Toward a Dynamic Learning Perspective of Entrepreneurship

An examination of the entrepreneurship literature reveals several “dominant” theoretical perspectives that have heavily influenced both the scope and legitimacy of extant research. Stevenson and Sahlman (1989) identify three primary schools of thought regarding the nature of entrepreneurship. First, theories that equate the word with an economic function, which can be described as the functional perspective. Second, theories that associate entrepreneurship with an individual, which can be termed the personality perspective. Third, theories that conceptualize entrepreneurship from a behavioral perspective. As Gartner's (1988) work illustrates, within this final perspective, the term “behavioral” can be understood as a broad descriptor for theories that focus primarily on the entrepreneurial process of new venture creation.

The aim of this article is to introduce a dynamic learning perspective of entrepreneurship that builds upon these existing theoretical approaches to explaining entrepreneurial activity. It is apparent that learning is gaining acceptance as an integral element of entrepreneurial practice and study. As Minniti and Bygrave (2001) state, “entrepreneurship is a process of learning, and a theory of entrepreneurship requires a theory of learning” (p. 7). However, a convincing argument exists that the entrepreneurship discipline does not currently possess sufficient conceptual frameworks to explain how entrepreneurs learn (Cope & Watts, 2000). Consequently, in terms of theory building, many aspects of entrepreneurial learning remain poorly understood (Deakins, 1996; Rae & Carswell, 2000). Utilizing a wide range of theories and models from management, adult, and individual learning literature, this article introduces new concepts for the study of entrepreneurial learning and develops a deeper conceptualization of emergent themes embodied within the growing literature on learning in entrepreneurial contexts.

Informed by qualitative empirical work with practicing entrepreneurs (Cope, 2001), this conceptual article works toward an integrated understanding of entrepreneurial learning by proposing three different yet interconnected elements of a learning perspective of entrepreneurship. ¹ Theory building begins by conceptualizing the dynamic nature of entrepreneurial learning, illustrating key temporal phases that are central to how and what entrepreneurs learn. Interrelated processes of entrepreneurial learning are then conceptualized and, importantly, the relationship between processes demonstrated. Particular emphasis is placed on the emerging significance of “critical learning events” (Cope & Watts, 2000; Deakins & Freel, 1998) as an essential entrepreneurial learning mechanism. Finally, the affective and social characteristics of entrepreneurial learning are introduced, which represent integrative, overarching dimensions of a dynamic learning perspective of entrepreneurship.

Before engaging in this process of conceptualization, it is vital to establish the credibility of a learning perspective of entrepreneurship as a useful and distinctive approach to comprehending and researching entrepreneurship. In demonstrating how it extends beyond existing theoretical approaches, the following section makes two meaningful claims. First, this article contends that entrepreneurship is an inherently dynamic phenomenon, the study of which extends beyond a focus on new venture creation. As such, the ways in which entrepreneurs manage and grow their businesses represent a rich arena for studying entrepreneurial learning (Reuber & Fischer, 1999). This reflects a wider recognition that a better conceptual grasp is needed of entrepreneurship post start–up, as Naffziger, Hornsby, and Kuratko (1994) emphasize:

The second proposition put forward is that the entrepreneur continues to be a worthy subject for research. Rather than trying to define “who an entrepreneur is,” it is argued that it is more productive to view entrepreneurship as a contextual process of “becoming” (Rae, 2000), where the entrepreneur is continually learning and developing in relation to his or her business and the wider environment.

Dominant Perspectives of Entrepreneurship

Early theories of entrepreneurship originate from the field of economics and have been concerned with defining the “entrepreneurial function” (Casson, 1982), which encapsulates activities and behavior characteristic of entrepreneurship. Conceptualizing the entrepreneur's interaction with his or her environment has been a major thrust of theorizing within this functional perspective. More contemporary economic theorists, Hébert and Link (1988), describe the notion of entrepreneurial “action,” which is defined as “the creation of an opportunity as well as a response to existing circumstances” (p. 159).

More recently, research in entrepreneurship has been dominated by the desire to define the entrepreneur through the identification of “entrepreneurial traits.” The main premise of this personality perspective is the notion that certain individuals have a unique set of inherent, stable, and enduring personality characteristics that predispose them to entrepreneurial activity (Greenberger & Sexton, 1988). Of significance is the perception that these traits are permanent and remain consistent across time and context. This search for the entrepreneurial personality has received heavy criticism in recent years, and it is not the intention here to engage in a prolonged critique of this approach. Several seminal articles have already undermined the credibility of this trait–based perspective (see, for example, Gartner, 1988; Shaver, 1995).

One of the most problematic aspects of much theorizing within the entrepreneurial personality perspective is that it symbolizes a static approach to understanding entrepreneurs and therefore represents the antithesis of a dynamic learning perspective of entrepreneurship. The assumed permanence of entrepreneurial personality traits precludes the ability of entrepreneurs to learn, develop, and change as they manage their businesses. As Deakins and Freel (1998) assert, “most writers of this [personality] approach would not allow for an experiential learning role to alter behaviour in entrepreneurship” (p. 146). In moving the study of entrepreneurs forward, this article argues that rather than trying to identify “who an entrepreneur is” (an objective that, as Gartner [1988] demonstrates, has unsuccessfully preoccupied trait–based theorists), it is beneficial to consider the evolutionary nature of entrepreneurship and explore who, through learning, an entrepreneur may become (Rae, 2000).

