Entrepreneurial Learning

Entrepreneurial Learning

 

 

  

 

 

 

Entrepreneurial Learning

The media and existing literature on entrepreneurship largely depicts an entrepreneur as possessing certain traits like being predominantly male, being of Western origin, and as a lone ranger. The impression created here is that women are less likely to be entrepreneurs, or that the entrepreneurial process is in itself an individual thing (Politis 2005). The focus of this essay is to prove that entrepreneurship, far from being a concept, is a process that encompasses the acquisition of knowledge and learning from others in the community and in this way, departs from the notion of it being a lone activity.

While there are various definitions to the term entrepreneurship, entrepreneurial learning as a concept is principally defined with the entrepreneurship theory in mind. For example, according to Miniti and Bygrave (2001), entrepreneurs can be defined as a process of learning. The authors further describing entrepreneurship learning as emanating from an argumentation of the belief in definite actions on account of their positive consequences.  Sullivan (2000) views entrepreneurial learning as a lifelong learning process whereby the individual acquires new knowledge that in turn revises and shapes his/her new experiences. Entrepreneurial learning can thus be broadly described as a process that enables individuals to obtain, absorb, and collocate newly developed knowledge with former structures, and the impact of learning on entrepreneurial action (Cope 2005; Corbett 2007). These definitions are indicative of a strong link between on the one hand, learning and on the other hand, the entrepreneurial process.

To better understand the concept of entrepreneurship, it is important that we move away from Ahl's view of the entrepreneur as an “individual lone island” (Ahl 2006) at examine the bigger picture known as the entrepreneurial process. According to Jack and Anderson (2002) entrepreneurship is not just an economic process but deduces the social contexts which give form and shape to the entrepreneurial outcomes. Context has emerged as vital aspect in describing the position of entrepreneurial processes. This view hinges on the notion that entrepreneurs are embedded in places, communities and networks which socially conceive opportunities and resources. This perspective of viewing entrepreneurship represents a departure from the conventional views that relate entrepreneurship to economic ideations of development, profit-oriented growth, and transformation (Davidson et al. 2006). Consequently, a growing body of work (for example, Drakopolou & Anderson 2007) now regard entrepreneurship as a socialised process. This position has seen Downing (2005) describe entrepreneurship as “a collective social achievement” (p. 196). The concept of embeddedness is crucial in explain the relationships between society and entrepreneurial self (Jack & Anderson 2002).

Embeddedness examines the influence of community and context on the noticeable potential in specific situations. Accordingly, embeddedness could either constrain or facilitate entrepreneurial activity (Downing 2005). Moreover, embeddedness may also aid in the creation of local opportunities, frequently aligned with the capabilities and needs of specific communities (Drakopoulou  & Anderson 2007). Guiso and Schivardi (2011) have identified actively pursuing learning opportunities as one of the six behavioural characteristics that underlie entrepreneurial learning. This further underscores the importance of learning is entrepreneurship as it is crucial in the development and growth of entrepreneurs (Corbett 2005).

Minniti and Bygrave (2001) opine that learning ought to be authentic, useful, relational, relevant, and productively shared. Lazear (2005) identifies three factors as being crucial in the occurrence and interpretation of entrepreneurial learning: social and personal emergence of an entrepreneur; contextual learning which promotes identification and imposition of opportunities in diverse specialised settings; and the negotiated enterprise made up of such processes as joint enterprise and participation, engagement in external networks, and roles that tend to change with the times. In line with these arguments, Holcomb et al. (2009) acknowledge the significance of realism vs. optimism in determining an entrepreneur’s knowledge and experience. The embedding mechanisms enables an entrepreneur to use utilise and draw upon resources within the local setting and in this way, become part of this local structure. As a matter of fact, embedding has on certain occasions actually proved essential in creating entrepreneurial opportunities.

While there have been arguments that entrepreneurs are born, not made, it is important to acknowledge the important role that learning in the entrepreneurship process. There are various ways through which individuals can acquire skills on becoming an entrepreneur. For example, one can learn from their parents, form schools, and from friends, among others. Such learning can also occur at various stages of life so that an entrepreneur can be a teenager or even a senior citizen.

