ENTREPRENEURIAL LEARNING: A CASE STUDY OF THE CREATIVE INDUSTRY
Entrepreneurial learning has emerged as a significant area of scholarly interest in the last two decades. An important question that still lingers is how entrepreneurs learn. This study seeks to offer a more explicit explanation of entrepreneurial learning. To meet the objectives of this research, a qualitative case-study was used to explore the experiences of creative entrepreneurs. In the context of this research, entrepreneurial learning is defined as a dynamic process that results from a continuous interaction of the entrepreneur’s personal and social experiences. The paper finds that entrepreneurial learning is a function of personal experiences integrated with sharing and collaboration.
The past two decades have witnessed a significant growth of entrepreneurship and its immense contribution to the world economy. The private sector, composed of entrepreneurial activities, accounts for more than 65 percent of the total employment in the US. It also contributes more than $100 billion annually to the gross domestic product. Thus, entrepreneurship has attracted much attention of both the scholarly community and policy makers. A wide range of theoretical and empirical researchers have employed a variety of methodologies to offer insights into the concept of entrepreneurial learning.
In the context of this research, the paper defines entrepreneurship as a process of creating and managing a venture through identifying and creating opportunities. The concept of entrepreneurial learning is explored using the case study of entrepreneurs in the creative industry. The conceptual framework is developed from the main themes in the learning experiences of creative entrepreneurs. The paper explores whether entrepreneurial learning is personal, experiential, or social.
Overview of Entrepreneurial Learning
Entrepreneurial learning is one of the areas of immense scholarly interest according to the recent academic inquiries. Though scholars in the past made a significant impact in the research of entrepreneurial learning, it still remains a field that is not studied enough. According to Harrison and Leitch (2008), learning is an important part of the entrepreneurship, where social aspect plays a significant role.
Entrepreneurship is a continuous process, where an entrepreneur is central to the whole process of entrepreneurship, as his activity enables the existence of an organization. According to Leach and Melicher (2009), entrepreneurial activities undergo a series of changes from time to time to match the requirements of the business. Therefore, the entrepreneurial process is highly dynamic, and the entrepreneurs have to change their behavior to deal with the entrepreneurial environment.
For a venture to progress, the entrepreneur should assume the role of a manager, innovator, and business owner. Each of these roles requires the possession of a unique set of skills, the application of which is a continuous learning exercise (Smith, Lynch & Knight 2007). The metamorphosis which takes place between the time entrepreneurs recognize an opportunity to the time they create an organization involves a series of learning cycles which enrich their experience.
According to Hiebert and Klatt (2001), entrepreneurial learning is the process of knowledge acquisition as well as enactment of new behaviors in recognizing and taking up opportunities that concern managing ventures. A greater composition of learning within the entrepreneurial context is experimental.
The Theories of Entrepreneurial Learning
Scholars have provided various theories to explain entrepreneurial learning. One of them is the so-called ‘situated action’ based on the theory of Jean Piaget. As Van Popta (2002) explains, the core argument of Piaget is that “individuals constantly try to form equilibrium between themselves and the environment” (Piaget cited in Van Popta 2002). Thus, a disturbance of this equilibrium will force an individual to seek ways of adapting to the environment. The law of development states that development establishes a more stable equilibrium (Van Popta 2002). In this way, the theory of experiential learning assigns a great significance to the role of the environment in the learning process of an individual.
The theory of Piaget was further developed by David Kolb (1984). Kolb states that when individuals actively participate in a certain context, they gain experience, which is the basis of the cognitive structure. Kolb argues that learning is a continuous process that is based primarily on experience (Rae 2005). Thus, the ability to learn distinguishes a successful entrepreneur from an unsuccessful one. The ability to adapt to the dynamic demands of a job, learn from past experiences and explore new opportunities adds to knowledge and skills to make an entrepreneur successful (Van Popta 2002). Experiential learning makes an individual pursue two goals. The first goal is to learn the aspects of a specific subject, and the second is to learn one’s own strengths and weaknesses. This would enable an individual to combine learning and develop new intellectual insights. When individuals test intellectual insights in their daily business situations, they gain experience. These activities constitute learning, which is an imperative part of work (Van Popta 2002).
Another aspect of entrepreneurial learning is social learning, which is based on collaborative learning. The society provides individuals with a system of values, obligations and signs that modify their thoughts. Social life affects intelligence through imposing rules on thought and intellectual values. Taras and Gonzalez-Perez (2014) argue that social environment provides interactions and acquisitions for developing individuals. The social environment also continuously changes the mental structure of an individual. Therefore, an environment with more knowledge can facilitate the development of new skills and greater learning.
