Agenda Does Cultural Diversity support Entrepreneurship? Dr. Marilena Vecco Erasmus University Rotterdam Dr. Heritiana Ranaivoson iminds-smit, Vrije Universiteit Brussel Relevance of cultural diversity and identity How economists cope with these issues? Home oeconomicus vs homo sociologicus Cultural diversity and socio-economic interactions Cultural diversity, values, social and cultural capital The interaction of cultural diversity and entrepreneurship Framework to analyse the impact of cd on entrepreneurship (national and then European level) 2 WHY CULTURAL DIVERSITY AND IDENTITY ARE SO IMPORTANT FOR OUR SOCIETY? 3 4 1
Culture & Development Necessary role of culture in the development process (Sen, 1990) Sustainable development = multi-dimensional view of development (economic, social, political, environmental, cultural) (Baltà Portolés & Roig Madorran, 2011) Culture: 4th pillar of sustainable development Interest in cultural dimension of development as a reaction to tensions caused by globalisation Inclusion of cultural rights within the human rights framework Everyone has the right freely to participate in a community s cultural life, to enjoy the arts and to share in scientific advancement and its benefits (Art. 27.1 of the Universal Declaration of Human Rights, 1948) Everyone (has the)right to (...) take part in cultural life (Art. 15.1 of the International Covenant on Economic, Social and Cultural Rights, 1966) Fribourg Declaration on Cultural Rights (2007) 5 6 The importance of cultural diversity At the international level: from Cultural Exception (Uruguay Round in 1994) to Cultural Diversity UNESCO 2001 Declaration (art. 3 cd as development factor, art. 1 as shared heritage by humanity) UNESCO 2005 Convention (117 ratifying countries) Importance of diversity in Throsby s (2008) list of principles for development that can be regarded as culturally sustainable Cultural diversity is an important aspect of the cultural footprint (Baltà Portolés & Roig Madorran, 2011) Ambiguities and questions behind cultural diversity About the notion itself Is it possible to define cultural diversity? Is it possible to assess cultural diversity? The diversity of what? Potential trade-offs Market Vs consumer interests Different tastes for diversity among consumers Diversity of producers Vs diversity of distributors Vs diversity of? films, etc. 7 8 2
A polysemic concept Cultural diversity vs globalisation Diversity of people Or diversity of cultural expressions? Diversity = amount? (of admissions, of films, etc.) Or underrepresented Vs hegemonic? Or having very different? (films, etc.) In terms of policy, tendency to promote the diversity on supply side What about consumption? Different traditions: - Differentiation vs. heterogeneration - Convergence vs homogenisation (imperialism, Americanisation..) - Cultural hybridation 9 10 Contrary to the homogenizing trend of the postwar period, today s economic system caters to and produces difference and diversity rather than the sameness characteristic of the former mass production system. (Baeck 1994: 38) HOW ECONOMISTS COPE WITH THESE ISSUES? HOME OECONOMICUS VS HOMO SOCIOLOGICUS 11 12 3
HOMO OECONOMICUS Preferences and cultural diversity. Traditionally - Fix preferences - Preferences are based on the individual - Rationality/Optimisation - Incentives - Prices/revenues/opportunity-costs HOMO SOCIOLOGICUS - Endogenous preferences - Interdependency connected with the group - Internalisation - Group influence - Social networks 13 14 VARIETY IN CULTURAL GROUPS The role of culture in entrepreneurship SOCIO-ECONOMIC OUTPUTS NEW/MIXED VALUES AND SOCIAL & CULTURAL CAPITAL ENTREPRENEURSHIP Entrepreneurship necessarily takes place within culture, it is utterly shaped by culture, and it fundamentally consists in interpreting and influencing culture. Consequently, the social scientist can understand it only if he is willing to immerse himself in the cultural context in which the entrepreneurial process occurs (Lavoie 1991: 36) 15 16 4
society E DOES CULTURAL DIVERSITY INCREASE THE RATE OF ENTREPRENEURSHIP? economy 17 18 Almagation of different cultures within a given geopgraphic area Sobel, Dutta and Roy (2005, 2006) Cowen (2002) - Close to the idea of «creative distruction» (Schumpeter 1942; Aghion, Howitt and Cowen, 1992) - Weber (1904): protestant influence on the emergence of capitalism in Europe - Nikolova, Simroth, 2012; Audretsch, Hohse, Niebuhr 2010, Karayinnis 2008, Fafchamps 2004; Basu, Altinay 2002) Environment for Entrepreneurship economic and political freedom (more individuality than conformity) A reward system (meritocracy) Open opportunities to purposeful aspirant entrepreneurs to drawing the capital of society A value system where success in business ranks high in the hierarchy of occupational prestige) Failure in business not to being regarded as an unforgivable error Creativity and innovation 19 20 5
Measures of E Rate of new small business creation (1 to 9 employees Rate of net new small business creation Venture capital investment per capita, Number of patents per capita, Index of each state s entrepreneurial activity But what about the intangible values? The network values? The exchange of ideas? 21 Culture features to analyse Setting: poor or developed countries Country quality of institutions Individualism- collectivism culture Previous residence of the immigrant Social culture Religion (shapes values and beliefs) Language (creation of sub groups) Attitude to education Family culture/tradition in business (Basu, Altinay, 2007) Ethnic diversity or fractionalisation 22 To conclude. Pluralism in cultures open profit opportunities to entrepreneurs coming from different cultural environments. Instead of a unifying and monolithic culture in Europe, it is much more better to entrust our future to a diversity of interdependent cultures, where each complements the others. (Karayiannis, 2006) Thank you for your attention! vecco@eshcc.eur.nl hranaivo@vub.ac.be 23 24 6