INFLUENCIA EN EL FAMILIA EN EL SUBSISTEMA DE EJECUCIÓN

The study of entrepreneurs and entrepreneurship has been undertaken from a number of different perspectives and this has resulted in a variety of definitions (Anderson, Dodd, & Jack, 2012, p. 966; Gedeon, 2010; McKenzie et al., 2007, p. 21) as well as confusion between the terms (Drucker, 1993 [1986], p. 21). While remaining supportive of entrepreneurship as a subject of study the proliferating definitions of entrepreneur and entrepreneurship have led some analysts to criticise the use of the terms as being, not just ill-defined but often, so open as to be meaningless (Stewart, 1991; Gartner, 1990).

However, Low and Isserman (2015, p. 177) contended that there are, indeed, many types of entrepreneur. While the various definitions have led to a field that can appear highly fragmented convergence analysis by Grégoire, Noël, Déry and Béchard (2006) suggested that the field has begun to evidence a low level of convergence around key ideas. Grégoire et al. (2006, p. 361) suggested that the low level of convergence is due more to the

complexity of the subject than the maturity of the field. Gedeon (2010, see especially pp. 19-21) conducted a review of thirty-one “major definitions” utilised in entrepreneurship

28 research and described the various types of entrepreneurship as “sub-domains”, creating a taxonomy of entrepreneurship domains including “innovative entrepreneurship” (2010, p. 27).

Richard Cantillon (1935 [1755], cited in Ahmad & Seymour, 2008) is often credited with the first use of the term entrepreneur. However, Baumol (2010, p. 12) noted that Cantillon’s “original English text continued to use the appellation ‘undertaker’” 11, which described “merchants of all kinds” (Cantillon, 1935 [1755], p. 54, cited in Baumol, 2010, p. 12; see also Drucker, 1993 [1986], p. 21). According to Baumol (2010, p. 12) it was not until Say (1827, cited in Baumol, 2010, p. 12) began to focus on “three types of ‘producers’: scientists, entrepreneurs, and labourers” that innovation entered the discourses of entrepreneurship. That being said, Baumol (2010, pp. 13-14) argued that the role of the innovative

entrepreneur in economic development did not enter fully into the theoretical debates until “Joseph Schumpeter’s breakthrough …” and the subsequent contributions of Israel Kirzner. These led to a focus on two salient perspectives on innovative entrepreneurship: Joseph Schumpeter’s (1983 [1911, 1934]; 1994 [1934]) innovation-focused entrepreneur and Kirzner’s (1979) speculator/arbitrager. However, Baumol (2010, p. 18) also argued that Schumpeter’s and Kirzner’s entrepreneurs can be differentiated as “innovative” and “replicative” entrepreneurs who play different roles in economic development, with replicative entrepreneurs copying existing businesses and innovative entrepreneurs creating new technologies, processes, forms of businesses and markets (2010, p. 15).

While Schumpeter and Kirzner were both early influencers in economic discourses regarding the entrepreneur’s role in economic development (Baumol, 2010), for many analysts William Gartner’s (1985; 1988) focus on venture creation became the proxy for entrepreneurship. Gartner (1988, p. 11) stated that: “Entrepreneurship is the creation of organisations.” Gartner (1988, p. 11) argued that only venture creation differentiated the business owner from the entrepreneur. Gartner contended (1988, p. 57) that

entrepreneurship was the “primary phenomenon”, thus venture creation should be the focus of entrepreneurship studies. In contrast Drucker (1993 [1986], pp. 21-22) and Low and Isserman (2015, pp. 177-178) argued that venture creation is insufficient to distinguish the business owner from the entrepreneur. Low and Isserman (2015, pp. 177-178) noted that the use of self-employment and establishment rates “are widely used

entrepreneurship proxies, although only a fraction of these so-called entrepreneurs

29 innovate” (2015, p. 172). Citing Cantillon’s (1964 [1755], in Low and Isserman, 2015, p. 177) broader definition of ownership of a business (thus inclusive of entrepreneurial entry into existing ventures), Low and Isserman (2015, p. 178) contended that it is propensity for risk and innovation that differentiate the business owner from the entrepreneur. Drucker (1993 [1986], pp.21-29), however, argued that it is innovation that defines the

entrepreneur as all business ownership carries risk. Thus, both Drucker (1993 [1986]) and Low and Isserman (2015) agree that the innovative entrepreneur is an important area of focus, with simplistic proxies such as business ownership being an insufficient criteria by which to define entrepreneurship.

