Business History: Entrepreneurship History

23 Results

 

Entrepreneurs, Firms, and Global Wealth since 1850

Geoffrey G. Jones

This paper examines the historical causes of the wealth gaps between the West and "the Rest." It integrates the business history literature into the current dominant explanations of global wealth and poverty which focus on deficient institutions, poor human capital development, geography, and culture. It argues that there is a "missing gap" between these factors, and the entrepreneurs and firms which create wealth and drive innovation. The paper examines why entrepreneurial catch-up was so challenging in the Rest in the nineteenth century. It shows that nonetheless productive business enterprises were emerging in Asia, Latin America, and Africa by the first half of the twentieth century. However, these were often crippled by the subsequent era of Communism and state intervention. The second global economy from the 1980s provided new opportunities for firms from the Rest to catch up, including easier access to knowledge and capital through returning diaspora, business schools and management consultancies, and smarter state capitalism. (A revised version of this working paper is forthcoming in Entrepreneurship and Multinationals: Global Business and the Making of the Modern World, Northampton, MA: Edward Elgar, fall 2013). Read More

The Messy Link Between Slave Owners and Modern Management

Harvard-Newcomen Fellow Caitlin C. Rosenthal studies the meticulous records kept by southern plantation owners for measuring the productivity of their slaves, some of which were forerunners of modern management techniques. Open for comment; 45 Comments posted.

Entrepreneurship in the Natural Food and Beauty Categories Before 2000: Global Visions and Local Expressions

Geoffrey Jones

How do entrepreneurs create a market? Geoffrey Jones takes a historical approach and focuses on influential figures who created new categories of natural and organic food, agriculture, and beauty products over the course of the twentieth century. At first these pioneering entrepreneurs, often motivated by ideological or religious convictions, faced little consumer demand for "green" products and little consumer knowledge of what they entailed. The creation of new categories thus involved a lengthy process with three overlapping waves of entrepreneurship. First, the diffusion of ideas through publishing, and promotion of research and education, engaged many entrepreneurs. They were, in effect, making the ideological case for natural products, and providing the basis for them to be made available. Second, entrepreneurs engaged in the creation of industry associations which could advocate, as well as give the nascent industry credibility and create standards. Finally, entrepreneurial ventures established retail stores, supply and distribution networks, and created brands. Read More

Entrepreneurship and Urban Growth: An Empirical Assessment with Historical Mines

Edward L. Glaeser, Sari Pekkala Kerr, and William R. Kerr

Does entrepreneurship cause urban growth? Economists and policymakers often argue yes, but it is remarkable how little is known about what lies behind this relationship. This paper investigates the connection more closely using a link between historical mineral and coal deposits and modern entrepreneurship observed in US cities today. Because the process of bringing ores out of the earth is a capital-intensive operation that often benefits from large-scale operations, cities with a historical abundance of nearby mineral and coal mines developed industrial structures with systematically larger establishments and less entrepreneurship. These early industrial traits persisted long after the initial conditions faded through intergenerational transmissions, path dependency, and similar. Using this variation, the study finds the strong connection between a city's initial entrepreneurship and subsequent economic growth is still observed after removing the most worrisome endogeneity. This connection works primarily through lower employment growth of startups in cities that are closer to mines. Read More

“Power from Sunshine”: A Business History of Solar Energy

Geoffrey Jones and Loubna Bouamane

In each generation, the concept of getting "power from sunshine" has attracted entrepreneurial visionaries who encountered a perennial problem: Solar energy was expensive compared to conventional fuels that were not priced to incorporate wider environmental costs. This paper by Geoffrey Jones and Loubna Bouamane provides a business history of solar energy between the nineteenth century and the present day. Its covers early attempts to develop solar energy, the use of passive solar in architecture before World War II, the subsequent growth of the modern photovoltaic (PV) industry, and alternative non-PV technologies such as parabolic collectors. As the authors argue, building viable business models proved crucially dependent on two factors: the prices of alternative conventional fuels and public policy. Read More

