Social Entrepreneurship and Complexity: social innovation in an indigenous context Paul Tapsell Adjunct Senior Lecturer Department of Anthropology; University of Auckland Co-coordinator Museums & Cultural Heritage Programme, University of Auckland Tumuaki – Director Maori Tamaki Paenga Hira / Auckland War Memorial Museum Private Bag 92018 Auckland Museum ptapsell@aucklandmuseum.com Deb Shepherd Senior Lecturer Management and International Business University of Auckland Private Bag 92019 Auckland New Zealand d.shepherd@auckland.ac.nz Christine Woods* Senior Lecturer Management and International Business University of Auckland Private Bag 92019 Auckland New Zealand cr.woods@auckland.ac.nz * Corresponding Author 1 Abstract This paper explores the notion of social innovation as it arises in indigenous communities. In particular, we consider entrepreneurial activity in Maori communities where innovation arises through the interaction of the young opportunity seeking entrepreneur (potiki) and the elder statesperson (rangatira). To explore this behaviour in more detail we draw on a neo-Schumpeterian understanding of innovation as self organisation: new combinations are seen as ‘the deliberate formation and re-formation of cooperating groups’ (Foster, 2000, p. 319). We then provide an illustrative example in the form of one social entrepreneurship venture: Maori Maps. Self-organisation is founded on the idea that entrepreneurially driven enterprises are embedded in larger systems; they are complex networks of many independent actors interacting with one another. These interactions give rise to emergent properties different to the properties of individual actors; these properties are the consequence of selforganisation. Self-organisation is the result of actor’s action on local knowledge – there is no central controller to tell actors what to do, nor does any actor have complete knowledge of the circumstances surrounding their actions. The interaction between actors of a system creates novel and unpredictable patterns. From a Schumpeterian perspective, for dynamic change to occur and for the economy to evolve, new combinations must be introduced to disrupt the circular flow framework. All disruptions are the result of innovation in the form of new combinations. The willingness to recognise and then exploit newly perceived opportunities is the hallmark of entrepreneurial behaviour (Schumpeter, 2003, p. 250). In concrete terms Schumpeter provides a list of the typical opportunities entrepreneurs recognise and then exploit. These new combinations ‘appear discontinuously’ and bring about economic change. Five types of new combinations are given and include: introducing a new good or method of production, opening a new market or sourcing new material; and carrying out a new organisation of any industry (Schumpeter, 1934, p. 66). Implementing these new combinations characterises enterprise and the individuals whose function it is to carry them out are defined as entrepreneurs (Schumpeter, 1934, p. 74). Schumpeter emphasises leaps and discontinuities rather than continuous change and his notion of evolution places an emphasis on novelty and change. Entrepreneurial activity takes place within an economy that needs to be understood as a process occurring in historical time. Entrepreneurial activity is socially situated and contingent on the historical context in which it occurs (Schumpeter, 1949a, 1949b). So how does Schumpeter’s understanding of innovation relate to social entrepreneurship? Schumpeter divides people into ‘those who are dynamic and do what is new, and those who are static and only repeat what has already been done’. Social entrepreneurship can therefore ‘be translated into Schumpeterian terminology as a form of dynamic behaviour in one of the non-economic areas of society’ (Swedberg, 2006, p. 33). To understand Schumpeter more clearly on this we need to return the first edition of The Theory of Economic Development. In this edition Schumpeter discusses entrepreneurship and how 2 it relates to different forms of economic as well as social change. Schumpeter states that the process of development has ‘remarkable analogies to other sectors of social life. Most importantly, these analogies can contribute to further illuminate our understanding, and to show that existence and activity in these other sectors can be grasped with a perspective parallel to ours’ (Schumpeter, 1911, p. 422).1 Further to this, Becker and Knudsen (2002) argue that, based on Chapter Seven of the first edition of Theory of Economic Development, Schumpeter saw ‘the development of the economy as a whole is a phenomenon emerging on the basis of the interaction among the various parts’ (emphasis added) (p. 396). We argue that this interaction can enable entrepreneurial activity in the form of innovation to emerge in the field of social entrepreneurship. Social entrepreneurship can be understood as dynamic change resulting from innovation which takes the form of the introduction of new combinations. The introduction of new combinations is a distinctive process requiring explanation. Schumpeter does not explicitly develop a theory to explain the microlevel, behavioural decision process of how entrepreneurs generate change. To explore this process in more detail we turn to work of John Foster (1997, 2000). Foster argues that Schumpeter’s understanding of economic evolution