Monthly Archives: September 2012

When the end justifies the means

To enterprise or not to enterprise – that is a question when you get unemployed and cannot find quickly enough a new job. Voices rise in the literature on entrepreneurship questioning whether, those who enterprise because they need to earn money, could still be labeled as “entrepreneurs”.

Well, as always you may see the situation from various points of view.

Firstly, the orthodox researchers on entrepreneurship claim that “an entrepreneur” is one who decides to set up their own business from the pure need of pursuing a new venture without regard on the short-run economic gains. Such entrepreneurs act on the need of challenging the market and verifying whether their idea is economically feasible or not. Other, less fundamentalist view claims, that entrepreneurs may will to establish their own business for the need of improving the world through innovation. They do not seek a short-run compensation either. They may rather be regarded as “dreamers”.

Now, what about those, who pressed by need of economically sustaining their lives decide to open a small business, often becoming the sole employee in this business? Are they entrepreneurs? I think yes, because the end justifies the means here.

Let me give you a small example. Antonio becomes unemployed from his previous job which he held for almost a decade by now. Antonio decides to look for another job crawling daily through tones of adds online and in the newspapers. Months pass and Antonio gets no job. Then Antonio thinks, well, if I cannot get anything decent in the job market, I need to take things in my own hands. Antonio sets up a small shop specializing in gourmet products. Business goes slow at the beginning but Antonio trusts that one day it will speed up. After 6 months some “wealthy clients” happen to pop up in his shop. Antonio advises them on several products and they come back for more within one week. At the same time a word of mouth spreads among the friends of the “wealthy clients” that Antonio sells really nice goodies. More and more people come to his shop and business starts bringing considerable profits. As it turns out the first “wealthy clients” of Antonio reside in his little village only during summer time meanwhile the rest of the year the live and work in a big city nearby. The same applies to the friends of these clients. All these people urge Antonio to open another shop – this time in the big city nearby. They are willing to invest in setting it up. Antonio after a long sleepless night agrees. Some years later Antonio sells his national chain of gourmet shops employing 3000 people to a multinational and switches to exclusive porcelain market since his sister, a gifted decorator, just got unemployed.

Now a question arises – is Antonio an entrepreneur when he gets fired from his job as sales representative in a small firm selling vegetables to supermarkets? Or he becomes an entrepreneur when he decides to escalate his business and set up the shop in the city?

This example proves that the ultimate end of becoming successful, however, understood can make a person an entrepreneur. Surely enough, had Antonio never received the visit of “wealthy clients”, his small gourmet shop might even go out of business. But entrepreneurship is a risky activity, so even the smallest enterprises undertake risks. In fact, those who enterprise because they have to, often bear much higher weight of risk than, those who do it for challenge or thrill from innovating.

Ultimately, all self-employed act in order to maximize the benefits of their enterprises and this end justifies the reasons why they had started in the first place.

 

Entrepreneurship for non-entrepreneurs? Yes!

Youth unemployment has been plaguing European economies for some time by now. Policymakers have been striving to improve this situation through series of policies aimed at employment of young people. The present economic crisis, however, jeopardized all governments’ efforts rendering them futile when it comes to employment of, not only youth, but also large pools of economically active population. Unemployment peaks particularly high in Spain, but does not spare even the best performing countries like France of Germany. In light of this situation, policymakers look for new ways of untying the Gordian knot of unemployment. Right now all eyes are looking at entrepreneurship as a solution for persistent unemployment and source of economic growth.

However, several vitally important questions arise here: Will everybody intend to become an entrepreneur now? And consequently, what about those who will not establish their own companies, are they doomed to drop out of the labor force?  Answers to these questions are not straightforward. Entrepreneurs comprise a small percentage of our societies. Self-employed individuals, who according to many researchers cannot be uniformly regarded as entrepreneurs are a minority group in all labor markets in Europe.

Notwithstanding, even if only a small group of individuals decide to establish their own enterprises, the rest still benefits from entrepreneurial skills. Alertness to new opportunities, ability to question one’s own ideas and ability to come up with new ideas are skills which can be effectively applied in many work setups may result very profitable for already existent organizations and workers. Opportunity-aware individuals, ready to undertake risks and willing to “think out of the box” are regarded as assets in many firms. Thus training such skills at university and perhaps also lower education levels makes sense from policymaker’s point of view. Research conducted within CEO Research Group demonstrates that entrepreneurial individuals are more prone to find adequate employment to their skills and even if they fail initially they are more likely to exit mismatch than their non-entrepreneurial peers. Entrepreneurial workers are thought also to be happier and healthier which makes them potentially more productive in their jobs. Hence one more time we confirm that it is worth to train entrepreneurship to people.

Concluding, we may affirm that, yes, entrepreneurship should become a part of formal training for everybody regardless if they will or will not undertake entrepreneurial activity in its orthodox form.