Caste and Entrepreneurship in India

Lakshmi Iyer, Tarun Khanna, and and Ashutosh Varshney

Has India's political revolution been accompanied by corresponding changes in the economic sphere? This paper argues that for the most vulnerable, whether in villages or cities, the social structure has not changed. While Scheduled Castes, Scheduled Tribes, and traditionally "middle-level" castes have made significant progress at the level of political representation in independent India, their progress in entrepreneurship has been uneven. By looking at the ownership of enterprises across the country, this paper sheds light on two larger narratives about India's emerging political economy: first, that the rich have benefitted more than the poor, the towns and cities more than the villages, and the upper castes more than the lower castes has acquired salience in several quarters. And second, that "Dalit entrepreneurship," a category conspicuous by its absence in India's business history, has become a significant trend. Findings by Lakshmi Iyer, Tarun Khanna, and Ashutosh Varshney show that while the "middle-level" castes have made progress in entrepreneurship, the Scheduled Castes and Scheduled Tribes are considerably under-represented in the entrepreneurial sphere. That is, for Scheduled Castes and Scheduled Tribes, political gains have not manifested themselves in greater entrepreneurial prowess. Read More

Managing Political Risk in Global Business: Beiersdorf 1914-1990

Geoffrey Jones and Christina Lubinski

After the outbreak of World War 1, management of political risk became a central concern for firms, especially those operating internationally. These risks were on many levels, from expropriation to exchange controls and other economic policies. German firms, which had flourished during the second industrial revolution of the late nineteenth century, and enthusiastically expanded internationally, found themselves especially exposed to such risks. Focusing on one such firm, Beiersdorf, a German-based pharmaceutical and skin care company (and, during the Nazi years, a so-called Jewish business), the authors examine corporate strategies of political risk management during the twentieth century, especially the volatile years of Nazi Germany. The history of Beiersdorf highlights areas of managerial discretion. Faced by the worst of all worlds, the firm survived and was able, albeit at great cost, to rebuild its business. Read More

Can Entrepreneurs Drive People Movers to Success?

Benjamin G. Edelman

Call them next-generation driverless taxis or people movers, the age of personal rapid transport is just around the bend. Could PRT change the face of public transportation in cities and smaller communities? HBS professor Benjamin G. Edelman weighs the benefits and opportunities for entrepreneurs and for society. "Right now, the field is wide open," he says. Read More

Buy Local? The Geography of Successful and Unsuccessful Venture Capital Expansion

Henry Chen, Paul A. Gompers, Anna Kovner, and Josh Lerner

From Silicon Valley to Herzliya, Israel, venture capital firms are concentrated in very few locations. More than half of the 1,000 venture capital offices listed in Pratt's Guide to Private Equity and Venture Capital Sources are located in just three metropolitan areas: San Francisco, Boston, and New York. More than 49 percent of the U.S.-based companies financed by venture capital firms are located in these three cities. This paper examines the location decisions of venture capital firms and the impact that venture capital firm geography has on investments and outcomes. Findings are informative both to researchers in economic geography and to policymakers who seek to attract venture capital. Read More

Creative Entrepreneurship in a Downturn

Bhaskar Chakravorti

Entrepreneurs, take heart. True, the global economic malaise removes opportunities and precious resources—but also adds them in new and interesting ways, argues HBS senior lecturer Bhaskar Chakravorti. In this Q&A he identifies reasons for optimism, and shows how entrepreneurs can think differently about bad news. Read More

The Matchmaker of the Modern Economy

In the wake of World War II, Georges Doriot helped found the world's first public venture capital firm, American Research and Development. Doriot (1899–1987) was also a professor at Harvard Business School for 40 years. Our book excerpt from Creative Capital: Georges Doriot and the Birth of Venture Capital (HBS Press) describes how ARD first came to "marry" investors and innovators. Read More

The Lessons of Business History: A Handbook

Geoffrey G. Jones

Compiling a handbook on the current thinking in any area of study seems daunting enough, but the just-published Oxford Handbook of Business History carries an even larger mission: bring the lessons of business history to current research in other disciplines and to the practice of business management itself. A Q&A with coeditor Geoffrey Jones. Read More

HBS Cases: Beauty Entrepreneur Madam Walker

She may have been the first self-made African American millionaire. Born of emancipated slaves, Madam C.J. Walker traveled from the cotton fields to business fame as a purveyor of hair-care products that offered beauty and dignity. Harvard Business School's Nancy F. Koehn and Katherine Miller explain what motivated her triumph. Read More

Who Rises to Power in American Business?

