Tuesday, 17 August 2004
The Value of Developing Entrepreneurs
It was back in '98 that Jerome L. Murray died. I never met him. I don't know if his friends called him Jerry. Yet, I knew him well. I knew him because he was an inventor ' the kind of old fashioned, entrepreneurial inventor who drives crazy those of us who have made a career of helping entrepreneurs.

I remember when Jerry Murray died because it was in the year (the academic year of 1997-98) that my friend Constantin Sasu lived with me while studying as a Fulbright Scholar at the University of Nebraska at Omaha. Dr. Sasu is a management professor at the Alexandru Ioan Cuza University (AICU) in Ia_i, Romania. We met in 1991 during my first visit to Romania. I was there, under a grant from the U.S. Information Agency, to help the economics faculty at AICU transition from teaching command market economics (i.e., socialism) to teaching demand market economics (i.e., capitalism).

Entrepreneurship isn't valued in command market economies. Economic advancement is presumed to come from major development projects, vertically integrated and designed by knowledgeable bureaucrats in a central government planning agency. Dr. Sasu was among the few professors at AICU interested in teaching entrepreneurship and small business management. To study entrepreneurship was to abandon all that Professor Sasu had been taught in his academic career.

Interestingly, this assumption of command market economics is at least partially justified by neoclassic economics ' the economics of Adam Smith. This is because demand and supply curves presume an advantage to the efficient producer. A socialist could well believe that a benign command structure would eliminate the negative effects of monopoly and achieve economic success through efficiency alone. Besides ignoring the obvious impossibility of assembling a benign command structure, this approach to economics ignores innovation. This was the great insight of Joseph Schumpeter, the economist who predicted in the 1930s that capitalism would not fall to communism for one reason, a reason ignored by Adam Smith. It is that capitalism encourages innovative entrepreneurs.

This brings us back to Jerry Murray. Professor Sasu and I were sitting in the family room reading the Sunday newspaper one February morning. Though Professor Sasu is accomplished in English, it is his second language so some words confuse. He turned to me and asked about an advertisement that proclaimed a bank's willingness to lend money to entrepreneurs wanting to exploit their latest gizmos. 'What,' he wanted to know, 'means 'gizmo'?'

A gizmo, I explained, is an invention that may tickle your fancy and seem to solve a problem but turns out to be more trouble than it's worth. I searched my mind for an example. What sprung there was the electric knife. An electric knife, I explained since I didn't have one to show him, has two blades connected to an electric motor. The blades move back and forth so that you can carve a roast in even slices. You soon learn, however, that the electric knife requires that you disassemble it to clean it and then put it back together. It's more trouble than a regular knife with not much better results. He smiled and nodded in understanding.

It was on Wednesday of the same week that I noticed a small article in the newspaper under the headline 'Multifaceted Inventor Dies.' It was an obituary of Jerome L. Murray. Jerry Murray, it informed, had invented the electric knife. And, that wasn't all. He had accumulated 75 patents, among them other gizmos, such as the audible pressure cooker.

I immediately knew that I knew Jerry Murray. He had to be like the many entrepreneurs I have met who know they have solved some problem and that their solution will make life better for everyone. Each of them knows that their solution, if understood by the masses, will be widely adopted and make them a fortune. They know this even as I look skeptically at the ideas with the sure knowledge that their products will never find a market.

One day in 1951 Jerry Murray was at the Miami International Airport. He saw people getting off of an airplane in the rain and walk to the terminal. He decided he could solve that problem and invented the airplane boarding ramp.

Somehow Jerry Murray learned that blood could not be pumped without damaging the cells. He decided to solve that problem and invented the peristaltic pump. It pumps fluids through a method of expansion and contraction that imitates the way that peristalsis moves the contents of the digestive tract. The peristaltic pump made open-heart surgery possible. His pump was also adapted for kidney dialysis and for food processing (to pump soup into cans without crushing the peas or the celery).

Jerry Murray rose above the level of gizmos. What brought him there, though, was the same desire to solve problems through innovation that produced the electric knife. One wonders how many of Jerry Murray's ideas were never patented and how many of his 75 patents will always rest in the dusty files of the Patent Office.

Today we assume that innovation means technological advance and that technological advance has become so sophisticated that it is now the realm only of research universities and large technology companies. That may be so. But, it is also true that technology does not advance by research alone. It is still required that people with a burning desire to solve problems must adapt research and bring it to the marketplace. It requires people like Jerry Murray. It requires entrepreneurs.

At the Nebraska Business Development Center (NBDC) we have been helping entrepreneurs for 27 years. We know that entrepreneurship isn't just a burning desire or having a good idea. Though some people have more natural talent at it than others, just as athletes differ in their talents, entrepreneurship is a process that must be learned.

Most entrepreneurs learn the process just as one would learn a game. First, they see it performed, in their family or in an entrepreneurial firm, then they are taught the fundamentals, then they try it on their own. No matter how far along they are in the process, they benefit from the advice of a coach.

At the Scott Technology and Incubator Center, on the UNO South Campus, NBDC has opened an office with an extraordinary coach. Craig Hergott has been through the process of entrepreneurship as one of the founders of JBA, Inc., an entrepreneurial firm that built housings for automatic teller machines when that industry was young. JBA was purchased by a large firm after it had proved itself with a strong period of growth. Hergott's specialty is marketing. He is helping firms in the Scott Incubator find markets. Soon, he will be joined by an associate from the NBDC procurement technical assistance program. Together, they will work with entrepreneurial firms to help them find markets for their goods and services.

The NBDC procurement technical assistance program is partially funded by the Defense Logistics Agency, U.S. Department of Defense. Its purpose is to help small businesses obtain Defense contracts. Last year, NBDC clients did more than $46 million in business with the federal government. But, Nebraska can't grow its share of the government market on its current base. It needs entrepreneurial firms with new ideas that respond to the government's needs.

The merger of Space Command into the Strategic Command brought a significant increase in contracts let through Offutt. And, these contracts are to exploit cyber space as much as outer space. We have the research capacity in the Peter Kiewit Institute to develop entrepreneurial firms to exploit the opportunity of those contracts. However, entrepreneurship is not developed by research alone. Entrepreneurship is a process of its own. Entrepreneurs need to learn how the process works.

NBDC has the resources to provide that expertise. It is helping young businesses at the Scott Technology Center make the proper connections. It is helping them build relationships with primary contractors, helping them learn how to find bidding opportunities, and helping them learn how to prepare successful proposals. NBDC will follow this effort with help to the businesses to transition from government markets to private markets. Many applications desired by the Defense Department can be modified to meet private sector needs. Then small Nebraska entrepreneurial companies can become big Nebraska entrepreneurial companies. It takes more than venture capital to make a successful venture. It takes a desire to meet needs through innovative products and services and the ability to find the right market for those products and services. It is a way that NBDC is helping businesses grow Nebraska.

Robert E. Bernier, Ph.D., is state director of the Nebraska Business Development Center and is Assistant Dean of the University of Nebraska at Omaha College of Business Administration.

 
Posted By Robert E. Bernier at 10:24 AM
View other days blogs
SUN MON TUE WED THU FRI SAT
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30 31     

The Latest Posts!
Archives
Categories
Links
About Author
Keyword Search