Professor Dr. habil. Andreas Aulinger describes how the definition of entrepreneurship has changed over time and discusses the issues examined in entrepreneurship research. In an interview with TRANSFER magazine, he also explores the impact of digital technology in business on entrepreneurs.
Hello, Professor Aulinger – the term entrepreneurship first started entering the wider circles of German business studies in the late 1990s, but it was by no means anything new. Richard Cantillon developed the first theory of entrepreneurship as early as 1730. He saw an entrepreneur as someone who was marked by a willingness to take business risks with the desire to generate high profits from this wherever possible. How has the term changed over the years?
Our current understanding of an entrepreneur really is quite different from the way Cantillon described it nearly 300 years ago. It’s closer to the way Schumpeter described it in the early 20th century when he said that a person who innovates, invests all his creativity and creative energy in new business ideas he has thought up himself. That being said, just like 300 years ago, from today’s point of view, a “real” entrepreneur is someone who is also successful with his business ideas. It was only this view that they are also successful innovators that made entrepreneurs likeable characters in politics and industry. Of course people don’t feel that happy about them if they’re directly affected by the “creative destruction” Schumpeter said entrepreneurs cause with their innovations.
One area you’re involved in is research in entrepreneurship. What are your goals in this area at the moment?
Of course entrepreneurship research looks at things like Schumpeter’s innovators, the nature of their personality, and their startup strategies, but it also examines the overall conditions and the business environments that entrepreneurs favor and where they thrive. Silicon Valley is currently the best-known environment for entrepreneurs, and there’s lots of research in the ways other areas are trying to mimic it. Another direction for entrepreneurship research is corporate entrepreneurship. This is where you examine how companies can remain or become innovative, even if they’re older and have grown. Even in that respect, Silicon Valley offers some of the best-known places to examine this topic, with companies like Apple, Google, and Ebay. At the Steinbeis Transfer Institute for Organization and Management (IOM), we’re now particularly interested in corporate entrepreneurship; we also call this “agile entrepreneurship.”
What qualities should an entrepreneur have in order to succeed?
Success-seekers are more likely to succeed than failure-avoiders. Basically, this means people who believe they mainly shape their lives and their own successes themselves. They’re more likely to succeed than people who think their lives and their success are dictated by their environment. The term used by specialists here is “locus of control.” But even if someone does have these rather useful qualities, they can still come unstuck as entrepreneurs, partly because there are simply so many other factors that influence the specific circumstances surrounding a startup. This is also because you can sometimes have too much of these two qualities. It you go out on full throttle as a success-seeker and have absolutely no fear of failure, or your locus of control allows you to be totally convinced you’re right, too much of a good thing can also make you fall flat on your face. If I’m totally honest, I’m actually quite relieved it’s not possible to identify clear success factors because that means everyone has the right or the opportunity to try their hand at being an entrepreneur, whatever their personal style or personality. We’re amazed sometimes and still take joy in seeing the sorts of interesting people and personalities that end up succeeding as entrepreneurs – despite all preconceptions.
Digital technology is bringing about major changes in industry at the moment, in fact, not just for companies but also for society in general. What effect is this trend having on entrepreneurs, and what challenges will they have to deal with?
True entrepreneurs aren’t driven by change in the economy. If anything, they’re the ones that drive it. Individual and corporate entrepreneurs are currently bringing something to this world that we call Industry 4.0, which deals with the issue of smart and interconnected factories. If the key issue is how established companies should cope with all the change caused by successful entrepreneurs, we have to look more closely at agile management practices. These are currently experiencing a boom because they show companies how to keep pace with the accelerating rate of change. Agile companies actively manage change. In the bestcase scenario, their agility allows them to become entrepreneurs themselves and pave the way for other companies. It’s worth mentioning a white paper here, which we’ve just published through our institute. It’s called “The Three Pillars of Agile Organizations.” In the paper, I describe how classic (agile) management methods have to work alongside new (agile) management methods and agile mindsets for companies to remain agile or become agile. This is also important for them to be able to operate as entrepreneurs, both inside and outside of a company.
Prof. Dr. Andreas Aulinger has been a full professor and holder of the professorial chair for organization at the Steinbeis University Berlin since 2012. He has been director of the Steinbeis Transfer Institute for Organization and Management since 2011. The center was set up by Prof. Aulinger with Markus Heudorf, and it provides advanced executive degree programs in the fields of leadership, change management, organizational management, and HR management. In 2015, Aulinger founded a community for agile organizational practice under the auspices of the organizational society gfo.
Prof. Dr. habil. Andreas Aulinger
Steinbeis Transfer Institute Organization and Management (Berlin)