The Creative Industry
Policy makers and academic researchers have exhibited a growing interest in creative industries over the last decade. The increased interest in the sector results from the idea that creative industries constitute a vibrant sector which provides opportunities for new business ventures, job creation, and attractive returns (Alon 2010). As a fast growing sector, the creative industry is viewed as an agent for robust economic development. These expectations have shifted priorities to the industry, including attracting political support, featuring on the educational agenda, and promotion as a driver for economic change. Universities and other institutions of higher learning are offering programs in entrepreneurship to promote enterprise development and increase entrepreneurial activities in the industry.
The emergence of creative industries has been a result of the need to link sectors that are subject to the intellectual property rights. It also sprung up as a means of capturing technological and cultural convergence expressed in new media. The media industry has a high economic and social significance in the United States. According to the economic survey of 2013, the media industry generated revenue of $ 105 billion and provided employment to about 1.5 million people (Taras & Gonzalez-Perez, 2014). The US creative industry is known globally for its innovation and creativity, excellence, music, filming, and videos. The businesses that make up the industry include advertising, architecture, fashion and design, music, television and radio, performing arts, publishing, and crafts (Taras & Gonzalez-Perez 2014).
Entrepreneurial Learning in the Creative Industry
Many research studies have been conducted in this field to offer an insight into the existing state of entrepreneurial learning. The researches undertaken identify entrepreneurs in the creative industry as self-directed individuals who systematically learn from challenges and problem solving. They also base their learning on the contemporary information need. This study explores the role of environment and opportunity recognition as influential factors in entrepreneurial learning. Kacou (2011) investigated the determinants of entrepreneurial learning in the creative industry by considering the macro, meso and micro variables. He found that micro and macro environments had a strong influence on entrepreneurs in the creative industry, especially on opportunity recognition. The meso environment has an indirect influence on entrepreneurial learning in the creative industry.
Thus, this paper seeks to create a deeper understanding of entrepreneurial learning in the creative industry.
The entrepreneurs in the creative industry include people who run various ventures, from self-employed artists to established global business organizations. The largest share of employment in this sector is micro-businesses and self-employed people (Jones, Macpherson & Jayawarna, 2013). The entrepreneurs are designers and producers. The market for the industry is influenced by factors such as high competition, changing market trends, cultural influences, and consumer demand, which change within short periods of time (Kyrö & Carrier 2005).
Unlike other large-scale industries such as manufacturing, the creative industry largely relies on micro-business. The creative industry often works on projects. Mostly, the projects are quite large, but the entrepreneurs mostly work informally. The industry is largely consumer-led, and entrepreneurs tend to offer goods and services according to the consumer demand. The entrepreneurs customize their goods to meet the specific needs of customers, unlike the manufacturing industry, where entrepreneurs produce a range of goods from which consumers make their choices (Kyrö & Carrier 2005).
The creative industry is dispersed in various sectors. Hence, creative entrepreneurs are exposed to a highly diverse and dynamic environment. The environment presents many opportunities for the creation and growth of new ventures. However, these conditions create significant volatility and risk, which the entrepreneurs cannot overlook. The effectiveness and speed of learning in such an environment are imperative for the success of a venture. This makes learning in the creative industry unique as compared to other industries.
The entrepreneurs in the creative industry are rarely known for taking formal business training before starting a venture, or even in the course of managing it. They are rather known to learn from networking and collaboration (Greenberg, McKone-Sweet & Wilson 2011). Their networks sprout more from connections rather than formal institutions. They base business learning on the cultural, economic and social contexts of the environment in which they operate. The entrepreneurs derive and develop the business knowledge they use from the interaction of people within a particular area of practice. In this context, business knowledge is a product of activity. Entrepreneurial learning in the creative industry is most powerful when entrepreneurs do and reflect on doing business in their sectors.
This research takes an interpretive approach to developing the understanding of entrepreneurial learning and takes the case of the creative industry. The interpretive approach is grounded on the assumption that the social world is perceived as complex and explains the events on the basis of people’s perception and understanding of their experiences.
The research adopted the qualitative rather than the quantitative method. The qualitative method is based on the context of discovery rather than justification. The qualitative approach is more inductive and less deductive.
This research obtains empirical data from in-depth case studies of entrepreneurs from California. The case study approach was preferred for this study because it is the most appropriate for the exploration of phenomena under discussion. According to Katz and Welbourne (2002), a case study is a good method of exploring new behaviors or processes that are not studied enough. Considering the purpose of this research, a case study has a particular relevance from the perspective of entrepreneurial learning in the creative industry.