A more comprehensive approach to conceptualizing the nature of entrepreneurial activity is provided by the behavioral perspective. First proposed by Gartner in 1985, the emergence of this process–based view of new venture creation was, in part, the result of the “inherently futile” (Low & Macmillan, 1988, p. 148) search for the elusive entrepreneurial personality. From a behavioral perspective, the personality characteristics of the entrepreneur are viewed as ancillary to behavior. Consequently, research should concentrate on what entrepreneurs do rather than who they are (Gartner, 1988). The main aim of this perspective is to discern the “entrepreneurial process,” defined by Bygrave and Hofer (1991) as “the functions, activities, and actions associated with the perceiving of opportunities and the creation of organizations to pursue them” (p. 14).

A key aim of the behavioral perspective is to examine the entrepreneurial “function” that enables new organizations to come into existence, by developing “contingency approaches which examine the behaviour of the subject in relation to salient contextual variables” (Chell & Haworth, 1988, p. 16). As Gartner (1985) asserts, “entrepreneurs do not operate in vacuums—they respond to their environments” (p. 700). Clearly, similarities can be observed between the functional and behavioral perspectives of entrepreneurship.

In appreciating how a dynamic learning perspective complements and extends beyond the behavioral perspective, two key areas for development are proposed. First, by defining entrepreneurship in terms of new venture creation, as many behavioral theorists tend to do (Bygrave & Hofer, 1991; Gartner, 1985, 1988; Greenberger & Sexton, 1988; Herron & Sapienza, 1992; Learned, 1992; Shaver & Scott, 1991), the ability of entrepreneurs to learn and adapt once the business is established is largely overlooked. Gartner (1988) highlights the problematic issue of deciding when entrepreneurship ends, yet he maintains that “the individual who creates the organization as the entrepreneur takes on other roles at each stage—innovator, manager, small business owner, division vice president, etc.” (p. 26).

Regardless of the contentious issue as to whether these roles cited by Gartner (1988) are entrepreneurial or not, ² an interdependent developmental relationship exists between the entrepreneur and the small business beyond the start–up phase that cannot be ignored (Cope & Watts, 2000). This article contends that the process of personal change described above by Gartner (1988) represents a rich arena for studying entrepreneurial learning and development—specifically, the complex ways in which entrepreneurs learn to adapt their role and develop new behavior in order to negotiate the management and growth of their businesses.

Several theorists have articulated the need to develop broader models of the entrepreneurial process (Chell & Howarth, 1988; Naffziger et al., 1994). As Merz, Weber, and Laetz (1994) state, “as a complement to the traditional notion of entrepreneurship as enterprise formation or birth, firm growth or expansion is becoming increasingly accepted as a valid indicator of entrepreneurship within firms well beyond the founding event” (p. 48). From a learning perspective, Reuber and Fischer (1993) demonstrate that the learning process within entrepreneurship is essentially dynamic and appears to be continuous throughout the life of a firm, rather than being concentrated in the first few years. Similarly, Woo, Daellenbach, and Nicholls–Nixon (1994) advocate a broader process perspective characterized by experimentation and learning and the dominance of random events. In viewing effective entrepreneurs as “exceptional learners” (Smilor, 1997), it is only by continuing to study the nature of entrepreneurship both during and post start–up that a comprehensive understanding of entrepreneurial learning can be developed.

The second pertinent issue for entrepreneurship research regards the importance of the entrepreneur as a subject of continued academic interest. Although a process–based perspective of entrepreneurship is laudable given the fundamental problems associated with the personality perspective, a learning perspective offers a new, capacious avenue for studying entrepreneurial individuals. As Shaver and Scott (1991) argue, the deep dissatisfaction with attempts to identify psychological characteristics of entrepreneurs has resulted in a tendency to concentrate “on almost anything except the individual” (p. 39). They go on to emphasize, however, that the entrepreneur is the catalyst for entrepreneurial activity and represents the essence of entrepreneurship.

In offering avenues for further research on the entrepreneur, Gartner (1988) recognizes that entrepreneurship involves a process of learning, particularly in terms of acquiring knowledge and skills regarding organization creation. ³ More recently, Gelderen, Van Der Sluis, and Jansen (forthcoming) have explored the learning process associated with new venture creation, stating that “we chose young firms as we expected learning experiences to be generally relevant in the first few years of the firm” (p. 8). Although clearly of interest, such assumptions marginalize the study of entrepreneurial learning and restrict a dynamic appreciation of the entrepreneur as an individual who learns and develops in conjunction with his or her evolving business and the wider environment. This point is reinforced by the work of Reuber and Fischer (1999), suggesting that “founders continue to learn, and… studying the venture's stream of experience can provide a better understanding of this learning process” (p. 33).

Within the entrepreneurship domain, a body of research is emerging that explores how entrepreneurs learn during the creation and management of entrepreneurial ventures. Concurrently, a body of theory is growing regarding organizational learning in smaller firms (Anderson & Skinner, 1999; Chaston, Badger, & Sadler–Smith, 2001; Gray & Gonsalves, 2002; Honig, 2001; Matlay & Mitra, 2002; Penn, Ang'wa, Forster, Heydon, & Richardson, 1998; Sadler–Smith, Chaston, & Spicer, 1999). ⁴ However, Deakins (1996) emphasizes the need for greater theoretical development around the concept of entrepreneurial learning:

The remainder of the article will work toward a theoretical framework for understanding entrepreneurship from a learning perspective, thereby developing a deeper appreciation of the nature of entrepreneurial learning. As literature on learning in entrepreneurial contexts is still emerging, the main thrust of this article is to provide a robust conceptual basis for developing further research on this important subject. To use the words of Gibb Dyer (1994), “such a framework is not designed to provide all the answers, but is formulated to raise questions and issues that need to be addressed in order to add flesh to the skeletal frame” (p. 8). New concepts of entrepreneurial learning will be introduced and deeper insights developed into emergent themes within the extant literature on entrepreneurial learning. Key areas for further research will also be highlighted. This theoretical progression will be achieved by presenting key conclusions from in–depth empirical work on entrepreneurial learning (Cope, 2001) and by applying a broad range of contributory adult, management, and individual learning literature that provide useful and coherent explanatory theories of learning. More specifically, the following sections will conceptualize three distinctive yet interconnected elements of a learning perspective of entrepreneurship. Namely, dynamic temporal phases of entrepreneurial learning, interrelated processes of entrepreneurial learning, and overarching characteristics of entrepreneurial learning.

