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Towards an interdisciplinary theory


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  • 2. IMPORTANCE OF ENTREPRENEURSHIP The consequences of liberalized world trade for industrial countries are twofold.  New export markets  Jobs are shifting  Industries shifting to low cost locations  Asian countries are gaining importance  Germany trying to encourage entrepreneurship as a tool for innovation  Unemployment is rising the relation of entrepreneurship and job generation has became center of interest
  • 3. CONT…  Small enterprise creating more jobs  Entrepreneurship in the form of starting up of a company can create jobs.  Entrepreneurship also act as a central figure for the distribution of economically relevant information.
  • 4. THE ROLE OF ENTREPRENEUR IN THE HISTORY OF ECONOMIC THEORY  Disappearance of Entrepreneur from economics literature.  Reason for the disappearance is the separation of micro and macro economics. Also introduction of neoclassical theory is considered as reason for disappearance of Entrepreneur.  In early economics entrepreneur has been considered as risk barer, innovator, industrial leader etc.  Marginal utility revolution at the end of 19th century was the beginning of neoclassical theory.
  • 5. ENTREPRENEUR AS UNCERTAINTY-BEARER Risk is consequence of uncontrolled and controllable change  Change has not occurred because of entrepreneur process but entrepreneur use changes for his purpose.  He considered profit of the entrepreneur as a compensation of bearing uncertainty. 
  • 6. THE ENTREPRENEUR AS INNOVATOR Schumpeter listed five categories of action:  The introduction of new good quality of a good  Introduction of new method of production- some thing as yet untried in industry  The opening of new market  The utilization of some new source of supply for raw materials or intermediate goods  The carrying out of some new organizational form of the industry
  • 7. THE ENTREPRENEUR AS ALERT DISCOVERER  Focus-Price realized by entrepreneurs Prices imbalance distribution of information asymmetric  ECONOMIC ROLE: Adjustment-prices-equilibrium  ECONOMIC PROBLEM: Information? MARKET PROCESS THEORY (market= discovering+learning by accepting knowledge) imperfect
  • 8. Information- advantages for own profit  Learning  Competition  Aim Maximize outcome  Determine new targets
  • 9. ENTREPRENEUR AS A COORDINATOR  Neo-classical theory- No theory on entrepreneurship Implicit access Highly subjective to information CASSON MODIFIED NEOCLASSICAL ASSUMPTION= assymetric info+ transaction costs (marketing making service)  Entrepreneur as a coordinator- DEFINITION  Dynamism, bearing economic uncertainty and alertness  Perception, imaginative
  • 10. ENTREPRENEUR IN ECONOMIC THOUGHT  Entrepreneurship is difficult in economic literature  Kirzner-Entrepreneur is central element in market process  Knight –Entrepreneur profit  Schumpeter-2 fold-  Dynamic and evolutionary perspective of economic development  Identify the entrepreneur
  • 11. ECONOMIC DECISION  Why certain individual becomes an entrepreneur.  Model of Campbell shows that new entrepreneurship could be stimulated by higher profits for existing ventures , that high profits attract imitative entrepreneurs.  Economic Decision Model , Baurnol the development of an economic explanation of entrepreneurship.
  • 12. SYSTEMATIC PERCEPTIVE  The model of systematic approach to entrepreneurship AGIL: Level of Social System , Level of Economic System and Level of Entrepreneurship System.  Function of social system 1. Concept of Systems 2. Concept of Homeostasis 3. Concept of thresholds
  • 13. PSYCHOLOGICAL   Entrepreneurs are approx. 70% male (decreasing). Entrepreneurs are in their mid 30s (decreasing).  Have a higher need for achievement.  Need for Independency , a prime motive.
  • 14. THE BEHAVIORAL APPROACH • The main idea is to distinguish between the dynamic entrepreneur and more static small business manager. • The Schumpeter’s theory states- “ Everyone is an entrepreneur when he actually carries out new combinations.”
  • 15. ENTREPRENEURSHIP RESEARCH SHOULD TRY TO ADDRESS THE FOLLOWING QUESTIONS:  What kinds of activities does the entrepreneur perform?  With whom he must work?  What basic roles can be inferred from the study of the entrepreneur’s activities?  Where does his ideas come from?  Where and how he try them?
  • 16. TO CONCLUDE: It can be concluded that the theory of entrepreneurship will be very difficult to develop, the unsolved problems are still enormous. The whole field of entrepreneurship research and economics is still its beginning.
  • 17. The empirical data on entrepreneurial traits give interesting insights on the person of entrepreneur but for the time being they do not lead towards the new theory.  Firstly, if Schumpeter's understanding of entrepreneur is widely accepted and that it may very well serve as starting point for a future theory of entrepreneurship.  Secondly the behavioral process, the entrepreneurial pursuit of business opportunities becomes the centre of empirical research.
  • 18. Thank You