Elements of Entrepreneurial Expertise
New Horizons in Entrepreneurship series
In a provocative article in the American Economic Review titled ‘The age of Schumpeter’ the noted German economist, Herbert Giersch, speciﬁed 10 basic postulates for a post-Schumpeterian paradigm. The ﬁrst of these was: The approach is micro rather than macro, socioeconomic (if not socioecological) rather than mechanistic. In the spirit of Schumpeter’s ‘methodological individualism’ it concentrates on processes rather than outcomes, on voluntarism rather than determinism. Being addressed to current world economic development, it stresses relevance rather than rigor, movement rather than static optimality. (Giersch, 1984: 105) This book embodies the spirit of this postulate. The theoretical development presented here seeks to provide valid microfoundations for an economics in which Schumpeterian perspectives on innovation, competition and growth are integral, yet consistent with recent evidence from evolutionary economics on the dynamics of markets and industries as well as with recent developments in behavioral economics on human decisionmaking. The empirical evidence for the microfoundations comes from a cognitive science based study of entrepreneurial expertise using thinkaloud verbal protocols. The evidence points to an alternative logic of decision-making under uncertainty that not only embodies the spirit of the postulate stated above but also clearly contrasts with mainstream models based on a causal logic. Causal logic provides useful decision criteria to achieve given goals subject to environmental selection in the face of an uncertain future. Eﬀectual logic provides useful design principles for transforming extant environments into new futures in the face of ambiguous goals. An entirely causal presentation of an eﬀectual...