Andre Spicer: Creativity vital to enterprise

During the past two decades we have become obsessed with all things entrepreneurial. A person who runs a tiny business is a micro entrepreneur; a middle manager working in the bowels of a hulking multinational is an intrapreneur; and a government employee is a public sector entrepreneur.

We even encourage children to build their entrepreneurial skills.

Some people say our obsession with enterprise has produced many of the fruits of success on which we now feast. They claim that the sustained economic success that countries like New Zealand have enjoyed recently is attributable to the pro-enterprise reforms of the 1980s and 1990s.

Supporters of our enterprise obsession remind us that countries which have not attempted to "enterprise up" their economies (such as Germany and France) have experienced sustained economic stagnation.

They say the only way out of this spiral of economic decline is to vigorously encourage a culture of enterprise.

But critics of enterprise obsession point out that enterprising-up the economy has created disasters.

There is a stark division between rich and poor. Whole sectors of the population are in increasingly precarious short-term employment and there has been a rapid decline in our commitment to community and public service.

This catalogue of failures has led critics to say that we must abandon our enterprise obsession and roll back many of the pro-enterprise reforms.

The polemical points scoring means there has rarely been any sustained reflection about what this thing called entrepreneurship is.

For both the critics and the pundits, being enterprising means ruthlessly applying economic methods such as cost-benefit analysis.

Being an entrepreneur means increasing the amount of output while decreasing the amount of input.

The strange part about this is that simply being committed to efficiency has little to do with entrepreneurship.

What both the promoters and critics of enterprise culture seem to be arguing about is management. Managers try to stretch out a budget across competing needs. Managers try to goad employees into being more productive. Managers slave over budgets.

Distinguishing managers and entrepreneurs may seem like splitting hairs. To succeed as an entrepreneur, people must be able to manage.

But an entrepreneur is far more than just a good business manager. Studies show that what makes a great entrepreneur is the ability to perceive and create opportunities.

Managers, by contrast, do their best with the scarce resources they have. People who are great at creating exhilarating opportunities are often bad at managing the businesses they build.

If we agree that it is important to encourage enterprise, then the way we are going about it seems wrong-headed. Programmes in school that encourage students' entrepreneurial capacities emphasise traditional business management skills such as accounting, people management, operations management and marketing.

If we were concerned with creating entrepreneurs, what should we do?

It is essential to recognise that entrepreneurship requires different skills than management. Instead of equipping people with skills in getting more from less, they must be provided with the skills to create opportunities.

That would include ensuring people have the creative skills to perceive opportunities, develop new ideas, and give older ideas an unusual twist.

Most important, we would ensure they have a commitment to bring to life new ways of doing things.

Perhaps the most urgent matter is to recognise that our obsession with managing nearly anything, from public sector organisation to personal relationships, can cramp our ability to innovate.

Entrepreneurship gives people a sense that they can be creative, and that they have the power to change things.

* Andre Spicer is an academic at Warwick Business School in England. He visited the University of Victoria in Wellington this month.