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The Times Call for a New Type of Entrepreneur

Nov 27-2024   



This article is based on the speech delivered by Professor Song Ligang of the Australian National University at the 26th issue of the Chengze Forum of Peking University's School of International Development.

 

What Is an Entrepreneur? Why Do We Need to Encourage Entrepreneurship?

Traditionally, the role of entrepreneurs in economic development is mainly a process of creative destruction, which is crucial under market conditions. Entrepreneurship plays an important role in fostering an enabling market environment, promoting technological innovation, solving employment problems and improving factor allocation. The current lack of vitality in the Chinese economy and the waste of resources due to irrational allocation of factors are related to the lack of entrepreneurship and the business environment for enterprises. Microscopically, if entrepreneurs take the lead in investment and drive the process of technological innovation, this will help to improve economic factor allocations, which in turn will increase efficiency, production, employment and living standards.

 

What Are the Determinants of Entrepreneurs’ Behavior?

Entrepreneurial behavior can be broadly classified into three categories: productive, unproductive and destructive. The choice of entrepreneurial behavior depends on institutional factors, including the market environment, the competitive environment, policy factors and regulations, as well as legal institutions, social and cultural factors, which together determine the behavior and role of the entrepreneur.

 

What Distinguishes the Modern Entrepreneur from the Traditional Entrepreneur?

From a social and environmental perspective, it has become the trend of the day that modern entrepreneurs need to continuously integrate business models to adapt to market competition and improve efficiency, including focusing on green supply chains, ecological investment, green finance, new technologies, new energies and conservation culture, and assuming the necessary social responsibility, especially for the large or highly profitable enterprises. In addition, business ethics has gradually become a key element in assessing an entrepreneur’s behavior.

 

How to Create an Analytical Framework for Modern Entrepreneurs?

In order to create an analytical framework that defines modern entrepreneurs’ behavior, we need to incorporate ESG (Environmental, Social and Governance) concepts. Market principles still underpin entrepreneurs’ behavior and the pursuit of profit maximum remains a core objective. However, this behavior needs to be constrained by other aspects such as technological innovation, environmental standards, social responsibility, etc. In addition, public policies and institutional frameworks play an important role, including maintaining the functioning of the market system and ensuring public welfare.

 

How Can Modern Entrepreneurship Be Assessed?

To assess modern entrepreneurship, we need to adopt a dynamic business perspective that considers market principles, technological innovation, public policy, institutional frameworks and business ethics in an integrated way. The main elements of the analytical framework include the external environment, internal social standards or corporate social responsibility, and ESG, production and financing can also be included in this assessment framework.

 

Some Conclusions

First, the key for companies seeking to reconcile economic growth with multiple objectives such as sustainable development and conservation culture is to change their old business models. Second, the key to creating a new business model lies in the cognitive and behavioral change of the entrepreneur. Third, the key to promoting cognitive and behavioral change is to define modern entrepreneurship more precisely and to examine and constrain the behavior of entrepreneurs from the perspectives of society and environment. Fourth, the new perspective requires us to redefine the boundaries between state, market, social environment and ecology, and to adjust the relationship dynamically in the light of new circumstances.

The Times Call for a New Type of Entrepreneur

Nov 27-2024   



This article is based on the speech delivered by Professor Song Ligang of the Australian National University at the 26th issue of the Chengze Forum of Peking University's School of International Development.

 

What Is an Entrepreneur? Why Do We Need to Encourage Entrepreneurship?

Traditionally, the role of entrepreneurs in economic development is mainly a process of creative destruction, which is crucial under market conditions. Entrepreneurship plays an important role in fostering an enabling market environment, promoting technological innovation, solving employment problems and improving factor allocation. The current lack of vitality in the Chinese economy and the waste of resources due to irrational allocation of factors are related to the lack of entrepreneurship and the business environment for enterprises. Microscopically, if entrepreneurs take the lead in investment and drive the process of technological innovation, this will help to improve economic factor allocations, which in turn will increase efficiency, production, employment and living standards.

 

What Are the Determinants of Entrepreneurs’ Behavior?

Entrepreneurial behavior can be broadly classified into three categories: productive, unproductive and destructive. The choice of entrepreneurial behavior depends on institutional factors, including the market environment, the competitive environment, policy factors and regulations, as well as legal institutions, social and cultural factors, which together determine the behavior and role of the entrepreneur.

 

What Distinguishes the Modern Entrepreneur from the Traditional Entrepreneur?

From a social and environmental perspective, it has become the trend of the day that modern entrepreneurs need to continuously integrate business models to adapt to market competition and improve efficiency, including focusing on green supply chains, ecological investment, green finance, new technologies, new energies and conservation culture, and assuming the necessary social responsibility, especially for the large or highly profitable enterprises. In addition, business ethics has gradually become a key element in assessing an entrepreneur’s behavior.

 

How to Create an Analytical Framework for Modern Entrepreneurs?

In order to create an analytical framework that defines modern entrepreneurs’ behavior, we need to incorporate ESG (Environmental, Social and Governance) concepts. Market principles still underpin entrepreneurs’ behavior and the pursuit of profit maximum remains a core objective. However, this behavior needs to be constrained by other aspects such as technological innovation, environmental standards, social responsibility, etc. In addition, public policies and institutional frameworks play an important role, including maintaining the functioning of the market system and ensuring public welfare.

 

How Can Modern Entrepreneurship Be Assessed?

To assess modern entrepreneurship, we need to adopt a dynamic business perspective that considers market principles, technological innovation, public policy, institutional frameworks and business ethics in an integrated way. The main elements of the analytical framework include the external environment, internal social standards or corporate social responsibility, and ESG, production and financing can also be included in this assessment framework.

 

Some Conclusions

First, the key for companies seeking to reconcile economic growth with multiple objectives such as sustainable development and conservation culture is to change their old business models. Second, the key to creating a new business model lies in the cognitive and behavioral change of the entrepreneur. Third, the key to promoting cognitive and behavioral change is to define modern entrepreneurship more precisely and to examine and constrain the behavior of entrepreneurs from the perspectives of society and environment. Fourth, the new perspective requires us to redefine the boundaries between state, market, social environment and ecology, and to adjust the relationship dynamically in the light of new circumstances.