Presetation is debating the successor of Capitalism: Entrepreneurship.
Regarding the work of Schumpeter and Herbert Simon, resulting in effectuation and design thinking, the 4th wave of industrial evolution has started.
Patient Counselling. Definition of patient counseling; steps involved in pati...
Entrepreneurship: the successor of Capitalism
1. Entrepreneurship:
Successor of Capitalism
Ing. Matthijs H.M. Hammer M.Sc.
Senior lecturer Innovative Entrepreneurship
School of Commerce & Entrepreneurship
Research center of Innovative Entrepreneurship
2. Introduction
Background
Chemical Environmental Laboratory sciences, Quality Management
Experience
Consulting company, Research centre of coating & surface technology
Saxion, university of applied sciences, Senior lecturer Innovative Entrepreneurship,
School of Commerce & Entrepreneurship
Eindhoven university of technology, PhD Researcher, Innovation Technology,
Entrepreneurship & Management (ITEM Capacity group)
Venturelab Twente, venture coach
European Council for Small Business and entrepreneurship, Country vice president for
The Netherlands
Editorial board of international scientific conferences and journals
Member supervisory committee of social and technology oriented enterprises
3. Menu
• History of economic eco-systems
• Analysis of last centuries developments
• Next step
• What is Entrepreneurship?
4. Definitions to start
Organisation and Management = Organisational Behaviour
• Organisational behaviour = an interdisciplinary science that
studies the behaviour of organisations and the factors that
determine this behaviour, and identifies how organisations
can be managed most effectively.
• Organisational behaviour contains both descriptive and
prescriptive elements.
• It is interdisciplinary, with elements from other disciplines (eg
economics, computer science, marketing, psychology) used to
develop a new approach.
• It helps the process of management, providing direction for
processes within the organization.
• It is goal orientated, so helps management to be most
effective.
5. First signs of trade
Glass spearhead, 70.000 BC from New Guinea
7. Develepment of economic
eco-systems
• Around Eufrat from 5.000 BC first city arose in Sumeria
(Irak) with 50.000 inhabitants and labour division.
• Introduction of a universal change value (rings of silver)
named “specie” (2.000 BC).
• 1100 AC, development of the western world.
• 1470, start of the Capitalism: growth of population, cities
and (international) trade. The principle of “Dept” was
introduced.
• 1820, labour division increase; urge to efficiency.
• 1971, abolition of the system of Bretton Woods;
decoupling values money and gold.
8. The development of trading
and the emergence of
multinational enterprises
The first international trading companies were set up and
funded by national governments with the aim of supporting
their colonial trade policies
– examples; English East India Company,
– Dutch East India Company,
– French West India Company
Today, nearly 90% of the world’s 500 largest companies are
located in North America, Europe and Japan
– The USA is home to 132 of these, e.g. General Motors
– Japan is home to 68 of these, e.g. Toyota
– France is home to 32, e.g. Carrefour
– Britain is home to 26 of these, e.g. BP
– The Netherlands is home to 12, e.g. Heineken
12. Waves of innovation
Society is in need of solutions to increasing complexity and
technological development ( e.g. Toffler et al., 1981)
What will be the 4th wave?
• Entrepreneurship? (o.a. Mayard, 1996)
• 21st Century Skills (e.g. Brown et al., 2001)
13. Evolution of Management
models
• Abell (Abell & Hammond, 1979)
• Deming (Deming, 1982)
• Mc Gregor (McGregor, 1960)
• Mintzberg (Mintzberg, 1979)
• Porter (Porter, 1980)
15. Innovation hero
Joseph Alois Schumpeter (1883 – 1950)
• "creative destruction" in economics
• Business Cycles; Without innovation no new
wave: hero is the entrepreneur
Business cycles, 1939
“Creative destruction”
17. Innovation hero
Joseph Alois Schumpeter (1883 – 1950)
• "creative destruction" in economics
• Business Cycles; Without innovation no new
wave: hero is the entrepreneur
Business cycles, 1939
“Creative destruction”
18. Evolutions in economic
development
Herbert Alexander Simon (1916 – 2001)
• A behavioral model of rational choice (1955)
• The Sciences of the Artificial (1969)
• Nobel laureate (1978)
• All impulses (realistic of symbolic) contribute to decision making.
