BUSS1000 Lecture Notes - Lecture 12: Business Model Canvas, Habitat, Creative Destruction
24 Jun 2018
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–As we talked about in our discussion of SE, there’s no common definition or application of
definition in the literature.
–We can however learn from the existing definitions.
–We can also gain traction with the OECD work. (see OECD Eurostat Entrepreneurship
Indicators Programme, 2009)
Entrepreneur: someone who starts their own business, especially when this involves seeing a
new opportunity.
–The essential act of entrepreneurship is new entry.
–New entry can be accomplished by entering new or established markets with new or existing
goods or services.
–New entry is the act of launching a new venture, either by a start-up firm, through an existing
firm, or via "internal corporate venturing” (Lumpkin & Dess, 1996)
–New entry is thus the central idea underlying the concept of entrepreneurship. Evidence of this
is suggested by the large portion of research on entrepreneurship that is devoted to explaining
the corollaries and consequences of new venture activity (see: Hisrich & Peters, 1989;
MacMillan & Day, 1987; Sandberg & Hofer, 1987; Stuart & Abetti, 1987).
–Although the concept of entrepreneurship as new entry is itself a topic brimming with issues
and research questions, in this article we are chiefly concerned with EO, a corollary concept that
emerged primarily from the strategic management literature.
Intrapreneur: an employee within a large company who takes direct responsibility for turning an
idea into a profitable new product, service, business, etc., often instead of leaving to start their
own company.
–There’s very little agreement however as to…
–Who are entrepreneurs?
–In what context do entrepreneurs operate?
–Could we all be entrepreneurial?
–How one would know if an entrepreneur is present?
Early reference to entrepreneurship
–Richard Cantillion -> bearer of uncertainty
–Early economist and writer of Essai sur la Nature du Commerce en Général (Essay on the
Nature of Trade in General) -> 16th/ 17th century trade and entrepreneurship
–Considered influential to this day
–Proliferated the idea of entrepreneurship
–Entrepreneurs buy at certain prices in the present and sell at uncertain prices in the future. The
entrepreneur is a bearer of uncertainty.
Forms of entrepreneurship
The entrepreneur is the innovator who implements change within markets through the carrying
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out of new combinations. These can take several forms;
● the introduction of a new good or quality thereof,
● the introduction of a new method of production,
● the opening of a new market,
● the conquest of a new source of supply of new materials or parts,
● the carrying out of the new organization of any industry(Schumpeter, 1934)
Different views on entrepreneurship
–Entrepreneurs attempt to predict and act upon change within markets. The entrepreneur bears
the uncertainty of market dynamics (Knight, 1921)
–Entrepreneurial activity involves identifying opportunities within the economic system (Issawi &
Penrose, 1963)
–Entrepreneurial activity involves "activities necessary to create or carry on an enterprise where
not all markets are well established or clearly defined and/or in which relevant parts of the
production function are not completely known” (Harvey Leibenstein 1968, 1979)
–…the creation of new organizations (Gartner, 1988)
–Entrepreneurial activity is a context dependent social process through which individuals and
teams create wealth by bringing together unique packages of resources to exploit marketplace
opportunities (Hitt et al., 2001, p.51)
–“Entrepreneurial activity is the pursuit of opportunity beyond the tangible resources currently
controlled” (Stevenson in Eisenmann, 2013)
Key themes of definition
–opportunity identification & exploitation
–new market entry
–change & creations of a ‘newness’
–risk & uncertainty
–creativity & innovation
–human behaviour
Critiques
–Opportunities have a natural ‘life cycle’
–Businesses are continually ‘fighting’ to innovate and re-invent themselves
–The ogre of ‘creative destruction’ hangs over all stakeholders (creation, sustenance,
destruction)
Definitions
Entrepreneurs are those persons (business owners) who seek to generate value through the
creation or expansion of economic activity, by identifying and exploiting new products,
processes or markets.
Entrepreneurial activity is enterprising human action in pursuit of the generation of value
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