Entrepreneurship

Entrepreneurship

1. Entrepreneurship Theory

Traditionally, entrepreneurship is defined as and is limited to the founding of a new venture by an individual actor. The development of Corporate Entrepreneurship (CE) is based on the shift from the emphasis of entrepreneurship research to the firm, instead of the individual. Gartner is often cited as being the first to shift the focus of entrepreneurship to the firm level by interpreting entrepreneurship as the creation of new organizations, by individuals or by an organization.

Joseph Schumpeter (1936, 1940/1950), an early-20th-century economist, argued that innovation by entrepreneurs led to “gales of creative destruction” as innovations caused old products, ideas, technologies, skills, and equipment to become obsolete (Schumpeter, 1934). More contemporary researchers concur that new technology drives economic growth by displacing older expenditures of capital, labor, and time as well as providing goods and services formerly unavailable, or available only to the very wealthy, as well as longer life, and better health. In his view, the entrepreneur is an innovator who is willing to break with social convention to pursue a risky business venture (Schumpeter, 1934). The entrepreneur must have the will and authority to be an innovator, and he or she must be impervious to criticisms that usually accompany innovation.

2. Entrepreneurship and Innovation

The first intention of CE is innovation , which, in general, describes the introduction of something new to the market. Innovation occurs in varying degrees, ranging from new-to-the-world products and services to minor improvements or adjustments or new applications of an existing product or process. Innovation is based on the firm's commitment to and investment in creating new products, services, and processes, which all may lead to the creation of new business models (Duncan, 1976). Thus, innovative activities aim at the development of new dominant designs that may profoundly change industries such as Google's search algorithm, which almost completely replaced prior searching solutions. A bureaucratically managed organization is unlikely to achieve such a radical innovation (Duncan, 1976).

Yet, in an organizational context, the transformation of such entrepreneurial ideas into successful innovation is a very complex undertaking due to restrictions concerning access to resources, autonomy of the subordinate, and emotional support to intrapreneurs. (Duncan, 1976) addresses this problem by claming that intrapreneurs do not necessarily need to be the inventors of new products, services, or processes, but they must be able to turn innovative ideas into profitable results. Consequently, conforming to prevailing definitions of entrepreneurship, putting the pursuit of opportunities at the very heart of entrepreneurship theory, perceiving business opportunities and subsequently developing these into profitable results may be considered as an indispensable prerequisite for employees in entrepreneurial organizations (Duncan, 1976).

In order to offer cohesive associations between theoretical articulations and authentic experiences, illustrative examples are incorporated in our chapter. Some examples were extracted from interviews conducted by one of the authors. Others were drawn from secondary resources, including newspapers and business magazines containing entrepreneurial narratives or stories (e.g., Business Weekly, Common Wealth Magazine, etc.) The illustrative cases concern well-known entrepreneurs in the greater China ...