Entrepreneurship policy

Abstract

A generation of management and economics scholars such as Chandler (1977; 1990) concluded that there was little room for entrepreneurship in the context of starting a new firm, to generate efficiency and ultimately business and managerial success. Schumpeter (1942: 132) similarly concluded that, due to scale economies in the production of new economic knowledge, large corporations would not only have the innovative advantage over small and new enterprises, but that ultimately the economic landscape would consist only of giant corporations: ‘Innovation itself is being reduced to routine. Technological progress is increasingly becoming the business of teams of trained specialists who turn out what is required and make it work in predictable ways.’ Accordingly, a generation of scholars suggested that public policy should focus exclusively on the large corporation. For example, Galbraith (1979: 93–4) argued that entrepreneurship was disappearing in the contemporary economy, where the great entrepreneurs of the Industrial Revolution were replaced by the hierarchical large corporation: ‘The great entrepreneur must, in fact, be compared in life with the male Alpis mellifera. He accomplishes his act of conception at the price of his own extinction.’ Thus, according to Galbraith (1979: 61), the entrepreneur ‘is a diminishing figure in the planning system. Apart from access to capital, his principal qualifications were imagination, capacity for decision and courage in risking money, including, not infrequently, his own. None of these qualifications is especially important for organizing intelligence or effective in competing with it.’