What are the roots of entrepreneurship as an academic field of interest? The term entrepreneur—literally, "undertaker"—has been around for over two centuries, having been introduced in the early eighteenth century by the Parisian banker Richard Cantillon. Believing that the primary role of entrepreneurs was to bear risk, Cantillon focused his attention on the economic functions of entrepreneurship—a focus that was to hold sway until very recently. In various economic approaches to entrepreneurship, we can identify three defining schools of thought: those scholars focused on risk, those focused on innovation, and those focused on new venture startup.
Since Cantillon's time, many arguments have persisted about the risk-bearing aspect of entrepreneurship. Many studies of entrepreneurs (including autobiographies) tend to focus on foresight and willingness to take risks as the essential prerequisites for entrepreneurship. But in recent years, increasing numbers of scholars (including Howard Stevenson) follow Schumpeter's lead in arguing that most entrepreneurs bear risk only grudgingly. Instead, these scholars argue, entrepreneurs attempt to create deals that apportion risk among lenders, investors, suppliers, employees, and so on. Recently this perspective has again been confirmed by Amar Bhidé's systematic study of the "bootstrap" entrepreneur.
Schumpeter himself associated entrepreneurship with innovation. Schumpeter defined creativity as either a new idea or an old idea applied to a new setting. (More broadly and more famously, he described capitalism as a form of "creative destruction," often involving the dismantling of old modes of doing business.) Schumpeter's definition of entrepreneurship as innovation has enjoyed considerable popularity in the field.
Finally, some writers have implicitly "defined" entrepreneurship by restricting their study to the process of starting new ventures, apparently on the assumption that entrepreneurial activity is in large part confined to the phase of new business formation. We suggest that, although this approach greatly simplifies the life of the researcher, it is incomplete and distorting. We make an analogy between new business formation and child rearing: starting the task requires only a moment of enthusiasm, but a successful completion generally requires decades of hard work.
As noted, each of the classical definitions of entrepreneurship—risk bearing, innovation, and starting new ventures—focuses on the economic functions performed by entrepreneurial activity. In the 1950's, following the work of Arthur Cole, attention shifted away from these economic functions in favor of more personal analyses of individual entrepreneurs. During this phase of development in the field, many researchers attempted to discover common character traits that might help distinguish "true" entrepreneurs from nonentrepreneurs. Jack Hornaday's work at Babson, as well as David McClelland's work on the entrepreneur's alleged "need for achievement," were seminal pieces in this genre. Other traits that have been singled out and cited include a proclivity for risk seeking, an internal locus of control, and even one's place in the family birth order. More recent studies have focused on overconfidence and other background characteristics.
Although this individually and psychologically oriented research has pointed to some interesting correlations, we argue that unfortunate consequences too easily result from such a focus. It implicitly suggests that, if one could only discern the psychological profile of an entrepreneur and then hold an individual up against that profile, one could predict whether that individual has the pontential to become an entrepreneur, or is one already. Yet none of the proposed "profiles" applies to all entrepreneurs, and many entrepreneurs refuse to conform to any of these profiles.
Here we must confess to a bias. An emphasis on individual personality traits as the key to successful entrepreneurship leaves little room for either teaching or learning. We and our Harvard colleagues are in the business of educating young people to be better managers—entrepreneurial or otherwise. Based on our own experience and that of others, we believe that teachers with the right tools can make successful interventions and can increase the would-be entrepreneur's chances of success. To argue otherwise would be to argue against business schools in general, and against entrepreneurship courses in particular—an argument we will leave to others.