Murphy, P.J. (2022), "Editorial: Entrepreneurship: from the industrial–organizational paradigm to the community-venture paradigm", Journal of Small Business and Enterprise Development, Vol. 29 No. 4, pp. 505-506. https://doi.org/10.1108/JSBED-08-2022-474
Emerald Publishing Limited
Copyright © 2022, Emerald Publishing Limited
As the field of entrepreneurship evolves in the context of the historical domain of business studies, certain aspects of the 20th century industrial–organizational paradigm influence and inform the field's development. Today's approaches to understanding entrepreneurship thus use the nomenclature of yesterday's industrial–organizational tenets. The concepts of a market, or of a product, for example, have been used by management and marketing scholars – not to mention economists – for far longer than the entrepreneurship field has existed. Terms like “total addressable market” and “product–market fit” are watchwords for today's most innovative entrepreneurs and investors. The core concepts are derived from commercial history. However, the entrepreneurial activity they are used to describe frequently goes beyond products and markets. Do the historic concepts accurately describe such modern entrepreneurial settings?
There are many examples of such concepts being applied to progressive entrepreneurial phenomena. When financing activities go beyond simple debt or equity as they do with simple agreements for future equity, convertible notes or other kinds of deals, traditional terminologies are still used to flesh out the particulars. Yet, the shares of stock, shareholder arrangements and returns on investment of financiers and investors are traceable in the west, at least to the East India Companies of the early 1600s. Indeed, many of today's principal entrepreneurial frameworks are defined in terms of the markets, products, customers, distributors, suppliers, shareholders, mergers and many other historic concepts that have described commercial activities in the decades and centuries of the past. Do these concepts apply to today's entrepreneurial ventures as fully as they applied to yesterday's commercial organizations? If not, then does their usage influence how we understand today's entrepreneurial ventures?
No serious entrepreneurship scholar would argue that markets, customers, products, etc., are irrelevant to today's entrepreneurs. They are relevant. However, the evolution of radically innovative entrepreneurial activity in relation to the paradigm that gave rise to these longstanding concepts deserves a close and critical eye. Paradigms rise and fall. Entrepreneurship scholars would do well to examine carefully the evolution of our field and attempt to delineate new concepts that extend and transform traditional concepts in order to better explain entrepreneurial phenomena. The worldwide trends are clear: large and traditional industrial organizations are declining in number while smaller entrepreneurial venture forms and the institutions that support them are increasing in number.
Members of the current younger generations wish to be entrepreneurs more intensely than previous generations. Technological advancements, which always transform the nature of life and work, are reframing industrial–organizational concepts, such as market entry when it comes to nascent entrepreneurial ventures. Culturally driven change has expanded routine discussions of “what” a firm does to include “why” the firm is doing it. Venture “performance” parameters based on economic data have begun to include “impact” in terms of measurable social and ecological data. The paradigm that gives rise to these novel conceptualizations is not the industrial–organizational paradigm.
Scholars and leading practitioners worldwide who devote their professional lives to entrepreneurship theory and practice, and who deal with hundreds of entrepreneurs each year, acknowledge the emergence of alternative concepts for explaining today's entrepreneurial venture activities. One such alternative is the concept of community. In addition to (and sometimes instead of) a market, the number of entrepreneurs who aim explicitly to engage various kinds of communities is growing. The shift heralds a new “community-venture paradigm” that extends and transforms the industrial–organizational paradigm.
The community-venture paradigm offers new avenues for theorizing about entrepreneurship. At its heart, a community is defined in terms of the shared values of its members. It can be very large or relatively small. It can assume geographic, virtual, cultural, demographic and other forms. In any of these forms, communities have boundaries that distinguish and identify their members. Shared values imply what is right or wrong for a community. They also have the character of strategic expectations and guidance for action when the environment is uncertain. Because of a community's shared values, entrepreneurs tend to define their ventures in terms of “why” and venture performance in terms of “impact.”
The technology-enabled entrepreneurial ventures of today, including the decentralized autonomous organization (DAO) and others from ecosystems around the world, are different from the bureaucratically structured organizations of yesterday. Even the traditional boundary between employees and customers becomes relativized as community-venture boundaries tend to entail a constituency instead of demarcating employees and customers. For ventures that serve constituents, success comes in terms of impact. Those being served often evolve into the ones doing the serving over time, especially in social enterprise settings. These entrepreneurial ventures denominate value in a variety of ways. They tend to identify themselves, their performance and their impact naturally in terms of shared values and communities.
What distinct concepts and frameworks will emerge as the entrepreneurship field continues to evolve? A community's boundaries make it as easily definable as a market, even though it composes a qualitatively different form and context. Services, unlike products, have historically been a middle ground concept and not as easy to evaluate in strict industrial–organizational terms. The technology sector, for instance, defines software as a service (SaaS) ever more frequently, after defining software in product terms for decades. Entrepreneurial ventures in the SaaS sector observe novel organizational logics, performance criteria and growth phases that can frustrate the industrial–organizational paradigm. In community-venture terms, however, such ventures are explained and understood more easily as businesses that can make money but also make an impact on a community. The traditional notion of product–market fit is hard pressed in many of today's most innovative entrepreneurial contexts, which can lead one's thinking toward “project–community fit.” Similarly, in such settings, the traditional notion of market entry can be conceptualized more effectively in terms of “community engagement.”
These brief observations are only a small illustration of the long theoretic avenues and large conceptual vistas for entrepreneurship scholars to discover and explore with a novel paradigmatic approach. The Journal of Small Business and Enterprise Development welcomes all kinds of entrepreneurship research and theory contributions, including ones that deal in the traditional concepts referenced above. However, we especially encourage contributions entailing radical and bold theorizing that embraces patently new kinds of potential for advancing the field of entrepreneurship into the decades and centuries of the future.