Entrepreneurship discourses in the Finnish policy texts Jarna Heinonen and Ulla Hytti TSE Entre, Turku School of Economics 20014 University of Turku, Finland [email protected] Abstract The chapter focuses on a Finnish special feature in entrepreneurship policy-making – a crosssectional entrepreneurship policy programme. The purpose of this chapter is to understand what kind of roles and mission entrepreneurship and entrepreneurs are given in the Finnish entrepreneurship policy texts. A discourse analysis was conducted based on selected policy texts related to the entrepreneurship project and programmes found in the Government Programmes in 1999, 2003 and 2007. In our analysis we identified a clear evolution, but no radical changes, in the policy discourses between the years indicating that policies rather develop incrementally by adding on the previous schemes. In addition, our analysis demonstrates the changing focuses, measures and key actors involved in the policy texts. In general, the discourses emphasise the need to create more and better jobs and economic growth. There is a very limited room for entrepreneurship in developing new innovations and change in the society. The results are informative for theorizing about entrepreneurship policy in promoting entrepreneurship. The chapter contributes to SME and entrepreneurship policy discussion by offering fresh insights on the intersection between entrepreneurship literature, policy texts, and the social reality. From the policy-learning perspective the chapter is highly relevant for policy makers in different countries. It presents an interesting, horizontal approach to entrepreneurship policy with an attempt to widen the understanding of the concept and applicability of entrepreneurship in the policy agenda. In addition, it suggests that policy makers need to be critical of the policy development in order to conduct truly entrepreneurial policies capable of promoting entrepreneurship within the society.

Introduction Politicians and academics acknowledge the importance of a healthy entrepreneurial sector for generating economic growth as it is considered as a channel through which new knowledge enters the economy (Sanders 2007). In Europe this view is illustrated by the European Commission´s Green Paper on Entrepreneurship (EU 2003). The Finnish entrepreneurship policy agenda reflects the European approach. However, the Finnish entrepreneurship policy has its own national flavour as it has developed in the interplay between political, social and economic factors (Gohmann et al. 2008, Robson et al. 2009). Finland has traditionally been marked by relatively low entrepreneurial cultures and attitudes (Stenholm et al. 2010). After the severe recession in the early 1990s entrepreneurship started to receive increasing awareness among policy makers and media. A particular entrepreneurship policy focus was adopted in the Government Programme in 1999.

Since 1999 an interesting speciality of the Finnish entrepreneurship policy is the cross-sectional and horizontal approach to entrepreneurship policy, which has attracted attention among entrepreneurship researchers and policy-makers (see for example Stevenson and Lundström 2001). The approach is concretized in particular entrepreneurship policy programmes, which have been included in the Government programmes during the 21st century. A starting point for the policy approach took place in 2000 when a special two-year Entrepreneurship project was launched by the Ministry of Trade and Industry and implemented in close co-operation between nine ministries and different associations. The horizontal approach to entrepreneurship policy involving different ministries and core actors in the Finnish society indicated a consensus in understanding of the holistic nature of the phenomenon of entrepreneurship. Ever since entrepreneurship policy has been included in the Government programmes with a focus not only on start-ups and SMEs but also on growth and competitiveness of existing businesses. Entrepreneurship has been linked to and seen as the solution for many challenges: creation of new jobs, economic growth and particularly generation of new innovations and company growth and competitiveness (Heinonen and Hytti 2008, see also van Praag and Versloot 2007). In 2003 the Entrepreneurship project was widened and a special Entrepreneurship policy programme was established as a part of the Government´s economic and industrial policy. The horizontal policy development and decision making was further focused on the Policy programme on work, entrepreneurship and work-life from 2007 combining the needs of employers and employees in the policy design.

This chapter focuses on this Finnish feature in entrepreneurship policymaking – the cross-sectional entrepreneurship policy programme – by conducting a discourse analysis of the fundamental policy texts of the programme. Our aim is to understand what kind of roles and mission entrepreneurship and entrepreneurs are given in the Finnish policy texts. We acknowledge that our analysis does not cover the Finnish entrepreneurship policy as a whole in the 2000´s as the Government programmes

include also other measures to promote SMEs and entrepreneurship in the Finnish society. However, by studying the policy texts of the horizontal entrepreneurship programme we are able to reach the basic assumptions related to entrepreneurship policy and, thus, to the promotion of entrepreneurship in Finland.

