Economics For Business
Dale Caldwell: Entrepreneur Zones Will Drive Accelerated Growth For Cities
Tags The EntrepreneurEntrepreneurship
Can entrepreneurship be a collaborative undertaking across multiple firms? Entrepreneur Zones are an idea from Dale Caldwell to boost the economic performance of cities, and represent one form of collaborative entrepreneurship. The business platform the Mises Institute is building — Economics For Business — represents another: an online collaboration of entrepreneurs to share knowledge, experience, and practices, while competing individually to be the best at serving customers.
How will this work? We can answer this question using our "5 Cs Framework" (Mises.org/E4B_102_PDF1).
Key Takeaways & Actionable Insights
1. Consumer Sovereignty / Customer First
The first principle of entrepreneurship is that value is subjective, and one way to express that principle is that consumers determine value. Entrepreneurs facilitate value for consumers. That principle is never relaxed. Deviation from it is fatal for entrepreneurial businesses. Therefore, even in circumstances where we see opportunities for entrepreneurial collaboration, it is never in violation of consumer sovereignty. Any collaboration is directed towards the facilitation of consumer value, and does not detract from it.
2. Collaborative Efficiency.
In an Entrepreneur Zone, as envisioned by Dale Caldwell, there is the opportunity for a group of entrepreneurs (geographically co-located in a city in his case, but potentially grouped along other dimensions) to search for shared advantage. To speculate, the shared advantage in an Entrepreneur Zone might be found in shared services, reducing unproductive overhead for all firms and releasing resources for exploration, innovation, and customer service. It could be found in shared or pooled marketing.
In the case of Economics For Business, we aim to provide shared knowledge (reducing search and knowledge acquisition costs and overcoming knowledge constraints), processes and tools that can be applied by all for greater effectiveness, and shared experience that can speed up learning.
"Collaborating to compete" sounds contradictory on the surface, but is the essence of capitalism. While firms look for shared advantage where it is available, they equally search for individual advantage through innovation, better ideas, better customer service and stronger relationships. The rivalrous drive to serve customers better and therefore enjoy the resultant revenue streams is primary. It’s the energy of economic growth. Success can be replicated by imitators, which is one of the ways the system works for all. By that time, the innovators have advanced to the next stage of competitive advantage. The system never stops and progress never ends, because of the competitive drive.
Behind competitiveness is creativity. New ideas and new knowledge, the result of new experiments, provide the fuel for continued growth. The collaborative entrepreneurial group can share ideas, bounce ideas between them, pursue their own ideas, ask for help, and merge ideas into new combinations. Creative ideas remain the original source for all entrepreneurs.
5. Cumulative Improvement
Entrepreneurship is a journey, with many twists and turns. It calls for learning, which might often require abandoning a path that once looked promising and taking up another. Success comes over time, via more and more learning, more and more feedback from the marketplace, more and more experiments run and recorded, more and more customer experiences logged. Improvement accumulates over time. For a collaboration such as Entrepreneur Zones or Economics For Business, participating entrepreneurs can anticipate long term success without any certainty about the length of the timeline.
"The 5 Cs of Entrepreneur Zones" (PDF): Mises.org/E4B_102_PDF1
White Paper: "New Jersey Entrepreneur Zones" by Dale Caldwell (PDF): Mises.org/E4B_102_PDF2
"Dale Caldwell Believes that Jobs Can Drive Societal Change": Mises.org/E4B_102_Article1
"Healing Divided Country with Entrepreneurship": Mises.org/E4B_102_Article2
"Opportunity Zones… We Need Entrepreneur Zones": Mises.org/E4B_102_Article3
"Trauma in Employment" (PDF): Mises.org/E4B_102_Article4