This is supported by anthropological investigations of entrepreneurship which show that simplistic definitions constrain analysis and lead to simplistic models of entrepreneurship (Rosa & Caulkins, 2013; Rosa & Scott, 1996; 1999). Gartner’s (2010, p. 8) perspective on entrepreneurship studies changed over the course of twenty years. Gartner (2010, p. 8) noted that the pursuit of general principles of entrepreneurship had eluded him with the data resisting reduction to “idealized” categories, “gestalts”, or models. However, rather than challenging the definition of entrepreneurship as venture creation, Gartner (2010, pp. 9-10) expressed disillusionment with the “rational-scientific” approach and the validity and reliability of statistical analyses of entrepreneurship:

“Generalized principles – ‘on average’- are offered in these studies, but the nuances of particular situations, the nuances that actually characterize how individuals go about thinking through, over time, the complications of utilizing their capabilities and resources as they are both informed by, and seek to change their circumstances, is ‘averaged’ away.”

(Gartner, 2010, p. 11)

Gartner’s (2010) critique of quantitative explorations of entrepreneurship referenced his own work but also extended to a broader disciplinary critique. For example, in relation to the Panel Study of Entrepreneurial Dynamics (PSED), Gartner (2010, p. 11) noted that this survey-informed, quantitative database suffered from the weaknesses stated above.

The more recently established Global Entrepreneurship Monitor (GEM) is similar to the PSED in many respects (Reynolds, Bosma, Autio, Hunt, De Bono, Servais, Lopez-Garcia, & Chin, 2005, p. 209). The GEM is a cross-national research programme initiated in 1998 and

30 designed to assess the “level” of entrepreneurship in a nation, the role of entrepreneurship in national economic development, and to provide comparisons between nations (Reynolds et al., 2005, p. 205). The GEM (Walter et al., 2003, p. 12) defines entrepreneurship as “any attempt at new business or new venture creation, such as self-employment, a new business organization, or the expansion of an existing business, by an individual, teams of

individuals, or established businesses.” The GEM data is based on adult population surveys of business owners, interviews and questionnaires completed by “national experts”, and an “assembly of relevant standardised measures from existing cross-national datasets”

(Reynolds et al., 2005, p. 205). The various fundamental data from these sources are then “harmonized” to achieve the GEM dataset. While Reynolds et al. (2005, p. 222-3) noted problems with the GEM in relation to data collection methods, sample size, sampling method and representativeness, one of the strengths of the GEM is that—while it overlaps with the definition of entrepreneurship proposed by Gartner—the GEM definition is broader collecting data on growing and maturing businesses, not solely new ventures (Reynolds et al., 2005, p. 209). This means that the GEM data can be collated in such a way as to represent a four stage process-based definition (figure two) of entrepreneurship (Reynolds et al., 2005, p. 209).

Figure 2: The GEM entrepreneurial process definition. Stages marked in red indicate the limits of the PSED. (Adapted from Reynolds, 2005, p. 209)

Due to the more diverse data collected, Reynolds et al. (2005, p. 209) contended that other definitions of entrepreneurship can be studied through the isolation of specific groups of variables within the GEM. An example of this can be seen in the study by Hessels, van Gelderen, and Thurik (2008) who explored entrepreneurial aspirations and motivations utilising data from the GEM Adult Population Survey. Hessels et al. (2008, p. 329) focused

Potential Entrepreneur (Knowledge and Skills) Nascent Entrepreneur (setting up a business) Owner- Manager (for to 3.5 years old) Owner- Manager of an established firm (3.5 years +)

31 on data pertaining to innovation, job growth expectations and export orientations. Hessels et al (2008) found that levels of “increase-wealth-motivated entrepreneurs” correlated positively with high-job-growth and export-oriented entrepreneurship. While the GEM allows broader explorations of various definitions of entrepreneurship, the adult population data within the GEM is extremely heterogeneous (Reynolds et al., 2005, p. 217), thus Gartner’s critique regarding the “averaging away” of diversity may apply. Further, it should be noted that the process of “harmonization” of the GEM data was also problematic (Reynolds et al., 2005, p. 205) due to the somewhat circular problem of variable definitions, as well as variable data collection and storage methods (Reynolds et al., 2005, p. 220).