Promoting entrepreneurship What is it that Governments wish to promote when they allocate funds for entrepreneurship policy? This is a challenging question as there is no single theory of entrepreneurship nor consensus on what is meant by the concept. To date most researchers and policy makers define entrepreneurship in terms of who the entrepreneur is, and what she or he does (Venkataraman 1997). In addition, the literature focuses on the performance of individuals or firms in the context of small business or new businesses (Shane and Venkataraman 2000). However, recently researchers have shifted their attention away from individuals with certain characteristics willing to become entrepreneurs, towards understanding the nexus of enterprising individuals and valuable opportunities. (Venkataraman 1997) Gartner (1988, 1990) presents three foundations for entrepreneurship as a scholarly domain: entrepreneurship is 1) about behaviour (rather than characteristics), 2) a process, and 3) about emergence. Based on Venkataraman´s work (1997) Shane and Venkataraman (2000: 218) define the field of entrepreneurship as a scholarly examination of „how, by whom, and with what effects opportunities to create future goods and services are discovered, evaluated, and exploited. Therefore, those interested in entrepreneurship should focus on sources of opportunities, the processes of discovery, evaluation and exploitation of opportunities as well as the individuals who discover, evaluate and exploit opportunities (Shane and Venkataraman 2000).

This focus demands a deeper understanding of opportunity in the entrepreneurial process (Eckhardt and Shane 2003). For researchers and policy makers relevant questions are: 1) why, when and how

opportunities are created, 2) why, when and how some individuals and not others discover and exploit the opportunities, and 3) why, when and how different modes of action are used to exploit entrepreneurial opportunities (Shane and Venkataraman 2000). This implies that opportunities do not fall from the sky but they need to be created. In addition, individuals need to make the decision to exploit the opportunity. (Mueller 2007) Accordingly, although opportunities exist, it does not mean that anyone first, perceives them and second, decides to exploit them. Opportunities are, thus, objective, but the perception of opportunity is subjective indicating that there is an interaction between the characteristics of opportunities and the characteristics of the individuals who exploit them (Casson 2005). Individuals need to recognize entrepreneurial opportunities, and then, only by exploiting the opportunity some desired outcomes may follow. For an entrepreneur a relevant outcome may be new goods or services (Venkataraman 1997) whereas policy makers typically long for economic growth, employment, innovations and wealth (van Praag and Versloot 2007, Storey 1994).

Due to expected, valuable outcomes of entrepreneurship in the economy and society, many governments have decided to promote entrepreneurship with the focus on SMEs and small businesses. Government action has been justified by three main arguments: first, the existence of market failures inhibiting small firm development, second, a special public interest due to SMEs´ capacity to create jobs, and third, the visionary role of government in developing the economy (Bennett 2006). According to Lundström and Stevenson (2005) entrepreneurship policy is aimed at the pre-start, the start-up and early post-start-up phases of the entrepreneurial process by addressing the entrepreneurial motivation, opportunity and skills with the primary objective of encouraging more people to consider entrepreneurship as an option, move into the nascent stage of taking actions to start a business and proceed into the entry and early stages of the business.

Governments have a variety of ways to support new entrepreneurs and small businesses. The use of grants, subsidies or reduced-rate loans is to reduce cost of inputs into the business. Macro-economic policies, such as taxation and interest rates are used to stabilize the economy to reduce uncertainties, i.e. to reduce risk. Regulatory environment is a key contribution to the level of risk small businesses experience. In addition, increasing the flow of information on international trends in markets and local and national issues as well as on government policies affecting small businesses, for example, is an option for governments to intervene. There is a variety of methods for government to reach the above aims: providing finance (grants, subsidies, cost effects of taxation and compliance), providing information and expert advice, and helping with training and personnel development. (Bennett 2006) Lundström and Stevenson (2005) categorized entrepreneurship policies and initiatives found in 13 studied countries into six areas: entrepreneurship promotion; entrepreneurship education; the environment for start-ups; start-up and seed capital financing; business support measures for start-ups; and target group strategies. These national government measures, or „remedies‟, met their definition of entrepreneurship policy. Although the definition indicates that entrepreneurship policy is a broad and horizontal policy area affected by and influencing other policy domains, it is still clearly narrower than the concept of entrepreneurship, which emphasizes the role of opportunities in the entrepreneurial process.

