Hans Landström [email protected] Sten K. Johnson Centre for Entrepreneurship

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

Three eras of entrepreneurship research

1870-1940 1940-1970 1970 - Economics Era Social Science Management- Knightian view Era Studies Era- Schumpeterian view - Historical/- Kirznerian (Austrian) view sociologist view

- Psychologist/ sociologist view

1870 1900 1950 2000

The economics eraAmerican tradition(eg. Walker, Hawley, Frank Knight Occupational choice modelsand Clark) (Lucas, Kihlstrom & Laffont)

Karl MarxLeon Walras

German Historical Research Center inSchool (eg. Smoller) Joseph Schumpeter Entrepreneurial

History

Austrian School ofEconomics (eg. MengerWieser, and Böhm- Hayek/Mises Israel KirznerBawerk)

Knightian tradition

Knight, F.H. (1916/1921), Risk, uncertainty and Profit,Boston: Houghton Mifflin.

Three types of uncertainty:1. Risk2. Uncertainty3. ”True” uncertainty

Entrepreneurship is mainly characterized by true uncertainty, i.e. entrepreneursreceives a return for making decisions under conditions of non-insurableuncertainty.

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. The basic assumption was that economic growth resulted from innovations or ”new combinations”.

2. Innovations in the form of new products, new production methods, new rawmaterial, new markets, and new organizational structure in industry.

3. 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 themarket 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 combinationsof 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 1900 1950 2000

From economic to social science …

Around the Second World War …

The economic science focused more and more strongly onequilibrium models and models in economics became increasinglymathematic oriented.

Baumol (1968) made clear that within the framework of marketequilibrium, there was no room for the entrepreneurial function. Entrepreneurship and economics have never been good ’travelling companions’.

The social sciences era

Center for Research inEntrepreneurial HistoryArthur Cole

Joseph Schumpeter Historical approach Sociologist psychologistInnovation and approachcreative destruction Jenks and Cochran McClelland and Hagen

Modernization of Psychologists Sociologists

societies around the - Traits - Ethnicity

world (eg. Cochran, - Categories of - CultureLandes, Jenks, entrepreneurs -

NetworksGerschenkron, etc.)

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 acountry’s level of achievement to economic growth.Characteristics: nACH, moderate risk taker, self-confidence, individual problemsolving, 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’ definitionThe entrepreneur has an intuitive ability – a sixth sense and instincts.

Psychological trait definitionThe entrepreneur is driven by some unique values, attitudes, needs and traits (e.g. nACH, LOC, creativity, persistence, etc.).

Leadership definitionEntrepreneurs are leaders of people.

Three eras ofentrepreneurship research



1870 1900 1950 2000

The environment during the 1950s and 1960s

Schumpeter (1942)”… what we have got to accept is that the large-scale

establishmenthas come to be the most powerful engine of progress.” (p 106)

Galbraith (1967)Argued that innovative activities as well as improvements in

productsand processes were most effeciently carried out in the context of

largecorporations. Therefore, economic policy should focus on largecorporations.

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

Entrepreneurshipand

Small Businessresearch

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 wasenormous (among policy makers as well as research community).

Considerable debate, but many of the findings have proved very robust andhave 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 whichresearchers discovered that the animal was different, composed ofrather 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)

■ Extensive growth of the field◙ Migration◙ Mobility

■ Policy orientation■ Ambition to understand the ’entire’

phenomenon

Highly fragmented research field

■ Building of a strong infrastructure

0

50

100

150

200

250

300

350

400

450

1950 1960 1970 1980 1990 2000 2010

Publication year

N o

f ar

ticl

es

Business & Management

Economics

Sociology

Psychology

133 other subfields

Searching for maturity (2000s) Realization that entrepreneurship is a complex,

heterogeneous and multi-level phenomenon Open up for broadening of entrepreneurship as a

phenomenon Economic phenomenon societal phenomenon.

Knowledge platform of its own 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

OpportunitiesEntrepreneurship investigates how and why some individuals (or teams)identify (business)opportunities, evaluate them as viable, and then decideto exploit them, whereas others do not, and, in turn, how theseopportunities result in product, firm, industry and wealth creation. (Brush etal., 2003; Shane and Venkataraman, 2000).

Firm creationEntrepreneurship is the creation of organizations, the process by whichnew organizations come into existence. (Gartner, 1988).

Management studies era – summary

Take off phase

Growth phase

Searching formaturity phase

Cognitive dimension

Explorative driven

Practical orientationPragmatic methodology

Phenomenon andempirical driven FragmentationPolicy orientationImprovedempiricalmethodology

Stronger theory orientation Hierarchical divideKnowledge orientationWidening ofmethodologicalapproaches

Social dimension

Strong links to societyIndividualism Creation of social networksPioneers

Strong links to the topicSocial infrastructure

Growth Migration/mobility

Strong links to thedomainEmerging ”tribes”

Institutionalization Legitimacy

Agenda



2. Challenge for the future: Systematic theoretical works


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 EntrepreneurshipJan Fagerberg and Hans Landström,Koson Sapprasert Gouya Harirchi andOslo University, Fredrik ÅströmNorway Lund University,

Sweden

Science and Technology Studies (S&TS)Ben Martin, Paul Nightingale and AlfredoYegros-YegrosSPRU, 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



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 EntrepreneurialVentures

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

CitedCiting

S&TS Innovation Entrepreneurship

S&TS 79% 18% 3%

Innovation 13% 67% 20%

Entrepreneurship 4% 27% 69%

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 industryVenture performance and growth

Corporate entrepreneurshipEthnic entrepreneurship

Technology-based entrepreneurship Social networks in entrepreneurship

Venture capital (markets and behaviors)A ‘trait’ approach A ‘process’ approach A ‘cognitive’ approach

Personal characteristics- technical entrepreneurs

Emerging fragmentation

Many parallel conversations Strategic concerns (Porter)

Many parallel conversations Strategic concerns(RBV) International comparison of firm creation- nascent entrepreneurs

Many parallel conversations Cognition theories- opportunityrecognition- effectuation

Effectuation theory Broader acceptance of entrepreneurship Entrepreneurship/ small business economics

Convergence Increased divergence

Divergence Divergence Decreased divergence

Development 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 researchWe need to understand the historical and contextual setting within which the entrepreneurs are operating (Lohrke & Landström, 2010)

Agenda



2. Challenge for the future: Systematic theoretical works


Some learning experiences

It is ’what you think’ that matters! – ContributionRead 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! – CommunicationLearn how to write – write, write and writeCreate 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 citationsPromote your works - accessibility

- marketing of the work- citations (influential scholars/self-citations)

Some learning experiences

It is ’who you knows’ that matters! – ContactsPrestige of the author (Matthews effect) is importantCollaboration 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 inthe network

Citations

More about the history of entrepreneurship

Hans Landström, 2005, Pioneers in Entrepreneurship and Small Business Research, Yew York: SpringerISBN 978-1-4419-1678-5

Hans Landström and Franz Lohrke, 2010, Historical Foundations of Entrepreneurship Research, Cheltenham: Edward ElgarISBN 978-1-84720-919-1

Hans Landström [email protected] Sten K. Johnson Centre for Entrepreneurship

Documents

Transcript of Hans Landström [email protected] Sten K. Johnson Centre for Entrepreneurship