Entrepreneurs question the status quo, their innovations change the way we operate on a daily basis. We also live in a world that changes continually and in which challenges, social inequities, and global problems, demand new and unconventional solutions. In many ways, entrepreneurs create solutions for these problems. We could also say that faced with adversity entrepreneurs are forced to think differently and produce solutions in a creative way. In this topic, we will explore the entrepreneur as an agent of change. We will also look at disruptive innovation and social startups.
Welcome to Topic 3: Entrepreneurs as Change Agents. In this topic, you will learn about:
- The entrepreneur as a change agent
- Disruptive innovation
- Social startups.
These relate to the Subject Learning Outcomes:
- Discuss the importance of entrepreneurship as a driver of growth and how it varies from "business as usual".
- Explain the fundamental role of entrepreneurs as change agents.
Welcome to your pre-seminar learning tasks for this week. Please ensure you complete these prior to attending your scheduled seminar with your lecturer.
Click on each of the following headings to read more about what is required for each of your pre-seminar learning tasks.
Read Doern, R, Williams, N & Vorley, T 2019 ‘Special issue on entrepreneurship and crises: business as usual? An introduction and review of the literature,’ Entrepreneurship & Regional Development, 31(5-6):400-412. Based on this article, think about the impact that crises have on entrepreneurship. You can record your thoughts in your reflective journal.
You can access the reflective journal by clicking on ‘Journal’ in the navigation bar for this subject.
The following article looks at how entrepreneurship can assist communities rebuild following disaster – in this case it looks at how this happens after the impact of hurricanes. Read Monllor, J & Murphy, PM 2017, ‘Natural disasters, entrepreneurship, and creation after destruction, A conceptual approach’, International Journal of Entrepreneurial Behavior & Research 23(4):618-637.
In your reflective journal answer the following questions:
- How important is the role of the entrepreneur in rebuilding communities after a disaster?
- Why do you think business as usual is not a solution in this same way?
- How has the change caused by a natural disaster encouraged entrepreneurial thinking?
Watch ‘Spotlight on the sharing economy' and think about the impact this has on entrepreneurial opportunities across different industries. Do some additional research to understand the significance of the sharing industry and make notes in your reflective journal. You may want to focus on a specific industry or look for general examples across different fields. Be prepared to discuss this as part of the seminar.
Read through the topic content and action the learning tasks within it.
The entrepreneur as a change agent
Often entrepreneurship is seen as a way of doing things differently, so rather than business as usual, we are looking at unconventional approaches to problems we are faced with every day. In a world where we are faced with global environmental issues such as social injustice, natural disasters, and the impacts we are seeing today from the global COVID-19 pandemic, business as usual is no longer the answer.
Social and environmental problems require new and different solutions - in fact in many ways they are a result of the ‘business as usual’ approach. The latest Intergovernmental Panel on Climate Change (IPCC) report has found that greenhouse gas emissions from human activity are responsible for 1.1° warming since 1850; it also projects that global temperature is expected to reach or exceed 1.5° of warming over the next 20 years (IPCC 2021). This will result in substantial changes to agriculture, it will result in species loss and require a significant reduction in emissions globally. We have already discussed examples where entrepreneurs are able to see solutions where others might see chaos and confusion. Social intrapreneurship responds to challenges that are not being addressed by either the market or the public sector.
An entrepreneur is one who always searches for change, responds to it, and exploits it as an opportunity...Drucker - 2014
With the COVID-19 restrictions, we have seen creative solutions to businesses faced with adversity, in some ways we could say that true entrepreneurs have used this as an opportunity. So, change has forced them to be entrepreneurial.
We have seen chefs collaborate with their competitors to create new and inspired, high-quality chef’s meals for at home.
There are examples of high school students starting an organisation that delivered free meals to frontline emergency workers.
There are new software solutions providing easy access to homeschooling for those countries that have had to shift their primary and secondary education online app extremely short notice.
Alcohol distilleries have scrambled to return all their plants and make critical equipment like hand sanitiser.
Think about examples that you have seen around you in response to the restrictions experienced? How might these new products and services transition to a new normal post the current pandemic?
Learning task 1: agents of change
To further understand how entrepreneurs respond to an ever-changing world, read:
Rogerson, S 2020, Entrepreneurs – the agents of change in today’s world.
Learning task 2: the power of hindsight/forecasting
Sometimes we wish we could look into the future and make decisions based on how we know something will develop, similarly when we can look back at how things have worked out we can use hindsight to inform our decisions. As we think about how entrepreneurs respond to/create change let’s look at this prediction from 2017 based on how Amazon might position itself as the pharmacy of the future and transform healthcare. Now that we are in the midst of a global pandemic and have been living and working with new restrictions and the corresponding new service and delivery models - consider the reading below.
Reflect on this article Marling, R 2017, ‘How Amazon can position itself as the pharmacy of the future,’ The health care blog, and consider some of the ideas put forward and compare that to how some of these have come into play today.
