We’re all entrepreneurs now – but our politicians have yet to realise it
History is littered with human traits that were for centuries seen as the preserve of an elite but which ultimately became indispensable features of everybody’s lives. Literacy, once a privilege of priests and nobles, is now a basic skill. Regular travel was reserved for the wealthy before cheap transport created the package holiday.
The same thing is now happening with entrepreneurialism.
Ever since Adam Smith pointed out how innovation and markets combine to create wealth, the ability to exploit opportunity and risk to generate change has been seen as a crucial mindset for economic success. But it has also been regarded as a minority pursuit.
Policy-makers and economists assume that most people simply do not have the requisite skills to become entrepreneurs. The majority are condemned to work for the elite of driven, bright risk-takers rather than make change themselves. The Austrian school of economics, which has had a major influence on the political right since the 1980s, built its whole model on understanding how a specialised group of entrepreneurs allocates resources in response to market signals.
We can now throw that textbook away.
Two potent forces are making the chance to be an entrepreneur something that is widely desired, eminently possible and, as with literacy, necessary.
The first is the simple drive for self-determination. This has arguably been growing since the idea of individual free choice burst onto the scene about 500 years ago during the Reformation. But after the social revolution of the 1960s, the notion of quietly working away anonymously as a wage slave has become increasingly stigmatised. In popular culture, the 1950s image of the comfortable nuclear family, sustained by the salary of a company man, has been replaced by the alienated cubicle serf, day-dreaming of a better life for themselves outside the corporate structure.
The second force is the recent waves of technological change, each one of which makes entrepreneurial behaviour cheaper and easier. In the 1990s, the internet radically reduced the cost of marketing. In the noughties, it made creating interactive networks of customers and partners dead easy. And now, new collaborative technologies such as block chain are set to make establishing and running an enterprise cheap and straightforward.
But what makes this trend so powerful is its self-reinforcing nature: as more of us choose to behave like entrepreneurs, so more of us have to behave like entrepreneurs. With ever more people generating new ideas and initiatives, the complexity and speed of change grows. In such an environment, having the skills to spot trends and respond rapidly to generate change is not a nice-to-have but a fundamental tool of survival.
This “entrepreneurialisation” of society can be seen most clearly in the rapid rise of self-employment and micro-business in recent years. It can be observed in the growing cult of the startup among students and young people. And it’s central to the success of wildly popular sites like Airbnb and eBay.
But the trend also has a subtler side. Just as literacy ceased to be primarily a way to read official documents and the Bible as it became a mass affair, so entrepreneurialism is no longer solely linked to the goal of enhancing personal wealth.
Increasingly, we use our entrepreneurial skill to share photos, music and ideas with thousands of others without any expectation of a financial return but in the hope of more tweets, likes and follows. Ever greater numbers are applying entrepreneurial approaches in areas such as health and education, using models that allow a total focus on social impact without getting sidetracked by a desire for personal affluence. Many others are setting up businesses in the burgeoning online arts and crafts sector – not to generate a significant income but in order to enjoy creativity and personal development.
This trend is bringing greater autonomy and fulfilment to millions, but it also poses huge challenges. The entrepreneurial life is inherently more volatile and risky than conventional employment and lifestyles. It also requires demanding skills such as leadership, collaboration and creative analysis.
Those shaping the welfare, health and education systems have barely begun to grasp how they must adapt to this new world. We can no longer offer support, schooling and care to people based on the assumption that they will earn a regular wage in a standard job. Lives are becoming more complex, diverse and volatile as a result of entrepreneurialisation, and our major institutions will need to follow suit.
Adam Lent has recently been appointed European director of research and innovation for Ashoka. His book “Small is Powerful: why the era of big business, big government and big culture is over” is due for publication in late 2015 and can be pre-ordered at unbound.co.uk/books/small-is-powerful @adamjlent