These issues reflect the frustration expressed by Gartner (2010, pp. 9-10) who contended that finding stable entrepreneurial “types” through quantitative analysis might prove fruitless. Gartner’s (2010, pp. 9-10) research had shown him that diversity was inherent to entrepreneurship, and that there existed a symbiotic relationship between the

entrepreneur and their particular environment leading to a dynamism that is not amenable to static categorisation. Similarly, McKenzie et al. (2007, p. 29) argued that the process of entrepreneurship must be understood through “the broad context of the social, political and economic environment.” It is within this broader environment that the entrepreneur is both prepared for and able to detect economic opportunity (McKenzie et al., 2007, p. 30). McKenzie et al. (2007, p. 30) offered the following definition for entrepreneurship:

“Entrepreneurship involves individuals and groups of individuals seeking and exploiting economic opportunity.” McKenzie et al. (2007, p. 35) argued that a more “encompassing definition” of entrepreneurship captures more of the entrepreneurial process. Recently, studies into the definition of entrepreneurship have also been initiated by the Organisation for Economic Cooperation and Development (OECD) in order to support the development of the Entrepreneurship Indicators Programme (EIP); another attempt to create an authoritative statistical database that compares “entrepreneurship” across countries (Ahmad & Seymour, 2008, p. 2). The development of a statistical database requires that the definition be expressed as measurable variables (Ahmad & Seymour, 2008, p. 2).

Analysis of these variables led Ahmad and Seymour (2008, p. 9) to recommend that entrepreneurs be defined as: “persons (business owners) who seek to generate value through the creation or expansion of economic activity, by identifying and exploiting new products, processes or markets.” Thus, Ahmad and Seymour (2008, p. 12) seek a definition that is broad, dynamic and measurable. The desire to broaden the definition of

32 entrepreneurship and to embrace different expressions of the entrepreneur is echoed in relation to international entrepreneurship studies. Peiris, Akoorie, and Sinha (2012) conducted an analysis of peer-reviewed articles on international entrepreneurship

published over the past two decades. Peiris et al. (2012, pp. 296-297) noted that a broader definition of entrepreneurship is required to deal with the complexities of the international entrepreneurship field. Such a definition, according to Peiris et al. (2012, pp. 296-297) should incorporate both cognitive and behavioural elements and embrace the study of entrepreneurial activity across the life cycle of the business. Peiris et al. (2012, pp. 296- 297) argued that such a breadth in definition and exploration is required if we are to understand the role of entrepreneurship in businesses that internationalise. Peiris et al. (2012, p. 296) suggested the following definition of international entrepreneurship: “… the cognitive and behavioural processes associated with the creation and exchange of value through the identification and exploitation of opportunities that cross national borders.”

Peiris et al. (2012, p. 304) also noted that international entrepreneurship should focus on innovative businesses, a contention supported by Low and Isserman who (citing Melecki, 1993, in Low and Isserman, 2015, p. 177) propose the study of innovative entrepreneurship as “the highest level of entrepreneurship.” Gunter (2012, p. 386) also noted the

importance of innovative entrepreneurs in the development of the economy and points to the tendency for economists to treat entrepreneurship as a weak exogenous variable12 thus under-estimating the impact of the entrepreneur on economic development (Gunter, 2012, p. 387). Gunter (2012, p. 387) contended that this happens due to continuing issues with diverse definitions of the entrepreneur, the inherent variability of the traits and activities of entrepreneurs, and the unique role of the entrepreneur in market disequilibrium. Gunter (2012, p. 387) noted the tendency for research to focus on a few characteristics of entrepreneurs or entrepreneurship and advocated for an inclusive definition that will establish “a foundation for more sophisticated analysis.” Gunter (2012, p. 87) suggested a focus on the individual as entrepreneur but incorporated venture creation and uncertainty in this definition: “Entrepreneurs are individuals who, in an uncertain environment, recognize opportunities that most fail to see, and create ventures to profit by exploiting these opportunities” (Gunter, 2012, p. 387).

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When developing causal (or predictive) quantitative models for economic analysis, an exogenous variable is an independent variable that may have an effect on an economic outcome but is otherwise independent from the states of other variables in the model.