Entrepreneurial activity signifies awareness and pursuit of business opportunities. Such an activity is often regarded as the work of entrepreneurs. Shane (2003) argues that an individual entrepreneur might identify a business opportunity, mobilise the necessary resources, develop a competitive advantage relative to other entrepreneurs, and take advantage of such an opportunity. Some individuals are known to rely solely on purposive rational action in pursuing a business opportunity, while others develop a business plan and assess markets and ideas, in addition to computing the costs involved in pursuing this activity, and the resources that they need to mobilsie (Sarasvathy 2008). Similar sentiments have also been echoed by Carlsson et al. (2013), who view entrepreneurship as being executed by entrepreneurs “...[who] perceive and create opportunities...The entrepreneurial activity and the entrepreneurial ventures are influenced by the socioeconomic environment.” (p. 914). In this case, the socioeconomic environment is often conceived as emdeddedness in the entrepreneur networks, considered essential I n the provision of advice and other useful resources for the business. In addition, the network could entail a team of founders, family business, or an entrepreneurial group. The entrepreneur's networking therefore function as a form of social capital which is essential in innovation and provision of valuable resources. Viewed at from this perspective, the entrepreneurial process, far from being an individual activity, is actually a community activity.

An entrepreneur demands that one possess various skills such as boldness, innovativeness, and risk-taking behaviour (Lazear 2005). Classical theories of entrepreneurship have endeavoured to emphasize on the importance of individual traits, in regards to the individual's ability to innovate, as well as to bear risk and uncertainty. While these features are without doubt crucial in the entrepreneurial process, the impact that networks have on entrepreneurship is perhaps worth of more consideration (Hoang & Antoncic 2003). Most of the available literature on the impact of networks on entrepreneurship reveals that local networks assist in the entrepreneurial activity. Michelacci and Silva (2007) opine that because entrepreneurs are, by and large, less mobile in comparison with employees, local networks are thus important in influencing their entrepreneurial process. The implication made is that the network effect is not just limited to the supply of vital inputs like information dissemination and knowledge spillovers, but also plays an influential role in improving the entrepreneurial ability.

The network effect is felt even after the entrepreneurship has been detached form the local network. For example Wahba and Zenou (2012), in their work on return immigrants, report that immigrants who had resided in a locality with entrepreneurial activities, unlike non-immigrants are more likely to start a business in spite of having severed their initial social networks while overseas. This is a clear indication of the influence of the entrepreneurs in the locality on the entrepreneurial spirit of other entrepreneurs. It is also a testament to the fact that entrepreneurs can still learn from others and go on to start their businesses owing to their exposure to an environment with entrepreneurs.

 This assertion is consistent with the findings of Glaeser, Kerr and Ponzetto (2010) who in their study report that area-sectors characterised by a lower number of firms record a significant levels of employment in later years. What this appears to suggest is that individuals with an entrepreneurial spirit learn from other entrepreneurs. This entrepreneurial learning proves essential in enabling such individuals to start their own businesses and in the process, end up employing others. It could also be an indication that individuals find it e a lot easier to accumulate their entrepreneurial skills in an area where more firms are concentrated. According to Guiso, Pistaferri and Schivard (2011), individuals who were raised in a family of entrepreneurs, or those who grew up in an environment characterized by his entrepreneurial density is more likely to become entrepreneurs. This finding holds regardless of whether we assume a broader definition of the term entrepreneur (for example, a definition that features self-employed individuals as well) or a narrower definition that only includes persons running an incorporated company. Again, this is a clear indication that the environment or the setting in which an individual grows up is a very important determinant of their future entrepreneurial process.

There are various factors that influence the entrepreneurial learning process. For example, past knowledge influences entrepreneurs to develop new knowledge which in turn enables them to identify and take advantage of opportunities (Holcomb et al. 2009). An important source of such knowledge for the entrepreneur is other entrepreneurs.  In the same way, there is a positive correlation between an entrepreneur's career experience, with regard to start-up, industry-specific experience and management and the development of their entrepreneurial knowledge (Politis 2005). Such knowledge is crucial in terms of promoting decision-making regarding entrepreneurial opportunities under pressure or uncertainty (Sarasvathy 2001). This knowledge can equally be gained from interactions and associations with other entrepreneurs. In this case, a budding entrepreneur is likely to acquire vital skills on how to identify a business opportunity or make crucial business decision from interactions with a seasoned entrepreneur, based on a recounting of their entrepreneurial journey. A study by Giannetti and Simonov (2009) sought to examine whether there was a correlation between on the one hand, entrepreneurial density and on the other hand, the likelihood than an individual would become an entrepreneur. The study establish a positive correlation between these two variable, and this is a clear indication that associating with other entrepreneurs triggers the entrepreneurial spirit in a person possibly due to the knowledge and skills gained in the process.