Conceptualizing Dynamic Temporal Phases of Entrepreneurial Learning

The concept of dynamic, temporal phases of entrepreneurial learning serves to demonstrate the complex connections between two pertinent stages of learning— learning prior to start–up and learning during the entrepreneurial process. The following section introduces the theoretical frameworks of “entrepreneurial preparedness,”“learning history,” and “learning task” as useful concepts to illustrate the importance of learning prior to start–up but also to provide an integrated understanding of the multifaceted relationship between these two phases of learning.

Reconceptualizing Entrepreneurial Preparedness as a Learning Process

Reuber and Fischer (1999) illustrate that each prospective entrepreneur enters the start–up process with a “stock of experience,” consisting of the background or history of the individual that has accrued up to that point. Similarly, Harvey and Evans (1995) propose that each individual approaches the entrepreneurial process with a unique range of accumulated skills and abilities, which shape their level of “entrepreneurial preparedness.” They go on to state that the preparation for entrepreneurship can be a proactive process, where each individual must focus on “their personal/psychological attributes, their stage of career and personal life–cycles, a skills assessment inventory, and the goals and level of motivation of becoming an entrepreneur” (Harvey & Evans, 1995, p. 342). More specifically, Harvey and Evans suggest that there are two primary elements to assessing one's level of entrepreneurial preparedness, namely, those personal versus business skills and attributes (both tangible and intangible) brought to the new venture creation process.

Although only implicit within Harvey and Evans’ (1995) work, from a dynamic learning perspective it is constructive to envisage “entrepreneurial preparedness” as a concept that encapsulates the immense complexity of accumulated learning that individuals bring to the new venture creation process. This present reconceptualization of entrepreneurial preparedness as a cumulative learning process has strong similarities to the concept of “anticipatory socialization” (Gibb Dyer, 1994; Starr & Fondas, 1992), which is described as the collective prior experiences and learning that prepares an individual for an entrepreneurial career and shapes the individual's attitudes, beliefs and abilities (Starr & Fondas, 1992). Although preparing for entrepreneurship can be an implicit and explicit process that has personal and interactive dimensions, such learning and development occurs throughout an individual's life rather than concentrated during the immediate prestart–up phase (Cope, 2001).

In comprehending the nature of entrepreneurial learning, this article emphasizes the need to appreciate that the way in which individuals perceive new situations and thereby “experience” learning during the entrepreneurial process is inextricably linked to prior learning and is a product of one's evolving “learning history” (Boud, Cohen, & Walker, 1993; Mezirow, 1991). Minniti and Bygrave (2001) emphasize that an entrepreneur's history is influential and that “knowledge is cumulative. What is learned in one period builds upon what was learned in an earlier period… An entrepreneur's previous investments and repertoire of routines constrains his future behaviour” (p. 7). More broadly, the importance of one's learning history is also emphasized within the adult learning domain by theorists such as Mezirow (1991):

In applying this adult learning concept to entrepreneurship theorizing, this article proposes that the learning history of each prospective entrepreneur defines the unique level of entrepreneurial preparedness brought to start–up. Harvey and Evans (1995) call for prospective entrepreneurs to actively assess their learned skills and abilities. Interpreting their work from a learning stance, this essentially requires the entrepreneur to look backward and inward, reflecting on the relevance of past experiences, but also looking introspectively at how ready they are to enter into entrepreneurship. However, there is not only a need for individuals to know themselves better, but to envisage that their “preparedness” for entrepreneurship is also defined by the specific situation that confronts them and the social groups to which they relate (Gibb & Ritchie, 1982; Katz, 1992; Kolvereid, 1996).

To be as fully prepared as possible for entrepreneurship, individuals must look outward in order to interact with, and learn about, the wider environment and recognize fully the opportunity that confronts them. Prospective entrepreneurs must also look forward, in order to visualize how to make their business grow and succeed. In encouraging and facilitating a more proactive process of learning in readiness for start–up, it is argued here that understanding one's level of entrepreneurial preparedness is, and must be, an exogenous as well as endogenous process. It is a dual, interactive process, where the individual develops a clear appreciation of their own strengths and weaknesses and those of their potential business in relation to the wider environment. The significance of conceptualizing entrepreneurial preparedness as a reflection of the prospective entrepreneur's cumulative learning or “learning history” is that this prior learning is a definitive factor in shaping the entrepreneurial “learning task” once the business is established.

The Entrepreneurial Learning Task

Due to the complexity and diversity of each individual's learning history, it is important to recognize the unique range of experiences, skills, and abilities that shape the “learning task” of every prospective entrepreneur once they enter into the new venture creation process. In appreciating that the past, present, and future all impact on the entrepreneurial learning task, factors such as the environment within which the business operates, the nature of the business and its staff, and its concomitant level of growth will all have an appreciable role to play in defining this learning challenge. A key argument of this article is that it is vital to view each entrepreneur's learning task as dynamic, contextual, and cumulative, reflecting Minniti and Bygrave's (2001) assertion that “entrepreneurs learn by updating a subjective stock of knowledge accumulated on the basis of past experiences” (p. 5).

