Entrepreneurship as Empowerment

Knowledge spillovers and entrepreneurial ecosystems

Vanessa Ratten, Vanessa Ratten

• Editore: Emerald Publishing Limited
• Anno: 2020
• ISBN:
  9781839825521
• Argomento: Betriebswirtschaft
• Categoria: Unternehmertum

Entrepreneurship as Empowerment focuses on entrepreneurial theory and practice through the lens of knowledge spillovers and entrepreneurial ecosystems, enabling readers to gain a better understanding about emerging trends and developments.
This edited collection widens the traditional field of entrepreneurship by discussing the way in which ecosystems facilitate the flow of knowledge, thereby creating new business opportunities globally. The current state of research on knowledge spillovers and entrepreneurial ecosystems is analysed with a view to highlighting research gaps that need further attention. Entrepreneurship as empowerment examines cultural and societal expectations and contextualises entrepreneurship across places and industries.
Aimed at both academics and practitioners of entrepreneurship, Ratten uses expectancy theory to understand entrepreneurship and contributes to the burgeoning body of literature from a knowledge management and practice standpoint. Entrepreneurship as empowerment provides a unique approach to understand the cultural and social expectations that are tied into being an entrepreneur today.

Chapter 1

Entrepreneurship as Empowerment: Knowledge Spillovers and Entrepreneurial Ecosystems

Vanessa Ratten

Abstract

Entrepreneurship is a form of empowerment as it provides a way for individuals to pursue their dreams. The generation of ideas is at the heart of entrepreneurship and involves assessing new opportunities. Recognizing gaps in the marketplace that new products, services or processes can fill is central to the idea of entrepreneurship. There are many different types of entrepreneurship including social, technological, sport and international that provide a way for ideas to enter the marketplace. This chapter focuses on the way entrepreneurship empowers people and provides a way for novel ideas to gain momentum. By taking a knowledge spillover and ecosystems perspective, the chapter highlights the way entrepreneurship gives strength to those with a creative idea. Thereby, acting as a form of empowerment, entrepreneurship provides a way for practitioners and researchers to make a positive contribution to society.

Keywords: Entrepreneurship; empowerment; knowledge spillovers; ecosystems; marketplace; ideas; creativity; innovation

Introduction

Many issues emerge when thinking about the role of entrepreneurs in society. Empowerment is a key role that entrepreneurs play in society and their actions can be considered from a number of different perspectives such as an enabler or influencer. Enablers provide the resources and means for new business activity. This is important as vision and a sense of futuristic thinking is needed in today’s competitive marketplace. Entrepreneurs are able to do what other individuals cannot do in society in terms of seeing potential then acting on these thoughts (Audretsch & Lehmann, 2005). Influencers help others fulfill their ideas by providing encouragement. This can be in the form of emotional or financial support that provides a way for ideas to become reality (Ferreira, Fayolle, Ratten, & Raposo, 2017).

The global economy is shifting from a manufacturing and service-based economy to one that is being dominated by digital technologies (Feldman, 2014). The increased usage of mobile communications and the internet has shifted the way consumers and businesses interact (Mooney & Pejaver, 2018). This has meant an increase in digital infrastructures to sell and buy products. Digital platforms have transformed the way entrepreneurs set up their businesses and increased the number of online businesses. The digitization of the global economy can be analyzed in terms of openness, affordances and generativity (Nambisan, Wright, & Feldman, 2019). Openness refers to the ability of consumers and businesses to co-create to build better products and services. This openness is often discussed in terms of open innovation due to the way it encourages feedback and discussion. This is important in promoting entrepreneurship and also benefits the global economy (Ratten, 2017). Affordances refer to online services becoming cheaper and easier to use. In developing countries, these affordances have changed the way people live by providing them more online access. Generativity refers to online communications becoming more standardized. This means that there are more digital marketing services that build on consumer needs to provide better interactions. Digital marketing is defined as “computer-mediated environments that allow consumers, firms and other stakeholders to create, interact and access digital content” (Quinton & Simkin, 2017, p. 455). Increasingly digital marketing has been used in entrepreneurial ecosystems as a way of encouraging knowledge spillovers.

