Definitions of Entrepreneurship

Many writers have also tried to provide a specific definition for entrepreneurship, identifying what they believe makes entrepreneurship distinct from other forms of economic and management thought and behavior. Table I-2 provides a sampling of definitions that covers a variety of perspectives across various eras, with an emphasis on recent developments. These definitions incorporate a wide expanse of skills, thought processes, intentions and actual behaviors. Some authors have developed their perspectives from observation, others from study and research, while still others have used mathematical techniques such as factor analysis or content analysis, trying to extract some essence. The diversity in the emerging definitions seems to only foil attempts at establishing some universal definition. The diversity and complexity seems to be expanding not contracting, making any condensation into a single summary definition dubious. What this table suggests is that the concept is based on complex interrelationships that are dynamic; entrepreneurship is a function of living and changing systems. Again, this definitional migration points to the need for systems thinking.

I believe that in many ways the entrepreneurship field has lost ground in validly defining its central construct over the last 40 years, because it hasn’t used systematic approaches. In the early industrializing epochs the farmer was the entrepreneur, or the entrepreneur was the simple trader, the artist or the craftsman who slowly moved mankind from being a slave to the land to being a slave to the industrial organization (agrarian-based to industrial-based in the organization). In the 18^th and 19^th centuries, there weren’t that many kinds of entrepreneurs, or even managers for that matter. Thus, entrepreneurship tended to take on a broad connotation encompassing every creative and administrative economic activity in the new mass-exchanging world. Virtually, any enterprising activity that involved wage-at-risk, as opposed to wage earning, would be entrepreneurial. The defining process quickened grand expansions suddenly took place when railroads and telegraphs opened new lands and people connected like never before. Entrepreneurial managers emerged from literally all sectors and status groups to grasp the burgeoning opportunities, especially in America (e.g., see the stories Ostroff tells in Chapter 1). Massive capital investment flowed from the general population into publicly traded enterprises for the first time to bring new meaning and nuance to wage-at-risk as mankind passed a major, economic point of economic demarcation in the financing of enterprise. Simplistic dichotomies like wage-earner versus wage-provider were no longer good enough to distinguish entrepreneurship from other forms of productive participation; and we haven’t been able to systematically pin down the concept since, because capitalism has advanced the nuance. (Note that Cantillon was one of the first entrepreneurship writers in the late seventeenth century who used this simple dichotomy, wage-at-risk versus wage-earner. It was well accepted for over 100 years as the way to separate entrepreneurs from other employees. Such a dichotomy is still useful today, but it misses the fullness of centuries of economic evolution).

As we have advanced, however, the definitions we proliferate often confuse matters more than clarify them. As Low and MacMillan (1988) put it, “The problem with these definitions is that though each captures an aspect of entrepreneurship, none captures the whole picture. The phenomena of entrepreneurship is intertwined with a complex set of contiguous and overlapping constructs such as management of change, innovation, technological, environmental turbulence, new product development, small business management, individualism and industry evolution. Furthermore, the phenomena can be productively investigated from disciplines as varied as economics, sociology, finance, history, psychology and anthropology, each of which uses its own concepts and operates within its own terms of reference. Indeed, it seems likely that the desire for common definitions and a clearly defined area of inquiry will remain unfulfilled in the foreseeable future (p.141).”

The economic systems of man have evolved through time, and new dimensions for entrepreneurship have been discovered, contradicted and debated throughout the journey. Environments have changed and the evolution of the field has changed with new researchers, new research methods and new models that seem to emerge from everywhere. Breakthroughs in economics and organization have ebbed and flowed at an ever-faster pace, with a myriad of definitional issues arising. New intricacies of entrepreneurial systems are being discovered all the time as researchers and writers sift ever-finer particles of information to stir up entrepreneurial imaginations; yet, we are still tempted to believe that some simple essence of entrepreneurship must exist. For instance, Carland and Carland (1997) developed their own instruments for analyzing different dimensions of entrepreneurship and undertook interesting mathematical smoothing techniques to clarify the key components of the construct of entrepreneurship. They found achievement, innovation and risk taking as reoccurring dimensions that should be a part of what they call a universal definition. Similarly, Gartner (1990) factor analyzed a sample of definitions produced by some of the leading minds in the field with a Delphi approach and produced eight themes: the entrepreneur, innovation, organization creation, creating value, profit or nonprofit, growth, uniqueness, owner-manager. But, do these themes really clarify the definition of entrepreneurship for you? They may help, but they leave much to the imagination of the true systems thinker.