This essay is about whether entrepreneurship can be learned or whether it is in built in someone’s character. I will explore this by using economic, entrepreneurial, as well as a recent Wall Street Journal article entitle, ‘Can Entrepreneurship be taught?’
“It is well established that, while only a small proportion of all entrepreneurial firms grow rapidly, this small minority delivers a disproportional economic impact relative to their numbers. Often-cited studies suggest that anything from between 3% and 10% of any new cohort of firms will end up delivering from 50% to up to 80% of the aggregate economic impact of the cohort over its lifetime.” (Autio et al, 2008)
If entrepreneurship can be learned then nations all around the world could instill entrepreneurship into its citizens boosting GDP, job creation, national wealth and economic prosperity, thus being an innovative and successful way to revitalize struggling nations around the globe. Yet, if entrepreneurship is found to be genetic this signals an alarming reality that governments, academic must take note of in order to save time, money, and effort before millions is spent around the globe of various funding and Gazelle schemes. The answer to this crucial question cannot simply be answered in a mere 2000 words; yet, I will try to use theoretical evidence to give balance and weighted argument to answer this question. There are four key theories that I will draw on throughout this essay Frank Knight’s risk, uncertainty and profit, Schumpeter’s innovation theory, Mark Casson’s economic theory and King’s psychological theory of mental capacity.
Frank Knight’s theory of risk, uncertainty and profit portrays the way in which entrepreneurs and firm owners judge, decide and classify economic risk and uncertainty ultimately leads to the profitability outcome seen by the business as a result. Lying at the heart of the risk and uncertainty decision-making that takes place by firms and business in the different market frameworks are the entrepreneurs and business owners. Entrepreneurs and business owners must make both calculated decisions about economic risk facing their business as well using ‘partial knowledge’ (Langlois et al, 1993: 459) in order to judge uncertainty that may face their business. According to Knight “uncertainty arises from the impossibility of exhaustive classification of states.” (Knight, 2006) Knight disputed that an unknown probability model governs the outcome of any decisions made about uncertainty. Can people be taught how to evaluate and act businesses future risk and uncertainty? Is it possible for owners and entrepreneurs to be created, taught and inspired by governments, nations and academia or are these figureheads born with the necessary conviction for business success?
Langlois and Cosgel’s premise is that Knight’s use of the expression ‘estimate of an estimate’ (Knight) refers to two separate actions needed when evaluating risks and uncertainty. There are crucially two parts of decision-making process when dealing with economic risk and uncertainty in the search for profitability. “The first step requires judgment and intuition rather than calculation.” (Langlois et al, 1993: 460) I believe this step cannot be learned and is innate in some of the population and not others. This intuitive first decision to analyze risk and uncertainty cannot be simplified, modeled or taught to somebody because it is instinctive. “Knight also makes it clear that the second estimate is probabilistic.” (Langlois et al, 1993: 460) This calculated decision-making process I think could be taught and developed over time. Many challenges faced by businesses are messy, unstructured and often come to unforeseeable outcomes. Organic framework. I think this hints entrepreneurs are born. Langlois and Cosgel stress that decision-making is ‘not reasoned...