A survey of the human population will show that people exhibit different levels of creativity. People have different abilities to generate novel solutions to significant problems in the society (Duxbury 1). Different theories have been advanced to explain the origin and factors influencing creativity among individuals. For instance, proponents of psychoanalytic theories argue that creativity is the result of reactions to repressed emotions or difficult circumstances. The major tenet of this theory is that the creative process is inspired by the need to find solutions to difficult situations in life. On the other hand, psychoticism theories posit that all creative people exhibit a propensity for psychotic tendencies. As such, the psychotic tendencies form part of the background and foundation for the creative personalities.
Creativity is a very important aspect of entrepreneurs. Creativity is usually the first process in the innovation process. As such, it offers an entrepreneur the stimulus required to discover opportunities and create new ventures (Runco & Jaeger 92). Entrepreneurs are required to exhibit high levels of creativity through which they conceive new opportunities in markets or products and unique value propositions. Their creative ability is not only required in the identification of these opportunities, but also in the building of robust organizations that can transform the opportunities into forms with commercial value (Duxbury 1).
Entrepreneurial activity and creativity are often intertwined, with one enabling the other. Creativity lies at the core of entrepreneurship and is required in the exploitation of opportunities in different contexts. As Puhakka (1) notes, the context in which entrepreneurial behavior is considered has changed over the years. Previously, entrepreneurs were seen as in the context of ownership of small businesses. The multiplicity of contexts in the current conception of entrepreneurship includes mid-size organizations and corporate entities. As Cuervo, Domingo & Salvador (1) indicate, an individual entrepreneur exploits opportunities through the creation of small businesses and medium-sized firms. The entrepreneur in this context will solicit the funding for this business, and sell the idea to customers in order to nurture it to growth. The corporate executive’s entrepreneurial behavior is no longer limited to managing the assets of the firm effectively. An entrepreneur in this context is required to articulate, anticipate and manage changes within the market and the organization.
In all this, creativity is required and often encouraged. It is important to understand the creativity in entrepreneurial behavior. To understand creativity in entrepreneurial behavior, it is not only important to look at its importance in entrepreneurship (Weisberg 227) but also relate it to concepts from various theories of creativity. This paper argues that various psychological theories on creativity explain creativity in entrepreneurial behavior. However, there is lack of sufficient evidence to explain creativity in entrepreneurial behavior in some theories. Additionally, some theories contradict each other with regards to the importance of and the concept of creativity when related to various theories of entrepreneurship.
The debate as to whether business opportunities are discovered or created is important in understanding the relevance of psychological theories and the extent to which they explain entrepreneurial behavior. This is in regard to creative versus discovery entrepreneurial theories. When viewed as the business which were weaved from opportunities through the creative process, one might be blinded to the fact that the business did not start as opportunities but as ideas. In this perspective, it is the business idea that was created into an opportunity through the creative process. For instance, one might argue that Facebook started as an idea that was created through the creative process and turned into the product that it is in today’s market. This would suffice the premise that business opportunities are created rather than discovered (Alvarez & Barney 11).
However, in order to understand the other perspective, it is important to consider a business opportunity at the point of conception or emergence. By arguing that such an opportunity was discovered, the implication is that such an opportunity is considered an object within the environment. Under this perspective, business opportunities are part of the natural environment, and can be discovered just like minerals (Allen 46). This means that such opportunities exist independently of time, human interaction and place. Under this conception, the fact that some people can discover the opportunities existing in the environment can be explained by their inability to interpret information in the environment.
According to Segurado (1), the propensity to discover opportunities in the environment is influenced by the ability of an individual to not only analyze, but also interpret information. For instance, the invent of mobile money transfer was an attempt to solve the problem of long queues in financial institutions like banks to carry out transactions, some that were less valuable compared to the time spent in the queue. Even though an individual’s ability to analyze and interpret the information is important, Shane (448) argues that professional and personal experiences, the presence of information relating to the field and personal effort influence the eventual discovery of opportunities and how they are transformed into solutions.
