Published in Proceedings of InterSymp-2011: Baden-Baden, Germany, August 1, 2011.
12 pages. Publisher's website: http://www.iias.edu.
In recognizing the importance of entrepreneurship and innovation as the principal drivers of economic growth, this paper focuses on the human attributes that govern the behavior of the entrepreneur and the societal perceptions that influence the human environment in which the entrepreneur operates. Foremost among these human attributes is the experience-based nature of the human cognitive system that prepares us well for dealing with events that are closely related to our past experience, but forces us to learn by failure as we apply past methods to new situations. In particular, the paper discusses the difficulties that the human dependence on experience poses to the entrepreneur in terms of the innate human aversion to change, the interpretation and assessment of new situations, and the formulation of appropriate plans and strategies within the practice of entrepreneurship. The value and pitfalls of intuition are discussed in some detail, with particular reference to the precautions that the entrepreneur should exercise so as not to be misled by the various experience-based and emotional influences that govern intuitional processes. In addition, statistical data shows that the success rate of entrepreneurial ventures in terms of actually becoming operational and the amount of personal wealth created is far below common public perception. While entrepreneurship is a leading generator of economic growth, the financial benefit to the individual entrepreneur is likely to be little more than that provided by normal employment. This suggests that the entrepreneurial urge that manifests itself in a small minority of persons, who are willing to abandon the comforts of status quo, is driven more by a combination of personality traits such as adventurism, competitiveness, non-conformance, and passion than deliberate planning based on sound market analysis. The author concludes that the critical factor of whether an entrepreneurial venture will eventually become even moderately successful depends on the willingness of the entrepreneur to learn from early mistakes and acquire the necessary knowledge and skills that appear to be a prerequisite for business success.