Schumpeter’s Plea: Historical Approaches to Entrepreneurship Research

Topics: Sociology, Scientific method, Entrepreneurship Pages: 35 (11949 words) Published: November 6, 2008
Schumpeter’s Plea:
Historical Approaches to Entrepreneurship Research
R. Daniel Wadhwani
Assistant Professor of Management &
Fletcher Jones Professor of Entrepreneurship
University of the Pacific
dwadhwani@pacific.edu
Geoffrey Jones
Isidor Straus Professor of Business History
Harvard Business School
gjones@hbs.edu
1
Abstract:
This paper outlines the case for why and how historical methods are important to the social scientific study of entrepreneurship. We begin by surveying the changing ways in which historical reasoning has been used in the development of entrepreneurship theory over the last century. We show that, despite theoretical agreement on the importance of context in the study of entrepreneurship, empirical research in recent years has tended to display declining analytical attention to historical setting in favor of focusing on entrepreneurial behavior and cognition. We highlight why analysis of historical context as well as behavior is essential to the study of entrepreneurship. We then outline some of the specific ways in which historical methods can help scholars analyze historical context in studies of entrepreneurial behavior. To ground our discussion, we focus on how historical methods can contribute to the emerging field of international entrepreneurship. We conclude by arguing that these methods can stimulate the kind of exchanges between the history and theory of entrepreneurship that Schumpeter envisioned. 2

Joseph Schumpeter began his now-famous 1947 article on “Creative Response in Economic History” with this plea: “Economic historians and economic theorists can make an interesting and socially valuable journey together, if they will” (Schumpeter, 1947). Though his article is most often cited for the distinction it developed between “adaptive” and “creative” responses in business, Schumpeter’s main purpose was to call for the extensive use of historical methods in the study of entrepreneurship. To Schumpeter, the very nature of entrepreneurship – the empirical difficulty of identifying it ex ante, the way it “shapes the whole course of subsequent events and their ‘long-run’ outcomes,” the great extent to which its character differed from place to place and over the course of time – suggested that a dynamic historical perspective was necessary in studying how it worked within capitalist economies. The purpose of this paper is to elaborate on the role of historical methods in the study of entrepreneurship. We define historical methods as a set of analytical approaches to understanding the context for entrepreneurial behavior within the stream of time and place and to uncovering the relationship between such behavior and change at multiple levels of economy and society. We outline the arguments for why and how historical approaches are essential for understanding entrepreneurial processes. Our more ambitious agenda is to re-stimulate the exchange between historical and social scientific studies of entrepreneurship that Schumpeter envisioned and at least briefly inspired in the decades after World War II. Today, empirical historical research on entrepreneurship and social scientific theorizing about it are separated by a deeper gulf than they were half a century ago. This is a loss to both sides. The paper begins with a survey of the evolution of the scholarly literature on entrepreneurship, paying particular attention to the changing ways in which historical perspective has been used by scholars in the field. We demonstrate that social scientific research on 3

entrepreneurship has displayed declining analytical attention to historical context over the last few decades. The arguments supporting Schumpeter’s assertion that “history matters” in the systematic study of entrepreneurship are then outlined. We highlight three specific historical methods that can contribute to the study of entrepreneurship. To ground our discussion, we focus on how historical perspective can contribute to the...

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