Knowing what the world is like today – and the needs that have been brought up by COVID-19, what recommendations would you put forward to Amazon if you could travel back to 2017 to advise them of innovative new service delivery? Note your responses down in your reflective journal.
Disruptive innovation
We talk of disruption when a smaller company with fewer resources is able to challenge the established market players. These are often big businesses that have captured market share and now focus on high paying customer segments by providing value-adds. This enables the established business to serve the higher end of the market however by doing so, they tend to overlook the lower end of the market. This is when disruptive innovation comes in to offer a solution and capture these customers that the established business has failed to serve adequately - this is referred to as a low-end foothold. On the other hand, when an entirely new market is created by the disruptor, we refer to this as new-market footholds (Christiansen et al. 2015). Disruptive innovation is based around three (3) main characteristics:
- It must have enabling technology; this is defined as substantially improving either processes to create something or the way in which people use something.
- It must be based on an innovative business model; there is a new business model that specifically targets lower-tier customers in an existing or entirely new market.
- A coherent value network must exist; this includes business partners at the start of the product lifecycle that are involved in extraction of raw materials or prefabrication of parts, as well as those at the other end in terms of distribution.
The following video ‘What is disruptive innovation?’ explains this in more detail.
Some examples of disruptive innovation where the outcome has created a more affordable and accessible solution for a broader population are:
The launch of an online bookstore by Amazon in the mid 1990s. Large existing bookselling companies lost market share the Amazon because of the disruption because it was much cheaper to display the books online without having to own physical brick and mortar stores in multiple locations. Amazon continued following this success to expand its disruption based on online technology which enabled it to provide different offerings such as groceries, electronics and so on.
Another example of disruption is Netflix the existing companies such as video sellers and rentals had thousands of physical stores with videotapes and DVDs. It was common to hire movies from a physical store. Originally Netflix disrupted this by offering DVDs that they mailed out. Shortly after this, they moved away to a fully online delivery where there was no delay between choosing what you wanted to watch and accessing it at home.
3D printers are an example of a technology that is disrupting manufacturing. They enable components of anything from houses to bridges to medical supports to be rendered from a digital file. There is research in the medical industry that uses bioprinting to create human tissue replacement. This kind of technology may disrupt the medical industry in terms of organ replacement or reconstructive surgery.
As an open-source platform, Wikipedia disrupted the world of encyclopaedias. Established companies would write and publish encyclopedia sets for substantial amounts of money and create hardcover volumes that were shipped out to customers. With Wikipedia providing a free accessible alternative, Encyclopaedia Brittanica, who had been the major player in this market, published its final encyclopaedia sets in 2012.
In summary, disruptive innovation is targeted at making products accessible, easy to use and available to a broader market. Often established companies may be too set in their ways and focused on tailoring their products to the high-end customer segment and therefore not see the disruption until it is too late.
Learning task 3: Disruptive innovation
To gain further insights, read Christensen, CM, Raynor, M & McDonald, R 2015, ‘What is disruptive innovation?’ Harvard Business Review, 5(5):44-53.
Social startups
Many values-driven entrepreneurs in the past accumulated wealth in the private sector first (so essentially worked as business entrepreneurs) before becoming philanthropic. It was essentially a choice to focus on one (making money) or the other (doing something they believed in and that aligned with their values).
With the emergence of the social entrepreneur, there is no longer the need to distinguish, or separate, wealth accumulation from philanthropic interests. It is as a result of this new business model that tackles social and environmental challenges through unconventional and creative solutions, that we are seeing a whole range of for-purpose or mission-driven ventures.
The purpose of the business in the case of social entrepreneurship is to create a greater social good. Examples of entrepreneurial ventures in this space might include environmentally friendly products or services. We can also see solutions tailored to communities that are ignored or where existing products or services do not meet their needs. Complete each of the following learning tasks.
Learning task 4: Social entrepreneurs to watch
Read Social Change Central 2021, 39 Australian social entrepreneurs to watch in 2021
Pick any two of the examples listed and do some additional research to understand what the venture is and who is behind this startup. You can post your findings in your reflective journal.
Learning task 5: Change debate prep
Class debate: do entrepreneurs respond to change, or do they create change?
Based on this statement, determine what your personal view is and explain why this is the case. Use examples to provide support for your response. Develop at least one counterargument that supports the other viewpoint. Note down your thoughts, arguments and examples in your reflective journal before our seminar.
Learning task 6: Think of yourself as an entrepreneur
Based on what we have covered so far and any entrepreneurial experiences or aspirations you may have, reflect on yourself as an entrepreneur. Share your thoughts in Topic 3: Forum activity 1. You can also navigate to the forum by clicking on 'ENT100 Subject Forum' in the navigation bar for this subject.
Learning task 7: Increase your investment
Based on the task we brainstormed for as part of the previous topic, you will be provided with an investment amount this week. Work on your investment opportunity as a group. Remember that we will continue to work on this across four weeks, so this is week 1 of 4. The aim is to create the biggest increase in your initial investment.