However, a budding entrepreneur who wishes to learn from other seasoned entrepreneur is bound to encounter several challenges. For example, while entrepreneurs as known to generally posses such common traits as the ability to take calculated risks, ability to spot business opportunities and being prompt at making business decisions, at the same time, we need to appreciate the fact that sometimes, entrepreneurs have to act on intuition. Accordingly, what works best in one setting will not always work under a different context (Minniti  & Bygrave 2001). What this means is that even though an entrepreneur may learn from the lessons of others they should also rely on their own intuition and acquired knowledge to interpret the situation at hand. An entrepreneur is more likely to learn best out of their won failure, as opposed to the failures of others entrepreneurs. Granted, learning from the failure of others enables one to avoid the same pitfalls but this in itself is not a true test of the innate abilities of a budding entrepreneur. Being embedded to an environment with a high concentration of entrepreneurs will obviously escalate the learning process and enable an entrepreneur to identify and take advantage of potential business opportunities (Wahba & Zenou 2012). However, the real hard work is to convert the business idea or innovation into a running business. Even with the best knowledge acquired from other entrepreneurs, the success of such a business enterprise will boil down to the attitude and tenacity of the entrepreneur. These are vital entrepreneurial skills that cannot be taught or acquired through learning from others.

In sum, entrepreneurship is a lifelong learning process embedded in social networks that can either make or break the individual spirit of entrepreneurship. Such networks are important in enabling the entrepreneur to recognise business opportunities, and to mobilise resources and skills needed to pursue such an opportunity.   However, innate individual skills are also essential in entrepreneurship and as such, entrepreneurs should not only strive to learn form others, but should also endevour to learn form their own mistakes and intuition.

 

 

 

 

 

References

Ahl H (2006),’Why Research on Women Entrepreneurs Needs New Directions’

Entrepreneurship Theory and Practice, vol. 30, no. 5, pp. 595-521.

Corbett AC (2005),’ Experiential learning within the process of opportunity identification and exploitation’, Journal of Business Venturing, vol. 29, no. 4, pp. 473-91.

Downing, S. (2005), “The social construction of entrepreneurship: narrative and dramatic processes in the coproduction of organizations and identities”, Entrepreneurship: Theory and Practice, Vol. 29 No. 2, pp. 185-204.

Drakopoulou Dodd S & Anderson AR (2007),’ Mumpsimus and the mything of the individualistic Entrepreneur’, International Small Business Journal, vol. 25, no. 4, pp. 341-360.

Giannetti M & Simonov A (2009),’Social interactions and entrepreneurial activity’, Journal of Economics & Management Strategy, vol. 18, pp. 665-709.

Glaeser EL, Kerr WR & Ponzetto GAM (2010),’ Clusters of entrepreneurship’, Journal of Urban Economics, vol. 67, pp. 150-168.

Guiso L & Schivardi F (2011),’ What determines entrepreneurial clusters?’, Journal of the European Economic Association, vol. 9, pp. 61-86.

Guiso L, Pistaferri L & Schivardi F (2015). Learning entrepreneurship from other entrepreneurs?. [Online]. 

[Accessed 18 Nov. 2016].

Holcomb TR, Ireland DR, Holmes MR & Hitt MA (2009),’ Architecture of entrepreneurial learning: Exploring the links among heuristics, knowledge, and action’, Entrepreneurship Theory and Practice, vol. 33, no. 1, pp. 167-92.

Lazear EP (2005),’Entrepreneurship’, Journal of Labor Economics, vol. 23, pp. 649-680.

McKeever E, Jack S & Anderson A (2014),'Embedded entrepreneurship in the creative re

construction of place', Journal of Business Venturing, pp. 1-16.

Minniti M & Bygrave W (2001),’ A dynamic model of entrepreneurial learning’, Entrepreneurship: Theory and Practice, vol. 23, no. 4, pp. 41-52.

Man TW (2006),’ Exploring the behavioural patterns of entrepreneurial learning: A competency approach’, Education & Training, 48, no. 5, pp. 309- 321.

Politis D (2005),’ The process of entrepreneurial learning: Conceptual framework’, Entrepreneurship Theory and Practice, vol. 29, no. 4, pp. 399-424.

Shane S (2003) A general theory of entrepreneurship: The individual-opportunity nexus. Cheltenham: Elgar.

Sullivan R (2000),’ Entrepreneurial learning and mentoring’, International Journal of Entrepreneurship Behaviour and Research, vol. 6, no. 3, pp. 160-75.

Wahba J & Zenou Y (2012),’ Out of Sight, out of mind: Migration, entrepreneurship and social capital’, Regional Science and Urban Economics, vol. 42, no. 5, pp. 890-903.