The Birth of Entrepreneurship
This article will expand on topics mentioned in Part One; ‘Lessons on Innovation and AI from an entrepreneurial and global context.
TLDR; Entrepreneurship was born a few centuries ago when people began to have hope for the future. Due to the scientific revolution and a number of successful voyages, people were much more likely to give out credit and fund business endeavours. In recent times, the rise of tech and the dot com era has made it easier than ever to connect with people on a global scale leading to a burst in global entrepreneurship. There has never been a better time for an individual to make a global impact.
In order to start a business centuries ago, a large amount of capital was required which put this dream well beyond the reach of the masses. The concept of credit came about and with it, a means for people to build in the present at the expense of the future. However, this was only part of the solution.
Despite this ‘credit’ being around for centuries, people were still hesitant to part with their capital. You see, in times of war, famine and plague, few believed the future would be any better than the present. Due to this belief, the economy didn’t grow and thus began the self perpetuating downward spiral.
What’s really interesting here is that people’s belief in a stagnant future is what caused it to be. (Harari, 2015)
Much like a modern day entrepreneur, in 1484 Christopher Columbus pitched his idea to potential investors (kings and queens) throughout Europe to finance a fleet that would sail west and find a new trade route to Asia (Harari, 2015). This was one of the first models of entrepreneurship and Columbus’ exploration turned into what’s known as a ‘unicorn’ in the start-up world today. His endeavour resulted in immense returns for his financier and from that point on, sea voyages became one of the first known forms of start-up with many explorers (entrepreneurs) pitching to finance their own expeditions. Due to the success of Columbus, investors were far more likely to finance voyages and had more trust in the potential of exploration. The immense wealth generated from the initial voyage also helped with financing.
Then came the scientific revolution and with it, the idea of progress. This resulted in credit being given out with less resistance as more people now believed in a better future.
The credit financed new discoveries, these discoveries led to new businesses and profits. Profits built trust which translated into more credit.
This is the compounding effect of entrepreneurship which allows for exponential growth and is responsible for the rapidly changing world we live in today.
In order to minimise risk, joint stock companies were formed to allow multiple investors to fund a voyage with only a small amount of capital. This became the basis for the entrepreneurial financial system we have today.
There’s no doubt that entrepreneurship has become essential for creating wealth, value and jobs within an economy today (Wu, 2015). With data sharing and communication technologies being identified as the enablers of international entrepreneurship (Reuber, 2011). Another factor for enabling global entrepreneurship is the concept of soft power. This refers to the ability to create change within a country through it’s networks, rules and resources. Those countries with a higher level of soft power would in theory, be easier to establish an international business in.
The technology boom of the 21st century has made it easier than ever to share information and communicate across the world for entrepreneurs looking to expand globally. This has given rise to what is known as the ‘knowledge economy’ where innovation has become a driver of economic growth through the creation and use of knowledge (Landström, 2008).
The internet and its plethora of innovations has created mass opportunity for entrepreneurs to start an online business and serve a global audience with minimal cost. One of the many roles innovation has played is to provide fuel for entrepreneurship by creating new opportunities. This pits Innovation as the driving force for entrepreneurial growth in the knowledge economy, as entrepreneurs constantly seek to innovate their offerings and stay relevant.
One of our greatest and still developing innovations, Artificial Intelligence, is poised to create more opportunities than any single innovation ever has before. Due to how deeply integrated into technology and computer systems our modern society has become, AI has the potential to change everything and have immense cultural impact. This means we will see a new age of ‘work’ where most jobs are automated and humans may need to find highly specialised niches from which they can offer services that an AI can’t. Solutions are currently being tested such as universal basic income (UBI) however that comes with it’s own problems.
As outlined, entrepreneurship and Innovation have become recognised as major driving forces for economic growth in both the traditional and knowledge economy. Supported by emerging tech that allow for more efficient means of communicating and sharing information, AI will have cultural and economic impact on a global scale which must be acknowledged and prepared for now if we are to stay relevant.
What do you think are some of the largest impacts AI will have on our world?
How would this effect our culture and the ways we see and do things?
If you haven’t already, check out part 1: Lessons on Innovation & Artificial Intelligence
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Harari, Y. (2015). Sapiens. [S.I.]: HarperCollins.
Wu, C. and Huarng, K. (2015). Global entrepreneurship and innovation in management. Journal of Business Research, 68(4), pp.743–747.
Reuber, A. and Fischer, E. (2011). International entrepreneurship in internet-enabled markets. Journal of Business Venturing, 26(6), pp.660–679.
Soft Power. (2017). Soft Power 30. [online] Available at: http://www.softpower30.com [Accessed 6 Sep. 2017].
Landström, H. (2008). Entrepreneurship research. Journal of Intellectual Capital, 9(2), pp.301–322.
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