Enterprise: Entrepreneurship and Innovation

Robin Lowe, Sue Marriott

• Publisher: Routledge
• Year: 2012
• ISBN:
  9781136405709
• Edition: 1
• Topic: Business
• Subtopic: Business generale
• Index: Business

Enterprise, Entrepreneurship and Innovation: Concepts, Contexts and Commercialisation provides readers with an accessible and readable introduction to the various dimensions of entrepreneurship and market innovation. It has a clear structure that is easy for the reader to follow and it focuses on enterprising behaviour. The text contains:
* case studies and 'pause and reflect' situations for the entrepreneur to deliberate on the information they have available before making their decision. This helps to emphasise the point that there are few simple and straightforward decisions closely reflecting decisions in 'real life'.
* integrative personal development activities that provide a basis for readers to reflect on the learning of the chapters and develop a personal development strategy to increase their ability to become more entrepreneurial and improve their ability to manage market innovation.
* an accompanying website giving students and lecturers access to additional resources in order to explore the subject further. A full set of powerpoint slides plus exercises is included, plus suggestions for the use in class of the case studies and other illustrations. Students can access further learning resources to build up their knowledge of innovation situations using the hotlinks to useful websites that will add further depth and bring up to date the case studies and illustrations.
Enterprise, Entrepreneurship and Innovation: Concepts, Contexts and Commercialisation shows: * how to understand and acquire the entrepreneur's skills, attitudes and knowledge
* the techniques needed to generate new business and create a new organisation
* how to become more innovative, self reliant, and opportunistic.
* the learning and decision-making processes of entrepreneurs

PART I Concepts

DOI: 10.4324/9780080492650-1

The words enterprise and entrepreneurship appear so frequently in newspapers, radio and TV programmes, and everyday conversation that we pay very little attention to what the words actually mean. The academic literature helps us very little in coming to a clear understanding of the concepts, as there are so many different definitions/perspectives, and they carry both positive and negative connotations.

It is surprising perhaps that ‘enterprise’ is the word associated with the very largest firms – multinational enterprises, and at the same time is associated with individual endeavour; an enterprising individual might not be associated with any organization at all. The UK government, for example, has an initiative to encourage enterprise in schoolchildren. Individual enterprise is almost always seen positively as relating to individual creativity and pursuit of opportunity, innovation and development backed up by the individual's determination to succeed. However, when applied to a large organization, the word ‘enterprise’ is by no means always used positively. Often it is associated with a large, lumbering and rather bureaucratic organization.

Perhaps all enterprises should be enterprising but unfortunately they are often not, and this brings us to the fundamental idea that runs right through this book. Large and small enterprises are not spontaneously enterprising. They need enterprising people, individually or collectively to be innovative, creative and capable of developing and successfully exploiting new and exciting opportunities. This applies whether the firm is a commercial enterprise or operating in the public, voluntary or community sectors.

Part I of this book focuses on enterprise concepts. Chapter 1 introduces enterprise in its broadest sense, exploring how conceptual perspectives have developed over time, comparing definitions, and beginning to identify the contexts in which it emerges (this latter aspect being explored in much greater depth in Part II). Chapter 2 looks at the individuals themselves – what entrepreneurs are like and what they do. We consider what it is that distinguishes them from managers in general, what their motivations are, and where we tend to find them. The concepts introduced here relate to entrepreneurial personality, characteristics, and behaviour, and consider how far ‘received wisdom’ is accurate in helping policy makers to ‘pick winners’. In Chapter 3 we shift our focus from the individual to the organization, and consider the sources of innovation in organizations and the process through which advantage is created. Finally, in Chapter 4 we bring individuals and organizations together again, looking at how organizations can develop their innovative capacity through learning and leadership.

CHAPTER 1 What is enterprise and where do we find it?

