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Entrepreneurial Cultures and Countercultures

William J. Baumol
Academy of Management Learning & Education
Vol. 3, No. 3 (Sep., 2004), pp. 316-326
Published by: Academy of Management
Stable URL: http://www.jstor.org/stable/40214120
Page Count: 11
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Entrepreneurial Cultures and Countercultures
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Abstract

It is arguable that history has usually been driven by active entrepreneurs. Here, I do not use the term, "entrepreneur", in the ordinary sense that denotes the founder of just any new firm among many similar existing firms. Rather, I employ a connotation that is in some ways narrower and in other ways broader than this, taking entrepreneurs to be the promoters of innovation, just as the prime chronicler of entrepreneurship, Joseph Schumpeter, so usefully did. Defined in this way, entrepreneurs can even be found in the focal economic activity of most of recorded history: aggressive warfare. After all, in many early societies, innovation in military techniques and technology was the most effective route to personal success and with it, power and wealth. But those early innovative warriors were not entrepreneurs as we tend to think of them today, as creators or promoters of new enterprises, new products, and new processes. This more familiar sort of entrepreneur attained a significant role only with the growth of capitalism, and so is historically a rather late arrival. And not only were these entrepreneurs late-comers but, it has also been suggested that they will be early departers—that their era is drawing to a close. Schumpeter, in his later book on the subject (1947), conjectured that growth and innovation were becoming so routine that the entrepreneur would thereby be threatened with obsolescence. Since well over half of spending on research and development in the United States now appears to be carried out bureaucratically within the larger enterprises, what is left for the independent entrepreneur to do? I argue, on the contrary, that the role of entrepreneurs and their new small enterprises, far from being on the verge of extinction, are more important than ever, and that their significance seems unlikely to evaporate in the foreseeable future. I will, however, indicate that the elevated valuation of the entrepreneur's role that is common today is, indeed, largely an attribute of the capitalist society, with other forms of economic organization, particularly those of the past, either denigrating the productive entrepreneur or characterized by institutions that impede effective exercise of entrepreneurship. Both conclusions, those about the past and those related to the future, are important for policy. The former, in which we look backward, will suggest how a developing economy can help to start off or enhance the growth process. The latter, where we look forward, will show what role, indeed a role arguably of growing importance, already remains to the entrepreneur and can be expected to continue in the future.

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