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This presentation might well be subtitled, "Fifty years of muddling toward a concept of entrepreneurship," since my active interest in the subject dates back to 1946, and I'm still searching to get it right. That interest, strangely enough, was first triggered by the exploits and accomplishments of a young, energetic, and versatile, Howard Hughes.

Hooked on Hughes

In 1946, Hughes launched an all-out publicity campaign for his controversial "sexually explicit" movie, "The Outlaw," starring Jane Russell. That same year he nearly killed himself in test piloting and crashing his experimental reconnaissance plane, the XF-11. When these kinds of incidents happen to a famous person, newspapers always print background information as well. I learned he was the producer of "Hell's Angels," starring Jean Harlow (making her a star) and "Scarface," starring Paul Muni (winning him an Academy Award). These two films had broken new ground in motion pictures: the first was Hollywood's first film spectacular, featuring
sensational WWI bi-plane dog fights; and the second introduced extreme violence in depicting the notorious Al Capone gang. Further, Hughes had broken one aviation record after another, survived several other near death crashes testing his crafts, bought control of TWA Airline and forced founder Charles Lindberg out, designed the most popular commercial plane-the Constellation-and built a successful aircraft company, Hughes Aircraft. Besides all this he directed the activities of The Hughes Tool Company (oil drilling bits) complete control of which he had wrested away from relatives after his father's death when he was only 18 years old. Tool Co, as it was called, served as a cash cow for his early exploits. (I learned later that early on, he had pumped money into research and development in drill bit design that paid off handsomely, in even greater cash flow.)

I continued to watch him, and in 1947 he test flew his second XF-11 successfully; then successfully defended himself ,without counsel at his side, when a Senate Investigating Committee questioned his methods of obtaining government contracts (Johnny Meyer, his PR man had earlier said it was with "strong drink and weak women")-walking out a hero, having ruined his accuser, Senator Owen Brewster, by exposing his less-than-ethical ties to Pan American Airline; and in November of that year, "flew" his famous HK-1 Hercules "Spruce Goose" in Long Beach Harbor. What was it that allowed one young man to do all this? I needed to know.

A Confirming Theory

My Hughes' watching continued, but in the meantime in 1947, I had enrolled in the Graduate School of Business at the University of Minnesota. (Prior to that time, I had been a Chemical Engineer with Union Oil and then a Project Engineer with The Air Matériel Command in the service, having a near-miss in seeing Hughes when he came there to seek permission, in late 1946, to test pilot his second XF-11).

In 1948, I found some explanation to the Howard Hughes riddle. I read Joseph Schumpeter's The Theory of Economic Development (1934). What a gold mine for me at that time. Through Schumpeter, I learned that entrepreneurs have the unique role of being the engines that drive economic development. They are change agents, who destroy the existing economic order. They are doers that carry out the distinctive function of putting agents together, uniquely, to create something distinctly different. They are deviants who go beyond social custom, tackling the unfamiliar, dealing with uncertainty, ignoring the negative signals from their social environment, as they create the new and render the old obsolete. They correspond closely to the type known as "Captains of Industry". They are leaders, where real leadership is called for-beyond the boundaries of the routine. They get people to follow, and manage what they create, recognizing "that new opportunities are continuously offered up in (t)his environment" (p.78). They seize the immediate chance that opportunity brings. They are characterized by super-normal qualities of intellect and will, by initiative, authority, foresight, and intuition-"the capacity of seeing things in a way which afterwards prove to be true-grasping the essential fact, discarding the unessential, even though one can give no account of the principles by which it is done. It comes from learning in (t)his natural and social world so that actions can be simply and reliably calculated" (p.86). With these talents, they seek out and seize the opportunities, and delight in the venture of change (Schumpeter, 1934).

I have presented this rather detailed description of Schumpeter's entrepreneur because it reveals, for those unfamiliar with his work, what a rich source it is, and to present my receptive state of mind regarding his views, and the powerful influence they have had on my thinking. To me, his description of the entrepreneur was Howard Hughes, personified!

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