Chapter 17: Industrial Renewal and Entrepreneurship in Sweden: A Structural Cycle Explanation
Hans Landström and Lennart Schön INDUSTRIAL RENEWAL AND ENTREPRENEURSHIP OVER TIME It has been known for many years that the level of entrepreneurship in a society differs strongly over time. For example, in his historical exposé including ancient Rome, early China, and, in particular, the Middle Ages and Renaissance Europe, William Baumol (1990) demonstrated that entrepreneurship behavior in terms of innovative activities and business development differs significantly from one time period to another. However, he argued that it is not the supply of entrepreneurs in a society that changes over time, but the variety of roles to which the entrepreneur’s efforts can be allocated. Some of these roles can be regarded as productive in the sense of promoting innovation and business development, whereas others can be considered more or less destructive and damaging to the economy (e.g. rent seeking and organized crime). The ‘rules of the game’, i.e. the relative rewards for different kinds of entrepreneurial activities in a society, in turn, have a profound effect on entrepreneurial behavior in different periods and societies. It can also be argued that there is a strong relationship between the growth and dynamics in a society and the level and characteristics of entrepreneurship. For example, Kyrö (2006) stated that entrepreneurship is a phenomenon that gains in importance in periods when society experiences some form of ‘transition’, i.e. when ideas of freedom and the need for a new kind of reality are especially vital for growth. In this respect the dynamics in...
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