What makes entrepreneurs so important? They take risks, spend investment capital, and hire new employees that stimulate the economy. President Obama made clear the importance small companies play in job creation in his recent State of the Union address. What proof do I offer that entrepreneurs drive job creation? Israel Kirzner (1973, 1999 http://www.nyu.edu/econ/dept/vitae/kirzner.htm) along with Grebel, Pyka, and Hanusch (1987) focused a lifetime of research on entrepreneurs as catalysts for market change. Many believe their work demonstrated that entrepreneurs are the essential ingredient in any successful economy; that entrepreneurs are the first to adapt to changing circumstances and keep economic activity at its highest level when it would otherwise suffer huge market gyrations and downturns.
These modern researchers built upon the Schumpeter foundation and provided data to demonstrate how entrepreneurs add value to products and services and most importantly buoy the financial markets. Entrepreneurs are important because they are willing to risk their capital training and paying for new workers who are not immediately productive. If you want to put your finger on a leading indicator for job growth, take a look at the start rate for small companies who added more than five employees to their payroll in a calendar year.
International entreprenuerism involves the added complexity of adapting a product or service to a new market or culture. International entrepreneurs face numerous challenges and barriers that add complexity to any venture such as trade barriers, legal constraints, distribution limitations, and human resource issues not found in their home country.
Yesterday, I wrote about intrapreneurs (see earlier post). Today, Entrepreneurs and Intrapreneurs recognize international opportunities and are willing to take significant risks to achieve results. Both gather or assemble resources from all over the globe and are accountable to the customer, whether they are in India or Brazil.
Based on my experience at three start-ups ventures, Netcentives (1997-2000), Capener Advertising-San Diego (1987-1992), and Above the Rim (1988-1993), we spent a significant amount of time finding, interviewing, and training new employees. Those new employees that could deal with ambiquity and change thrived. Those that were willing to change and adapt as we uncovered market opportunities found working in a start-up a thrilling ride. Many hesitated or became scared watching the changing landscape. The speed required to seize these opportunities seemed to be similar to the metaphor of the train pulling into an intermediate stop and the passenger chooses to get aboard or watch the train leave the station as fast as it pulled in. Successful entrepreneurs know when to jump on to (the train) something and when to get off in a hurry.
Block and MacMillan wrote, “The entrepreneurial drive to pursue [opportunities] is a combination of many factors, chief among them motivation and attitude. These attributes in turn, affected by childhood influences, role models, and later workplace environments. Providing they work hard, those with more talent will clearly do better than those with less; entrepreneurial ability can be directly influenced by education, training, and experience. In other words, entrepreneurs are made, not born” (Block).
As I mentioned yesterday, Intrapreneurs must be able to influence others to succeed. In a company environment, many rules or cultural norms become large barriers to change or even [continuous] improvement. These barriers prevent intrapreneurs from succeeding unless they can persuade their colleagues to follow them or provide them with resources, so they tend to be skilled at negotiation, diplomacy and mediation. From my experience in both corporations and start-ups, entrepreneurs are more like “Bulls in a China Closet” when it comes to corporate politics and they can run ruff shod over people who do not have thick skin. One example is a successful entrepreneurial relative of mine who said, “I have no patience or time for these corporate bozos”. If you set corporate policy or work in government, make sure you don’t put up barriers in front of the intrapreneurs or small businessman that are adding employees. They are the engine for economic prosperity. Its all about the jobs, right?