Although it is difficult to prepare fully for the trials and tribulations of small business ownership, it is apparent that some prospective entrepreneurs are more prepared than others (Cope, 2001). Nevertheless, it is clear that most people still enter entrepreneurship “in a substantial ‘learning’ situation” (Gibb & Ritchie, 1982, p. 35). From a dynamic learning perspective, there remains a pressing need to understand how entrepreneurs learn to become effective managers of people and resources, or to use Rae's (2000) words, how individuals learn to work in entrepreneurial ways. A better theoretical grasp of entrepreneurial learning is imperative, as it is through learning that entrepreneurs develop and grow, and have the potential to become more “capable” business owners (Rae & Carswell, 2000). This reflects a broader recognition within the adult learning literature that a deeper appreciation of different forms of learning task is necessary, as Boud, Keogh, and Walker (1985, p. 38) emphasize: “Learning theory, despite some hopeful signs, has yet to make any substantial contributions to the kind of learning tasks with which we are normally faced.”

Developing a deeper grasp of the key elements of the entrepreneurial learning task is a prime objective of this present work and represents a significant dimension of a learning perspective of entrepreneurship. This article does not purport to offer a definitive conceptualization of either the “content” or “process” dimensions of this learning task. As Cope and Watts (2000) argue, we are still a long way from the development of sufficiently broad–based frameworks to illustrate the diversity of the entrepreneurial learning task with any adequacy. Rather, the intention is to map out and extend current boundaries of thinking regarding entrepreneurial learning, thereby synthesizing and developing existing work into coherent and integrative themes that provide a clearer direction for further research from a learning perspective.

In terms of the content dimension of the entrepreneurial learning task, i.e., “what” entrepreneurs have to learn about, much of this learning remains context–specific but preliminary work by Sexton, Upton, Wacholtz, and McDougall (1997) has identified important “learning needs” of growth–oriented entrepreneurs. Topics proposed include learning about management succession and the problems and pitfalls of growth. Their work also indicates that the learning priorities of entrepreneurs may vary according to industry sector. Clearly, more research is needed in this area and this article augments current theorizing by introducing five broad areas of significance that require further exploration, which are outlined below:

Conceptualizing Interrelated Processes of Entrepreneurial Learning

Recent work on entrepreneurial learning has begun to conceptualize its “process” dimension. In comprehending “how” entrepreneurs learn, there is a common recognition that entrepreneurs are action–oriented and much of their learning is experientially based (Rae & Carswell, 2000, 2001). Several theorists have emphasized that entrepreneurs learn primarily through “learning by doing” (Cope & Watts, 2000; Smilor, 1997), including such learning processes as trial and error, explicit problem solving, and discovery (Deakins & Freel, 1998; Young & Sexton, 1997). As Minniti and Bygrave (2001) argue, knowledge about “how to be entrepreneurial” can only be acquired through learning–by–doing or direct observation, a point reinforced by Dalley and Hamilton (2000). “It seems accepted that there are no shortcuts in the learning process, that surviving various ‘trials by fire’ is almost a rite of passage, and that there can never be any substitute for experience” (Dalley & Hamilton, 2000, p. 55).

Postle (1993) refers to this as the “affective” mode of learning, which “refers to learning by encounter, by direct experience. It finds expression through ‘being there,’ through immersion in an experience” (p. 33). The notion that “we begin where we are, and learn as we act” (Hutton, 1989, p. 54) is extremely relevant to the study of entrepreneurial learning, as Gibb (1997) emphasizes:

Entrepreneurial Learning from Critical Experiences

Recognizing that learning from experience is a dominant form of entrepreneurial learning, Reuber and Fischer (1993) argue that it is the need to conceive more deeply how entrepreneurs learn from formative experiences, through the identification of entrepreneurial learning “mechanisms,” which remains a key research objective. In identifying such mechanisms there is growing evidence to suggest that significant “events” or “episodes” have an influential role to play in stimulating entrepreneurial learning (Cope, 2001; Deakins & Freel, 1998; Rae & Carswell, 2000). Crucially, both positive and negative experiences, such as notable successes and failures, are seen to impact on the entrepreneurial learning process (Minniti & Bygrave, 2001; Reuber & Fischer, 1999). As Young and Sexton (1997) assert, the learning activities of entrepreneurs emerge in response to meaningful opportunities and problems. The importance of unusual, discontinuous learning “events” is also apparent within the management and adult learning literature (Burgyone, 1995; Marsick & Watkins, 1990; Mumford, 1994). Although learning is a continuous process (Mumford, 1991), it appears that confronting and overcoming challenges and problems can be rich sources of learning (Daudelin, 1996; Kleiner & Roth, 1997).

The notion of “critical learning events” has become an emergent theme within theorizing on entrepreneurial learning (Cope & Watts, 2000; Deakins, O'Neill, & Mileham, 2000; Deakins, Sullivan, & Whittam, 2002; Deakins & Freel, 1998; Sullivan, 2000; Taylor & Thorpe, 2000). Interestingly, Rae and Carswell (2000) postulate the existence of wider “learning episodes,” where entrepreneurs have described seminal periods of learning that have been instrumental in forming their approaches to life and work. Similar work on entrepreneurial learning has demonstrated the major impact that “critical episodes” can have on the entrepreneur's personal learning and development (Cope, 2003b). Deakins and Freel (1998) eloquently summarize the importance of critical events in distinguishing how entrepreneurs learn:

Although critical learning events represent an appreciable entrepreneurial learning process, there exists currently a lack of understanding within the entrepreneurship discipline regarding the specific forms and levels of learning associated with these exceptional experiences. Drawing on wider learning literature, it can be demonstrated that a pertinent aspect of critical events is that the learning from these experiences can be “transformational” (Appelbaum & Goransson, 1997), in the sense that when individuals face such nonroutine situations, their learned responses and habitual ways of behaving prove ineffectual (Marsick & Watkins, 1990). Such unusual circumstances require heightened attention and experimentation, forcing individuals to question their taken–for–granted beliefs and assumptions and reframe their appreciation of the situation at hand (Argyris & Schön, 1978; Schön, 1983). In exploring these issues within the context of entrepreneurship, Cope (2003a) concludes that there is more to entrepreneurial learning from critical events than the gradual accumulation of more routinized and habitual “incremental” learning (Mezirow, 1991). ⁵

