Entrepreneurship philosophy defined
By: Dr. Patrick Caoile - @inquirerdotnet
Contributor / 01:28 AM May 16, 2016
There are two types of entrepreneurship and these are the replicative
type and the Schumpeterian typed named after Joseph Alois
Schumpeter, an Austrian born American economist, who taught at
Harvard University from 1932 until his death at 66 years old in 1950.
Several schools whether big or small had embraced an entrepreneurial
philosophy and rightly so since this what our country needs.
Entrepreneurship is the modern day philosophers’ stone, a mysterious
something that supposedly holds the secret to boosting economic
growth, development and creating jobs.
Replicative entrepreneurial activities are best exemplified by the
ubiquitous sari-sari store and even food franchises.
These are termed replicative because expansion is seen as additive
and as you add more enterprises then the business grows.
There is a world of difference between the replicative entrepreneur of
the typical small business owners who dreams of opening another
shop and the entrepreneur who dreams of changing the entire
industry.
Much of the philosophical thought and framework of this other type
of entrepreneurial behavior is mostly the work of Schumpeter, who
was born in the now Czech Republic.
Schumpeter believed that capitalism could only be understood as an
evolutionary process of innovation, entrepreneurship, and creative
destruction.
The success of the entrepreneurial capitalist leads to corporatism
defined as entrepreneurial spirit. Innovation, technological changes
and improvements come from entrepreneurs.
This wild spirit translates into huge capital surplus that can be
channeled into research and development that further results in
improvement and more surplus capital.
To help foster this spirit, business schools must have the proper kind
of leadership.
This is a tricky aspect but a crucial one. Educational institutions do not
pay well so an entrepreneur might never be hired or apply, specially
the Schumpeterian kind.
Of course, there had been leaderships where the business school head
had gone abroad to a finishing school and put up a string of franchise
stores like those of Jollibee and Red Ribbon. That does not deserve the
Schumpeterian kind but more of the replicative kind.
This is another conundrum of business schools.
Its leadership, administrators and faculty are better teachers if they
run or are still running a business if it is the Schumpeterian kind.
What is the default position for the leadership structure and faculty of
these business schools?
The fallback is in research.
The currency of education is now research and the teaching aspect is
probably a mere 10 to 20 percent of an educator’s performance.
The Western world battle cry of publish or perish is now prevalent in
the Philippine shores.
The business school research should focus on best practices, creating
models for strategy planning, implementation and evaluation, even
forecasting and predicting trends for BHAG ventures.
The entrepreneur who dreams of changing the entire industry can do
so if he or she can find a need and fill that need just like George
Mitchell, the Texas oilman who revolutionized the oil industry with the
process known as fracking.
Daniel Isenberg, another Harvard University professor like Joseph
Schumpeter researched on the successful habits of entrepreneurial
people and found out that entrepreneurs look at projects that are
worthless, impossible and stupid and with sheer wild spirit turn these
losing propositions into spectacular projects.
Schumpeter, just like most economists, was more popular after their
demise than when they were alive. He was discovered by the
millennial generation after over a half century after his death.
There are even blogs about him and his ideas like the Schumpeter blog
of the Economist magazine that indicated the following graph showing
the disposition of billionaires per million populations with Hong Kong
and a population of 5 million people topping the list.
It is no surprise that the Philippines is not even mentioned in the
chart.
The monopolist and monopolistic competition market structure is a
dampener for Schumpeterian entrepreneurship and fosters only the
replicative kind.
Schumpeterian entrepreneurship is anchored on innovation so the
business school that embraces this philosophy should be steeped in
research and mirror the innovative nature of the business enterprise.
The wild spirit should pervade in the leadership, administration,
faculty and the student populace that should veer away from the
replicative entrepreneurship.
(The author took his doctoral studies in De La Salle University and
teaches finance and economics in DLSU and the Entrepreneurs School
of Asia.)