Defining entrepreneurship

The term 'entrepreneurship' first appeared in the French Dictionary 'Dictionnaire Universal de Commerce' in 1723. Richard Cantillon is considered to be the first economist to define who an entrepreneur is. In his seminal book 'Essai sur la Nature du Commerce en Général', considered the first complete treatise on economics, he defines entrepreneur as non-fixed income earner who pays known costs of production but earns uncertain incomes, due to the speculative nature of pandering to an unknown demand for his/her production (Wikipedia). Since then, perhaps no other term has been redefined, reinterpreted and conveniently adapted with such plasticity across theory and practice.

To define something is to state or describe exactly its nature, scope or meaning (Oxford Dictionary). "A good definition", as an editorial note in the Academy of Management Review (AMR) puts it - "should accomplish several tasks. First, the definition should effectively capture the essential properties and characteristics of the concept or phenomenon under consideration.Second, a good definition should avoid tautology or circularity...Third, a good definition should be parsimonious" (AMR, 2010). It appears to me that a definition of such nature for the term 'entrepreneurship' is yet to be arrived at.

The scholarly study of entrepreneurship as a phenomenon, though dates back to late 17th century, gained a much greater academic currency in 1930s owing to the works of the economist Joseph Schumpeter. Since then many scholars have attempted theory building of this phenomenon through a variety of disciplinary lenses - economics, sociology, psychology and management.

It is interesting to note that the first ever course in entrepreneurship - Management of Small Enterprise(MSE)- was offered way back in 1947 by Professor Myles Mayes at the Harvard Business School. The first conference on small businesses was held at the University of St. Gallen in Switzerland in 1948. The first journal in entrepreneurship- Explorations in Entrepreneurial History - was started in 1949. The first academic conference on entrepreneurship research took place at Purdue University in 1970. But it was the 1980s and 90s that marked a turning point in the field of entrepreneurship. Owing to many global trends and institutional reforms, the role of small businesses became more pronounced. This period saw emergence of many new academic journals, such as the American Journal of Small Business (renamed Entrepreneurship Theory and Practice), Journal of Business Venturing,Small Business Economics,Small Business Strategy, Family Business Review, and Entrepreneurship and Regional Development. The first comprehensive overview of entrepreneurship as a field was published in 1990 by Casson (Carlsson et al, 2012).

Post 2000s, there has been an exponential growth in interest in the field of entrepreneurship. The increasing academic interest is evidenced by the below data on the number of publications with 'entrepreneurship' or 'entrepreneur' in the publication title.

Figure 1: Academic interest in entrepreneurship (Google Scholar Search, dt:Nov 16, 2012)

It must be noted that the entrepreneurship has gained such momentum in the scholarly domain despite a lack of consensus on what it precisely means. One approach to conceptualization of 'what entrepreneurship entails' has been to first define 'who an entrepreneur is'. This is based on the view that the entrepreneur causes entrepreneurship. Within this school of thought, while some have adopted the trait approach to define an entrepreneur, others have taken a behavioral perspective. The trait based approach distinguishes an entrepreneur from the rest (including small business owners) through such psychological profiles as locus of control, risk-taking, achievement orientation and open to innovation. The behavioral perspective on the other hand views creation of an organization as a contextual event and entrepreneur as part of a complex process of new venture creation. As Gartner writes in his widely cited article 'Who is an Entrepreneur? Is the Wrong Question', a baseball player is not something one is, it is something one does (Gartner, 1988).

To me both these approaches to understanding entrepreneurship by knowing who an entrepreneur is or what he/she does seem as difficult as understanding what philosophy is from who the philosopher is or what he/she does. In other words, how could we possibly explain the intricacies of a Chess game by merely knowing more about a Chess player?

It appears that the many definitions of entrepreneurship is still being vigorously debated on when one looks at the number of articles listed by Google Scholar for the phrase 'defining entrepreneurship'.

Figure 2: Academic interest in defining entrepreneurship (Google Scholar Search, dt:Nov 16, 2012)

However, in the recent past, most definitions seem to fall into either of the two broad school of thoughts - one defines entrepreneurship as the identification, evaluation and exploitation of opportunities, and the other defines entrepreneurship as the study of firm formation. Reflecting on his co-authored article that recently won The 2010 AMR Decade Award, Professor Scott Shane writes - "..if the field is to advance, we need to do a better job of deciding on our definition of entrepreneurship and aligning conceptual and operational definitions in empirical work" (Shane, 2012).

It must be emphasized that this scholarly debate on the definition is not merely a semantic exercise critical and urgent to advance the theory construction in entrepreneurial studies. With unprecedented buzz around entrepreneurship across the globe as an engine of growth, many practitioners and policy makers are attempting to measure entrepreneurial activities and are undertaking comparisons across regional contexts (Marcotte, 2012). This is evidenced by many surveys, indexes and datasets such as that by Global Entrepreneurship Monitor (GEM), EIM COMPENDIA, World Bank Group Entrepreneurship Survey, Legatum Institute Survey of Entrepreneurs, GEINDEX and OECD-Eurostat Entrepreneurship Indicator Programme that have been created in the recent years.

With such indexes increasingly feeding into regional and national policy decision making, the importance of what the indexes precisely measure becomes even more pronounced. The nuances of entrepreneurship, and how the construct could be measured and operationalized are more critical now than ever before. However, as an editorial note in the AMR puts it a good construct should not only offer clear boundaries and scope, but also be sufficiently 'linguistically ambiguous' to spark new connotative relationships (AMR, 2010).

Until we arrive at a pragmatic clarity of what entrepreneurship is, let us hope that the billions of dollars being spent across the countries in nurturing entrepreneurship has perhaps not been always chasing rainbows.

References

CLARITY, C. (2010). Editor’s comments: Construct clarity in theories of management and organization. Academy of Management Review, 35(3), 346–357.

Gartner, W. B. (1988). “Who is an Entrepreneur?” is the Wrong Question. SSRN eLibrary. Retrieved from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1505236

Marcotte, C. (2012). Measuring entrepreneurship at the country level: A review and research agenda. Entrepreneurship & Regional Development, 1–21. doi:10.1080/08985626.2012.710264

Reflections on the 2010 AMR Decade Award: Delivering on the Promise of Entrepreneurship As a Field of Research. (n.d.). Retrieved November 15, 2012, from http://amr.aom.org/content/37/1/10.full.pdf+html

Shane, S., & Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. Academy of management review, 217–226.

The Evolving Domain of Entrepreneurship Research. (n.d.). Text.Preprint. Retrieved November 17, 2012, from http://swopec.hhs.se/cesisp/abs/cesisp0284.htm

The History of Entrepreneurship at HBS - New Business - Arthur Rock Center for Entrepreneurship. (n.d.). Retrieved November 17, 2012, from http://www.hbs.edu/entrepreneurship/newbusiness/history.html