Anthony Mayo

Business leaders in the United States have usually been white men who were blessed with the right religion, family, or education. But "outsiders" have also created their own paths to leadership, a trend on the rise today. Paths to Power is the first book in fifty years to exhaustively analyze the demographics of leadership and access in business in the U.S., and how the face of American leadership might be changing. A Q&A with Anthony J. Mayo. Read More

Banking Deregulation, Financing Constraints and Entrepreneurship

William Kerr and Ramana Nanda

What effect does an increase in banking competition have on the entry of start-ups? In particular, does an increase in banking competition have a differential effect on the entry of start-ups relative to the opening of new establishments by existing firms? The U.S. branch banking deregulations provide a useful laboratory for studying how banking competition affects small businesses. Prior to 1970, all but twelve states had stringent restrictions on the ability of banks to open new branches or to acquire the branches of other banks within the state; beginning in the 1970s and until 1994, all but two states removed these restrictions. In this research, Kerr and Nanda studied the entry of newly incorporated businesses between 1976 and 1999 using detailed data collected by the U.S. Census Bureau. Their findings matter for understanding how reforms that affect the financing environment may improve the real economy through the reallocation of resources in the non-financial sectors. Read More

Entrepreneurship and Business History: Renewing the Research Agenda

Geoffrey G. Jones and R. Daniel Wadhwani

This paper identifies major opportunities to raise entrepreneurship as a central research issue in business history and to build on the strong roots that are already in place in that discipline. Historical research on entrepreneurship began in the 1940s and 1950s, much of it at Harvard Business School, but then lost momentum. Nevertheless the paper shows the major achievements in exploring how context shaped the structure of entrepreneurship, and identifying the wide variation in organizational form and entrepreneurial behavior. It concludes with the main contributions of business history to the study of entrepreneurship, and proposes a renewed research agenda. Read More

Bankers, Industrialists, and Their Cliques: Elite Networks in Mexico and Brazil During Early Industrialization

Aldo Musacchio and Ian Read

Mexico and Brazil had different institutional structures in the early 20th century. Did entrepreneurs in these two countries organize their business networks differently to deal with the different institutional settings? And, how can we compare the impact of the institutional structure of Mexico and Brazil on the networks of entrepreneurial finance and entrepreneurship in general? In this research, Musacchio and Read look at the networks of interlocking boards of directors of major joint stock companies in two large Latin American societies in 1909. Read More

Schumpeter’s Plea: Rediscovering History and Relevance in the Study of Entrepreneurship

Geoffrey G. Jones and Dan Wadhwani

Academic studies of entrepreneurship have focused on people and firms but ignored the context of history. The result is an over-reliance in the experiences of high-tech start-ups in the U.S., leading to generalizations using empirical evidence from an exceptional and atypical industry and location. Economist Joseph Schumpeter believed the study of entrepreneurial behavior made little sense without the equal study of the broader industrial, social, and economic setting in which they operated. An exchange between historical and social scientific approaches will yield far richer understanding. Read More

Birth of the American Salesman

Walter A. Friedman

Modern sales management is a uniquely American story, says Harvard Business School's Walter A. Friedman, author of Birth of a Salesman. PLUS: Book excerpt. Read More

Enterprising Women—a History

In conjunction with the major exhibit "Enterprising Women: 250 Years of American Business," the Radcliffe Institute for Advanced Study recently presented a two-day program entitled Women, Money and Power. Harvard Business School professor Nancy F. Koehn participated in the conference's opening panel—an informal discussion and reflection on the exhibit and its major themes. Read More

Sam Walton: Great From the Start

Sam Walton’s retailing career began September 1, 1945, in Newport, Arkansas. He paid a princely $25,000 to Butler Brothers to franchise a 5,000-square-foot Ben Franklin’s variety store. In this excerpt from Giants of Enterprise: Seven Business Innovators and the Empires They Built, author and HBS professor Richard S. Tedlow depicts the huge success Walton made of his first store—against all odds. The book is scheduled for publication later this year by HarperBusiness. Excerpted with permission of the author. Read More

Building a Powerful Prestige Brand

Leveraging ambition, customer input, intuition, and a keen commercial imagination, a daughter of immigrant shopkeepers created a leader in the global prestige cosmetics market. HBS professor Nancy Koehn examines the genius of Estée Lauder. Read More

Henry Heinz and Brand Creation in the Late Nineteenth Century

H.J. Heinz founder Henry Heinz developed sophisticated brand-building strategies without the advantages of modern economic analytic technique, data and theory. HBS Professor Nancy F. Koehn shows how in this excerpt from her Business History Review article "Henry Heinz and Brand Creation in the Late Nineteenth Century." Read More