This article emphasizes that significant opportunities and problems during the entrepreneurial process have the power to create “higher–level” learning outcomes. Such fundamental learning involves radical change and has the capacity to transform the underlying assumptions and values that guide one's actions (Argyris & Schön, 1978; Mezirow, 1991), thereby creating a shift in “mindset” (Applebaum & Goransson, 1997). It is suggested here that higher–level learning creates the capacity for entrepreneurs to “do things differently” rather than refining the efficacy of extant behavior and actions. As Fiol and Lyles (1985) assert, some kind of “crisis” is a prerequisite for “higher–level” learning and that such “shocks,”“jolts,” or “crises” are necessary for “unlearning, new higher–level learning and readaptation to take place” (p. 808).

Within the organizational learning literature the terms “double–loop,”“transformational,” and “generative” are used interchangeably by some theorists to describe the same kind of higher–level learning (Appelbaum & Gorannson, 1997; Nevis, DiBella, & Gould, 1995). Recent work within the entrepreneurship domain (Cope, 2003a), however, illustrates that entrepreneurs can experience very different forms of higher–level learning with regard to critical events. It demonstrates that discontinuous events can trigger both “double–loop” (Argyris & Schön, 1978) and “transformative” (Mezirow, 1991, 1990) learning outcomes—forms of learning conceptualized by management and adult learning theorists that are both of a higher–order and yet remain qualitatively different.

More specifically, Cope (2003a) highlights that critical events can create double–loop learning in entrepreneurs that generates a renewed understanding or redefinition of organizational processes and strategies. In contrast, such experiences can also stimulate transformative learning that has a distinctly personal dimension and has the capacity to trigger considerable changes in the entrepreneur's self–awareness. As Mezirow (1991) states, transformative learning involves “an enhanced level of awareness of the context of one's beliefs and feelings [and]… involves profound changes in self, changes in cognitive, emotional, somatic, and unconscious dimensions” (pp. 161, 177). Thus, discontinuous experiences not only have the capacity to create fundamental changes in the entrepreneur's awareness regarding the effective management of their business but also in terms of the entrepreneur's personal identity—learning that impacts directly on their self– understanding, perceptions, and behavior at a much deeper level (Cope, 2003a). Adult learning theorists Boud et al. (1985) emphasize the powerful impact that such learning can have:

In developing an understanding of the relationship between higher–level and lower–level forms of entrepreneurial learning, this article proposes that learning from critical events can be “metamorphic” in the sense that more fundamental higher–level entrepreneurial learning is often followed by a period of more adaptive, incremental learning (Cope, 2001). This more gradual learning can either positively or negatively reinforce the more radical, transformational change in awareness created by a discontinuous event. Within the context of entrepreneurial learning, such findings stand in contrast to Nevis et al.'s (1995) work in the management–learning domain, which asserts that subsequent adaptive learning necessarily reinforces transformational learning.

The Affective Dimension of Critical Experiences

Although critical events can act as triggers for fundamental forms of entrepreneurial learning, a key proposition put forward in this article is that such learning can often be traumatic and stressful for the entrepreneur to endure (Cope, 2001). With regard to transformative learning, for example, Mezirow (1991) concedes that there is often considerable emotional “fallout” associated with learning that challenges the individual's perceptions of himself or herself. “Any major challenge to an established perspective can result in a transformation. These challenges are painful; they often call into question deeply held personal values and threaten our very sense of self” (Mezirow, 1991, p. 168). A constituent element of many significant experiences during the entrepreneurial process, particularly more negative experiences or “crises,” is that they are emotionally charged events (Cope & Watts, 2000). This reflects Brown's (2000) recognition that “learning and emotion work together in a tandem motion” (p. 290). Within the field of management, Snell (1992) illustrates that such negative critical experiences can often represent painful psychological blows, which he describes as “hard knocks.” However, Snell (1992) goes on to emphasize that there is much more to crises than merely viewing them as wholly negative experiences:

Accepting that mistakes, crises, and failures can have a negative immediate impact in both business and personal terms, it is useful to highlight here the positive and productive learning outcomes that can result from these events in the longer–term. Reuber and Fischer (1999) highlight that “a particular event can have both positive and negative impacts. For example, the loss of a key customer might reduce sales revenue in the short term, but if the firm can learn from this experience, it may result in better long–term performance through reduced dependency and/or improved service quality” (p. 31). This article stresses how valuable negative critical events can be not only in gaining both confidence and knowledge, but also in terms of reflecting on the consequences of one's actions and actively trying to ensure that such events do not reoccur (Cope, 2001). As Smilor (1997) states, entrepreneurs “learn from what works and, more importantly, from what doesn't work” (p. 344). This reflects Snell's (1992) acknowledgement that “personal development and total control are incompatible, hard knocks cannot be totally prevented if the person wishes to continue to learn and develop” (p. 18).

The Importance of Routinized Learning

It must be highlighted at this point that entrepreneurs do not learn solely through facing exceptional learning “events.” Rather, entrepreneurs are constantly learning and developing as they manage their business (Hines & Thorpe, 1995; Reuber & Fischer, 1993), and can learn through regularized and repetitive activity as well as more nonlinear, discrete events (Costello, 1996; Reuber & Fischer, 1999). As Minniti and Bygrave (2001) point out, “learning is a process involving repetition and experimentation that increases the entrepreneur's confidence in certain actions and improves the content of his stock of knowledge” (p. 7).

