Cobus Oosthuizen PhD

Pathfinder

Tag Archives: Entrepreneurship

Entrepreneurship: Instinct or learned behaviour?

Instinct refers to the inborn pattern of behaviour often responsive to specific stimuli. In terms of entrepreneurship that could imply the inborn pattern of behaviour a person exhibits in response to the stimuli from the environment the person finds him/herself in; with specific reference to opportunity recognition and then applying human energy (mentally, emotionally and physically) to initiate a concept and realise a value creating venture.

I think instinctively mankind desires to “make meaning,” to “create value,” to “satisfy needs and wants” in response to the stimuli of our physical environment. From the invention of the wheel around 8000 BC to the advent of the Internet this is evident. Surely, this instinct is more acute, more “awake” in some people than in others. This more intensified state in some, I posit, could be ascribed to exposure to learning though education, training and development, whether informal (in family or communal context) or formal (schooling). In other words, entrepreneurial instinct is akin a seed that lies dormant in all humans, and is fertilised by upbringing, social interaction, primary-, secondary and tertiary schooling – what I call total societal exposure. In other words, exposure to the collection of relationships between individuals, that consists of distinctive cultural, economic, educational, political, religious, and technological properties. It is in this exposure that entrepreneurial conditioning takes place (or do not take place) – subliminal conditioning – conditioning that takes place below the threshold of conscious perception.

Yes, I hear voices that argue a case for certain attributes that are desirable for entrepreneurial success, attributes not prevalent in all people, and, yes, I’m in accord. However, looking at human ability in general, most people can run, albeit not all at the same speed; most people can hold their breath, albeit not all for the same length of time; most people can pick up things, albeit not all the same weight; most people can sing, albeit not all at the same tone. There are thus abilities inherent to all people, and I propose, entrepreneurship is one of them. Rather than to categorise people in two distinct different groups, i.e. those who can be entrepreneurial en those who cannot be entrepreneurial, I propose that, generally speaking, most people can be entrepreneurial

Yes, I am generalising, and that is exactly my thesis: All humans with a sound mind, ceteris paribus, have the innate potential to think and act entrepreneurially. The antithesis would juxtapose that not all people with a sound mind has the innate ability to be entrepreneurial, a proposition I submit that is not grounded in sufficient empirical evidence.

We are often led to believe that entrepreneurship is the domain of a select few. Of course, not everyone will become entrepreneurs, but that is not the issue; the issue is human potential; what people can become because of dormant instinct. We know that entrepreneurship is fundamentally a human, creative act, and involves: (1) a process, (2) the creation of value where there was none before, (3) putting resources together in a unique way, and (4) opportunity driven behaviour. I therefore propose that entrepreneurship is a blend of instinct and learned behaviour – It is inherently part of human nature and manifests in relation to the extent of the total social exposure. The extent of the exposure will thus determine the extent of the orientation.

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Where’s SA’s Entrepreneurial Leaders?

There is increasing consensus within South Africa about the importance of entrepreneurship in economic development. Although there have been significant steps taken towards increasing the level of entrepreneurial activity in South Africa, many challenges still remain. The Global Entrepreneurship Monitor (GEM) research continues to reveal that four major problems face entrepreneurship in South Africa, namely (1) a low level of overall education and training; (2) social factors that do not promote entrepreneurship as a career path of choice; (3) lack of access to finance; and (4) a difficult regulatory environment. Notwithstanding agreement on the importance of entrepreneurship in economic development, why is it then that South Africa finds itself in the position it is?  There are many government and private sector initiatives aimed at promoting entrepreneurial development in South Africa.  It, however, seems that the desired results are not achieved.  Could it be that this is mainly attributable to the absence of a national strategy that encompasses stakeholders from both government and private sector?  Or could it be that there is no aligned commitment, or the existence of a common goal, or coordination of initiatives on a macro level?