This chapter aims at developing a theory of entrepreneurship as a form of empowerment to better understand variations in entrepreneurial activity. Thereby enabling context to be examined in terms of how it helps or hinders entrepreneurship (Ratten, 2018). By doing so, there are three main contributions to research, policy and practice. Firstly, conceptually it is useful to develop metrics about entrepreneurship in order to determine its benefits within an entrepreneurial ecosystem. This enables the relationships amongst different stakeholders to be identified as a way of understanding the system. The most relevant aspects of an entrepreneurial ecosystem can be identified in order to target key stakeholders. This is useful in facilitating interactions amongst entities in an ecosystem that influence entrepreneurial behavior. Secondly, a conceptual framework for understanding the role of knowledge in entrepreneurial ecosystems is discussed. This framework is based on a positive view of entrepreneurship and includes various institutional and socio-economic elements. By providing a conceptual base to understand entrepreneurial ecosystems and knowledge spillovers, it helps to provide clues on best performance practices. Thirdly, the conceptual framework can be used as a knowledge platform that is dynamic in nature and changes over time. This facilitates the growth of new theories and adds to the existing body of entrepreneurship literature.

The ambitious agenda of this chapter is to advance our understanding of entrepreneurship as a form of empowerment. This will help provide answers about how the environment in terms of context can facilitate entrepreneurship. Thereby making theoretical inroads into what entrepreneurship is and how it is defined. This will enable better integration of the entrepreneurship literature with other knowledge sources. There is a complexity within entrepreneurship research due to the multiple linkages business ventures have with the environment. Often the way entrepreneurs begin is unexpected and a result of chance, which can make it hard to study.

Role of Entrepreneurship in Society

Entrepreneurs have an ability to pursue an idea that is new to the market. An entrepreneur is defined as “an individual who is instrumental in the conception and implementation of the idea of the enterprise” (Armstrong & Hird, 2009, p. 420). The field of entrepreneurship is originated from the works of Cantillon (1755) and Say (1803) who discussed the role of business management in economic development. In these early works, reference is made to the role of managers in creating business enterprises. Later on Schumpeter (1934) became famous for his work on entrepreneurship by suggesting that innovation is important to the effective functioning of an organization. Innovation and creativity have since been the most common themes in entrepreneurship studies (Turner & Fauconnier, 1997).

Yang and Andersson (2018, p. 457) states “the term ‘entrepreneurship’ can mean different things, especially in empirical studies of entrepreneurial phenomena.” The core of entrepreneurship is a sense of positive change and this permeates the literature. Entrepreneurs do something that others cannot do in terms of seeing potential opportunities in the marketplace. Being an entrepreneur involves a form of disruption as change is inevitable. This means entrepreneurs are seen as heroic figures that encourage innovation in society. Entrepreneurs revolutionize the world by encouraging pathbreaking ideas to enter the market. To do this, entrepreneurs need to alert about the opportunities and they require the appropriate information and foresight. By discovering opportunities, entrepreneurs can provide solutions to market-based problems. Most definitions of entrepreneurs view them as profit-seeking individuals but there has been an increased emphasis on the social and financial elements of entrepreneurship.

Entrepreneurs are referred to as “people who strive to overcome difficulties, with a high internal locus of control, independent character and strong self-reliance” (Fu, Okumus, Wu, & Koseoglu, 2019, p. 4). Entrepreneurship does not happen in isolation but rather is the result of a number of different factors. Context is an important part of entrepreneurship as it provides the environment for business to take shape. The most recent trend in entrepreneurship research has been to take a multi-disciplinary perspective that incorporates a number of different topic areas. This enables a more inclusive approach that allows for new topic areas to be included. This is important for entrepreneurship research that prides itself on being novel. By taking a more functional approach, it enables the field of entrepreneurship to evolve. This means a more modern and contemporary approach to entrepreneurship studies. Studies on entrepreneurship systems benefit from insights from other topic areas as they provide fresh approaches. Recently, there has been an increased interest in the role of entrepreneurial ecosystems in society. This is due to entrepreneurship being considered a vital ingredient in healthy economies. Whilst it is acknowledged that entrepreneurship is required for the functioning of an effective economy, more research has been centered on the role ecosystems play in this process. Entrepreneurship is affected by context so more information is needed on how it is adapted and sustained.