The selection of respondents relied on the multiple sampling techniques. The sampling techniques applied in this study were purposive, criterion, and snowball. Purposive sampling helped in identifying entrepreneurs that participated in the study based on the criteria relevant to this study. For criterion sampling, the profile of participants of the research was guided by the following set of three attributes. First, the participant has, independently or in collaboration with partners, started a venture which is still running. Second, the participant should be the main decision maker of the business. Third, the participant should have been running the venture for at least the last four years.
The data was collected using in-depth open-ended interviews. The interview was conducted by asking the respondents to share the story of their career, which was important in providing an in-depth view of their unique experiences. A topic guide was developed and used to ensure coverage of all relevant questions. The contents of the responses included the events prior to and after setting up a business, the aspects that attracted them to choose entrepreneurship, how they converted ideas into a venture, the resources of learning they employed, the steps they took to fill the gaps in their learning and the critical situations encountered in their entrepreneurial life. The interviews were face-to-face.
For analysis, the study employed grounded theory techniques and cross-case comparisons to identify dominant patterns. The preference for grounded theory techniques was based on their systematic way of analyzing data of inductive nature. Cross-case comparison also provided a better approach to identify dominant patterns.
Analysis and Discussion
A conceptual framework for this research was developed by employing the grounded theory and the cross-case comparison. The analysis of the data collected gave rise to three themes that can help in understanding the entrepreneurial learning in the creative industry. The themes include entrepreneur’s biography, venture emergence, and social experimental learning.
The entrepreneur’s biography was one of the conspicuous concepts that emerged from the data collected. The entrepreneurs held unique biography characteristics regarding early life, educational experiences, and phases of employment. The entrepreneurs highlighted the impact of situations, people, and relationships and accorded them specific meanings based on their personal interpretation. The three concepts played important roles in building the current status of the entrepreneurs. The educational experiences prepared the individuals for employment opportunities which enabled acquisition of necessary skills that they used in creating ventures. A good example, in this case, is Jane, who runs her business as a card designer and a creative consultant for years of employment as a creative consultant.
Each of the respondents presented information that some formal educational experience laid a ground for the take off of their careers. The formal educational experiences sprang from the time before their first employment to the time during their employment. Educational experiences were seen all along the career life of most of the respondents. The experiences helped the respondents to make important career choices which concern their personal preferences for available career options.
“After clearing my A-level, I did not have an idea about the job I wanted to do. I decided to proceed to university and take a higher qualification. So I joined the University of Chicago and registered for a humanities degree. I spent three years studying English and psychology. After finalizing my undergraduate, I still had not decided what I wanted to do. Though the opportunities in teaching were plenty, I did not want to be a teacher”, Catherine.
Multiple employment experiences also contribute significantly to entrepreneurial learning. An example, in this case, is Catherine, who started her career as a librarian at a local library. She later got an on job training opportunity. However, Catherine’s sponsors did not have an open vacancy for a librarian by the time she completed the training. She exploited other opportunities apart from being a librarian and worked in various places. Employment experiences create an opportunity for job training and also equip an individual with skills such as handling multiple responsibilities as well as interpersonal skills. These skills later greatly help an entrepreneur in managing the venture.
Skills and Knowledge Gained From Previous Career Experience
The multiple learning experiences that Catherine gained contributed to her learning in the management of a venture. She also gained various skills through the experiences.
“I attended a local college and later went to St. Mary’s College where I worked as the head of learning resources for about a decade. At St. Mary’s, I conducted all library and information services. Since I was working in an institution of higher learning, I was given the responsibility of guiding students to locate, use and interpret information and how to use it to work their assignments. I gained research and information searching skills. The work was enjoyable”, Catherine.
This information shows that Catherine’s entrepreneurial learning resulted from formal education and employment experiences.
Experiential and Social Learning
Two aspects are imperative in entrepreneurial learning. The first one is the entrepreneur’s personal experiences gained through working in different situations. The second aspect is the social experiences gained through interacting with people and maintaining relationships. Entrepreneurs continually observe and respond to their environment. They are obliged to manage relationships with business people, customers, family, and friends. Dennis, the founder of cross-cultural training consultancy, offers a better illustration of the theme.
Critical Events During Entrepreneurial Life
Dennis initially worked in his family business. He later left the business to pursue his interests. He married, and his wife also joined the business. The business started to perform poorly, and he decided to shift to another business. His family vehemently resisted his decision. As he thought about changing business, he identified knowledge gaps in the previous business and settled for a consultancy business.
“In early 2000, the business fortunes began worsening, and I thought I needed to change the way I do business. I knew for certain that I mastered all jobs in the business but did not fare well in running the business. Consequently, I decided to learn”, Dennis.
