Entrepreneurship: New Perspectives in a Global Age

Citation

Carter, S. (2005), "Entrepreneurship: New Perspectives in a Global Age", International Journal of Entrepreneurial Behavior & Research, Vol. 11 No. 6, pp. 438-441. https://doi.org/10.1108/13552550510625186

This book, an edited collection, but based primarily on the contributions of its two editors, provides fresh and innovative perspectives on entrepreneurship. The book is informed by an interdisciplinary approach, primarily a melding of economics and sociology, and encompasses a range of topics which show the contributions of these two core disciplines to their best advantage. A strong theoretical underpinning is supplemented in several chapters by empirical, case study data primarily derived from the Labour Market Dynamics (LMD) Research Project based at Massey University, New Zealand, the academic home of the authors.

The book contains 12 chapters, of which all but two are authored or co‐authored by the book's editors. The two introductory chapters firstly define the concepts and themes of the book and secondly focus specifically on the notion of constrained entrepreneurship, a construct that unites the disparate topics explored in subsequent chapters. The first chapter explicates the editors’ view of entrepreneurship as a continuum, which captures activities such as running a business, self‐employment, and family business as well as the Schumpeterian innovator and the “swashbuckling” entrepreneur described by Casson (1982). This broad approach requires a compatible notion of the entrepreneur and for this the editors turn to Hebert and Link (1989, p. 47) and Long (1983) whose views on judgemental decision making and management competences can be applied to entrepreneurship “in a range of settings and contexts” (p. 8). The authors contend that entrepreneurship is an embedded activity, and draw on the work of Polanyi (1992) and Granovetter (1985) to expound this perspective. Following the work of Portes (1995), Waldinger (1995) and Uzzi (1997), de Bruin and Dupuis provide a critical reflection on the concept of embeddedness, using the idea of “atrophied embeddedness” to conceptualize some of its negative aspects, where ties become too entrenched, impeding growth, flexibility and adaptability. The book's sub‐heading refers to the “global age”, a term deliberately chosen to denote epochal change and a transition to a new era. Globalization, the editors argue, “cannot be seen purely in economic terms, but is a social, political, technological and cultural phenomenon as well” (p. 13). As a key sub‐theme of the book, the implications of the global age for entrepreneurship are comprehensive and necessitate new thinking and perspectives on entrepreneurship: the objective of this book. The first chapter ends by identifying the themes that form threads throughout the book's chapters: new technology, the importance of ethics, the impacts of demographic changes, the role of the nation state and culture and identity.

The second introductory chapter introduces the concept of “constrained entrepreneurship”, a broad underpinning notion that moves entrepreneurship away from the “optimizing free rein of the neo‐classical economic actor” to encompass an approach that accounts, not just for the cognitive limitations of the individual, but also for the “broader restraints to economic activity, such as social norms and values” (p. 37). This chapter contributes the intellectual heart of the book and, in drawing on both economic and sociological theory, is a near‐perfect demonstration of the strength of interdisciplinary analysis. The chapter starts with a critique of neoclassical, orthodox views of rationality, from which Herbert Simon's concept of bounded rationality becomes the starting point for the authors’ own conceptual development towards the notion of constrained entrepreneurship. Powerful critiques of the conventional model of rationality have come from both inside and outside the economics discipline, and the authors draw on many sources including North and Williamson's new institutional economics, Etzioni's instrumental rationality, Nelson's feminist economist critique, as well as the sociological contributions of Mark Granovetter. The chapter then considers the authors’ interdisciplinary alternative to the rationality foundation of neoclassical economics. The notion of constrained entrepreneurship is intended to complement and extend bounded rationality and also to reinforce the usefulness of the transaction cost economics (TCE) approach, giving due recognition to the fact that running a successful business involves both transaction cost economizing and entrepreneurial activity. Constrained entrepreneurship is presented as a twofold conceptual development of TCE and its behavioural assumption of bounded rationality. First, TCE is extended (following Coase's own reflections) by an explicit focus on running a business, which in turn the authors’ translate as being entrepreneurship. Second, the authors expand the idea of boundedness with that of constraints and, recognizing that possibilities exist within the context of constraints, give explicit consideration to context and entrepreneurialism. Finally, the authors argue that the concept of constrained entrepreneurship can be applied to contemporary consumer society:

