Entrepreneurship Across Cultures

Entrepreneurship Across Borders and Cultures
by Prof. Dr. Liora Katzenstein, Founder and President, ISEMI, Israel & Sam Burshtein

Updated: 16.8.14 

This paper seeks to examine to what extent cultural and educational issues impact the practice of entrepreneurship. Are entrepreneurs in different cultures different or do they share certain key traits? Is entrepreneurship an inborn trait or a skill that can be taught?

We argue that entrepreneurship is a form of creative expression, and as such – while building on the entrepreneurs innate character traits – is influenced it its application by different cultural bases amongst different populations issues and by educational background.

Some two hundred years ago, French economist J.B. Say described the entrepreneur as one who

“…shifts economic resources out of an area of lower into an area of higher productivity and greater yield.”

More recently, Laurie Cox, the Chairman of the Australian Stock Exchange argued:

“Entrepreneurship is a combination of skills, talents, and timing. It is not a static thing that can be measured but rather a dynamic and continuing process. Entrepreneurship is quintessentially a process of innovation and initiation. The quality of entrepreneurship embodies, among other things, alertness to new opportunities, the assembly and management of scarce resources, the adding of real value to new products, calculated risk taking (as opposed to gambling) and personal responsibility and involvement.”

If one agrees with these definitions, accepting the view of an entrepreneur as a “change agent”, who takes the lead in realigning economic and social relationships in a society, then one is forced to conclude that what differentiates entrepreneurs of different cultures is the nature of the resources they move, and the context in which “value” is measured and defined.

Thus, we can talk about entrepreneurship education as conveying a set of skills and perspectives that can, and in fact should, be transferred amongst cultures. Much of entrepreneurship throughout history has in fact been the adaptation of a “foreign” cultural concept to a “domestic” environment.

As a personal example, our parent institution, ISEMI, the Israel School of Entrepreneurial Management and Innovation, was formed by a group of entrepreneurship academics seeking to create a new educational paradigm to teach entrepreneurship in Israel and the region. As experienced academics the principals embarked on a process of designing a program based on what they learned in decades of experience of teaching entrepreneurship. Yet in the course of research they found – in Australia of all places – a program that exactly paralleled the principles they were trying to implement.

The program creators in Australia were also entrepreneurs, whose perspective aligned so closely with those of their compatriots half way around the world, and after a brief period of negotiations the two groups embarked on a partnership, and SUT’s program the basis of ISEMI’s academic offering.

The key elements that both parties felt an “entrepreneurship” program should encompass included a “hands-on”, practical orientation – “theory for practice’s sake” as the Australians refer to it, an emphasis on teamwork, a focus on identifying and evaluating opportunities and on launching new business venture and managing their growth, and the importance of an “integrated” structure”, built around projects to which that students could apply their skills. ISEMI and Swinburne had both, almost independently, based their program on the same principles.

The Israeli team couldn’t however transplant the MEI program wholesale. In many areas Israel is very different from Australia, and it was necessary to “localize” the program. But this “localization” addressed not the program’s philosophical and “instructional” elements, but rather the cultural overlay … what local financiers look for prior to extending funding, the local legal environment and the resulting constraints on behavior entry barriers, availability of key resources (such as technically skilled employees), and the cultural definition of “success”.

It important to note that the expression of entrepreneurship depends on two interrelated issues – innate propensity to entrepreneurial and the skills required act on that propensity.

Our experience is that propensity for entrepreneurship is inborn … though not overly rare. Many of those with the propensity are prevented from acting upon it by a lack of essential skills. This is why entrepreneurship education has a high social return.

Societies that encourage entrepreneurship … such as the Jews, Americans, Dutch, have consistently shown themselves better able to adapt to changes and exploit opportunities presented by social and technological change.

Because the expression of entrepreneurship depends on a set of skills, we see great importance to encouraging entrepreneurship education at all levels. One interesting initiative in this area is a project launched by the Branco-Wise Institute in conjunction with Israel’s Ministry of Education to introduce an entrepreneurship curriculum into the school system – even at the primary school level.

We believe strongly that entrepreneurship should be nurtured and encouraged at all levels and that public policy should work to lower the cultural barriers to its expression – be they excessive adherence to tradition, or fear of the disruptive effects of change.