ECON BC3063 (02) Senior Seminar: Entrepreneurship

Instructor: : Alan Dye, Spring 2004

The word "entrepreneur" has two meanings. In some instances, it is used concretely to describe the founder of a business startup; in others, it is used abstractly to refer to the human force behind economic innovation - the person who takes a new idea about a technology, product or process, and implements it profitably. This seminar on entrepreneurship looks at the enablers and obstacles of entrepreneurial activity as they apply to start-ups, small firms, business networks, and other venues for generating new economic activity and innovation. Course readings emphasize applied material, including applied research, contemporary and historical case studies, and quantitative analyses.

The seminar is framed around three sets of questions. First, what motivates entrepreneurs? And what factors explain successful entrepreneurial ventures? We look at patterns of success and failure in entrepreneurial firms and ask about the significance of a wide range of social, economic, regulatory, and legal factors. We will model entry and exit strategies, and consider problems facing entrepreneurs as they conduct pre-entry feasibility analyses in fundamentally uncertain contexts.

Second, a necessary condition for entrepreneurial ventures is funding. In the last decade or so, the growth of venture capital markets has attracted much attention. Yet studies find that most entrepreneurial firms do not obtain funding from venture capital groups, and very few women-led or minority businesses receive venture-capital backing. What are the causes of the observed biases in funding? What alternative sources are available to disadvantaged groups? Among the alternatives, we look at kinship-, gender-, and ethnicity-based networks. Also of interest are a variety of public programs, such as the Small Business Administration, local government initiatives, and private advocacy groups.

Third, business networks play a larger role than just in funding. What roles do business networks play? Some researchers propose that networks can level the playing field for small versus large business, or for women-led and minority enterprises. We explore the roles of business and social networks, looking at topics such as ethnicity-based institutions, interlinked contracts, technology licensing, regulatory environments, and other institutional factors. We will draw insights by looking at or comparing a range geographical cases, including Silicon Valley, northern Italy, Harlem, and Lima (Peru).