The Wise, The Foolish and The Entrepreneur
In these changing times, does the notion of an entrepreneur evolve as nations experience economic growth and development?
There is an old saying that goes, “Entrepreneurship in neither a science nor a piece of art. It is just a practice”. A practice which I believe doesn’t have any drastic fundamental changes but rather changes and shapes itself with relative importance in this world. What really is crucial, however, is the sheer determination and ambition to prototype better solutions, rectify the mistakes quickly and persevere even if challenges seem great.
A better understanding of historical data on entrepreneurship reveals how most people in the mid-20th century thought of improvement-driven entrepreneurs as the only type of entrepreneurs representing ‘creative destruction’. Now notice how the term has evolved. The ‘Schumpeterian’ entrepreneur is therefore above everything else, an innovator first. In the early days, entrepreneurship was not considered to be very important in the preliminary stages of economic development. It was rather thought to be contributing in the later stages of a developing economy; where the society is driven by knowledge and competition. But now, entrepreneurship plays a continually growing substantial role in developing countries. It’s effect is not always seen but plays an indirect role in the market and largely, the economy.
Two of the fastest growing economies, China and India in the recent years have seen similar evolution of entrepreneurship.
In 1952, 90% of employment in China was in agriculture while 5% were in the secondary and service sectors, respectively. However, as economic development took hold in China, agriculture’s share of employment diminished, being overtaken by services in 2011 and manufacturing in 2014. The most recent data indicate that services make up over an astounding 40% of overall employment, while about 30% in the secondary sector and just under 30% in agriculture. Numerous young people who were born in the 1980’s and 1990’s with entrepreneurial aspirations come not only from the metropolis like Beijing, Shenzhen or Shanghai, but also from second-tier or even smaller cities. These people unlike their ancestors were not afraid of failure; they believed in the ‘trial and error’ method being an inevitable part of the process and eventually a way to come out of the competition and be different. China is now the world’s second largest producer of “unicorns,” i.e., non-listed companies valued at over US $1Bn; the most representative ones being Xiaomi, China Internet Plus (recent merger of Meituan and Dianping) and DJI. In addition, Baidu, Alibaba, Tencent and Xiaomi are on the world’s 50 smartest companies list. Jack Ma, a self made billionaire has always stressed on the fact that entrepreneurs should compete with themselves instead of setting goals and aspirations based on others’ success stories.
Similarly, in India there has been a rise in young Indians shedding their phobia of failure and facing challenges in the world of startups. The IT boom has been instrumental in kick-starting the entrepreneurial economy especially in big cities like Mumbai and Bangalore. Talking of statistics, a growth of 14% in revenues generated by startups makes India the 4th biggest country in the world in terms of digital startups. 76% of startups are conceived by people under the age of 35 which shows their desire to be innovative and necessity driven entrepreneurs. Success stories of startups like Flipkart, Ola Cab, Toppr, Paytm and Zomato continue to be definitive. However, a lot is yet to be achieved. The ‘Make in India’ initiative has helped the twin cause of entrepreneurship and production in the lagging manufacturing sector of the country, but it comes at a cost. The campaign welcomes foreign enterprises to manufacture in India and there are fears of dominating the small local entrepreneurs, thereby forcing them out of business. This can be adversarial for the Desi entrepreneur who works for a foreign firm merely as an employee taking orders.
What the entrepreneur stands for in these changing economic scenarios and the comparison to ‘the wise’ and ‘the foolish’
As exciting the previous paragraph suggests for entrepreneurship in developing countries, note that it’s because China and India have been ingenious in implementing their policies. Other countries have been more careful in screening foreign investment proposals, and have limited the participation of multinational corporations to certain pro-government activities. Restrictions placed on small entrepreneurs and decrease in the number of journal articles and books on the subject of entrepreneurship are a sad state of affairs; which can dishearten rookie entrepreneurs and cruelly challenge them to be further self dependent. This brings us to our final yet a question of prime importance. What is the ideal entrepreneur? Enthusiastically foolish or Conservatively wise?
The answer is both and none. A perfect balance between the two traits is what’s needed in the modern world. No great person can define the ratio to be exact like 45–55 or 60–40. The word ‘perfect’ completely depends on yourself, how you approach challenges and confront failures. The entrepreneur who proclaims to ‘being wise is the key to success’ has never really tasted the joy of ‘risk taking’ other than being a conformist and skeptic to innovative ideas. While the entrepreneur who quotes ‘Stay Hungry, Stay Foolish’ as an authoritative trick of the trade relies too heavily on being prone to failures and brushing them off as ‘mere experiences’. One should be able to take a failure in one’s stride but at the same time by being a little cautious one could avoid failures; at least some of them.
Startups often make ‘avoidable’ mistakes and we should learn from them by being wise. Willingness to go against accepted wisdom carries the risk of being called ‘a fool’ which contradicts the very essence of an entrepreneur —being ‘ innovative’. Therefore the true entrepreneur is the Third Man, neither foolish, neither wise but who has a vision for something and a want to create.
