The Myth of Objectivity and Positivism in Entrepreneurship Research

Entrepreneurship scholars, by in large, research the entrepreneurship process and its outcomes primarily through measurement of some indicators, thus relying on assumptions of (big O) Objectivity and Positivism. Recently, and with considerable hype, these social science academics have developed the Global Entrepreneurship Monitor (GEM) with the aims to survey potential entrepreneurs on their potential to start new businesses, the actual start-up of new businesses, and linking these to economic growth indicators across many nations. In this first blog post, I aim to convince the reader that, as opposed to Objectivity and Positivism underlying entrepreneurship scholarship, the understanding of entrepreneurship and its role in revolutionizing culture demands a cultural approach.

Objectivity is, few would argue against, foundational for modern scientific thought. Whether it be discovering and measuring the inner workings of atoms, bacterial eco-systems, animal behavior or even solar systems, what is important is the ability of the scientist, or scientific team, to accurately and precisely measure the object under question without their own bias and motivations playing a key role. Any theory of causality – where something influences another thing – is said to be only knowable by science if we can build models to explain a phenomenon repeatedly. Indeed, a belief in objectivity reigns supreme in not only the natural sciences but also most social and political sciences.

Comte argued that, much as the physical world operates according to gravity and other absolute laws, so also does society. Many sociologists, economists and political scientists attempt to explain and predict socio-economic conditions or political elections based on a series of ‘objective measurements’. Their Positivist goal is to find universal ‘laws’, like the natural sciences, that connects actions or policies to some significant outcome. Theodore Porter in his book Trust in Numbers points to the dominance of Objectivity and Positivism in social science when he writes: “Objectivity arouses the passions as few other words can. Its presence is evidently required for basic justice, honest government, and true knowledge.” Today, objectivity and positivism are also the scientific mode of choice when researching something even as fuzzy as entrepreneurship.

Leading scholarship in entrepreneurship promotes the idea that opportunities for entrepreneurship are ‘out there’ just waiting to be seen and captured by visionary people. And, to a large extent this is true. There does seem to be many inefficiencies in markets where basic needs and wants of people are not being met, even though they would be willing to pay a price if someone would come along and offer it. Yet, this basic argument for objectivity and positivism misses a number of critical insights into the nature of entrepreneurship (ontology) and whether entrepreneurship is objectively measurable.

Entrepreneurship is action. It is a series of decisions and practices set up to champion some opportunity. The decisions and practices setup during activities, whether its to find a buyer or build a new organization, are what it means to act entrepreneurially. Yet, these actions are contingent upon context; the physical material necessary to make products, the people needed to provide a service, what types of products and services, who has the resources, etc. These actions are linked to the particular ‘need’ or ‘want’ of a community. What is more, what people in society crave or need varies widely across cultures.

In East Asia, for example, people place considerable value on rare African rhinoceros horns that are seen as a remedy for a variety of health issues. The value is so high that illegal entrepreneurs work to poach these animals, obtain their horns, and sell them on the black market. This cuts to core of how these two distance cultures, East Asian and African, view these animals and their inherent value to others. In another example, in the US states of Colorado and Washington marijuana has been recently granted legitimate status, prompting entrepreneurs to rush to offer it to a pot-smoking sub-culture. Meanwhile, in Amsterdam, marijuana has a decriminialized status – a gray area between legal and illegal – where entrepreneurs start up ‘coffeeshops’ to meet an international pot-smoking sub-culture. How these two cultures view marijuana isn’t static, but dynamic leading to vastly different ways of acting entrepreneurial. As a result, comparing entrepreneurship across cultures and nations as in the GEM database seems paradoxical and problematic.

Defining entrepreneurship as the nexus of individuals and culturally produced opportunities means that comparing entrepreneurship processes across opportunities compares apples to oranges. The first pillar of discovering precise and accurate measurements for Objective and Positivist science has its cracks.

Just as significant, what a community ‘needs’ and ‘wants’ often is historically bound. The rise of the internet has created a new platform for entrepreneurs to sell products and services on a global marketplace. This did not go unnoticed as entrepreneurs, supported by Silicon Valley culture, flooded the marketplace with new organizing practices, products and services in the early 2000s. After the dotcom bust, many of these opportunities were shown to have significantly less value than previously thought. Elsewhere, such as in Africa and Latin America, the internet is only now gaining access and influence, which has translated into a number of new concepts and businesses harking back to the Silicon Valley dotcom days. Yet, if we compare ICT entrepreneurship in 2001 in California to ICT entrepreneurship in Nairobi in 2013, we can see different uses, different products, different opportunities and challenges. This complicates objective entrepreneurship research as history, place, and culture play a significant role in constraining and enabling entrepreneurship. Thus we may not be able to compare entrepreneurship across time and place as easily as the GEM database would lead us to believe.

Additionally, identifying what others ‘need’ and ‘want’ involves a complex mix of emotions, knowledge and empathy, which points to the subjective aspects of entrepreneurship as well as the researcher herself. First, the evaluation of one’s own surroundings and situation, cultural and economic, vis-a-vis a another in a potential market is an internal act. Perception of circumstance, life history and orientation, play a key role in identifying and acting to meet some ‘need’ or ‘want’. What is ‘in here’ cannot be capture accurately and precisely across individuals in the aggregate since identities change and so does circumstance. Second, when entrepreneurship researchers ignore the sentiments and identities of entrepreneurs, they insert their own interests and beliefs into the research findings.

Objectivity in entrepreneurship research is a myth – it is used to invoke authority on the topic and to professionalize the area in relation to other disciplines.

Connecting what is ‘out there’ to what is ‘in here’ demands a cultural approach to entrepreneurship.

A cultural approach to entrepreneurship warrants some perspective of the thorny concept of culture. I have recently used the Institutional Logics Perspective (ILP) developed by Pat Thornton, Willy Ocasio, and Mike Lounsbury in an attempt to bring a structuralist and systematic approach to entrepreneurship and culture. While many scholars argue for a more contexutalized approach to entrepreneurship, few have been able to identify an approach that challenges economic and psychology orthodoxy.

Born out of Anthony Giddens’s Structuration Theory, the ILP approach provides a way to conceptualize culture, identify key institutions (rules, norms, beliefs), define them, and build expectations of how individuals and organizations will use and react to them. What is interesting is the way individuals can subvert salient institutions, build collectives, and  bring about cultural change. We see this, for example, with entrepreneurs challenging fossil fuel extraction orthodoxy by supplying customers with renewable forms of energy.

Using this approach to culture, one can being to understand how entrepreneurs make sense of their cultural surroundings, identify opportunities, organize to champion opportunities in a particular time and space.

It is my hope that the field will take a ‘cultural turn’ much like other social science disciplines. If it loses its trust in numbers at the aggregate and focuses on entrepreneurship in context, the future looks bright for the field.

Related articles