Intellectual Foundations of Entrepreneurship Research
ESU Conference 2011 Seville, 14 September 2011
Hans Landström
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 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
1870-1940 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
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
1870-1940 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 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
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 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
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 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
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! – 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