As highlighted, there are perceptions that opportunities are created and not discovered. Under this conception, markets and opportunities are subjective realities that need to be created. It is also conceived that opportunities are not dependent on market information or consumer preferences, rather on the ability of an individual to act creatively in order to design new combinations. In this regard, individuals who are not creative many not develop opportunities because their actions are required. This conception challenges the notion that opportunities are present in the environment independent of time, human intervention and place and will be ultimately visible to all. Instead, opportunities result from the interaction of an entrepreneur with the environment.
Psychoanalytical theories of creativity do not entirely explain entrepreneurial behavior with regards to whether opportunities are created or discovered. According to psychoanalytical theories, creativity stems from unconscious biological drives. Even through the discovery of opportunities is sometimes achieved subconsciously; entrepreneurs use proactive techniques to identify opportunities in the environment. In this regard, psychoanalytical theories are deficient in this aspect. However, their holding that creative behavior is a defense mechanism against unmet desires explains some entrepreneurial behavior to some extent. In order to understand this, it is important to consider why Jan Koum invented WhattsApp. The unmet desire to communicate with people in his native Ukraine compelled him to create the social networking platform. By applying psychoanalytical theories of creativity, Koum was defending himself from the unmet desire of communicating with the people he left back in Ukraine after he immigrated into the United States. However, the holding that such creative action results from unconscious though is challenged by the proactive nature of the entrepreneurs thought and actions.
Under the economic theory of entrepreneurship, entrepreneurial behavior is seen as an economic function rather than a type of firm or an employment category. In this theory, entrepreneurial behavior is seen as an attempt to equilibrate the market. This is by closing existing pockets of ignorance. Under this theory, there are several types of entrepreneurs as seen under different theorists. Kirzner sees a pure entrepreneur as one who only serves to discover opportunities in the market. As such, he does not supply his own capital or labor to close the identified pocket of ignorance. Pure entrepreneurs as defined by Kirzner do not invest in the opportunities identified because they do not have capital. These entrepreneurs do not necessarily require being creative or innovative because they do not commit their resources to creating businesses from the profit opportunities. These pure entrepreneurs will not engage in the starting of firms or the management of an enterprise as their sole function is discovery of profit opportunities. All they require is the entrepreneurial alertness to find profit opportunities in the market (Klein 2).
It is easy to posit that theories on creativity have no bearing on the economic theory of entrepreneurship. On a basic level, theories of creativity explain the sources of creativity within an individual and the environment while the economic theory of entrepreneurship does not require an entrepreneur to be creative as indicated in (Klein 2). However, the humanistic theories of creativity explain the lack of creativity for the pure entrepreneur defined by Kirzner. The pure entrepreneur is seen as an individual whose function in the equilibration of the market is the identification of profit opportunities. This individual does not go forth to for a business under the concept identified. Primarily, the reason behind this is that the individual does not have the capital or the means to raise the capital required to start the business.
Humanistic theories adduce that one can only be creative after meeting their basic needs and achieving self-actualization (Isbell & Shirley 13). It is only after these needs have been met that an individual can be creative. Irrespective of the environmental conditions, people choose not to be creative because they have unmet basic needs. This is also irrespective of the fact that creativity might create new opportunities through which the unmet basic needs can be satisfied, hence edging close to self-actualization. The entrepreneurial behavior to only serve the identification function under the economic theory of entrepreneurship can be explained by the possibility that the basic needs of the pure entrepreneur are not met. Arguably, it is because of this reason that he does not have the requisite capital or the means to raise the capital to invest in the profit opportunity indentified.
Creativity has become even more important in the contemporary marketplace. The advent of technology has resulted in superior production methods. However, the same technology has resulted in an overcrowded market where products are not very differentiated. This is where creativity is important for entrepreneurs. Through creativity, entrepreneurs can differentiate their products from their competitors, and thereby get a competitive edge. Three main dimensions of entrepreneurships have been advanced. These include risk-taking, innovation and proactiveness. Innovation in entrepreneurial behavior entails the way through which entrepreneurs browse the environment for profit opportunities and the manner in which such profit opportunities are profitably concluded.
