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2009/11/11 21:46

Emergence of  the entrepreneurial society

 

【摘要】: Once dominated by a managed economy,the United Statesand ,eventually, the entire world come to acknowledge the incredible power of the entrepreneurial movement of the 1990s. The entrepreneurial society refers to places where entrepreneurship has emerged as a focal point for economic growth,sustainable fob creation,and copetitiveness in global markets.Thiis article explains why and how the entrepreneurial societh emerged, and why it is key to taking advantage of the opportunities afforded by globalization by enhancing the innovation prowess of a nation.

 

內容:

 

1.      Entrepreneurship seemed to be fading during the heady years of American post-jWjorld war II prosperity.Even as the country surged with new confidence reflecting leading world rates of growth and levels of prosperity,the role of entrepreneurship was diminishing. Charlie”Engine” Wilsonthen the Chair of General Motordeclared ”Whats good for General Motors is good for America,” highlighting the emergence of large manufacturing corporations able to churn out record numbers of automobiles,tons of steel ,and other manufactured goods by exploiting scale economies yielding an unprecedented level of efficiency and productivity. As Chandler1977,1990showed, it was the unique capacity of the large corporation to hamess economies of scale and scope the generated an unprecedented competitive advantage and admirably high leels of performance.

       Even Joseph Schumpeter1942,the eminent scholar who identified a unique contribution by entrepreneurs in triggering a widely proclaimed process of creative destruction ,concede in the late years of his writing that

       Since capitalist enterprise,by its very achievements, tends to automize progress,, we conclude that it tends to make itself superfluousto break to pieces under the pressure of its own success. The perfectly bureaucratic giant industrial unit not only ousts the small-or medium-sized firm and “expropriates” its owners,but in the end it also ousts the entrepreneur and expropriates the bourgeoisie as a class which in the process stands to lose not only its income bur also, what is infinitely more important, its function.

 

John Kenneth Galbraiith(1967) would subsezuently echo Schumpeter’s dismissal of entrepreneurs, concluding that the entrepreneur ”is a diminishing figure…Apartfrom access to capital, his principal qualifications were imagination,capacity for decision and courage in risking money, including, not infrequently, his own. None of thes qualifications is especially important for organizing intelligence or effective in competing with it”. As Galbraith(1967) concludes, power shifted from entrepreneurs to the large organization:” So it is with organizationorganized competencethat the power now lies”

 

By the 1990s’,something radically changed. Business and policy leaders were no longer looking to the large corporations, based on scale and scope, to provide growth and jobs. Rather, entrepreneurship emerged as the engine of growth, innovation, and economic development. For example, the 2000 lisbon Proclamation of the European Council of Europe committed the European Union to becoming the world’s entrepreneurship leader, in order to ensure prosperity and a high level of economic performance in the EU. According to Prodi(2002), at that time the President of the European Commission,”Our lacunae in the field of entrepreneurship needs to be tgaken seriously because there is mounting evidence that the key to economic growth and productivity improvements lies in the entrepreneurial caprcity of an economy”Europe was not alone in turning to entrepreneurship as an engine of economic growth and job creation. In 2006, the National Governors Association of the United States declared innovation and entrepreneurship as the keys generating economic development and competitiveness at the state level.

    In this article, I explain the emergence of the entrepreneurial society. As the focal force for generating economic growth, employment, and competitiveness has shifted from physical capital to knowledge and on to include entrepreneurship, the institutions and public policy have correspondingly changed. The entrepreneurial society’s institutional landscape is hospitable and nurturing of entrepreneurial forces.

 

2.      The managed economy

 

Along with the victory from the Second world war, America was relieved to enjoy a vigorous ad largely unanticipated prosperity movement. Post-war American prosperity was built on manufacturing. Amecica’s soldiers returned home from the battlefields of Europe and beaches of Asia with a hunger for the good life. The good life consisted of manufactured products. But, it was not just America which displayed pent-up demand for these items: war-devastated Europe and Asia also desired the manufactured goods needed to restore a basic standard of living.

    While many countries wanted, only one actually had what needed to efficiently supply the goods: capital. After the war, the United States found itself with the lion’s share of the world’s viable capital stock:

The U.S wasan ecomomic lord set far above the destroyed powers,its once and future competitors among both Allies and Axis powers….While European and Japanese factories were being pulverized, new American factories where being built and old ones were back at work, shrinking unemployment to relatively negligible proportions.

 

As Robert Payne, the prominent historian, pointed out:

 

There never was a country more fabulous than America . She sits bestride the world like a Colossus; no other power at any time in the world’s history has possessed so varied or so great an influence on other nations… Half of the wealth of the world, more than half of the productivity, nearly two-thirds of the world machines are concentrated in American hands;the rest of the world lies in the shadow of American industry(Halberstam,1993,p.116

 

The major industries serving as the engine of American economic successautomobiles, steel, tires, chemicals, aluminum and, later, computerswere characterized by an oligopolistic market structure consisting of a few dominant firms with high, and ever increasing rates of, concentration. Volumes of literature identified a clear, long-term trend toward increased concentration in economic activity both at the aggregate level, as well as for individual markets. The manufacturing assets owned by America ’s largest 100 corporations increased from 36% in 1924 to 39% after the war. By the end of the 1960’ , America’s 100 largest corporations controlled over 50% of the manufacturing assets, causing Scherer(1970) to conclude that, “ Despite the statisticaluncertainties, ne thing is clear. The increasing domestic dominance of the 100 largest manufacturing firms since 1946 is not a statistical illusion”

     Physical capital’s key role was captured in Solow’s Growth Theory, which was ultimately awarded a Nobel Prize in Economics. The Solow model recognized that labor also mattered in shaping economic growth. William H. Whyte(1956) observed factories in the post-war economy for his 1956 book, The Organization Man. Whyte described the proudly independent, free-thinking, American men who had once pushed west and tamed the last frontier as being replaced by slavishly obedient organization men, confirming to society’s sense of propriety and doing what they were told. The once maverick characters now obeyed social norms, valuing reliability, regularity, predictability, and loyalty to the employing organization usually a corporationabove all else. As Whyte concluded, conformity was supposed to buy contentment.

