Entrepreneurship and Strategy: A Symbiotic Relationship

Abstract

An important implication of the shift of global economy from Industrial era to Knowledge era is that much of the production and commercialization of new economic knowledge is less associated with large traditional corporations and more associated with high-tech entrepreneurial firms found in innovative regional clusters, such as Silicon Valley, Research Triangle and Route 122. Schumpeter in his theory of creative destruction proposed that new firms with the entrepreneurial spirit displace less innovative incumbents, ultimately leading to a higher degree of economic growth. Entrenched large corporations tend to resist change, forcing entrepreneurs to start new firms in order to pursue innovative activity. Hence entrepreneurs reform or revolutionize the pattern of production by exploiting an invention, or more generally, an untried technological possibility for producing a new commodity or producing an old one in a new way. Entrepreneurship is concerned with understanding how, in the absence of markets for future goods and services, these goods and services may manage to come into existence (Venkataraman, 1997). To the extent value is embodied in products and services, entrepreneurship are concerned with how the opportunity to create "value" in society is discovered and acted upon by some individuals. The field of strategic management is concerned with the "methods" used to create this "value" and the ensuing struggle to capture a significant share of that "value" by individuals and firms. This paper presents an overview of the symbiotic relation between entrepreneurship and strategic management, as both seek to describe, explain, predict and prescribe how value is discovered, created, captured, and perhaps destroyed.