In addition, South Africa as a nation must upgrade its ways of competing if successful economic development is to occur; our companies must shift from competing on comparative advantages (low-cost labour or natural resources) to competing on competitive advantages arising from unique products and processes, and move from tapping foreign distribution channels to building our own channels. From the literature on entrepreneurship, it becomes evident that it has the potential to improve and increase productivity and ultimately GDP.  It is therefore safe to suggest that an increase in entrepreneurial activity could potentially lead to an increase in productivity (and employment) that in turn could lead to an increase in real GDP.  An increase in real GDP induces increased sales flows to the different factors of production – managers, workers, landowners, shareholders, and other input suppliers – and national income increases correspondingly.

What needs to be accomplished is a national strategy for entrepreneurial development in South Africa to spearhead and coordinate entrepreneurial development in South Africa on a national level. The ultimate purpose is to induce economic growth and making South Africa a stronger competitor in the mainstream global economic arena. A vehicle to bring such a strategy to fruition could be a unified national centre consisting of stakeholders from government and private sector to lead and coordinate entrepreneurial development across the country. The four key performance areas should be to (1) improve the level of overall education and training; (2) promote entrepreneurship as a career path of choice; (3) improve access to finance; and (4) influence policy in terms of the regulatory environment.

Kurt Lewin conceived of change as modification of those forces keeping a system’s behaviour stable.  In relation to this discussion, it implies modifying those forces keeping South Africa’s entrepreneurial behaviour stable. Change efforts falls on a continuum ranging from incremental changes that would involve fine-tuning South Africa’s entrepreneurial position to quantum changes that would entail fundamentally altering how South Africa operates in terms of its entrepreneurial activity. What we need is an “entrepreneurial transformation,” which implies radical changes in how South Africans perceive, think, and behave in terms of entrepreneurship.  It must supersede “making things better” or fine-tuning the status quo.  It concerns fundamentally altering South Africa’s assumptions about its entrepreneurial functioning and how it relates to the global environment. Changing these assumptions entails significant shifts in our philosophies and values and in the numerous structures and arrangements that shape our current entrepreneurial behaviour. This change will inevitably require leadership… who will stand up to the challenge?

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What is Entrepreneurship?

Ask ten people what their understanding of the word “entrepreneur” or “entrepreneurship” is, and you get ten different answers. It seems to be a highly misunderstood phenomenon. Many stereo­types and oversimplifications exist, and people hold widely disparate views. It is also in danger of becoming yet another “buzzword” popularised by the press, consultants, and entrepreneurs themselves.

An “entrepreneur” is a creative innovator who, acting on initiative, seeks and maximises opportunity, takes the required risk, and energetically takes it to a worthwhile conclusion, in other words one who recognises economic needs and combines other production factors in order to fulfil those needs.

“Entrepreneurship” is the process through which individuals and teams create value by bringing together a unique collection of resources to take advantage of opportunities, to create value and grow by fulfilling wants and needs through innovation and uniqueness, no matter what resources the entrepreneur currently has.

It’s all about a way of thinking, reasoning, and acting that is opportunity obsessed, holistic in approach, and leadership balanced. Entrepreneurship results in the creation, enhancement, realisation, and renewal of value, not just for the owner, but for all participants and stakeholders. At the heart of the process is the creation and/or recognition of opportunities, followed by the will and initiative to seize these opportunities. It requires a willingness to take risks – both personal and financial – but in a very calculated fashion in order to constantly shift the odds to your favour, balancing the risk with the potential reward.

Today, entrepreneurship has evolved beyond the classic start-up notion to include companies and organisations of all types, in all stages.

Thus, entrepreneurship can occur – and fail to occur – in new firms and old; in small firms and large; in fast and slow growing firms; in the private, non-profit, and public sectors; in all geographic points; and all stages of a country’s development.

In essence, we can therefore conclude that:

  • Entrepreneurship involves a process.
  • Entrepreneurs create value where there was none before.
  • Entrepreneurs put resources together in a unique way.
  • Entrepreneurship is opportunity driven behaviour.
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