A Brief History of Entrepreneurship

That’s the title of a book by Joe Carlen (A Brief History of Entrepreneurship), on the pioneers, profiteers, and racketeers who shaped our world. Published by Columbia Business School Publishing, you might expect it to be a dry read, but I found it to be a page turner.

Okay, I was a history major and I love this stuff. But I believe that continually expanding our understanding of the roots of entrepreneurship and what’s changed are key to being a good business owner.

 

Here are 5 things I learned from the book:

 

1. The meaning of entrepreneurship

The term “entrepreneurship” is derived from a French word “entrependre,” which means undertaking. The undertaking, to paraphrase what’s in the book, is an adventure to pursue economic goals.

As an aside, today the terms “entrepreneur” and “small business owner” are often used interchangeably. Is this valid? Probably not. The former is the explorer (like Columbus); the latter is the settler (like the Puritans). Anyway, that’s how I view it.

 

2. Entrepreneurship goes back 20,000

to 30,000 years

We may think that the concept of entrepreneur is a modern one. However, the author provides examples of how “the entrepreneurial impulse found expression among some of the more enterprising tribes” during the Upper Paleolithic period and the end of the Stone Age. At that time, barter was the medium of trade.

It was Mesopotamia (part of the cradle of civilization), with the development of writing and cities, that gave birth the entrepreneurial class—merchants. For the first time, there were people who did not actually produce the goods sold but acted as intermediaries for sales. This time and place also witnessed the start of a monetary system and credit (the concept of debt).

 

3. Not all civilizations foster entrepreneurship

While entrepreneurship is driven by individuals and not the state, it appears to be the state that “foster[s] an environment conducive to entrepreneurship.” The Mesopotamians and Phoenicians had a positive environment; the Romans did not. The Romans created wealth through the spoils of war rather than creating anything new.

The rise of Islamic civilization became “an influential pollinator.” It was in this region and in this time that many features essential to flourishing entrepreneurship came to pass: the Silk Road (international commerce), the widespread use of paper, and Arabic numbers (including zero).

 

4. Entrepreneurship depends on innovation

The underpinning of entrepreneurship is the continual development of something new. “[T]he entrepreneur’s creative inclination finds its fullest expression in societies characterized by inventiveness.” The innovation may be technological (e.g., the invention of the compass and “flying money” [paper currency] in China) or attitudinal (e.g., the growing status of the merchant class in Europe during the Renaissance and the ability of those of “low birth” to attain status during the Industrial Revolution in England).

The Industrial Revolution, which the author describes as “a specifically British phenomenon,” produced new trade routes, new production centers, and new technology. Britain was the first country to issue patents.

The author calls the U.S. from the Civil War to the end of the 20th century as the “quintessential entrepreneurial society.” This period witnessed inventor-entrepreneurship, led by such luminaries as Bell and Edison.

 

5. Not everything about entrepreneurship is wonderful

The sad truth is that there is a dark side to entrepreneurship. Throughout history, it has often been supported with such practices as slavery, piracy, conquest, war profiteering, and monopoly.

 

Conclusion

It really gets you thinking about what will come next. The author suggests space adventurers, such as Elon Musk and his SpaceX, will be the entrepreneurs in the next frontier. Thrilling.

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