Risk-taking in entrepreneurial behavior entails the willingness of an entrepreneur to invest considerable resources to grow a profit opportunity to success. Proactiveness in entrepreneurial behavior entails personality traits like perseverance and adaptability in nurturing profit organizations. The importance of personality traits in explaining entrepreneurial behavior is very important. Some of the most successful entrepreneurs are also the most hardworking. As a dimension of entrepreneurial behavior, innovation may result in failed attempts before any success is registered (Fillis 3). One of the most common examples of perseverance in entrepreneurial behavior is seen in Thomas Edinson when he failed one thousand attempts before he invented the light bulb.
This is arguably one of the things that set entrepreneurs apart from other individuals. However, the trait theory cannot be reliably used to explain entrepreneurial behavior. This is because the trait theory is not backed by research evidence. As such, entrepreneurial behavior can be explained using the trait theory by alluding to personal traits (Zhao & Seibert 259) and then concluding that such an individual have innate personality traits that make them entrepreneurs. However, the use of this model in this way cannot give validity of results because a level of variance in results is expected. More evidence based research is required on the explanation of entrepreneurial behavior using the traits model to explain entrepreneurial behavior. Studies in this area should be design to explore whether certain innate personality traits increase the propensity for entprepreneurial behavior (Simpeh 3).
However, this entrepreneurial behavior can be explained using the need for achievement theory. This theory posits that people have a need to succeed and excel. This need affects people in different ways. The need is greater in entrepreneurs as is seen in their incessant pursuit for success. The need for achievement theory is affects entrepreneurs through the different phases of entrepreneurship. This is through the identification of profit opportunities and nurturing them to success. It is arguable that the personality traits such as perseverance and adaptability are accentuated by the need for achievement theory. An example of this theory in explaining entrepreneurial behavior can be seen in entrepreneurs who pursue vertical integration, mergers and acquisitions (Simpeh 3).
The sociological entrepreneurship theory also offers insights and opportunities to evaluate the effectiveness of psychological theories in explaining creative behavior in entrepreneurship. Under this theory of entrepreneurship, creativity entails forming long lasting networks that enable a business venture to thrive without necessarily exploiting customers. This is because the focus of the enterprise is not just on monetary gain but also the social context. The relationships forged by an entrepreneur do not embody opportunism, but create an environment where trust flourishes.
Another dimension under this theory of entrepreneurship is ethnic identification. The sociological background with which one identifies determines creativity in an individual. For instance, people who come from marginalized communities may be motivated to succeed in order to break the cycle of poverty (Simpeh 4). The humanistic theories of creative adduce that individuals may be influenced by challenges in their life to become creative (Motsching & Pitner 2). Contrary to psychoanalytic theories that adduce that challenging events in life might suppress creativity, humanistic theories argue that such events will challenge one to become creative. This relates to the ethnic identification domain of the sociological theories where challenges common in a certain community might inspire creativity.
The discussion above has ventilated on various perspectives on creativity in entrepreneurship. The bottom line established is that creativity is the difference between en entrepreneur and any other person. Through creativity, people are able to identify profit opportunities and nurture them to success as evidenced in the establishment of businesses from novel ideas. Whether it is through discovery theories that posit that opportunities are existent in the environment independent of time, human intervention and place or whether it is through creative theories that posit that opportunities are only created through creative actions, creativity is vital in entrepreneurial behavior. The economic theory of entrepreneurship posits that creativity in entrepreneurship serves to equilibrate the market by identifying profit opportunities in the market. Part of creativity under this theory can be seen in a pure entrepreneur whose sole function is to identify profit opportunities in the market, and does not pursue them through meaningful investment of resources.
Psychological theories of creativity explain creativity in entrepreneurial behavior to some extent. For instance, humanistic theories can be used to explain the creative behavior of the pure entrepreneur. The lack of self-actualization suppresses the creative power because all basic needs are not met. Psychoanalytical theories partially explain the entrepreneurial behavior in creative and discovery theories. Their proposition that creativity occurs unconsciously is challenged by the proactive approach used in the identification of opportunities under the creative and discovery theories. Trait theories are deficient because they lack evidence based research to back the explanation of the commonality of certain personality traits in entrepreneurs. Further research on trait theories is required in order to better understand this phenomenon.
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