Research Debate: Where Do Entrepreneurs Come From?

Is Entrepreneurship a skill to be trained, a natural ability, or both? Understanding the source of supply and/or the quantity supplied of entrepreneurs is crucial to encouraging new business creation.

Can a community increase the supply and/or quantity supplied of entrepreneurs through programs, training, stimulus, and regulatory change? It is generally agreed that small and medium sized businesses (SMB) play a significant role in a capital market and the region of the community or nation in which they operate. The supply of SMBs stimulates growth, creates jobs, and, maybe more importantly, creates high quality jobs. The positive impact of SMB growth and sustainment is of interest to researchers, government, and industry. The significance of SMBs’ current role in our nation and communities makes it a mandate to understand the variables that can influence and/or increase the supply of viable SMBs. Adam Smith recognized that the key catalyst needed to activate all the unique combinations of factors of production needed for a viable enterprise is the fourth factor of production: entrepreneurship. This is why in his work Wealth of Nations, entrepreneurship is segregated and distinguished from labor (Smith, 1789). The act of forming and causing an ongoing business enterprise from nothing is unique from that of growing or sustaining an ongoing enterprise.

The supply of new SMBs is driven from one key catalyst–the individual who acts on an idea and acquires capital, employees, and land to cause that idea to become a functioning business. The entrepreneurship factor acts as a catalyst on the other three factors of production to create economic output. In periods of recession or slow growth, many economists believe that it is the single best solution to lowering unemployment, stimulating growth, and restoring a higher level of prosperity for their community.

The ongoing debate and discussion about the total supply and quantity supplied of entrepreneurs is of interest to researchers looking to understand how to increase the total number of viable SMBs. Understanding whether there is a change in the quantity supplied, or if an overall shift in the entire supply curve occurs is crucial to developing the most efficient strategies by the stakeholders charged with inducing growth in startups. To understand this difference, one must understand how nature and nurture impact the career decision to become an entrepreneur. This question drives the well-documented debate: Can a community increase the total supply, or is it just a movement along the same supply curve? Implied in this debate is the question: Do entrepreneurial intentions form naturally, or can they be created through nurturing?

Author: Gilbert Gonzalez

Cite as: Gonzalez, G. (2017). Research debate: Where do entrepreneurs come from? Muma Business Review, 1(6). 57-67.