fields that could be
tested in the entrepreneurial context.
There is a tradition of migration of scholars anchored in
mainstream disciplines, and importing concepts and theories
from other fields.
Borrowing concepts and theories from other fields might be a
necessary first step towards developing unique theories of its
own.
Problem

Entrepreneurship as a ‘bounded’ multi-disciplinary field, i.e. the
use of knowledge between different research fields is limited.
Comparing three interrelated
research fields
Innovation
Jan Fagerberg and
Koson Sapprasert
Oslo University,
Norway
Entrepreneurship
Hans Landström,
Gouya Harirchi and
Fredrik Åström
Lund University,
Sweden
Science and Technology Studies (S&TS)
Ben Martin, Paul Nightingale and Alfredo
Yegros-Yegros
SPRU, the UK
Methodology:
’Handbooks’ in entrepreneurship
Editors
Title
Year
Chapters
References
Kent, Sexton & Vesper
Encyclopedia of Entrepreneurship
1982
18
630
Sexton & Smilor
The Art and Science of Entrepreneurship
1986
12
381
Sexton & Kasarda
The State of the Art of Entrepreneurship
1992
22
1549
Katz & Brockhaus
Advances in Entrepreneurship (1)
1993
5
334
Katz & Brockhaus
Advances in Entrepreneurship (2)
1995
8
657
Katz & Brockhaus
Advances in Entrepreneurship (3)
1997
7
852
Sexton & Smilor
Entrepreneurship
1997
18
907
Sexton & Landström
Handbook of Entrepreneurship
2000
21
1422
Acs & Audretsch
Handbook of Entrepreneurship
Research
2003
19
1688
Alvarez, Agarwal &
Sorensen
Handbook of Entrepreneurship
Research Disciplinary Perspectives
2005
11
652
Casson et al.
Oxford Handbook of Entrepreneurship
2006
27
2081
Parker
The Life Cycle of Entrepreneurial
Ventures
2007
18
1629
Core scholars in
entrepreneurship
J-index
Author
Country
1
47.02
Joseph Schumpeter
Austria/USA
2
29.59
Howard Aldrich
USA
3
29.52
William Gartner
USA
4
29.30
Israel Kirzner
USA
5
27.71
Scott Shane
USA
6
21.91
Sankaran
Venkataraman
USA
7
17.14
William Baumol
USA
8
16.59
David Audretsch
USA/Germany
9
15.68
Frank Knight
USA
10
14.62
David Birch
USA
Top-15 works in S&TS, Innovation
and Entrepreneurship
Rank
S&TS
Innovation
Entrepreneurship
1
Latour (1987)
Nelson & Winter (1982)
Schumpeter (1934)
2
Latour & Woolgar (1979)
Nelson (1993)
Shane & Venkataraman (2000)
3
Kuhn (1962)
Porter (1990)
Shane (2000)
4
Jasanoff (1990)
Schumpeter (1934)
Knight (1921)
5
Shapin & Schaffer (1985)
Rogers (1962)
Schumpeter (1942)
6
De Solla Price (1963)
Lundvall (1992)
Gartner (1988)
7
Traweek (1988)
Freeman (1974)
Bhide (2000)
8
Star & Griesemer (1989)
Cohen & Levinthal (1990)
Kirzner (1973)
9
Bloor (1976)
Pavitt (1984)
McClelland (1961)
10
Narin et al. (1997)
Arrow (1962)
Storey (1994)
11
Haraway (1991)
Saxenian (1994)
Kirzner (1997)
12
Bijker et al. (1987)
Freeman (1987)
Casson (1982)
13
Gibbons et al. (1994)
Von Hippel (1988)
Aldrich & Zimmer (1986)
14
Collins (1985)
Christensen (1997)
Saxenian (1994)
15
Pickering (1995)
Teece (1986)
Venkataraman (1997)
Share of citations between
and within fields
Cited
S&TS
Innovation
Entrepreneurship
S&TS
79%
18%
3%
Innovation
13%
67%
20%
Entrepreneurship
4%
27%
69%
Citing
Comparing three distinct
research fields of their own
Innovation
Entrepreneurship
S&TS
Suggestions for the future

