Someone said that if you want to learn a subject, teach it. For seven years I have been learning about entrepreneurship through university teaching. The more I learn about entrepreneurship, the more I realize that classical economic theories provide tremendous insight into better entrepreneurship. A few examples to demonstrate my point might include:
- Individual empowerment is the foundation of entrepreneurship--Friedrich Hayek
- The asymetry of information leads to the entrepreneur's insight for a new business concept--Israel Kirzner
- Disruptive innovation is perhaps the modern interpretation of "creative destruction"--Joseph Schumpeter
Economics also provides several methods to identify a new business concept:
- Look for what is abundant and then look for that related item that is scare--economics of abundance
- Look for ways to eliminate transaction costs--theory of the firm (Ronald Coase)
- Economic value is related to the flow of information--information economics (Michael Spence)
Many more examples could be cited to demonstrate the two themes above (which is why we have comments on blogs).
I have finished my second book on social entrepreneurship and I am now thinking about a new book on techniques and processes to identify new business concepts to build large companies. Maybe I will call it "20 Techniques to Identify New Business Concepts". I have eight techniques already identified, but if I read more Nobel Prize winning economists (Hayek, Coase, Spence) I am sure I'll get to twenty.
As an alternative to a new book, I could always teach a new course (for me) on the economic fundamentals of entrepreneurship. Regrettably, that course would probably attract about one undergraduate student.
Read more economic theory, especially the Nobel Prize winners. It will help your entrepreneurship.