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Skip to 0 minutes and 11 secondsWhat is entrepreneurship? And what has it to do with uncertainty and complexity? Borrowing from my colleague, Dr. Olga Belousova I take the comparison to an ultramarathon. These are runs longer than a normal marathon, often in very difficult areas, like deserts or mountains, and sometimes even both. It's a length journey. And entrepreneurship is like these marathons, a process which takes a lot of effort and time to accomplish. It needs preparation. An ultramarathon runner prepares based on a map, where to accelerate, where to regain some energy, where to take food, and where to take some drinks. Still, it's a risky adventure or which it is uncertain if you will get to the finish. However, entrepreneurship can be more uncertain and complex.

Skip to 1 minute and 3 secondsIn many cases, the route is not given. And on top of that, also the finish is not always clear. So how to prepare and how to use resources? Especially, innovation-based entrepreneurship is difficult. The entrepreneur often has to do deal with what we call real Knightian uncertainty, meaning she cannot plan the entrepreneurial process and has to decide on limited information. Also, entrepreneurs are only bounded rational. So how does entrepreneurship divide? The simplest definition describes entrepreneurship as creating a new business at one's own risk and expense. This broad definition therefore focuses specifically on the aggregation level of the company. But a creation of a new company is usually attributed to the entrepreneur as a person.

Skip to 1 minute and 57 secondsAldrich and Zimmer focus their attention on the network aspect. An entrepreneur is a networker. Timmons places the emphasis on the recognition and seising of opportunities. Entrepreneurship was in an existing company, is beyond the scope of this definition. However, other definitions of the term not only could see the entrepreneurship in new companies, but also distinguish entrepreneurship in existing companies. For example, a very early definition from a fairly famous sociologist, Max Weber, reads, "Entrepreneurship means the taking over and organisation of some part of an economy in which people's needs are satisfied through exchange for the sake of making a profit and at one's own economic risk."

Skip to 2 minutes and 43 secondsAccording to this definition, entrepreneurship can be organised both within an existing company and by means of a new company. In both cases, however, it clearly evolves an entrepreneur, who takes the initiative, runs the risk, and seeks profit by creating a new supply of something and a demand for it. This defines the principle of market-oriented enterprise. Still, the assumption that every entrepreneur seeks profit in the first place needs to be relaxed. What is it entrepreneurs seek? In the first place, it is value. We will contend in this lecture that entrepreneurs need to create value for part of society to become a sustainable enterprise. Without that, it loses its licence to operate.

Skip to 3 minutes and 30 secondsAn entrepreneur is not a lone cowboy, but part of an institutionalised social system, which is influencing but is also influenced by the entrepreneur and the enterprise. Entrepreneurship and innovation often go hand in hand. One of the most well-known definitions of entrepreneurship is that of Joseph Schumpeter. Entrepreneurship is making new combinations of products, processes, organisation, and markets. As discussed by Professor Hoogduin, Schumpeter bases entrepreneurship on innovation and new combinations. And in this regard, both incremental innovation and modern radical innovation can give rise to entrepreneurship. Creating a new combination of existing products, processes, organisation, or markets is regarded as incremental, which chiefly means effect that no significant changes are necessary in existing societal situations in which this new combination can be used.

Skip to 4 minutes and 29 secondsIn this lecture, we showed the character of entrepreneurship. It boils down to a process that creates value in society and that is often lengthy, complex, and uncertain endeavour. Later we will discuss theories which will shed some light on these uncertainties and heuristics to handle them.

Entrepreneurship, complexity and uncertainty

This lecture continues on the role of entrepreneurship discussed in the previous lectures by Lex Hoogduin. In it, Professor Aard Groen will build a Process Model of entrepreneurship and place it into context.

But first: what is entrepreneurship? What has it to do with Complexity and Uncertainty? Of course, an entrepreneur is not a lone wolf, it is part of a system. The entrepreneur influences the system and is influenced by the system.

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Decision Making in a Complex and Uncertain World

University of Groningen

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