Within the field of management learning, Burgoyne and Hodgson (1983) illustrate the importance of everyday learning by doing in creating a gradual or tacit change in one's orientation or attitude. They indicate that managers appear to draw on elements of a “background consciousness” as they deal with events and that this background consciousness can change, in a gradual manner, in the light of a continual flow of information. Thus, this article argues that although critical learning events play a central role in triggering higher–level entrepreneurial learning, they are not the only learning mechanism capable of creating such deep learning. Although more routinized, “adaptive” learning is normally associated with lower–level learning outcomes (Appelbaum & Gorannson, 1997; Argyris & Schön, 1978; Fiol & Lyles, 1985), the work of Burgoyne and Hodgson (1983) demonstrates that higher–level learning can also arise from the accumulation of more gradual, incremental learning:

Understanding the Relationship between Reflection, Learning, and Action

It is vitally important, given the consensus that much entrepreneurial learning is action–oriented, to dispel the misconception that entrepreneurs are merely “doers,”“whose time is best spent in doing, not in dreaming or retrospective sense–making” (Bird, 1988, p. 446). Rather, it is beneficial to view entrepreneurs as “reflective practitioners” (Cope & Watts, 2000; Schön, 1983). In developing a deeper understanding of how the process of entrepreneurial learning takes place, this article draws on a range of adult learning literature to emphasize that it is through reflection that experience is turned into learning (Boud et al., 1985; Daudelin, 1996; Preskill, 1996). As Marsick and Watkins (1990) argue, “learning takes place through an ongoing, dialectical process of action and reflection” (p. 8). Reflection can be viewed as a process that brings meaning to experience (Rae & Carswell, 2000), for as Jarvis (1987b) states, “for an experience to become meaningful, people have to think about it, reflect upon it” (p. 168). Although Boud et al. (1985) recognize the difficulties associated with defining reflection they offer the following conceptualization: “A generic term for those intellectual and affective properties in which individuals engage to explore their experiences in order to lead to new understandings and appreciations. It may take place in isolation or in association with others” (p. 19).

This article contends that an essential feature of critical learning events within the entrepreneurial process is their capacity to stimulate challenging or “deep” reflection, particularly more negative mistakes or crises, which is instrumental in creating higher–level entrepreneurial learning from these experiences (Cope, 2003a). As Jarvis (1987b) points out, it is disjunction and unexpected events, rather than more routinized experiences, which provide a greater stimulus for thought and reflection. This point is reinforced by Marsick and Watkins (1990), stating that “mistakes are potent tools for learning, in part, because individuals often feel so brittle about making them. As a result, they will be more likely to reflect on the mistake to determine its causes and to prevent its repetition” (p. 13). It is also imperative to stress the complex relationship between reflection and action, and to recognize that critical experiences have the capacity to create “reflection–for–action” (Preskill, 1996), which involves the individual's ability to focus on the future rather than the past and to predict how they will use what they have learned from previous experiences. Action learning theorists McGill and Beaty (1995) illustrate the complex relationship between reflection and action with regard to critical experiences:

The Generative Process of Entrepreneurial Learning

Numerous learning theorists argue that reflection and learning inform further action (Boud et al., 1985; Hutton, 1989; Jarvis, 1987b; Kolb, 1984; Mezirow, 1991). As Boud et al. (1985) assert, “while reflection is itself an experience, it is not, of course, an end in itself. It has the objective of making us ready for a new experience. The outcomes of reflection may include a new way of doing something, the clarification of an issue, the development of a skill or the resolution of a problem” (p. 34). There is the notion that, through reflection, individuals are not only able to learn from events and experiences, but that they are also able to “bring forward” this learning to new situations and encounters. This ability to extrapolate one's learning and develop new ways of looking at the world is described as “generative” learning (Senge, 1990), which Gibb (1997) introduces within the context of entrepreneurial activity:

Interpretation suggests that generative learning is both retrospective and prospective, as it is the interaction between the past and the future that provides the basis for intention and further action (Boud et al., 1985; Jarvis, 1987b). As Daudelin (1996) asserts, there are two key conditions for learning from experience, “developing insights from past events and applying them to future actions” (p. 38). It is this application of reflective learning that encapsulates the distinctive nature of generative learning. In apprehending the generative process of learning from critical events, this article reconceptualizes Gibb's (1997) earlier definition to describe “generative” learning as the ability to extrapolate and “bring forward” one's learning from critical events to new situations, incidents, and experiences.

Although the concept of generative learning is touched upon by Gibb (1997), this article maintains that this is a valuable concept for the study of entrepreneurial learning that remains significantly underconceptualized. A major contribution of this present work is the development of a deeper theoretical appreciation of generative learning within the entrepreneurial process. A key argument put forward here is that the importance of generative learning rests on its ability to enable entrepreneurs to abstract and generalize across contexts, to recognize patterns and build relationships between different situations and events. Generative learning outcomes not only allow for more effective action, but also allow for more effective action in a broader range of new situations (McGill & Warner Weil, 1989); thereby creating “higher–order skills that are generalisable and lead to a greater transfer of learning” (Henry, 1989, p. 29). With regard to critical learning events, through generative learning processes entrepreneurs are able to make sense of current and immediate critical events by understanding their “relatedness” to previous critical experiences. In essence, developing new cognitive “frames of reference” (Huber, 1991) that may help to recognize the underlying reasons why certain events occur.

In developing the concept of generative entrepreneurial learning, this article introduces two distinctive forms of generative learning, “adaptive” and “proactive” (Cope, 2001). In conceptualizing adaptive generative learning, extant theorizing illustrates that cumulative learning through experience enables entrepreneurs to develop what could be described as a “cognitive store” of accessible experiential learning, which they are able to reflect upon and subsequently utilize in similar situations. Kim (1993) describes this simply as the acquisition of “know–how.” Entrepreneurship researchers have described such learning as the “subjective stock of knowledge” (Minniti & Bygrave, 2001), or “experiential stock” (Reuber & Fischer, 1999) that entrepreneurs accumulate over time.