• Machines, systems and models can replicate ‘cold’ cognition1,
but not ‘hot’ cognition2.
1: reasoning, planning, observing and decision making.
2: pain, pleasure, desire, and other emotions.
21. Types of Entrepreneurship
In many situations there is a debate about entrepreneurship;
different situations have different dynamics (Wennekers, 2013)
23. Summary
• Our (capitalistic) economic system emerged from trade and
value exchange for fixed values (Monetary values). Based
on trust the moment to equalise the transaction may be
postponed (debt).
• In the third wave of innovation, scientific models and
theories are used to simulate and simplify the increasing
complexity of reality to predict the future (positivism).
• Last decade the dislocation of the third wave of innovation
seem to be arrived. More and more there is attention to a
shift paradigm toward design-thinking (interpretivism /
social constructivism); What about (our innovation-hero)
the entrepreneur?
28. Baron Charles Louis de Maere
5 december1802 – 8 september 1885
• Entrepreneur, 1832 textile factory Schuttersveld
• Founding father of Saxion, 1833
32. Dimensions of a business
opportunity prototype
factors
describing
the business idea
1. Solves customer
problems
2. Positive net cash flow
3. Manageable risk
4. Superior product
5. Change industry
factors
referring to the feasibility
of business development
1. Overall financial model
2. Advice from experts
3. Unique product
4. Big potential market
5. Intuition
Source: Baron and Ensley, 2006
35. How ventures are build:
Conventional Wisdom (Causal Logic)
Come up
• Show there is a large market for it
• Write a winning business plan
• Raise money
• Build and grow the venture
• Go public or sell
• Go off to the Bahamas
36. So how do
Expert entrepreneurs do it?
• At least 15 years experience founding and running
companies
• Multiple ventures including successes and failures
• At least one IPO
Th e y use Effe c t ua t io n
38. Principles of effectuations
decision making heuristics learned by expert entrepreneurs
in uncertain, disruptive situations. (Sarasvathy, 2001)
BLUE = causal; RED = effectual
39. Means. The basis for decisions
and new opportunities:
– Who I am
– What I know
– Whom I know
Goals vs means
Goals. Given (based on predictions)
41. Affordable Loss.
Calculate downside potential and risk no more than you can afford
to lose.
Risk, Return and Resources
Expected Return.
Calculate upside
Potential and pursue the
(risk adjusted) best
opportunity.
42. Risk, Return and Resources
Alternative Own capital Loan bank investment Expected
return
1 40 0 35 50
Example
2 40 10 50 75
Alternative 2
Alternative 1
43. Partnership. Build your “future” together with
customers, suppliers and even prospective
competitors.
Attitude toward others
Competition. Set up transactional
relationships with customers and
suppliers.
45. Underlying logic & what to do
To the extent we can predict the future, we
can control it.
PLAN
To the extent we can control the future, we don’t
need to predict it.
CO-CREATE
More information:
www.discovereffectuation.nl
www.effectuation.org
46. Principles of Effectuation
Bird-in-hand principle:
• Start with Who you are, What you know, & Whom you know (Not
pre-set goals/opps)
Affordable loss principle:
• Invest what you can afford to lose – extreme case $0 (Not
expected return)
Crazy Quilt principle:
• Build a network of self-selected stakeholders (Not competitive
analysis)
Lemonade principle:
• Embrace and Leverage surprises (Not avoid them)
Pilot-in-the-plane principle:
• Co-create the future (Not find inevitable trends)
48. Summary
• Entrepreneurship is featured by process-oriented operations,
executed by people.
• Entrepreneurship is non-linear / predictable.
• Entrepreneurs have a predilection for co-operation (co-
creation)
• Entrepreneurs do like a dynamic environment; perceived as
risk by non-entrepreneurs.
• Entrepreneurs and managers apply different logics to make
decisions.
• Entrepreneurship is not better or worse than managing;
different. Both are needed for a sustainable development of
a company, economy or society.
49. THANK YOU FOR YOUR
ATTENTION
Thank you for your attention
52. Conclusion
The adoption of an entrepreneurial
approach of the learning process and
the knowledge of entrepreneurial
methodologies as effectuation seems
to be practical aspects to start.