Philosophical Reflections on Engineering-Entrepreneurship and Innovation, Part 1

November 19, 2020

For quite a few years now, I have had the opportunity to give a guest lecture on Engineering and Entrepreneurship for undergraduate students at Ontario Tech University in Oshawa, Ontario. In my last session, I shared anecdotal observations from the last six or seven years I’ve spent working in-depth with engineers who founded and led technology startups--during which time I became interested in what motivates technology entrepreneurs and thereby drives innovation.

Contra orthodox (neoclassical) economic assumptions, in no case could I confidently identify the extrinsic profit motive as a fundamental or even secondary psycho-social cause. In nearly every discernable instance--spanning dozens of startups from hardware and advanced manufacturing to biotech and cleantech--I observed something far more basic than rational choice/risk reward calculations. I can only describe this (perhaps romantically) as a drive for knowledge, for progress, for mastery... to contribute something ingenious to the general edifice of scientific and civilizational progress. I would venture to say that this humanistic and intrinsically social impulse seems to me definitive of some minimal positive conception of human nature (I know this is a grand claim) and it is my further contention that this impulse is always causally prior to the process of capitalist subsumption.

A word on subsumption: I learned from Bill Aulet at MIT-Sloan that innovation is a novel solution to an unsolved problem that is successfully commercialized, and that profitability (successfully leveraging the competitive advantage of a new technology product over market incumbents to achieve sales, market share and drive business growth) was what demonstrates actual success--what separates an invention or fantasy from reality (all the more real if the technology represents a major leap forward or a fundamental shift). In essence, commercialization is taken as fundamental to innovation, and the corporation as the apex organizational form forged by modern markets is presumed to be the optimal vehicle of its realization.

There is truth in this standard view, but it is only true in the context of capitalist modernity. I want to start theorizing the prior cause of innovation by asserting that it precedes commercialization, and more broadly, that it is separate from and only later subsumed in that process because of the historical and contingent circumstances of our current political economy (incidentally, if one follows Varoufakis, one that is also changing via the decoupling of the state-financial complex from industrial capital, but that aside...). Given our current conjuncture (the value-form of capitalism determining all and mediating all social processes), almost invariably, the engineer-led startup is structured as a for-profit share corporation, in anticipation of venture capital investment, ownership and control of IP, positioning for government funding and tax advantages and limitation of liability. Indeed, if sales (and profitable sustainability of the new venture) do not follow, if the founders are not able to execute a business model, the new knowledge, or technical process, or technology (or whatever breakthrough) cannot really take root in the world. However I want to repeat the claim that commercialization is a constructed social form imposed upon (perhaps even exploiting) a more primary humanistic impulse, which is the origin of innovation.

I recently read Boyd Cohen’s Post-Capitalist Entrepreneurship: Startups for the 99% (2017), and I’ve been thinking a lot about the theory of entrepreneurs, how economic thinkers have conceived of entrepreneurship conceptually, and in particular, what role entrepreneurs play in technics, in the forms technology entrepreneurship takes in our society and what innovation means in terms of value creation. For now, I think it’s important to underscore that in the casual way that entrepreneurship and capitalism are taken as equivalent, one can too easily miss the intriguing underlying ethos amongst engineer-entrepreneurs that is flagrantly vitalistic and idealist, and one can also miss the ways in which these engineer-entrepreneurs are even innovating the very social form which this impulse is given (via praxis). There is an interplay here. Indeed, many technology entrepreneurs (especially the next generation) are searching for new ways to collaborate, create value and have an impact in the world in a way that goes beyond routine commercialization. They may yet contribute to revolutionizing new modes of production.

In line with this, I noticed in my observations of engineer-led startups (amongst younger engineers especially) that there was a clear impulse to make decisions based (at least implicitly) on multiple bottom lines. In other words, they could be categorized quite readily as social entrepreneurs. It is difficult these days to find a young engineer-entrepreneur who is motivated only extrinsically, who goes to pitch to a panel of investors without declaring they are on a mission. We could add that young people today have an ever dwindling faith in capitalism and many believe their future is increasingly foreclosed by looming economic collapse, racial injustice, climate crisis and for the first time in modern history, the sense that the future for them may not be as good as it was for their parents.

But is social entrepreneurship real? Are we talking about a new organization form or something simply superficial and gestural, so-called “conscious” capitalism--or, in the context of environmental activism, mere greenwashing? Some may have a critical or even cynical view of this. I tend to think that the initial motivation I’ve described is indeed authentic. It is part of the reason why, as a non-technical practitioner of entrepreneurial development, I have always admired engineer-entrepreneurs who strayed from pre-assigned and rote professional careers to embark upon an unpredictable and atypical “journey” of tremendous difficulty and complexity.

John Hayden

John Hayden has worked in the combined realms of economic development and technology entrepreneurship acceleration for almost 15 years. He received his BA from the University of Toronto and MA from the American University of Beirut, and holds a certificate in Strategy and Innovation from MIT’s Sloan School of Management where he completed the Entrepreneurship Development Program in 2013.