Micro-businesses: A Quiet Revolution?
This article by Professor Michel Marchesnay is published in partnership with the Revue Française de Gestion to mark its 40th anniversary. “Small Businesses: Moving Beyond Ignorance?” has been ranked among the 19 most influential articles in the journal’s history.
Michel Marchesnay, University of Montpellier
The Third Industrial Revolution has entered what is known as the “intensive” phase of innovations linked to the digital and cognitive revolutions. The hypermodern “Generation Z” advocates a cosmopolitan, networked individualism and challenges both the wage-based society and managerial dogma. Thus, entrepreneurship finds fertile ground for expansion: reports indicate that two out of three “young people” would like to start their own business, and that micro-entrepreneurship is a massive source of jobs.
SME Expo
Studying the individual entrepreneur
The individual who takes the initiative—whether as a “hunter” or the “hunted”—invests their “capabilities,” on their own account and at their own risk, in a project that is more or less innovative (original), expecting a return (financial, personal, social, etc.). They work on microprojects, either out of necessity (limited resources or proximity to the environment) or out of conviction (unique skills or market conditions).The “enterprise,” as an organized endeavor, consists at most of an interactive “team,” which, according to cognitive scientists, is capped at four people, or seven in cases of delegation or part-time work.
In fact, the visible part comprises only the million individual or related businesses, ranging from crafts to the liberal professions, from high-tech startups to food trucks, including street vendors. We would need to exclude pseudo-businesses (de facto wage labor, front companies) and add “undeclared” crypto-businesses, including “illicit” activities (drugs, prostitution, smuggling, etc.). But the digital revolution is constantly expanding entrepreneurship to include exchanges among individuals in networks within the collaborative, social, and solidarity-based economy, etc. An entropic number of micro-entrepreneurial activities are emerging outside of, or even in opposition to, the market, giving rise to a new, non-market conception of exchange.
Consequently, a systematic program of micro-entrepreneurial research must be developed. The dominant models and paradigms in entrepreneurship favor positivist approaches, centered on the analysis of facts to identify “constant conjunctions” (Hume) capable of “refuting” (Popper) causalities derived from the “literature.” This approach of logical empiricism, stuck in the middle between induction and deduction, has the merit of producing a flurry of so-called “field” research. But it proves inapplicable when it comes to micro-entrepreneurship, for an epistemological reason: the process is first and foremost individual and subjective, as it is centered on the individual and the team.
However, each individual has their own history, their own identity, which means that no other individual is like them, but also that the same “fact” will not be perceived identically by “others”—which refutes the hypothesis of the objectivity of facts and the interchangeability of individuals. Each of us is also subject to the contingency of events, so that we evolve over time, including in our own perceptions.
Finally, everyone distinguishes between what they openly declare as persona and what they think inwardly as anima (Jung), which largely invalidates declarative judgments. Thus, the entrepreneur and their “team” compare their perceptions, self-organize, and, through “conversation” (Aristotle), collaboratively construct— muddling through—the logic and practice of action.
The Value of Cognitive Psychology
Working with micro-businesses (and entrepreneurs) is of particular interest to the younger generations. Trainers and advisors will increasingly need to adopt methods aligned with the digital and cognitive revolution (for example, holding video conferences with the entrepreneur and their team). In this spirit, the use of real-life case studies—which involves close and ongoing ties with micro-entrepreneur clubs—constitutes a form of maieutic learning,inquiry according to Peirce. Unlike the French education system, the focus is on identifying problems rather than providing “the” solution. In a complex world characterized by the relativity of causes, the evolving nature of effects, and the diversity of problems, participants will need to discover and apply frameworks and approaches tailored to each unique situation.
Such an approach highlights the growing importance of the humanities—in this case, cognitive psychology—in management as a tool for understanding the foundations of decision-making, and thus for improving the “utility” (in the sense used by Mill and James) of micro-entrepreneurship. It is through the consistency observed in the cases studied that we can eventually expect an empirical generalization and—why not?—a general model, an archetype, of the microenterprise.
Michel Marchesnay, Professor Emeritus, Economics, Strategy, Entrepreneurship, University of Montpellier
The original version This article was published on The Conversation.