Combine topical and disciplinary knowledge (Davidsson
2003):




Entrepreneurship scholars who learn more about theory and
methods from other disciplines.
Disciplinary scholars who learn about entrepreneurship.
Collaboration between topical and disciplinary scholars.
Deeper understanding of the assumptions and the
intellectual roots from which borrowed concepts and
theories have evolved (Landström & Lohrke, 2010).
Create concepts and theories
of its own

Arguments




Entrepreneurship is something unique that can’t be understood
using concepts and theories from other fields.
Stronger knowledge platforms in entrepreneurship: more
internally oriented knowledge (Cornelius et al., 2006) and more
nuanced language (Karlsson, 2008).
A new generation of scholars is entering the field (Hjorth, 2008).
Problem

Our knowledge is highly fragmented, changeable and contextual
dependent, but we have a lot of empirical knowledge about
entrepreneurship.
Empirical knowledge in
entrepreneurship research
1980
1985
1990
1995
2000
2005
The role of entrepreneurship in the dynamics of the industry
Venture performance and growth
Corporate entrepreneurship
Ethnic entrepreneurship
Technology-based entrepreneurship
Social networks in entrepreneurship
Venture capital (markets and behaviors)
A ‘trait’ approach
A ‘process’ approach
A ‘cognitive’ approach
Personal
Emerging
Many parallel
Many parallel
Many parallel
Effectuation
characteristics
fragmentation
conversations
conversations
conversations
theory
- technical
entrepreneurs
Strategic
Strategic
Cognition
Broader
concerns (Porter) concerns
theories
acceptance of
(RBV)
- opportunity
entrepreneurship
recognition
International
- effectuation
Entrepreneurship/
comparison of
small business
firm creation
economics
- nascent
entrepreneurs
Convergence
Increased
Divergence
Divergence
Decreased
Development
divergence
divergence
of ‘tribes’
Suggestions for the future
Detailed understanding of the phenomenon is a necessary
first step in building theory (Eisenhardt, 1989), and it
improves the validity and power of the theoretical models
developed (Ghoshal, 2006).


We need to make a solid “ground-work” in
entrepreneurship research
We need to understand the historical and contextual
setting within which the entrepreneurs are operating
(Lohrke & Landström, 2010)
Agenda
History matters in entrepreneurship research!
1.
Evolution of entrepreneurship as a research field
2.
Challenge for the future: Systematic theoretical works
3.
Some learning experiences
Some learning experiences
It is ’what you think’ that matters! – Contribution



Read and reflect – solid ’ground work’
Challenge existing knowledge/taken-for-granted assumptions  you
need to develop something interesting
Hard work counts!!
It is ’what you write’ that matters! – Communication




Learn how to write – write, write and write
Create your ’own voice’ in writing (writing models)
Choose right journal - level of journal in relation to quality of your paper
- journal impact factor important for citations
Promote your works - accessibility
- marketing of the work
- citations (influential scholars/self-citations)
Some learning experiences
It is ’who you knows’ that matters! – Contacts



Prestige of the author (Matthews effect) is important
Collaboration with other scholars (eg. use your ’peers’ in the process
and write together with others [not least well-known authors within the
field]) – don’t be afraid of comments on your work!
Social network – centrality and citations
Centrality in
the network
Citations
More about the history of
entrepreneurship
Hans Landström, 2005, Pioneers in
Entrepreneurship and Small Business
Research, Yew York: Springer
ISBN 978-1-4419-1678-5
Hans Landström and Franz Lohrke,
2010, Historical Foundations of
Entrepreneurship Research,
Cheltenham: Edward Elgar
ISBN 978-1-84720-919-1
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Intellectual foundations of Entrepreneurship