offers intuitions and insights compatible with a self organisation approach and that Schumpeter’s ‘self organisational intuitions were derived from his extensive and detailed study of economic history’ (Foster, 2000, p. 319). Foster points us in the direction of complexity science and expands on the self organisation approach of Schumpeter.2 Entrepreneurial acts develop in a spontaneous process. Innovation emerges from the endogenous novelty-creating, self-organising acts of entrepreneurs. According to Foster (2000, p. 319), the entrepreneurial desire to discover new and profitable organisational combinations provides what we can now label as a self-organisational impetus within the economic system creating organised complexity. ‘Combination’ implies, not competition, but the deliberate formation and re-formation of cooperating groups engaged in production. The result is expanding variety in products and processes. (emphasis added) Organisations are complex adaptive systems comprised of people ‘who experiment, explore, self organise, learn and adapt’ to their changing environments; to do this the key self organising behaviours include exploration and experimentation (Carlisle & McMillan (2006, p. 3, 4). Emergent possibility or innovation lies between the regions of stability and chaos (Brown & Eisenhardt, 1997). Organisations can be placed along a spectrum: at one end of the spectrum we have random and highly chaotic and at the other we have mechanistic and highly ordered (Carlisle & McMillan 2006). It is between the ‘edge of chaos’ and ‘the edge of stability’ that the complex adaptive system operates, and innovation through self organisation occurs in this space. Carlisle and McMillan (2006) label this the Zone of Emergent Complexity and suggest that organisational success and survival requires an organisation to operate at both edges and avoid moving out of the Zone. Too much chaos and the organisation risks disintegration, too much structure and rigidity and ossification occurs. The CAS moves between and on the edges. 3 For the purposes of this paper we wish to focus on the aspects of CAS that assist our understanding of how innovation can occur as self organisation. We focus on the interactions that occur within the Maori tribal community between the potiki (young opportunity seeker) and the rangatira (elder). Intense interactions between tribal members and the environment enabled the formation and self organisation of tribal identities that operated within self generated boundaries. Typical of a CAS, Maori society formed into nested self-similar layers (MacGill, 2007). However, while society is hierarchically organised with clearly defined roles, interactions between all levels of society is significant. Rangatira and potiki represent two aspects of the CAS system. Autonomy and connectivity are vital for the continuation of a CAS. If the autonomy of the individual takes precedence then the group looses its ability to cooperate and coordinate resources. If on the other hand connectivity becomes paramount then actors lose their individuality and diversity and the tribal community becomes too inflexible (MacGill, 2007). The potiki operates at the edge of chaos and autonomy and the rangatira at the edge of stability and connectivity. Self organisation occurs in the Zone of Innovation where the potiki and rangatira interact within the tribal setting. Actions are guided by Tikanga (customary practice) which is able to adapt and change in response to internal and external forces. To illustrate this dynamic in more detail we draw on the illustrative example of Maori Maps. Maori Maps is about social and genealogical entrepreneurship. It is a Maori driven response to a very real, emerging crisis: Maori cross-generational alienation. The challenge is to find an effective way to meaningfully reconnect the urban-raised ‘potiki generation’ to their home communities and elders. The marae has been the continuous focus of tribal values, spanning 3000 plus years of oceanic voyaging, settlement, innovation and most recently a retreat from colonisation. Post World War II urbanisation has not only ruptured customary knowledge transfer – elder to grandchild – but geographically separated them, rendering each invisible to the other and preventing marae rejuvenation. Maori Maps seeks to reconnect core kin-relationship and ensure Aotearoa’s unique marae remains central to New Zealand’s future well-being and national identity. In this paper we discuss the emergence of Maori Maps as an example of social innovation. Here tradition and heritage form the path to innovation with the opportunity seeking adventurers taking the steps along the path to begin the journey. 4 Becker, M. C., & Knudsen, T. (2002). Schumpeter 1911: farsighted visions on economic development. American Journal of Economics and Sociology, 61(2), 387-403. Brown, S., & Eisenhardt, K. (1997). The art of continuous change: linking complexity theory and time-paced evolution in relentlessly shifting organisations. Administrative Science Quarterly, 42, 1-34. 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This chapter was totally eliminated from the 1934 English translation. 2 McKelvey (2004) notes that Schumpeter’s highlighted other key principles of complexity theory such as phase transitions and punctuated equilibrium well before leading complexity theorists like Prigogine and Muruyama. 5