Dean of Trinity Business School, Professor Andrew Burke, gives Inaugural Lecture on the ‘New Entrepreneurship’
Posted on: 13 October 2015
In his inaugural lecture Professor Andrew Burke, the Dean of Trinity Business School explored the evolution of entrepreneurship research and practice over the last 25 years. He argued that while the impact of entrepreneurship has increased in importance for business and economic performance over this period, entrepreneurship itself has changed dramatically in terms of the typical person, business organisation and strategies that drive entrepreneurial performance. He argued that a desire by aspiring entrepreneurs to mimic – and governments to promote – the long-standing definitive characteristics of entrepreneurship such as risk-taking, innovation leadership, and business start-up were more likely to worsen rather than enhance business performance. In his lecture Professor Burke provided an insight into ‘the new entrepreneurship’ drawing out lessons for business strategy and organisation, government policy as well as those seeking to pursue entrepreneurial careers.
The following are excerpts from the Inaugural lecture by Professor Andrew Burke, Dean of Trinity Business School & Chair of Business Studies.
New Entrepreneurship
“Business start-ups and successful owner-managers have become our modern day economic heroes who are admired for being innovative and taking risks necessary to create products that transform our lives and create jobs. However, over the last decade the drivers of growth in entrepreneurial activity have not been these archetypal entrepreneurs but freelancers. These freelancers are typically skilled workers with specialist abilities and they are usually hired on project basis; paid on an output basis for completion of a project rather than input of hours. They enable businesses to be entrepreneurial by allowing the adoption of a lower risk variable cost approach to innovation development and growth while allowing access to a wide variety of extra skills and expertise not available within the organisation. In many cases they are the direct providers of innovation by not only suggesting entrepreneurial strategies to businesses but also leading their launch and commercialisation in the market.”
“These new freelance entrepreneurs have been the driving force behind the growth of self-employment over the last 15 years – a time when the number of employer owner-managers have not grown at all! The growth in freelancing has mainly been in the professional segment of the labour force and in these segments freelancers have been well rewarded for their high value added input to the innovation economy. Freelancers in Standard Occupational Codes 1, 2 and 3 comprising managers, professional and associate technical workers earn 2-3 times more in gross earnings than their equivalent employees. They also are at 85% capacity in terms of hiring out the weeks they are available to work.”
“Despite being major beneficiaries from their valuable contribution to the modern innovation-driven economy, freelancers hardly get any recognition for what they do. As a result, it may be tempting to say that it does not matter but in fact, it does and a lot. At present too many people are still stuck with a 20th Century labour force mind set where we assume that career choice is either between becoming an employee or starting your own business. Most freelancers don’t view themselves as business owners but merely register a company because it is the only option to avoid overpaying taxes when most fiscal authorities across the globe don’t recognise freelancing as a distinct economic agent. The result is that freelancers become stigmatised as either false self-employed who should really be employed or underperforming business owners as they have no employees. This stigma also makes it harder for companies to engage with freelancers for fear that they will fall foul of fiscal rules.”
“If we want a high performing innovation-driven economy we need to recognise, legitimise and nurture the freelance sector. We need to recognise freelancing as legitimate and distinct economic agent in the labour force. This ought to be defined around project based work as this is what enables freelancers to add value to organisations while simultaneously distinguishing them from false self-employment. We also need to re-think enterprise policy to break out of a preoccupation with start-up rates and the international entrepreneurial league tables that go with them. Earlier in the lecture we observed that successful entrepreneurship is not about having the most start-ups, innovations and risk-taking and more about the process of enhancing business performance (often with lower start-up rates), innovation that solves the last 10% of the consumer problem (not the most innovative and rarely the pioneering innovator) and managing rather than taking risk. The ability of businesses to hire freelancers on a variable cost project basis is one of the key enablers to allow businesses adopt these winning strategies. Therefore, we need to make sure that businesses can easily engage with freelancers and have no shortage of high quality freelancers available to them.”
“Likewise, we need to ensure that people who choose a freelancing career get the right guidance and training in order to enable them to have a realistic and optimal freelance career performance. As we know, the financial and lifestyle benefits can be significant but there are risks too and freelancing is not for everyone. This will require changes in education in terms of adequately preparing those who would like to pursue a freelance career for the labour market. Many of these people are young but a significant proportion are over 40 so re-engagement later in life will be key. “
“In the 1960s entrepreneurs were considered to be ‘capitalists who exploited workers’. Today they have become heroes – even celebrities – who enhance our lives by innovating better and/or cheaper products/services which create jobs in the process. What has changed in the meantime is that developed economies have become more innovation-driven than they were for most of the 20th Century. The freelancer has been overlooked in this development process and is still depicted as the 1960s vulnerable worker. Some still are but there has been the emergence of a new segment of skilled freelancers who are working less and earning more than their employee equivalents and who play a huge role in driving growth, innovation and ultimately job creation in businesses. We need to recognise, celebrate and nurture this new entrepreneurship as our prosperity and well-being increasing depends on it. We also need to ensure that our freelancers remain internationally competitive so that firms here and abroad have an incentive to hire them. Apart from their expertise and professionalism this will also mean that our relatively high income tax rates (which limit the ability of our freelancers to compete for work) are going to become as important as corporation taxes in terms of promoting our economic prosperity.”
About Professor Burke
Professor Andrew Burke is Dean of Trinity Business School and the Chair of Business Studies. He is Chairman of the London-based IPSE international think tank on freelancer research. Previously he held the Bettany Chair of Entrepreneurship at Cranfield School of Management where he was founder and Director of the Bettany Centre for Entrepreneurship. He was also a Board Member of Cranfield Ventures Limited – Cranfield University's tech transfer unit – and Director of the Cranfield Business Growth Programme (BGP). He also served as Director of Graduate Programmes and a member of the Executive at Cranfield School of Management. He was a Visiting Professor at the Anderson School of Management, UCLA, USA in 2002 and 2012. He was a Research Professor at the Max Planck Institute for Economics, Germany from 2003-2009. He has also been on the faculty of Warwick Business School, the University of Edinburgh, Balliol College Oxford and the University of St Andrews.
He is widely published in top ranked international journals including the Harvard Business Review, Journal of Management Studies, Journal of Business Venturing, Regional Studies, International Journal of Industrial Organization, the Oxford Bulletin of Economics and Statistics, and Small Business Economics. His work has been presented at the EU Commission, World Trade Organization, HM's Treasury, UK Houses of Commons and Lords as well as through media such as BBC Breakfast Television and the Working Lunch. Andrew is founding editor of the International Review of Entrepreneurship and was a guest editor of the International Journal of Industrial Organization. He is on the editorial boards of the International Journal of Business Innovation and Research and the International Journal of Research, Innovation and Commercialization.
He has acted as a consultant for organisations such as the European Commission, Businesslink UK, GESAC (EU), Forbairt (IDA), Hudson Contract, Schlumberger, Selex-Galileo, May Gurney, Bank of Ireland International Banking, the Irish Music Rights Organisation, and the UK Professional Contractors Group (PCG).