In their attempts to develop a conceptual framework of entrepreneurial learning, Young and Sexton (1997) differentiate between “explicit” and “implicit” learning. They make the valuable suggestion that implicit learning appears to develop gradually, and that entrepreneurs often “possess a ‘feel’ or ‘knack’ for performing certain tasks and understanding how a particular system works. This feeling or knack may be the result of implicit learning that allows entrepreneurs to improve their performance” (Young & Sexton, 1997, p. 227). This incremental process of positive affirmation of one's actions can have a “self–reinforcing strength” (Minniti & Bygrave, 2001). In extending such theorizing, this article suggests that this evolutionary form of learning can produce a kind of adaptive generative learning, where the entrepreneur employs successful, tried and tested responses when faced with a new event or set of circumstances that is perceived to have distinct similarities to his or her previous experiences (Cope, 2001). As Minniti and Bygrave (2001) state, “knowledge gained in earlier problems is used later to solve similar ones and becomes embedded in expectations and beliefs” (p. 14).

The concept of proactive generative learning describes a learning process that enables entrepreneurs to become sensitized to potential critical incidents by becoming attuned to factors and circumstances that may become “critical.” This form of generative learning enables entrepreneurs to develop what is described here as a cognitive “early warning system” that enables the visualization and anticipation of critical events more effectively. In this respect, generative learning can be a highly productive form of entrepreneurial learning, as it can endow entrepreneurs with more control over the successful management of their businesses. Furthermore, there is evidence to suggest that entrepreneurs who experience such learning are able to proactively put measures in place to try and avoid the repetition of more negative experiences (Cope, 2001). This resonates with Boud et al.'s, acknowledgement that the benefits of reflection may be lost unless they are linked to action and a commitment of some kind based on one's reflective learning.

It is vital to recognize that the generative process of bringing forward one's learning to new situations and experiences may not be immediate. With regard to entrepreneurial learning, Reuber and Fischer (1999) highlight the issue of “timing” between learning events and the subsequent application of lessons learned. Similarly, Mezirow (1991) indicates that more challenging and critical forms of reflection require a “hiatus” in which adult learners are able to put their experiences into perspective. Consequently, the learning that results from such reflective practice cannot necessarily become an integral or instantaneous element of entrepreneurial action. Boud, Cohen, and Walker (1993) come to similar conclusions:

A central proposition of this article, therefore, is that entrepreneurial learning can be conceptualized as a dynamic process of awareness, reflection, association, and application; the important issue being that the utilization of entrepreneurial learning may take place long after the experience itself.

More radically, it must be emphasized that it may not always be possible for entrepreneurs to “bring forward” learning from previous experiences. As Kleiner and Roth (1997) point out, in certain instances individuals continue to make mistakes and “seem to stumble along, oblivious to the lessons of the past… Most important, the old ways of thinking that led to the mistakes are never discussed, which often means that they are still in place to spawn new mishaps again and again” (p. 172). Jarvis (1987a) postulates the existence of “nonlearning” responses to situations in which individuals may learn errors that fit in with their existing view of the world or that reinforce erroneous beliefs.

Within the field of entrepreneurship, West and Wilson (1995) argue that it is possible for entrepreneurs to fall into “learning traps,” whereby they misinterpret new situations due to their over–reliance on preconceived perceptions formed through past experience. What must be stressed here is that learning extrapolated to new situations is not necessarily positive or beneficial and does not always increase an entrepreneur's effectiveness, for “individuals can incorrectly learn, and they can correctly learn that which is incorrect” (Huber, 1991, p. 89). Lengthy experience can actually be counterproductive to entrepreneurial effectiveness (Reuber & Fischer, 1999), as entrepreneurs may over–exploit actions that generate initially desirable outcomes, thereby bringing forward learning that is false (Minniti & Bygrave, 2001).

The aim of the following section is to emphasize that any conceptualization of how or what entrepreneurs learn must be mediated by an appreciation of the overarching affective and social characteristics of entrepreneurial learning. In moving toward a robust learning perspective of entrepreneurship, it is vital to understand the context in which learning takes place (Taylor & Thorpe, 2000). It is argued here that although literature on these fundamental dimensions of entrepreneurial learning is emerging, much further theoretical development is required.

Conceptualizing the Affective and Social Characteristics of Entrepreneurial Learning

Within the adult and management learning literature it has long been recognized that learning is located within certain situations and contexts (Fox, 1997) and that learning is an intrinsically social process (Burgoyne, 1995; Holman, Pavlica, & Thorpe, 1997; Pavlica, Holman, & Thorpe, 1998). Lave and Wenger (1991) explicate the concept of “situated learning,” where learning is described as “an integral and inseparable aspect of social practice” (p. 31). In applying Lave and Wenger's work to the entrepreneurship domain, this article stresses the importance of viewing entrepreneurs as practitioners who operate within multiple, overlapping social communities of knowledge and practice:

Researchers have begun to conceptualize the social dynamic inherent within entrepreneurial learning (Deakins et al., 2000; Hamilton, 2004; Rae, 2002; Taylor & Thorpe, 2000). Particular emphasis has been placed on entrepreneurial networks as “learning systems” (Mäkinen, 2002). Hines and Thorpe (1995) argue that a complex network of “learning agents” exists and entrepreneurs learn within the wider context of these personal and business relationships. Similarly, Gibb (1997) defines the “learning environment domain” for small business as embedded within the transactional and business relationship networks of the entrepreneur including suppliers, customers, bankers, staff, as well as family and peers. Gibb (1997) goes on to emphasize that “learning partnerships” need to be created where small businesses and their owners need to learn from, and with, key network agents.

