We Need A Change In Arab Attitudes Toward Entrepreneurs That FailWithout tolerating a large number of failures, it is impossible for Arab economies to achieve true innovation.
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There are manydefinitions of an entrepreneur．According to Professor Russell S. Sobel from the Military College of South Carolina, the word "entrepreneur" originates from a 13thcentury French verb, "entreprendre," meaning "to do something" or "to undertake." By the 16thcentury, the noun form of the word, entrepreneur, was used to refer to someone who undertakes a business venture.
Sobel states that the first academic use of the word by an economist was likely in 1730 by Richard Cantillon, who identified the willingness to bear the personal financial risk of a business venture as the definingcharacteristic of an entrepreneur．在1800年代初,经济学家斯特说and John Stuart Mill further popularized the academic usage of the word "entrepreneur." Mill used the term in his popular 1848 book,Principles of Political Economy, to refer to a person who assumes both the risk and the management of a business.
Two notable 20thcentury economists, Joseph Schumpeter and Israel Kirzner, further refined the academic understanding of entrepreneurship. Schumpeter stressed the role of the entrepreneur as an innovator who implements change in an economy by introducing new goods or new methods of production. The Schumpeterian view emphasizedthe beneficial process of "creative destruction"in which the introduction of new products results in the obsolescence or failure of others.
In contrast to Schumpeter's view, Kirzner focused on entrepreneurship as a "process of discovery." Kirzner's entrepreneur is a person who discovers previously unnoticed profit opportunities. The entrepreneur's discovery initiates a process in which thesenewly discovered profit opportunities are then acted onin the marketplace until market competition eliminates the profit opportunity. Thus, unlike Schumpeter's disruptive force, Kirzner's entrepreneur is an equilibrating force.
Two years ago, when I wrote an article about the cultural, psychological and cognitive barriers facing failed entrepreneurs in the MENA region, I got a number of striking replies: most of the Arabic audience seemed to have faced such dilemmas, which led them to be hesitant toward trying any other new venture(s) after the first "failure,' as their society looked at them in a shameful manner. I emphasized thatArab culture (and the existing regulatory regimes) shows a unique attitude to failure: it's one that prevents "failed entrepreneurs" from coming back into the marketplace and to constructively use their experience to try again, leaving them permanently stigmatized and marginalized.
In the Arab world, there is no appreciation of the fact that errors in judgment by the part of entrepreneurs are part of the learning or discovery process vital to the efficient operation of markets. A vibrant, growing economy depends on the efficiency of the process by which new ideas are quickly discovered, acted on, and labeled as successes or failures. Just as important as identifying successes is making sure that failures are quickly extinguished, freeing poorly used resources to go elsewhere. This isthepositiveside of business failure．
Keeping this in mind, we need to start serious empirical research on failed entrepreneurship in the Middle East, analyzingthe barriers that inhibit further trialsby the part of failed entrepreneurs. Such studies should explore the effect of cognitive, psychological, demographic, socioeconomic, and institutional factors on the likelihood of a failed entrepreneur choosing another trial.
Lastly, there should also be a serious focus by the part of the public sector, private sector and civil societies on the possible measures that can bring on board institutional mechanisms tofostering a culture of tolerancetoward failed entrepreneurs. Think tanks, research centers and training institutions in the region and worldwide should thus start thinking of applied courses and design materials that target our so-called failed entrepreneurs.
Let us face the reality: without tolerating a large number of failures, it is impossible forArab economies to achieve true innovation．
