The quality of life we enjoy in America today can be traced back directly to our entrepreneurial culture. The innovations of automobiles for everyone, safe, well-constructed homes, the electricity grid and all the devices attached to it, the internet and all its pages and interconnections, sanitation, medical care, airplanes that whisk us around the world and around America – whatever combination of things makes you think “quality of life” can find its origins in entrepreneurship.
We can differentiate between entrepreneurship and entrepreneurs. Entrepreneurship is an economic function, which can be considered in the abstract, separate from the individuals who practice it. Entrepreneurship is the process of introducing customer-approved innovation – including all those items on the list above, and all the many more that have customer approval, from Disneyland to cosmetic dentistry. The function of entrepreneurship comprises the desire of customers for betterment, the alertness of entrepreneurs to identify this desire as an opportunity for profit, and the implementation of that opportunity as a successful commercial business that delivers the betterment that the customer seeks. Entrepreneurship as a function begins with the customer via an unmet need, and finishes with the customer via their approval. There’s a multi-stage learning cycle: the customer learns what to want, what’s available to meet their need, and how to make accurate choices from everything that’s offered.
There’s an individual who instantiates the function of entrepreneurship – the individual (or firm) we call the entrepreneur. The entrepreneur is not an abstraction but a real flesh-and-blood person who performs the actions of entrepreneurship. These actions include the diagnosis of what the customer needs – which is often not well-articulated, because the customer is better at identifying what’s wrong or what’s missing or what falls short in their current arrangements, but not very good at inventing the future innovation that will fix the problem. Through the use of human understanding, the entrepreneur imagines the new future that the customer can’t yet articulate, and embarks on the process of trying to bring it into existence. Entrepreneurs are dedicated to better futures.
Connecting the abstract function of entrepreneurship and the personal commitments of entrepreneurs is an entrepreneurial culture – the behavioral norms and practices and institutions that provide the social context for entrepreneurship, both in the cultural permission for customers to always demand improvement, and in the cultural approval of the risk-taking entrepreneur pursuing the uncertain market reward of an imagined future. If the consumer culture was one of accepting the status quo, there would be no entrepreneurship, and if the producer culture was one of intolerance of risk and uncertainty, the same would be the case. The consumer culture is as important as the producer culture.
An entrepreneurial culture includes:
- Optimism for the future – for a consumer to believe in the potential for betterment in the future requires an optimistic outlook; the same goes for the entrepreneurs who believe they can deliver that betterment. Optimism is an American trait. It’s not felt so much in European cultures, for example, where existential dread and a sense of civilizatinal and cultural decline are more the norm.
- Creativity – entrepreneurial innovation does not result from bureaucracy or linear systems of management or mathematical models or computational projections or even from scientific inquiry experimentation. It stems from creativity. Someone imagines a better future and imagines how to bring it about. A design process brings the future into the presence via sketches, prototypes, blueprints, molds, and trial and error. Americans are creative. They created a nation and a constitution, they populated empty land west of the Rockies, they created railroads and corporations and a legal system where there had previously been nothing. Creativity is a national trait.
- An open, mobile society – the ranks of the entrepreneurs are not limited to those born wealthy and privileged and educated at the best schools. They’re not even limited to those born in America. Our society is open to mobility in multiple directions and entrepreneurship benefits from this social mobility.
- Risk – an entrepreneurial culture does not embrace pampering or sheltering or avoidng risk. It seeks risk. It seeks the uncertainty that means it is possible to imagine and seize an pportunity withiut any guarantee.
- Skin in the game – the reward for risk is profit, acclaim, recognition and influence. Entrepreneurs strive for these outcomes; the entrepreneurial culture grants them this level of privilege if they are successful in improving others’ lives. Skin in the game means taking the risk and thereby qualifying for the reward.
- The right to succeed – a few entrepreneurs achieve untold riches; many achieve great financial success. The entrepreneurial culture celebtrates their success and sets them up as examples for others and for future generations. Let’s all be entrepreneurs!
The opposite traits will undermine the entrepreneurial culture. If we become pessimistic and subscribe to the idea of American decline; if we permit ourselves to be governed or managed by bureaucrats following restrictive standardized rules; if we close ourselves off to immigration or mobility of any kind; if we fear risk and give up on the rewards that come with it; if we criticize and decry entrepreneurial success because we resent the level of reward our successful entrepreneurs are accorded; these are the feelings and actions and tendencies that will bring an end to American entrepreneurship. We’ll catch the European disease of restraining entrepreneurship by over-regulating and over-bureaucratizing. We might fall into the Asian error of state-mediated entrepreneurship. We might inherit the South American fear of entrepreneurship.
The entrepreneurial culture is not something that can be governed by the apparatus of the state. It’s not something that can be taught at university. It’s much more likely to be communicated at the family dinner table, and spread by sharing optimistic attitudes and open-minded delight in possibilities. It is strengthened by open-minded acceptance of every experiment, and by welcoming innovation on principle. It’s collaboration and participation and inclusion and expansiveness. It’s the embrace of change, even when it is uncomfortable. It’s open-minded active learning.
Let’s hope we can maintain it. Let’s try hard.