Without entirely meaning to, it seems the concept of entrepreneurship has soundly eclipsed big corporations, with many employees breaking off from their 9-5s, and starting their businesses.
According to Joseph Schumpeter, a renowned economist, a thriving economy is largely dependent on the dynamic disequilibrium instigated by entrepreneurs. Reportedly, disparities in growth rates among nations stem largely from variations in entrepreneurial quality. Such is the impact of the Entrepreneur. In the modern era, entrepreneurs often find themselves idealized as the bedrock of a thriving capitalist society. But how did this dynamic come to be?
Despite the prestige attached to it, Entrepreneurship isn't all fun and games and ancient entrepreneurs can certainly attest to that. It's a concept that has been reinventing the status quo since ancient history.
Photo by William Fortunato
Ancient Traders (17,000BCE)
About 20,000 years ago when bartering reigned supreme, the endeavor of trading can be traced to around 17,000 BCE in New Guinea. Here, the more enterprising locals engaged in tangible exchanges, swapping prized obsidian for essentials such as tools, skins, and food. This primitive form of entrepreneurship endured for ages, with hunter-gatherer tribes bartering goods, and going far and wide to provide for their communities.
Agricultural Revolution (10,000BCE to 2000BCE)
When humans became more domesticated, this came with a huge shift for mankind. No longer having to scourge for food, we learned to cultivate the land and keep domestic animals within reach for easy access to food. This means our primary method of obtaining food was no longer primarily nomadic. We could stay in one place and live out our lives.
As settlements grew, so did populations and communities. Communities typically specialized in professions like hunting, fishing, and tool-making and this fostered trade for essential goods.
Ancient entrepreneurs saw growing needs and found ways to meet them.
Social institutions, such as marketplaces, emerged alongside professions like pottery, carpentry, and masonry. With rising standards of living, innovation thrived, driven by entrepreneurial solutions to new challenges. Cities expanded globally and so entrepreneurs recognized the potential of inter-city and cross-cultural trade, which brought about a new era of commerce.
Maritime trade was the order of the day and the ancient world had historical ports such as Port of Guangzhou (ancient China), Canopus (ancient Egypt), Port of Chittagong (ancient India), Zanzibar, and Mogadishu (ancient East Africa), and Trans-Saharan
and the River Niger Trade Routes (ancient West Africa). Notably, trade routes weren't merely channels for physical goods but also the dissemination of ideas and technologies, spearheaded by entrepreneurs.
The Rise of Empires (2000BCE to 17th Century CE)
In these times, weapons trading was extremely crucial. With the discovery of iron circa 2000 BCE, civilizations rich in this resource became quite dominant, which gave rise to the world's inaugural empires: the Macedonian, Mongol, Roman, and Persian Empires. Eventually, more empires such as the Songhai, Ghana, and Mali Empires would pop up.
During this period, the possession of advanced weaponry was directly correlated with the strength of an empire. The fact is, entrepreneurs facilitating military trade were handsomely rewarded, with some of history's most prosperous traders dealing in the tools of warfare across continents. It was a lucrative business and has remained so today.
But a pivotal moment in both entrepreneurial and human history was the advent of money, changing the game of commerce. Before this, all trade relied on the barter system, so this novel framework shook the foundations of economic exchange.
The Dawn of Currency
With societal complexities, inventors recognized the problems that came with existing systems, and this gave rise to the quest for a more stable unit of measure or value.
The Barter system, pioneered by early entrepreneurs, faced some inadequacies. The absence of actual standard measurements was an issue, as well as the necessity for a double coincidence of wants. This means that each party had to want what the other was willing to trade and vice versa. You can imagine the difficulty in matching needs so accurately. Then there was the inability to balance trade exchange with high-value goods.
That said, currency certainly upgraded trade dynamics. Early forms, like silver rings and bars in ancient Iraq from 2000 BCE, termed specie, varied globally—some cultures utilized seashells, tobacco leaves, beads, or large rocks. Progressively, metal coinage and paper money emerged in the 7th and 10th centuries CE respectively.
Currency then empowered entrepreneurs by facilitating long-distance trade, serving as a better medium of exchange, and offering a means to store value in bulk.
The Industrial Revolution (18th Century CE)
Around the 18th century, the world experienced a shift- the transition from manual labor and agrarian economies to mechanized production, urbanization, and technological advancements. Key drivers were advancements in energy production, enabling large-scale factories, and the influx of cheap labor into urban centers.
This meant twice the manufacturing and production capacity so of course, enterprising people made the most of this. This period propelled entrepreneurship from small towns to big cities leading to more expansion and therefore, a higher impact of entrepreneurship on society. Capitalism was on the rise, and this birthed iconic entrepreneurs like Carnegie, Morgan, Rockefeller, and Ford, in America.
Later on, in the 19th Century, globalization brought about a worldwide effect. Places like Africa weren’t left behind. During this era, there was a notable surge in mining operations as valuable resources like gold, diamonds, and copper were extensively extracted, leading to their significant economic importance. The rapid expansion of trade networks and export markets played a crucial role in driving industrialization forward, although it also magnified disparities and instances of exploitation.
In the 20th century, Joseph Schumpeter's insights distinguished between entrepreneurs and capitalists. He introduced "Unternehmergeist," or "entrepreneur-spirit," highlighting its pivotal role in driving innovation and economic transformation. The defining distinction is interesting because while there’s an overlap, entrepreneurs stand out based on being driven by innovation and creativity as opposed to just capital gain.
Post-World War II (1940s to 1990s)
The framework of entrepreneurship shifted once again due to globalization. Improved shipping and communication drastically expanded markets globally. In the U.S. for example, car ownership drove highway construction, spurring demand for roadside amenities like restaurants.
Entrepreneurs like Ray Kroc thrived with standardized models, echoed by companies like General Electric, Lockheed, IBM, and Holiday Inns. Similar growth occurred worldwide, with Japan, Nigeria, and Germany leveraging population and labor advantages for economic expansion.
Today, entrepreneurs drive economies worldwide, even in command economies like China, where innovation is encouraged for global competition. With modern infrastructure and communication, entrepreneurship faces global competition, not just local. Access to cheaper production means and resources challenges entrepreneurs, but also offers exceptional opportunities for reward.
Advanced Technology and the Advent of AI (21st Century CE)
The advancement of technology and the advent of AI has brought about a new playing field for enterprising individuals. Technology advancements are already replacing tasks associated with idea production, selling, and scaling and these changes are bringing about new ways of working.
Artificial intelligence is also weaving itself into the very fabric of entrepreneurial thinking, bringing with it fresh perspectives and far more innovative approaches. We're seeing previously challenging situations easily solved through prompts with tools like Chat GPT.
These technologies are nudging us towards more tech-centric business practices and experts are considering the implications for the organizational design of entrepreneurial ventures. There's also more access to funds, enhanced levels of consumer trust, more tools available and therefore more opportunities for those looking to build a business today.
While AI has undoubtedly skyrocketed productivity, its implementation often comes at the cost of human labor, displacing many workers from their jobs.
So, the trajectory of technological progress raises the significant question: Will advancing technology bring about more seasoned entrepreneurs, or will it fundamentally reshape the job market, potentially rendering a vast population out of work?
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