entrepreneurship as the pursuit of opportunity beyond the resources you currently control

Apparently, it was Harvard Business School professor Howard H. Stevenson who first called entrepreneurship “the pursuit of opportunity beyond the resources you currently control” (PDF).

If you decide how to allocate a budget, personnel, or other resources that you have in hand, you are administering. If you make those allocations collaboratively, you are negotiating or deliberating. If you plan a ten-million-dollar house in your mind, without having any way to get the $10 million, you are daydreaming. If you have the capacity to seize someone else’s resources, you are stealing. But if you come up with a plausible plan to raise $10 million in voluntary investment capital, you are an entrepreneur.

You can be an entrepreneur (as opposed to a mere administrator) inside business, government, academia, or the nonprofit sector. Wherever you work, you must make plans that involve resources that you can get but don’t yet have.

The definition is not narrowly individualistic. In fact, Stevenson says,  “Entrepreneurship is greater when successful members of a community reinvest excess capital in the projects of other  community members.” So my entrepreneurship may depend on your behavior, and vice-versa.

Entrepreneurship, on this definition, does not hinge on novelty. Entrepreneurs seek resources beyond the ones they control, but they need not do so in original ways. Starting a humanities center on your campus is entrepreneurial even if there are hundreds like it on other campuses.

I suppose this definition is a little fuzzy. If you are required to propose next year’s budget, and there is a chance it will be cut, your proposal is sort of entrepreneurial. You are pursuing resources that you don’t control. But this kind of situation sounds like regular administration unless the odds of success are low and a great deal of creativity is needed to get the funding. At the other extreme, if you come up with a crazy new business plan, you are merely daydreaming, unless the odds of success are moderately good.  Since being entrepreneurial seems to depend on operating in a zone of moderate uncertainty, entrepreneurship isn’t sharply delimited from other ways of operating. Also, since efforts either succeed or fail, it can be hard to tell whether an initiative was entrepreneurial. If it works, it looks like administration; and if it fails, it looks like daydreaming.

Finally, entrepreneurship isn’t good; it is a morally neutral category. But it is useful, nonetheless.

About Peter

Associate Dean for Research and the Lincoln Filene Professor of Citizenship and Public Affairs at Tufts University's Tisch College of Civic Life. Concerned about civic education, civic engagement, and democratic reform in the United States and elsewhere.
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