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Theory, Networks, History

Mark Casson

In this important new book, Mark Casson argues that the fundamental significance of entrepreneurship requires it be fully integrated into core social science disciplines such as economics and sociology, as well as into economic and business history. This book shows how this can be done. It formalises the role of the entrepreneur as innovator, risk-taker and judgemental decision-maker, and relates these functions to the size and growth of the firm. Mark Casson discusses entrepreneurship as a form of strategic networking, showing how entrepreneurs gain access to established networks in order to source information, and then create their own networks to exploit this information. Applying these insights to historical evidence leads to a radical re-interpretation of key issues in economic and business history, including the emergence of trading companies, the spread of empires, the rise of the modern corporation and the globalisation of the firm.
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Chapter 13: Conclusion

Mark Casson


INTRODUCTION: THE PROBLEM OF EXPLAINING SUCCESS The theory of entrepreneurship set out in this book was originally developed to ‘plug a gap’ in economic theory. There are various symptoms of this gap, including the lack of a convincing account of market processes, and the omission of strategic leadership from the theory of the firm. In conventional economics the existence of firms and markets is regarded as given rather than as something that needs to be explained. Conventional economics, it is often pointed out, is inherently static; even growth is often analysed as a steady-state process. By recognizing the importance of a specific class of people dedicated to the pursuit of change, the study of entrepreneurship transforms static analysis into dynamic analysis. According to this dynamic analysis, the pace of change adjusts to the threats and opportunities faced by the economy. Increasing demand for change translates into increasing demand for entrepreneurs, which increases prospective profits, and triggers a corresponding increase in their supply. Perhaps the most fundamental problem with conventional economics is that it does not have a satisfactory theory of success. It does not explain fully why certain people are able to derive so much profit from the market process, nor why some small firms grow into successful large firms whilst many others fail. A successful economy depends on the cumulative effects of numerous initiatives undertaken by successful people. The limited supply of potentially successful people is a major constraint on national economic performance. Increasing this supply is an important...

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