Knowledge check
Complete the following two (2) tasks. Click the arrows to navigate between the tasks.
Key takeouts
Congratulations, we made it to the end of the topic! Some key takeouts from Topic 3:
- The global pandemic has led to intrapreneurial thinking in response to forced changes.
- The significant environmental and social problems we are facing as a society today have led to diverse solutions from social entrepreneurs.
- Disruptive innovation is an example where intrapreneurial ventures challenge established markets offering affordable alternatives to the broader public.
Welcome to your seminar for this topic. Your lecturer will start a video stream during your scheduled class time. You can access your scheduled class by clicking on ‘Live Sessions’ found within your navigation bar and locating the relevant day/class or by clicking on the following link and then clicking 'Join' to enter the class.
Click here to access your seminar.
The following learning tasks will be completed during the seminar with your lecturer. Should you be unable to attend, you will be able to watch the recording, which can be found via the following link or by navigating to the class through ‘Live Sessions’ via your navigation bar.
Click here to access the recording. (Please note: this will be available shortly after the live session has ended.)
In-seminar learning tasks
The in-seminar learning tasks identified below will be completed during the scheduled seminar. Your lecturer will guide you through these tasks. Click on each of the following headings to read more about the requirements for each of your in-seminar learning tasks.
- Based on the video you watched on the sharing economy, how important do you think shifts like this might be for entrepreneurial thinking?
- What other shifts do you think have -or- might impact entrepreneurial thinking in any specific industries? Provide examples wherever possible.
Class debate: do entrepreneurs respond to change, or do they create change?
Based on this statement, determine what your personal view is and explain why this is the case. Use examples to provide support for your response. Develop at least one counterargument that supports the other viewpoint.
Welcome to your post-seminar learning task for this week. Please ensure you complete this after attending your scheduled seminar with your lecturer. Your lecturer will advise you if this is to be completed during your consultation session. Click on each of the following heading to read more about the requirements for your post-seminar learning task.
Reflect on your learnings from this topic and contact your lecturer if you have any questions.
Each week you will have a consultation session, which will be facilitated by your lecturer. You can join in and work with your peers on activities relating to this subject. These session times and activities will be communicated to you by your lecturer each week. Your lecturer will start a video stream during your scheduled class time. You can access your scheduled class by clicking on ‘Live Sessions’ found within your navigation bar and locating the relevant day/class or by clicking on the following link and then clicking 'Join' to enter the class.
Click here to access your consultation session.
Should you be unable to attend, you will be able to watch the recording, which can be found via the following link or by navigating to the class through ‘Live Sessions’ via your navigation bar.
Click here to access the recording. (Please note: this will be available shortly after the live session has ended.)
The following additional resources can be used to extend your understanding of this topic:
- Schwab Foundation on social entrepreneurship
- The Young social entrepreneur’s book of guidelines and checklists
References
- Christensen, CM, Raynor, M & McDonald, R 2015, ‘What is disruptive innovation?’, Harvard Business Review, 5(5):44-53.
- Doern, R, Williams, N & Vorley, T 2019, ‘Special issue on entrepreneurship and crises: business as usual? An introduction and review of the literature’, Entrepreneurship & Regional Development, 31(5-6):400-412.
- Drucker, PF 2014, Innovation and entrepreneurship, Routledge.
- Frederick, H, O’Connor, A & Kuratko, DF 2018, Entrepreneurship, 5th edn., Cengage.
- Lenox, M 2017, ‘What is disruptive innovation?’, https://youtu.be/jstCc3A4OWY
- Laverty, M & Littel, C 2019, Entrepreneurship, Openstax, https://openstax.org/books/entrepreneurship/pages/5-introduction
- Marling, R 2017, ‘How Amazon can position itself as the pharmacy of the future’, The health care blog, https://thehealthcareblog.com/blog/2017/06/07/how-amazon-can-position-itself-as-the-pharmacy-of-the-future/
- PWC 2015, Spotlight on the sharing economy, https://www.youtube.com/watch?v=q8shRsyeGr0
- Rogerson, S 2020, Entrepreneurs – the agents of change in today’s world, New scientist, https://www.newscientist.com/article/2244609-entrepreneurs-the-agents-of-change-in-todays-world/#ixzz7ATDyhH6f
- Storr, VH, Haeffele-Balch, S & Grube, LE 2018, ‘Entrepreneurs drive community revival in the wake of disaster’, The Review of Austrian Economics, 31(4):479-484.
- Social Change Central 2021, 39 Australian social entrepreneurs to watch in 2021, https://www.socialchangecentral.com/39-australian-social-entrepreneurs-to-watch-in-2021/
- Swanson, LA 2017, Entrepreneurship and innovation toolkit, Openpress, https://open.umn.edu/opentextbooks/textbooks/entrepreneurship-and-innovation-toolkit