   However, generating high economic performance required more than just an organizational structure and workforce. Rather, this managed economy depended upon a complex and nuanced set of inteventions, regulations, fine-tuning, and support-not just from government, but also from a broad spectrum of social institutions spanning schools and churches. Friedan(1963), in The Feminine Mystique, noted that it went so far as to include marriage and the family.

   Small business and entrepreneurship received scant attention in the managed economy. Compelling literature found that small firms were generally less efficient than their larger counterparts, provided lower levels of compensation for their employees, and were only marginally involved in innovative activity. In short, the relative importance of small firms in the economy was declining. Galbraith’s(1967) thinking reflects the shift from what he viewed as an entrepreneurial and individualistic industrial revolution era, to the contemporary era of managed capitalism. In this sense, the industrial revolution’s great entrepreneurs were replaced by the large, structured, and hierarchical corporation. The entrepreneurial founders, as Galbraith(1967) observed, “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”(pp.93-94). Much of Galbraith’s book , The New Industrial State, is devoted to explaining why the earlier era of the entrepreneur and the individual gave way to the bureaucracy inherent in large corporations.

    Not only did Schumpeter(1942) conclude that the large corporation was more efficient and productive, but he also believed it was the engine of technological change  and innovative activity.

    What we have got to accept is that the large-scale establishment or unit of control has come to be the most powerful engine of …progress and in particular of the long-run expansion of output not only in spite of, but to a considerable extent through, this strategy which looks so restrictive(p.106)

    The empirical evidence was convincing: small firms and entrepreneurship were burdened with an inefficient size that resulted in low level of productivity. These firms were a drag on economic efficiency and growth, and generated lower quality jobs in terms of direct and indirect compensation. Public policy reflected the view of ecomomists and other scholars that small firms were becoming less and less important, and unexpected to survive in the long-run. Galbraith(1958) concluded that:

  

   There is no nore pleasant fiction than that technical change is the product of the matchless ingenuity of the small man forced by competition to emplwy his wits to better his neighbor. Unhappily, it is a fiction. Technical development has long since become the preserve of the scientist and engineer. Most of the cheap and simple inventions have, to put it bluntly and unpersuasively, been made.(pp.86~87)

 

   Consistent with the trend toward concentration was the shift if economic activity from small firms to large enterprises. The share of employment by small firms decreased in every major economic sector after World War II. Perhaps most striking was the decrease in the share of employment accounted for by small manufacturing firms: nearly 25% between 1958 and 1977. there was no doubt that the driving force of the American post-war success was not just iits abundance of factories. Establishments,  and plants, but the extent to which this physical capital was controlled by a select few large corporations in key industries.

    Some countries- such as the Soviet Union,  Sweden , and France-allowed small firms to gradually disappear as a matter of public policy. In the United States , policy echoed Jeffersonian traditions as it reflected the long-term political and social valuation of small firms. There was a strong and vigorous policy to preserve small business, even if it was burdened by glaring inefficiencies that might otherwise drive it into extinction. In 1953, Congress created the Small Business Administration, to “aid, counsel, assist, and protect… the interests of small business concerns.” (The Small Business Act, authorizing the creation of the Small Business Administration, was passed by Congress on July 10,1952) it reflected a preservationist American public policy toward small business, despite the managed economy.

    Globalization put an end to the American managed economy. By the 1970s, the counter lay paralyzed in the throes of the oil crisis. Imported manufactured goods-initially automobiles and steel, later electronics-flooded the United States . The rest of the world, or at least Europe and Japan , had finally recovered from the devastation of World War II and were catching up to the United States . The U.S had lost its physical capital monopoly.

    The superiority of the United States in manufacturing industries based on large scale capital investment gave way to the widely despaired competitiveness crisis. The internationalization of U.S markets was the harbinger of widespread globalization(Friedman,2005). Globalization brought gloomier prospects, as articulated by the Dean of MIT’s Sloan School of Management, Lester Thurow (1984). He felt that America was “losing the economic race,” because:

 

    Today it’s very hard to find an industrial corporation in America that isn’t in really serious trouble basically because of trade problems….The systematic erosion of our competitiveness comes from having lower rates of growth of manufacturing productivity year after year, as compared with the rest of the world(p.23)

 

   A dream team of 23 scholars, spanning a broad spectrum of academic disciplines and led by the MIT Commission on Industrial Productivity, produced Made in America , a report directed by Michael L. Dertouzos, Richard K.lester, and Robert M. Solow(1989). The work presented a compelling case that the key to restoring the international ccompetitiveness of American corporations lay in regaining the lead in capital-based industries which fueled the American economic engine in the 1950, such as automobiles and steel. It suggested that the U.S should adapt thos institutions, policies, and strategies that had proven so successful in facilitating the ascendency of German and Japanese companies to become international leaders, such as industrial targeting of key manufacturing industries. Total Quality Management(TQM) and Just-In-Time(JIT) production became buzzwords for American firms. Studying foreign firms and adapting their strategies would restore America ’s international competitivenes.

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