In this chapter we do not restrict ourselves to any a priori definition of entrepreneurship policy. We take the selected policy texts as a starting point of our analysis and then reflect our findings upon the concept of entrepreneurship in order to understand how the Finnish uniqueness – entrepreneurship policy programmes carried out in the 21st century – addresses the entrepreneurial process to be promoted.

Research material and methodology Discourse analysis as a method or theory In this chapter we will conduct a discourse analysis of the chosen policy texts. The interest lies in language in use which is considered to create social reality. Language not only describes the world but it gives meaning and simultaneously constructs, reproduces and transforms the social reality we live in. There is never only one discourse or one reading of discourse. Accordingly, the research cannot ever fully capture the complexity of language use that occurs over time, on multiple sites and sometimes in hidden ways. (Jokinen et al. 1999, Grant et al. 2004) The contribution of the approach is its capability to show how discourse is central to the social construction of reality, and how, via a variety of discursive interactions and practices, these go on to shape and influence the attitudes and behaviour of people. The focus is on how particular context come into being and are rendered meaningful through people‟s engagement with each other. The interest is in how people use different and conflicting discourses to understand the world around them or to achieve certain goals. (Eriksson and Kovalainen 2008) Research material and analysis The research material consists of entrepreneurship policy texts related to entrepreneurship project and programmes found in the Government Programmes in 1999, 2003 and 2007. We read through the selected texts and in the analysis, we focused in particular on the following issues (see e.g. Eriksson and Kovalainen 2008): -

What kind of discourses on entrepreneurs and entrepreneurship are evoked and constructed in the policy texts?

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What kind of discourses are silenced in the policy texts?

The role and mission of entrepreneurship and entrepreneurs in the policy texts

The analysis demonstrates what kind of role and mission entrepreneurship and entrepreneurs are given in the Finnish economic policy context. The analysis yielded three evolutionary phases based on the respective Government programme (Table 1).

The main policy challenges in 1999 are identified as ensuring economic growth, improving employment and diversifying the industrial structure. In addition, industry policy actions are said to be directed at improving the functioning of the markets. The main motivation for the entrepreneurship project in 1999 is focused on the need to create new jobs. The role for entrepreneurship is thus connected to the job creation potential of small firms. Consequently, entrepreneurship in the project is equalled with small firms. The individuals – potential, nascent or acting entrepreneurs - are missing from the policy. The discourse is focused on perceiving obstacles or hindrances that need to be removed or tackled. In particular the following obstacles are named: inequalities between firms in different sectors in taxes, payments and business support, administrative burden and lack of financing in particular with regard to exporting firms. As the solutions the policy offers the possibility of making different payments with one payment, combining the information needs of different authorities and creating new forms of eadministration. Hence, the policy suggests that by creating more fluent and easy administration processes the policy will foster entrepreneurship. The question of developing incentives for entrepreneurship is not touched upon apart from the need of promoting business transfers in family firms. Additionally, the project aims to encourage the authorities to actions in support of new firm establishment. Hence, the question is not about encouraging the individuals but the administration.