DOI: 10.4324/9780080492650-2

Learning objectives

By the end of this chapter the reader will be able to:

• ■ appreciate the different conceptual perspectives on entrepre-neurship and innovation;
• ■ compare narrow and broad definitions, and evaluate their usefulness and purpose;
• ■ understand the relationship between individual and organizational enterprise;
• ■ recognize the different contexts in which enterprise skills and behaviours arise;
• ■ assess whether initiatives to support the development of an ‘enterprise culture’ have the impact they intend.

Introduction

Over time, there have been a variety of writers who have offered views on what enterprise means and the role that entrepreneurs play in economic and, more recently, social regeneration. They have highlighted examples of how individuals, and the organizations that they establish, have contributed to the prosperity of communities, regions, and nations. Whether you see these elusive characters that we call entrepreneurs as saints or as villains, it is difficult to argue that they make no difference to the world in which we live. Many governments see them as vital in growing economies, and seek to encourage more enterprise and innovation at all levels in society. This means that they would like to see individuals and organizations being able to achieve their full potential, and contribute as much as they can to society in general. By ‘organizations’ we do not just mean businesses – we mean any group of people that come together with a shared purpose. This can be as simple as your local gardening group or as complicated as a multinational firm. It can be private sector, but it can also be public sector, or not-for-profit.

Our view is that defining enterprise just as something that happens within businesses would be a very narrow way to approach the subject. Individuals can be enterprising in how they live their lives and those that are enterprising create and pursue more opportunities for themselves and, perhaps, get more enjoyment out of life. Unfortunately, not all enterprising people are successful, however they choose to measure success. Success to some means social standing or self-esteem, while to others it might mean artistic excellence; to some it might mean financial gain, while for others it might mean more time at home with their family. Enterprising behaviour inevitably includes taking risks, and where there is risk there can also be failure. Not many people write about failure, but maybe they should. Enterprising people often see failure as an opportunity to learn – it tells them something that helps them do things differently next time.

In this first chapter we will explore what we mean by enterprise for both individuals and organizations (whatever their size or sector), and where it can be found. Is enterprise really the prerogative of small and medium-sized businesses, or is it found more broadly? We will consider the various approaches to entrepreneurship and innovation that have evolved over time, and how innovative organizations rely on individual enterprise to maintain their competitive edge. We then go on to consider issues of enterprise policy: why might governments want to encourage a more enterprising culture, how might they go about it if they did, and what might the implications of intervention be?

The evolving conceptual perspectives of entrepreneurship

Over time, various authors have taken different perspectives on entrepreneurs and their role in the economy. Some focus on their contribution to economic change, some on their creativity and innovation, some on the way they organize the factors of production, or resources, to add value, and some on their propensity for risk and its consummate reward. Deakins and Freel (2003: 3–10) offer a useful analysis of these, which is briefly summarized below.

The physiocrats

Theories of entrepreneurship had their origins in economics. Cantillon and Say belonged to a French school of thought known as the ‘physiocrats’. Cantillon saw entrepreneurs as having a key role in economic development by virtue of their having individual property rights as capitalists. He saw entrepreneurs as the key group, the other two that he recognized being landowners and workers. However, should we take it for granted that the entrepreneur is always the capitalist? We see entrepreneurs acting within a social and community context where they own little tangible capital but nevertheless add value in terms of social and economic regeneration. Also, in today's knowledge-based businesses, the distinction between who holds the capital and who does the work is less clear cut than it was, for example, during the Industrial Revolution. Where the capitalist owned the factory and the machines and the workers were employed by them to produce physical products the distinction between capitalist entrepreneur and worker was obvious. By way of contrast, if we consider a small company involved in research and development, the premises may be rented and the capital is the skills and expertise of the company as a whole, not only of the founder. In this case, the intangible capital belongs to each of the workers as the expertise is personal to them, although they may achieve synergy from working collaboratively. As a team of professional people, they may have equal status and run the company on more democratic lines, making it difficult to distinguish one individual as the leader (although it is common to identify senior partners, as, for example, in accounting firms). Each of them may act in an entrepreneurial way, and the distinction between entrepreneur, capitalist, and worker becomes somewhat more complicated to make.

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