A Study of the Entrepreneurial Spirit

One of the greatest minds of economic synthesis during the 20th century – Josef Schumpeter studied the causes which lead to growth in an economy and mainly the causes connected to the dynamics of entrepreneurial development. Schumpeter views the entrepreneur as a creative individual, who finds "new combinations of production (factors)" in order to develop new products/services and to create new markets and/or new market niches.  In reference to the study of this phenomenon, Schumpeter put under revue the psychology of the entrepreneur, as an economic agent, which is formed by the requirements towards his specific function – to find and implement new opportunities. These opportunities are offered by the economic environment and in the first place – the new technological discoveries and inventions.

It is generally accepted that the economic motive in a free market is looking for profit. The ideal type enterpreneur is motivated not as much by the dreams of higher prosperity , but by his individual motivation for success. His motives are egotistic in very special kind of way – in the sense that he is decisive and unceremonious, since he is lacking any links and traditions. At the same time the enterpreneur is rational in a very special way, since he is a the motor of innovations, through which is created that which the other get ready made.

Schumpeter claims that the enterpreneur is motivated by "the dream to build his own kingdoom or dinasty ….(inspired by) motivated to fight to prove his superiority over the rest and at the end of the day to win just for victory itself.  Supported by the historic idear of Schumpeter, in the beginning of 2008 several economists from the World Bank decided to study the subject about the fundamental premises for development of enterpreneuralship in a society. 

The economists used data from a very large study which took place during 2006 in Brazil and was related to the factors which determine the spirit and culture of the entrepreneur. In their analysis the researches apply various approaches from sociological studies and interviews through statistical analysis of relations to applying the methodologies of cognitive science

The first question is which social factors are the main prerequisites for the possibility that a given individual will become an entrepreneur?

  • The study shows that the largest influence on the choice whether or not to become an entrepreneur have the family and the values which it passes to the children;
  • On second place is the social environment where he/she grows and is building his personality. A very important role is played the friends, their interests and perception of the surrounding reality; 
  • The level of education does not show significant correlation with the success of the entrepreneur, the results show that a very large proportion of the successful entrepreneurs are out side the top 10% of the graduate from a certain educational degree.

The previous question was reviewing the social factors, which have an effect on the choice to become or not an entrepreneur for each individual.  The second question is related to that what are the main (internal and external to the individual) factors, which determine the degree of success of the entrepreneur?

Preparedness to undertake risks when implementing various projects (internal); 

Resourcefulness, imitativeness and accurate assessment of the opportunities in specific situations (internal);

Institutional environment and circumstances surrounding the individual: regulations, protection of rights and legal system, freedom of action and social environment etc. (external).

If we assume that in one side of the main variables of the entrepreneurial ship, the main influence has the social environment and the perception of life and the world as a specific psychological paradigm for every individual, while from the other side there are identifiable measurable approaches to assist and facilitate the implementation of the ideas of entrepreneurs. The approaches are related to very large extend to the appropriate policies of the State towards the business: 

  • § Guarantee of property rights and contractual obligations;
  • § The freedom of choice and action;
  • § Effective administration in favor and benefits of the business;
  • § Reduction of the tax burden and improved quality and effectiveness of the tax administration;
  • § Flexible labor market;
  • § Minimum obstacles to start a business initiative (for example no requirement for minimal capital and elimination of a number of formal and technological process when you start a business);
  • § Reduction of the barriers to entry and exit from sectors, which are directly dependent on the State – various norms and technical regulations requirement.

 


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