The entrepreneurship project in 2003 is grounded in securing growth of the economy, reasonable and stable interest rate and low inflation rate in order to facilitate firm investments and employment in the long term. The policy in 2003 focuses on incentives for individuals in entering an

entrepreneurial career, promoting activities and expansion of start-up and growth firms and female entrepreneurship, adapting legislation also to the needs of small firms, facilitating transfer of ownership of entrepreneurs, bridging between the requirements of parenting and entrepreneurship and developing new initiatives tackling the needs of entrepreneurs‟ social security. Hence, the policy discourse in 2003 identifies the individual – rather than the firm – as the key actor. The individual is identified also to have a gender (of a female nature) and he or she may have difficulties in creating an acceptable work-family balance. The project is developed around the idea of a business life-cycle. Besides the start-up and growth phase the policy aims to focus also on „avoiding unnecessary bankruptcies‟. The incentives for embarking on an entrepreneurial career are connected to the education. The unnecessary administrative obstacles are being removed and business support system is developed with the principle of „one stop shop‟ model. The information systems are seen as a way to develop entrepreneurship but also as a rural policy objective: by developing information systems it is possible to operate a business everywhere in the country.

In 2007, the policy project is focused on work, entrepreneurship and working life. Besides economic growth, employment and securing funding for the welfare society, ageing of the population is identified as a policy challenge. The policy project is focused on prolonging the individual careers in working life. The needs of employers and employees are said to be met by aiming to balance between security and flexibility in working life. This dual perspective is visible in the policy text. For example, the need to identify and remove barriers from creating new jobs and in particular from hiring the first employee is matched with the need to map the factors that influence the individual employment conditions. Hence, providing and creating new employment possibilities are not only tasks for the firms but the individual job seekers need to possess the necessary capabilities for entering employment. In a way, entrepreneurship is given a lesser focus in the policy project in 2007. On the other hand, by assigning more responsibility for the individuals we

may understand this to be part of the entrepreneurship project: every person is an entrepreneur in charge of their own employment and career. The policy project states explicitly the need to raise the desirability of entrepreneurship and the need to remove barriers from growth of firms. This is done by developing entrepreneurship education, creating incentives through taxation and developing entrepreneurs‟ social security. In addition, particular focus will be assigned to developing management and business knowledge in support of innovation capacity.

Table 1: Evolution of the Finnish entrepreneurship policy programme Entrepreneurship project (1999/2000)

Entrepreneurship policy programme (2003)

Focus Remedy

to improve economic growth, employment, industrial structure small firms removing obstacles, providing business support, reducing administrative burden

to secure economic growth, employment, investments individuals incentives and education for entrepreneurial career, life cycle perspective to business support

Key actor(s)

administration

individuals (potential entrepreneurs)

Ultimate aim

Policy programme on work, entrepreneurship and work-life (2007) to secure economic growth, employment, welfare society work and working life flexicurity, removing barriers from employment and improving individual employability, prolonging career dual: entrepreneurs and employees

To summarise, it is possible to identify a clear evolution, but no radical changes, in the policy discourses between the years 1999, 2003 and 2007. In 1999 the focus is assigned on the small firms and SME sector as a whole. The project is about removing barriers and hindrances in particular by facilitating the processes. The idea is that by making the administrative burden easier to tackle will incentivize the small firms to develop and grow. In 2003, the individuals are given a much more visible room in the policy: they are not inherently geared towards an entrepreneurial career, but they need to be incentivized in particular through education. Simultaneously their human nature – for example through the need to combine work and family – is acknowledged. In 2007, the policy is broadened to include also work and working life. Hence, this policy aims not only to give responsibility for entrepreneurs and small firms in creating more jobs but also to focus on the

responsibilities of employees in remaining employable. The policy assumes a dual approach, and is also explicit in stating that security and flexibility need to be balanced in working life.

A common element in the policy is that entrepreneurship is needed to create more new jobs. New jobs and better employment are needed to combat various other challenges such as economic growth and growing ageing population. There is a very limited room for entrepreneurship in developing new innovations and change in the society.

Discussion and conclusions The chapter contributes to SME and entrepreneurship policy discussion by offering fresh insights on the intersection between entrepreneurship literature, policy texts, and the social reality. Recent entrepreneurship literature highlights the need to understand entrepreneurial process and the role of opportunity within it when defining the field of entrepreneurship. The sources of opportunities, entrepreneurial process including the discovery, evaluation and exploitation of opportunities, and individuals active in the process are the key areas to be focused. (Shane and Venkataraman 2000; Venkataraman 2007) Literature on entrepreneurship policy portrays a narrower picture of entrepreneurship and mostly takes as granted that opportunities have already been discovered and evaluated – they only need to be effectively exploited (see Shane 2000), and entrepreneurship policy has a role there in cutting red tape and providing different kind of support for small business.

