What is the History of Entrepreneurship? Today, our focus is often on large businesses and successful capitalists. We tend to overlook how it all began and the lessons hidden in its history. This article takes you on a journey through time, shedding light on the origins and evolution of entrepreneurship. By the end, you’ll have a clearer understanding of the history of entrepreneurship.
The history of entrepreneurship dates back as far as 20,000 years ago when barter trade was the primary means of exchange, evolving into modern forms of currency and digital transactions. The first trade happened around 17,000 BCE in New Guinea.
The roots of entrepreneurship run deep in history, offering invaluable lessons to today’s entrepreneurs. This article unveils its multi-generational evolution, enduring structure, and influence on contemporary and future entrepreneurs. Exploring this rich history sheds light on our journey to the modern world.
How did entrepreneurship start?
Historically, entrepreneurship has gone through many phases. However, one of the crucial aspects to focus on is the exciting story of how entrepreneurship shifted from hunting to farming, industrialization, and into what we have today (online trading, eCommerce, etc.) Interestingly, farmers during this period exchange their needs such as shelter and tools in replacement of the foods they produce. Sporadically, entrepreneurship changed from what it used to be to the invention of technologies, but still to achieve the same purpose from its origin.
Going down to the origin, the first real entrepreneurs are referred to as merchants. Basically, one main item that was first traded by those merchants was Obsidian(Volcanic glass) obtained from hunters in exchange for other needed items. History has it that, after such eras in the last 20,000-17000 BCE, the agricultural exchange came into the picture. Agriculture changed a lot about human advancement; it paved the way for stationary communities which challenged the human quest for knowledge, development, and civilization. Prior to this time, there were only migratory communities/people who explored a land, abandoned it, and moved on to the next. Records have it that the human population increased to 7 billion from 15 million since humans started to grow bigger communities and people migrated to join society.
Subsequently, around 8,000 BCE, global divisions began to form, with communities building their empires. Over time, civilizations advanced, adopting record-keeping practices that eventually gave rise to the first writing systems. Another pivotal moment in the history of entrepreneurship was the establishment and expansion of trade routes, connecting Asia to China, Africa to Rome, and more. This exchange included not only goods but also religious beliefs and weaponry, particularly around the year 1200, fostering the emergence of new markets for trade.
Fast-forwarding through the last 2000 years to today, the fundamental rule of entrepreneurship has remained consistent across the various phases of its history. As succinctly put by Peter F. Drucker, ‘The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.’ The market evolved into complexity, prompting entrepreneurs to seek even more opportunities for wealth creation. This period also witnessed a significant shift from communism to capitalism, where individuals secure their own financial destinies.
As the world progressed, we entered the official era of industrialization. Industries multiplied, mass production became the norm, and education became widespread, fueling curiosity about the world. Individuals became increasingly driven to accumulate wealth, investing in technology to amass even more riches. To manage the complexity of the market, nations developed economic rules and trade policies, while the protection of employees’ rights gained prominence. Additionally, the internet emerged, marking the world’s transition into the digital age.
Development of money in entrepreneurship history
It would be incomplete to delve into the history of entrepreneurship without acknowledging the parallel evolution of the means of exchange. As the world grew more sophisticated, inventors recognized the disparities in exchange systems among people. This realization led to the necessity of creating a more stable unit of measure. This, in turn, brings us to the enduring significance of money today. The Barter system, initially established by old merchants and entrepreneurs, possessed numerous inadequacies that ultimately drove the innovation of money, including…
- No standard units of measurements
- The impossibility of goods subdivision
- The difficulty in the double coincidence of wants
- Inability to balance trade exchange with expensive goods that have higher values
These limitations posed a significant challenge to the Barter system, prompting the recognition of the need for an alternative means of exchange. As a response to this necessity, money was introduced into the system. Delving deeper into history, the use of currencies can be traced back to ancient Iraq around 2000 BCE, showcasing its long-standing relevance. As trade continued to advance in subsequent years, the exchange of goods based on currencies gained popularity, fundamentally transforming the landscape of entrepreneurship. What sets apart the Barter system from currencies in the context of entrepreneurship history? Explore these distinctions in the table below:
|Barter system and entrepreneurship
|Money and entrepreneurship
|Restriction within the trading vicinities
|Ability to carry out long-distance trade
|Inability to exchange for the exact value
|Medium of value exchange
|Value storage problem
|Money value can be stored
|Value is in the commodities
|Only serves as a measurement of value
The introduction of banknotes marked a pivotal moment in the history of entrepreneurship. It opened the door to indirect trading, assigning specific values to each good, which could be equated in terms of money. Historical records show that as early as 600 B.C., Europe initiated the minting of coins using industrial facilities, effectively using them as currency. Furthermore, in approximately 770 B.C., China introduced the use of paper money as a means of exchange. While it’s true that money itself has no inherent value, its popularity and relevance have steadily grown since its introduction.
What Lessons Does History Teach Us About Entrepreneurship?
Essentially, a closer examination of history reveals a consistent portrayal of entrepreneurs: risk-takers, hard workers, and adventurers. As Per Bylund aptly puts it, “Entrepreneurs are portrayed as a risk-loving, hard-working, adventurous bunch.” This view of the entrepreneur resonates with the French term “entrepreneur.”
Throughout history, entrepreneurs have consistently paved the path to innovation, transformed economies, and emerged as the champions of creation. Even today, entrepreneurs continue to evolve, adapting to new and dynamic modes of operation. Let’s analyze the insights we’ve gained about entrepreneurship through its enduring changes across history.
Surprisingly, while entrepreneurship has traversed many historical phases, its fundamental essence has remained unaltered. Entrepreneurship’s static nature persists, from the agricultural age through the industrial and digital eras. In summary, businesses are propelled by individuals who identify opportunities and are willing to take calculated risks. This fundamental principle has been firmly established throughout history and remains the driving force behind innovation.
History has consistently provided a foundation for entrepreneurs to build upon the achievements of their predecessors. Throughout human history, exceptional entrepreneurs have dedicated themselves to studying people’s problems and devising innovations that remain relevant today. These great entrepreneurs have transcended their immediate limitations, pushing the boundaries of their ideas. Across history, we find records of innovative entrepreneurs who have left an indelible mark:
- Thomas Edison (1862): The first to establish commercially viable inventions such as the incandescent light bulb, phonograph, kinetograph, and kinetoscope through the industrial research laboratory in Menlo Park.
- Walt Disney (1928): Pioneered the creation of the world’s largest and most famous theme park and produced the first animated feature-length movie shown in Technicolor.
- Henry Ford (1914): Revolutionized the automobile industry by making cars affordable to the masses.
- Oprah Winfrey (1954): Achieved significant success with her TV talk show and created a popular magazine, becoming the wealthiest black American in the 20th century.
- Ray Kroc (1955): A leader in the fast-food industry, he established the first partnership with McDonald’s.
These examples from history demonstrate that entrepreneurship’s essence has remained constant: identifying opportunities, taking risks, and driving innovation.