33 Gunter (2012, p. 388) focused discussion on two broad types of entrepreneur, the

Kirznerian entrepreneur and the Schumpeterian entrepreneur. Citing Kirzner (1979, in Gunter, 2012, p. 389), Gunter described the role of the “Kirznerian entrepreneur” as responding to disequilibrium in supply and demand caused by market shocks. According to Gunter (2012, p. 390) they do this by specialising in “arbitrage and speculation”, essentially buying “a good or service at a low price” and selling it at a profit. The second

entrepreneurial “type” described by Gunter, the “Schumpeterian entrepreneur”, does not simply respond to economic shocks but actually creates change in the economy through the development and diffusion of innovative technology and processes. Citing Schumpeter (1983, in Gunter, 2012, p. 390) Gunter noted that advancement in knowledge provides opportunities for Schumpeterian entrepreneurs to profit through different forms of innovation. However, Kirzner (2008, pp. 146-147) had previously contended that making the “Kirznerian” entrepreneur distinct from the Schumpeterian entrepreneur denoted a flawed interpretation of his discussion on entrepreneurship. Kirzner (2008, pp. 147-149) noted that Schumpeter’s focus was on the entrepreneurs role in market disequilibrium through acts of “creative destruction”, with the primary characteristics of the entrepreneur being boldness and creativity. However, Kirzner (2008, p. 150) argued that once the market is in disequilibrium the focus of Schumpeterian-entrepreneurs moves to arbitrage that speculates on market pricing eventually returning the market to a state of equilibrium. Thus, as stated by Baumol (2010, p. 15): “So while Schumpeter’s entrepreneur destroys all equilibria, Kirzner’s works to restore them.”

For this, Kirzner (2008, pp. 149-151) argued the entrepreneur also required the characteristic of “alertness”. Therefore, there is only one Schumpeterian/Kiznerian- entrepreneur, who is defined by alertness, boldness and creativity (Kirzner, 2008, p. 151). According to Baumol (2010, p. 17) the ability to clearly define the entrepreneur is also challenged by a lack of differentiation between managers and entrepreneurs. Baumol (2010, p. 17) defined “the manager as the individual who oversees the ongoing efficiency of continuing business processes.” As such, Baumol (2010, p. 17) situated the actions of the manager within what is both “routine” and “traditional” and within the limits of the current technological resources of a firm. However, as noted earlier, Baumol (2010, p. 17) also differentiated entrepreneurs into two broad groups; that being, “replicative” and “innovative” entrepreneurs. By using these descriptors, Baumol (2010, p. 18)

acknowledged, broadly, the “entrepreneur” as one who “undertakes” activities. However, Baumol (2010, p. 17) then differentiated two sub-types within the broad group. Replicative

34 entrepreneurs (who he contended were the majority) “undertake” activities using a

business as a vehicle, without creating or implementing new ideas or technologies that differentiate the business from other existing businesses. In contrast, “innovative

entrepreneurs” are focused on new ideas and their implementation (Baumol, 2010, p. 17). Baumol (2010, p. 17) contended that the maintenance of the status quo is unsatisfying for innovative entrepreneurs as “today’s practice is never good enough for tomorrow.” Baumol (2010, p. 7) conceded that both replicative and innovative entrepreneurs can “double as managers” in their firms, but that their entrepreneurial function differs from management, and by the type of entrepreneur.

Baumol (2010, pp. 17-18) contended that failure to differentiate such foci and type led to misinterpretations of innovative entrepreneurs as they are subsumed within a dominant cohort of replicators and managers resulting in a failure to understand innovative entrepreneurship. Having considered this, and the various approaches discussed here, I decided that an appropriate starting point for the definition of the entrepreneur for this study is:

The entrepreneur is an individual who chooses to exploit economic opportunity through the ownership and control of one or more businesses. The entrepreneur leverages innovation to capture economic opportunity. This innovation is evident in the

entrepreneurial processes and outputs of their businesses across the life cycle, new market creation or in the exploitation of inefficiencies in current markets.

Therefore, this study focuses explicitly on innovative entrepreneurs. Entrepreneurship, in this study, describes the business-related activities of the innovative entrepreneurs defined above, therefore I define entrepreneurship very simply as:

Entrepreneurship is defined as the business-related activities of entrepreneurs.

In noting that this is a starting point, I acknowledge that the definition is drawn from previous literature rather than from participant data. While this allows me to identify participants, I will reflect on this definition again at the conclusion of this study. I have now made clear what I mean by entrepreneur and entrepreneurship. However, before I

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