Edited by David B. Audretsch, Christopher S. Hayter and Albert N. Link
A generation ago, entrepreneurship was a topic that was barely on the radar screen of economics and business. Al and David never came across the word, let alone studied it as graduate students in the 1970s; and they were both students of industrial organization, the subfield of economics specializing in the analysis of firms and industries! It was not as if scholars had never heard of or come across the terms “entrepreneur” or “entrepreneurship.” The eminent scholar, Joseph Schumpeter (1911, 1942) made sure of that. With his penetrating and vivid depiction and analysis of both the entrepreneur as well as the entrepreneurial process, Schumpeter made a compelling case explaining why the process of creative destruction triggers innovation and, ultimately, economic growth and development.
Perhaps sated by the post-World War II economic boom, however, the entrepreneur, along with Schumpeter, remained something of the forgotten man of economics. Rather, as the MIT scholar Alfred Chandler (1977, 1990) painstakingly documented, it was the massive economies bestowed from both size and scale that drove competitiveness, productivity and prosperity.
It took a major economic downturn in the 1970s, marking the end of the seemingly unending prosperity that followed World War II, to waken scholars out of intellectual slumber and (re-) discover that entrepreneurship matters.
How and why entrepreneurship matters became vividly clear by the 1990s. Most scholars and thought leaders in business and public policy were poised for an inevitable economic decline of the United States, which seemed unable to compete against their Japanese counterparts in the traditional manufacturing industries, such as steel and automobiles. Through what many perceived to be unfair industrial policies, Japanese companies were able to attain scale and scope, while improving product quality, at a magnitude unthinkable to their American counterparts, who ultimately were constrained by antitrust laws and government regulations. A dream team of scholars spanning a broad range of academic fields and disciplines, the MIT Commission on Industrial Productivity, warned in their highly influential book, Made in America: Regaining the Productive Edge (Dertouzos et al., 1990), that unless the United States could match the scale and scope of its Japanese counterparts in industries such as automobiles and steel, a prolonged economic decline was all but inevitable.
Regaining the productive edge is exactly what transpired in the United States in the 1990s as Stiglitz (2004) made clear in his highly celebrated book The Roaring Nineties: A New History of the World’s Most Prosperous Decade. But it did not come about the way that the MIT Commission on p. 2Industrial Productivity had imagined. The American automobile and steel industries never again regained their postwar prominence and dominance. Rather, the unexpected surge that triggered “the most prosperous decade” (Stiglitz, 2004), came instead from a very unexpected direction: the entrepreneur. As entirely new industries – such as software, biotechnology and information technologies – were created by bold entrepreneurs such as Steven Jobs and Bill Gates, scholars along with leaders in government and industry began to take entrepreneurship – and its role in economic dynamism – more seriously.
In the past two decades a considerable body of knowledge has been created by the generation of scholars answering the call to better understand entrepreneurship – and its relationship to technology and innovation. The purpose of this volume is to provide a concise and coherent overview about some of the most salient insights that have been gleaned from state-of-the-art research about entrepreneurs and entrepreneurship. In compiling this volume we have included some of the world’s leading scholars on the subject. Taken together, these concise essays provide a compelling picture about the individuals who have emerged to the forefront of the contemporary economy: entrepreneurs.
Schumpeter, J. (1911), Theorie der wirtschaftlichen Entwicklung. Eine Untersuchung über Unternehmergewinn, Kapital, Kredit, Zins und den Konjunkturzyklus, Berlin: Duncker und Humblot, English translation (1934), The Theory of Economic Development, trans. Redvers Opie, Cambridge, MA: Harvard University Press.