Entrepreneurship also involves some form of risk. There are three main types of strategic risk: unknown, committing assets and borrowing heavily (Baird & Thomas, 1985). Venturing into the unknown is common for entrepreneurs particularly those entering new markets or experimenting with technology. For this reason, it is useful for entrepreneurs to assess risk levels to ensure they are comfortable with the process. Committing assets involves putting a large proportion of resources into a particular endeavor. This can be risky if the business venture fails or does not meet expectations. Thus, scenario planning can help reduce risk by ensuring there is a safety net. Borrowing heavily may be needed by entrepreneurs especially in the early stages of a business venture. The payoffs can be large if the business is successful but can involve risk when the outcome is unknown.

Risk can be evaluated in terms of perceptions, preferences and propensity (Sitkin & Pablo, 1992). Risk perceptions involve the way risk is viewed by an individual. The level of acceptable risk will vary depending on an individual’s tolerance levels. Entrepreneurs will likely have a higher level of risk tolerance but this can depend on the type of business venture. Risk preferences involve the type of risk associated with a business. Some entrepreneurs prefer different forms of risk such as monetary or financial whilst others are concerned with reputational effects. Risk propensity involves the degree of chance associated with an event occurring in the market. Entrepreneurs have more propensity for risk as they are involved with innovation.

The benefits of entrepreneurship have been receiving growing attention in the past decade due to the way entrepreneurs influence social and economic development. Fu et al. (2019, p. 1) states that “entrepreneurship and its derivatives have influenced all industries and levels of society, because it deals with innovation, competitiveness, productivity, wealth generation and job creation.” Yet, there is still some way to go in terms of fully understanding how entrepreneurship empowers individuals and communities. In this chapter, I explore the role of entrepreneurship in society by focusing on how it empowers people. To do so, an interdisciplinary perspective linking the cultural, geographic and institutional context is undertaken. This enables consideration about how entrepreneurship enables knowledge creation and dissemination in society. In the digital age, knowledge is a source of power but needs to be properly managed. Thus, entrepreneurs facilitate knowledge diffusion by providing innovative new business ideas. This enables others in a community to embed knowledge within their entrepreneurial activities.

An entrepreneurial ecosystem approach advocates a stakeholder perspective to the way entrepreneurial behavior occurs in society. This is due to entrepreneurship occurring at the individual, firm and societal level. Audretsch and Belitski (2016) suggest five main policy actions needed to facilitate entrepreneurial ecosystems: (1) more labor mobility, (2) effective leadership, (3) increased cultural facilities, (4) an entrepreneurial culture and (5) stimulating entrepreneurial awareness. In the knowledge economy, labor mobility is encouraged due to the need to have access to people with appropriate experience and qualifications. This means having the right leadership in place to organize the entrepreneurial activity. Cultural facilities such as libraries, universities and museums can help in this regard by encouraging knowledge sharing. This will lead to the emergence of an entrepreneurial culture where innovation and risk taking are valued. As part of this culture, people and businesses need to be focused on stimulating entrepreneurship.

Many questions remain about the processes contributing to entrepreneurial ecosystems and how entrepreneurship empowers a region. Some groups of society may have a more positive perception of entrepreneurship than others due to their interest in business ventures. In order to understand these societal differences, Thompson, Purdy, and Ventresca (2018) suggests the four main approaches to study entrepreneurial ecosystems, namely: clusters, state actors, relationships and complex structures. Industry clusters are a useful way to understand why certain types of businesses are located in the same area. Businesses that are located close to one another can share costs and resources. In addition, the presence of other stakeholders in a region such as educational providers can provide the skills and knowledge for businesses to grow. The network linkages within a cluster not only facilitate the sharing of information but also emphasize the advantages of residing in a certain area due to the social relationships. However, entrepreneurial activity in a region can be complex due to the multiple and dynamic interactions occurring in society.

The study of entrepreneurial ecosystems has been spurring new...