Several theorists also highlight the social characteristic of entrepreneurial learning in relation to critical learning events (Boussouara & Deakins, 1999; Taylor & Thorpe, 2000). As Boussouara and Deakins (1999) state, “critical incidents and learning occur from the experience of dealing with customers/suppliers and other stakeholders” (p. 221). Taylor and Thorpe (2000) conclude that there is a powerful social dimension to owner–manager learning from nonroutine events, though the significance of this influence is yet to be revealed.

More empirical work is clearly required to identify the distinctive forms of learning that arise from the entrepreneur's engagement in social relationships, both inside and outside the venture. For example, compelling evidence suggests that the role of the entrepreneur's domestic partner in facilitating reflection and learning by acting as a “sounding board” is an important yet currently neglected area of research (Cope, 2001). The social characteristic of entrepreneurial learning developed here provides new ways of appreciating the evolving nature and value of network relationships in all aspects of entrepreneurial activity. In terms of “who” entrepreneurs learn from and with, work by Deakins et al. (2000), Sexton et al. (1997) and Sullivan (2000) indicate that issues such as trust, respect, and shared experience impact on the quality of the learning experience. Substantial research issues surround the influence that social issues such as these have in terms of stimulating different types and levels of entrepreneurial learning. Consequently, a dynamic learning perspective of entrepreneurship places individuals involved in the entrepreneurial learning process—including network actors and “powerful others” such as the entrepreneur's spouse, family, and friends—at the heart of continuing inquiry.

In creating conceptual links between the emotional and social characteristics of entrepreneurial learning, Cope (2003a) highlights the importance of highly emotional relationship conflicts in stimulating higher–level forms of entrepreneurial learning. As Boyd and Gumpert (1983) state, “the complaint we heard most often from those we interviewed concerned the frustration and disappointment they experienced in their relationships with partners and subordinates” (p. 56). Further research is required to understand more clearly the role of social conflict in the entrepreneurial learning process and the extent to which it contributes to the inherently stressful nature of the entrepreneurial role (Boyd & Gumpert, 1983). This article concludes that developing a small business and learning to be an effective entrepreneur is by no means a smooth or easy process. Entrepreneurship can be understood as an emotionally intense process. To use Snell's (1992) terminology, an exploration of the learning experiences of entrepreneurs suggests that many aspects of the entrepreneurial learning task are achieved through “painful” experiential learning and repeated“hard knocks” (Cope, 2001).

Glimpses of the powerful emotional dimension of entrepreneurial activity and learning can be observed in extant research (Cope & Watts, 2000) and yet the complex connection that exists between emotion and learning is yet to be conceptualized within the context of entrepreneurship. This reflects a broader recognition within the adult learning domain that most research on learning has failed to take into account its intrinsically affective dimension (Boud et al., 1985). As Boud et al. (1993) remark, “emotions and feelings are key pointers for, and barriers to, learning” (p. 15). A constructive avenue for inquiry involves exploring the affective dimension of critical events during the entrepreneurial process in more detail, particularly the relationship between the emotional “intensity” of the experience and the resultant depth of reflection and learning.

Applying a “Learning Lens”: Directions for Further Research

The purpose of this article has been to present a number of theoretical frameworks or “building blocks” for understanding the nature of entrepreneurial learning and, more broadly, for studying entrepreneurship through a “learning lens.” The previous section has outlined some important areas for further research but it is vital to consider, in greater depth, how such theorizing can be applied to move the study of entrepreneurial learning forward. Earlier work by the author (Cope, 2003a) is one example of how management and adult learning theory can be utilized to make sense of entrepreneurial activity. However, theories of learning in entrepreneurial contexts are still emerging and a range of significant research opportunities exist:

Conclusion

This article has synthesized a broad range of learning literature to propose a learning perspective of entrepreneurship as a valuable and distinctive approach for studying the dynamic nature of entrepreneurship both during and beyond the new venture creation phase. This approach to researching entrepreneurship offers a new way of looking at the field, particularly those individuals engaged in entrepreneurial activity. It presents fresh opportunities for understanding entrepreneurs in context, by highlighting the complex, interactive learning relationship that exists between the entrepreneur, his or her business, and the wider environment.

In conceptualizing the nature of entrepreneurial learning in terms of phases, processes, and characteristics, this article has provided an organized, coherent, and integrative theoretical basis from which additional research can continue to build an appreciation of entrepreneurship from a learning perspective. These interconnected elements of entrepreneurial learning are by no means definitive. Further research may reveal entirely new dimensions of learning in entrepreneurial contexts and more interdisciplinary, in–depth empirical work is a vital part of this theory–building process.

Entrepreneurial learning is not characterized by the notions of stability, consistency, or predictability. Rather, it has been demonstrated that the concepts of metamorphosis, discontinuity, and change more appropriately encapsulate the dynamics of this phenomenon. Critical learning events have become a unifying theme within the literature on entrepreneurial learning. This article has augmented current comprehension of these significant experiences through a process–based conceptualization of the relationship between reflection, learning, and action. A deeper appreciation is required of the periods of intense, fundamental learning that surround these discontinuous experiences in relation to subsequent phases of more stable and gradual learning. To borrow from Greiner's (1972) seminal thesis, new avenues for research exist in exploring the connections between revolutions and evolutions that occur in entrepreneurial learning as organizations grow.

In conclusion, this article has drawn upon empirical research and numerous learning literature to develop emergent themes on entrepreneurial learning and to introduce new concepts that clarify the multifaceted nature of the learning experienced by entrepreneurs. Solid theoretical foundations have been laid but researchers committed to understanding entrepreneurship from a learning perspective are confronted with innumerable avenues for further research.