All entrepreneurship is thus constrained at an overarching level in that it must work within the bounds of the consumer society and cater to the “wish” of the consumer. Yet, just as the consumer has choice in the fulfilment of wish, so too the entrepreneur can exercise choice within constraints, in so much as it is possible to create and manipulate consumer wish … The concept of constrained entrepreneurship has the capacity to recognize both the impediments and opportunities afforded by the present day form of consumerism. Similarly, by moving into the shadows, yet acknowledging the bounded rationality underpinnings of entrepreneurial activity, it provides a better fit with the acceptance that in contemporary consumer society irrational wishes could be part of the rational order (p. 37).

The remaining nine chapters provide examples of the activity continuum of entrepreneurship presented within different contexts, and each also illustrates the nature of constrained entrepreneurship in action. The first of these chapters, by Chris Moore and Anne de Bruin, focuses on ethical entrepreneurship and provides a strong theoretical overview of the importance of ethics in entrepreneurship. Patrick Firkin next explores entrepreneurship from a resource‐based perspective, providing within this a deep and theoretical discussion of the various types of entrepreneurial capital supported by three mini‐case studies drawn from the Labour Market Dynamics study. A similar approach is taken by Firkin, Dupuis and de Bruin in the following chapter on familial entrepreneurship. Three central chapters on community, municipal‐community and state entrepreneurship allow the authors to discuss notions of entrepreneurship in different contexts and explore the political economy and political sociology of entrepreneurship.

The final three chapters focus in turn on indigenous, elder and youth entrepreneurship. The first of these, by Anne de Bruin and Peter Mataira discusses the role and importance of entrepreneurship within indigenous communities, such as New Zealand Maori and Australian Aboriginal and Torres Strait Islanders. The relatively low socio‐economic status of indigenous people in developed countries can, it is argued, be ameliorated only by their abilities to foster and generate their own sources of revenue and sustainable economic wealth. Entrepreneurial activity, enacted at multiple levels, is crucial to this self‐sustaining economic development. Three levels of action are discussed: at an overarching level “heritage entrepreneurship” is necessary to secure cultural heritage resources, at a macro level “tribal entrepreneurship” is seen as a prerequisite for deriving commercial value from tribally‐owned resources and at the micro level entrepreneurship enacted through self‐employment is necessary to secure greater employment opportunities for individuals and families. The final two chapters explore elder and youth entrepreneurship. Anne De Bruin and Patrick Firkin's chapter on elder entrepreneurship explores the impact of demographic changes on the entrepreneurial population. A review of the rather sparse literature on elder entrepreneurship is supplemented by a future research agenda. Kate Lewis and Claire Massey's chapter on youth entrepreneurship, providing a detailed discussion of the research evidence relating to youth entrepreneurship drawn from international sources, completes the book.

This book has a number of great strengths. First, the interdisciplinary approach of the book is primarily seen in the melding of economic and sociological theory. This book demonstrates how important both of these established subject disciplines are to the analysis of contemporary entrepreneurship. The book is theoretically rich and each chapter provides researchers with an accessible entrée into each of the topics that are explored in the book. The editors have chosen their chapter topics wisely; each chapter demonstrates the strength of the core disciplines of economics and sociology and the advantages to be gained from an interdisciplinary approach. Equally important is the topics that are omitted from this book. This is an important part of the book's appeal. The focus on individualism and the consequent honouring of psychological explanations over structural analyses has been, in many respects, an unfortunate and distracting tendency within entrepreneurship research. This book, the work of two authoritative subject experts, reminds us how important the economics and sociology disciplines have been to our understanding of entrepreneurship and how much they can contribute to future entrepreneurship research.

All references are drawn from the book under review.