Learning from Personal Experiences
Learning occurred by the personal experiences of the entrepreneurs from the various situations they encountered. The experiences applied in their entrepreneurial life through reflection, drawing conclusions, and application of the lessons learned in the venture.
“I got an opportunity to work for a business consultancy in London one week a month. I could work in our family business for two weeks and spend the rest of the time in the UK working for a wide range of businesses who wanted to internalize. My period of work at the UK offered me an opportunity to learn cultural differences and do business in a culturally diverse region”, Dennis.
The entrepreneurs in the creative industry are, to a large extent, social learners. They learn from both personal experiences and from the experiences of other people. They share their goals, feelings, experiences, and visions with the people around them. They gain essential knowledge from the knowledgeable and trusted people within their circles.
“There was a time I wanted to change business, but everybody opposed the idea. All the individuals in the business were older and felt that changing the business was a wrong idea since they had been in the business for quite a long time. I visited a consultant in the business I wanted to venture and explained my vision and how I would run the venture. The consultant encouraged me to press on with the idea I had conceived. Though he did not promise to offer financial assistance, he offered to allow me access to the people in his business that could help me to learn. He also offered me access to experts in his business who could examine my plans and offer necessary advice”, Dennis.
Once the entrepreneur creates a venture, it does not operate in isolation. Firms in the creative industry operate in a complex and dynamic environment. The entrepreneurs engage in various activities in the course of their entrepreneurial journey, with the focus on making their ventures better. The entrepreneurs accumulate skills through social and experiential processes and apply them in expanding their ventures.
The main activities that take place in the start-up phase of the business include marketing of the product and the business. The major undertakings at this phase include setting up the business, getting referrals, building a reputation, and advertising and marketing. The friends and family made a significant contribution to popularizing the businesses at initial stages.
When Tom left his job as a post office manager, he had no idea what to do next. Since his friends knew he had been trained as a designer, they advised him to set up an interior design business.
Managing and Expanding the Business
Creative entrepreneurs seek to grow their businesses. They maintain multiple types of the same venture by offering different products and services. A good example in this case is Tom, who started as a designer by running cafes and later ventured an event management business.
“Sound management and strategy formulation have enabled the business to grow. I started operating a little café, whose returns could only cover the costs. Later, I bought a café in California, which had better returns. I also bought a sandwich bar and later another café to operate both retail and outside catering business. Two years ago, I realized that the sandwich bar and retail catering did not sit well with me and sold off the businesses. At the moment, I operate the outside catering and event management businesses. I found that I have many strengths in the current businesses”, Tom.
In the creative industry, the self-development criterion best evaluates the business. The common metrics include personal choice and preferences of creative entrepreneurs. These metrics influence the expansion, contraction or modification of the business. The venture evolves with time as these metrics change.
Effective establishment and management of relationships with employees, customers and other business people are important in entrepreneurship. The ventures in the creative industry interact with a wide range of suppliers and customers. The ability to effectively manage relationships is integral to the success of the venture.
“A former client at the catering business knocked at my office one day and identified me even before I could remind him. He asked whether I can do an event for him”, Tom.
“At the present, I have 15 part-time employees. The employees work at different times, some only during evenings, some during day time, and others on weekends. I respect their schedules and will not call them to duty when they are not available. In so doing, we have enjoyed a long working relationship”, Tom.
Significance of Creative Industry Context
The intrigues in the creative industry trigger the entrepreneurs to learn continuously. The creative industry is characterized by a dynamic environment, reference to different geographic regions, rapidly changing technologies, consumer demand, market trends and fashions (Carayannis 2000). To achieve a successful venture, creative entrepreneurs constantly seek to identify the demands of customers to ensure full satisfaction.
The entrepreneurs experience a knowledge gap that prevents them from dealing with these challenges. This sets entrepreneurs to engage in continuous learning. They learn by utilizing expertise and external knowledge from their social networks. They fill the knowledge gap by extensively consulting, learning from others and applying the knowledge in their ventures. By so doing, they create a new phase of learning.
This paper illustrates entrepreneurial learning as a dynamic process that results from continuous interaction of personal and social experiences of the entrepreneur during the entrepreneurial life. The study examines entrepreneurial learning by taking a case of the creative industry. As exhibited by the entrepreneurs interviewed in this study, the entrepreneurial learning process is characterized by the integration of personal experiences, knowledge sharing, and high level collaboration. One of the conspicuous factors in the complex and dynamic environment was the entrepreneur’s biography and background. The creative entrepreneurs brought unique knowledge and experiences to the entrepreneurial context, including unique educational history and employment experience. The entrepreneur’s biography influenced the choice of businesses they engaged in and the products they offered. The entrepreneurial learning, as explained by theories and proven by this qualitative research, is an experiential and social learning process.