First published in the Financial Times on 15th April 2014.
Last week I was a panel member in a debate at the Royal Institution in London entitled, “What is the DNA of an entrepreneur?” The discussion was full of revealing insights but as is so often the case with such conversations, it descended into an argument about semantics: in other words, what is the true definition of an entrepreneur?
I don’t really care. There are lots of types of entrepreneur: from freelancers to tycoons, from inventors to promoters, from speculators to craftsmen (and women), from traders to impresarios, from managers to acquirers, from founders to visionaries to industrialists to social entrepreneurs. The one aspect they have in common is the urge to work for themselves – and for the more ambitious ones, the desire to build a serious business.
I want there to be more entrepreneurs of every description: from urban to rural, from manufacturers to service providers, from one-person bands to conglomerateurs, from digital world-beaters to part-time lifestyle entrepreneurs. It does not matter what we call them. They stand for self-determination, and the desire to earn their own living. I am happy that the word entrepreneur is bandied around by all sorts of self-employed citizens starting their own micro-businesses. Perfectionists insist it should only refer to those bold innovators who found companies and build them into substantial concerns. That attitude is too precious.
The word entrepreneur has come to enjoy positive connotations, and we must embrace that. Those who take the plunge and become their own boss choose to join a special tribe. Between them they create jobs, spark innovation and generate wealth, and it is encouraging all entrepreneurs are increasingly seen across the political spectrum, and among society, as a vital breed.
Certain careers have long established cultural standing – professionals such as doctors, barristers, architects, accountants and so forth. These learned experts embellish their status with letters after their names such as BM, MRC, QC, RIBA, etc. These reflect qualifications and memberships of professional bodies. Within these worlds there is huge significance attached to who possesses which post-nominal letters. But there are no such organisations or academic certificates for entrepreneurs. That deficiency is not so terrible – entrepreneurs have chosen an equally valid, yet different path in their work. And they have the word entrepreneur, in all its confusion and glory, to describe their calling.
When I feel like stirring it up, I use the word capitalist to describe those who undertake business. I accept it does not enjoy the broad appeal of entrepreneur. But in certain respects capitalist is a more honest characterisation. A capitalist believes in the profit motive, trade, markets, competition, growth, choice, free enterprise, rule of law, property rights and limited government. Some on the left disapprove of such values and have spent decades demonising capitalists. Hence, for most it has little of the favourable meanings implied by entrepreneur – such as creativity and success. But I suspect the majority of entrepreneurs would approve of the capitalist philosophy I outlined. I suppose entrepreneur is really the modern, politically correct way of saying capitalist.
There seems to be fairly recent and universal approval of entrepreneurs among all mainstream political parties. This must reflect a recognition that they are probably the only way the mature economies of Europe, for example, can address the challenges of feeble growth, deficits and high unemployment. This endorsement of the enterprise spirit should lead to certain conclusions. If entrepreneur/capitalists are so important then their views must matter. I am confident they would argue the big welfare systems in the west are unaffordable and need drastic reform; that rigid employment legislation damages job creation; that the private sector should expand and the state should shrink; and that civil servants and legislators should learn how private enterprise innovates, improves productivity, delivers value for customers and shareholders – and restructures when times are hard.
Entrepreneurs are typically adaptable and cope well with change. It is therefore only right that the language we use to describe these mavericks is flexible.