By conducting a discourse analysis of the entrepreneurship programme texts we identified some evolution in the focus, remedies and key actors of the programme during the years. In general discourses emphasise the need to create more and better jobs and economic growth. There is a very limited room for entrepreneurship in developing new innovations and change in the society, and discourses on entrepreneurial process and opportunities are invisible. In 1999 the project only

focuses on the exploitation phase of the entrepreneurial process assuming that the opportunities have already been discovered. Although a shift towards encouraging potential entrepreneurs for entrepreneurial career is identified in 2003, the entrepreneurial opportunities are still silenced. The evolution of the policy towards dual perspective acknowledging both entrepreneurs and employees as key actors widens the scope of entrepreneurship policy. Taking care of employee‟s employability brings the element of intrapreneurship (see Antoncic and Hisrich 2003) at the individual level in the policy discussion indicating that entrepreneurship can take place also in other contexts than SMEs and small businesses. This implies wider understanding of the concept of entrepreneurship and the co-existence of paid work and entrepreneurship in working life.

The entrepreneurship does not remain stable over time. Even within a relatively short period of time between 1999 and 2007 we identified important changes in the focus and understanding of the entrepreneurship policy. The new updated versions of the entrepreneurship programme introduce new elements into entrepreneurship policy. Recently industrial and entrepreneurship policy discussions in Finland have been critical of the increasing number and of overlapping business support initiatives and measures (Koski and Ylä-Anttila 2011). This suggests that while the policy focus changes, this is not reflected in the actual practice. No instruments or initiatives are actually abolished, but the new elements are added on the previous ones. It seems that the basic idea of Schumpeter´s (1934) creative destruction and renewal are not visible in the policy development. Genuine renewal of the policies would require abolishing the existing measures and building new ones. Besides discussing and analysing “entrepreneurship policy” there is a need for developing a better understanding of “policy entrepreneurship”, here understood as the promotion of significant policy change (Mintrom and Norman 2009). More importantly this policy change should be reflected not only on the policy and programme texts but also on the level of practice: the actual instruments and initiatives.

From the policy-learning perspective the chapter is highly relevant for policy makers in different countries. First, the Finnish cross-sectional entrepreneurship programme is an interesting approach and learning experience as it integrates different ministries and actors in promoting entrepreneurship. The approach also makes entrepreneurship highly visible both among policy actors, particularly ministry administration, and general public. Although the programme attempts to promote entrepreneurship through joint forces and more entrepreneurial administration, by doing so it on the other hand ignores the crucial elements – entrepreneurial process and opportunities. Second, the Finnish entrepreneurship programme is an example of a governmental attempt to widen the understanding of the concept and applicability of entrepreneurship in the policy agenda. This is noteworthy because entrepreneurship as a process is to be found in many other contexts than SMEs and small businesses. Third, the incremental nature of policy development is hardly a Finnish policy characteristic only. Due to continuous benchmarking and comparisons, countries tend to develop similar approaches in their policymaking by adopting measures that have proven to be successful in other countries and contexts (Heinonen et al. 2010). Hence, there is a clear message for the policy makers. It is important to critically assess policy developments: whether any old measures and policies are abolished when new remedies are created. In addition, it is recommended to ponder whether and how entrepreneurship process and opportunities are visible in the policy agenda. Entrepreneurship is about how, by whom and with what effects opportunities are discovered, evaluated and exploited (Shane and Venkataraman 2000). As our analysis shows the emphasis still lies on exploitation phase and the earlier phases of entrepreneurial process remain silenced in the policy texts. Governmental remedies for supporting the exploitation of opportunities become relevant only when individuals have already discovered opportunities to be exploited. Finally, the dual perspective on entrepreneurs and employees within the Finnish entrepreneurship programme suggests that it is worth considering work and working life as a whole. Accordingly, it needs to be

easy for individuals to move between paid work and entrepreneurship. National governments have their crucial role to play here.

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