The great entrepreneurs of the last century \u2014\u00a0folks like Henry Ford, John D. Rockefeller, and Thomas Edison \u2014\u00a0spawned huge companies that were designed around a model of scalable efficiency. In that model the job of workers was to fit into their roles and perform tightly specified and standardized tasks in a highly reliable and predictable way. The employee society<\/em> was born. Enormous wealth was created for the entrepreneurs who pioneered this way of organizing business, and enormous value was delivered to the marketplace. And most of us became employees.<\/p>\n But the very model of organizing a business is becoming increasingly challenged by what I call the Big Shift<\/a>\u00a0\u2014 long-term forces, such as the rise of digital technology infrastructures, that are reshaping the global business landscape. For evidence of the magnitude of the challenge, we only need to look at the long-term collapse of\u00a0return on assets<\/a> for all the U.S.\u2019s public companies:\u00a0From 1965 to today, return on assets has\u00a0declined by 75%.<\/p>\n What is to be done? If we are to thrive and harness the enormous potential of the Big Shift, we will all need to mobilize to create the entrepreneurial society, as Peter Drucker anticipated many decades ago. In the process, we must all become entrepreneurs.<\/p>\n But first, let\u2019s step back and reassess what we mean by entrepreneur. In the public mind, entrepreneurs have been reduced to young people who want to create world-changing businesses that can quickly reach $1 billion or more in market value \u2014\u00a0the fabled unicorns.<\/p>\n But is that all there is? Maybe we need to expand what \u201centrepreneur\u201d means. A more useful definition might be someone who sees an opportunity to create value and is willing to take a risk to capitalize on that opportunity; some elements of\u00a0this are opportunity spotting, risk taking, and value creation.<\/p>\n In a world that is increasingly shaped by exponential changes in technology, new opportunities are arising at an ever more rapid rate. But risk also increases because of accelerating change and increasing uncertainty. What we need are entrepreneurs who are willing and able to cope with those risks and to see and harness the opportunities on the other side.<\/p>\n While some of these opportunities may evolve into unicorns, we shouldn\u2019t unduly focus on them. Today many product businesses are\u00a0fragmenting<\/a> as the means of production become more broadly affordable and accessible and as platform businesses emerge to help connect these product businesses with customers around the world. We are already seeing this in digital realms such as\u00a0music, video, and application software. New technologies such as\u00a03D printing and biosynthesis are likely to expand this trend into physical product businesses.<\/p>\n For entrepreneurs, this is an opportunity to make a comfortable living for themselves, and perhaps a small team of people, by designing and commercializing products that are targeted to the specific needs of small groups of customers. Fragmentation suggests that unicorns will become rarer and rarer in many product businesses, and may even become an extinct species. But the entrepreneurs attracted into these niche businesses will nonetheless be creating value for customers and for themselves. Why shouldn\u2019t we embrace and encourage them?<\/p>\n And let\u2019s not just talk about entrepreneurs in developed economies. A key to accelerating the growth of developing economies will be the ability to encourage more and more entrepreneurs throughout these countries, both in growing cities and in rural areas. While they may not be unicorn entrepreneurs, they can create value in their neighborhoods and perhaps beyond.<\/p>\n Of course, not everyone will be working independently or in small companies. We\u2019ll still have very large companies where network effects and economies of scale or scope continue to support the concentration of economic activity. Won\u2019t the employee society persist in those places?<\/p>\n Well, not exactly. Here\u2019s the thing. In a world of accelerating change and growing uncertainty, even the largest companies may need to reframe work. The \u201cemployee\u201d mindset \u2014\u00a0that is, the notion of just showing up to do a predefined set of tasks until leadership tells you otherwise \u2014\u00a0just isn\u2019t cutting it anymore. What we need are entrepreneurs in every part of the organization, people who are relentlessly focused on identifying new opportunities to create even more value and are willing to assume the risks required to address those opportunities. In short, we will need to move from scalable efficiency to scalable learning<\/a>, where everyone is driven by the need to learn faster and accelerate performance improvement.<\/p>\n As Peter Drucker has noted, entrepreneurial management practices are fundamentally different from employee management practices, requiring large-scale transformation of our existing enterprises. The challenge is that top-down, big-bang approaches to organizational transformation rarely succeed. Instead, the most powerful way to achieve transformation is by scaling at the edge \u2014\u00a0a part of the company that today is\u00a0relatively modest in terms of revenue and profit but which, because of the exponential forces at work in our economy and society, has the potential to grow into\u00a0the new core of the company. Who can do all this? Why, entrepreneurs, of course.<\/p>\n And, by the way, the need for entrepreneurs is not limited to commercial enterprises. All of our institutions will likely need to cultivate and encourage entrepreneurs throughout their ranks \u2014\u00a0NGOs, schools and government agencies. Which of those institutions doesn\u2019t feel increasing pressure to find new opportunities to create and deliver value to its\u00a0stakeholders?<\/p>\n There\u2019s a compounding dynamic that\u2019s being set in motion as we begin this transition to an entrepreneurial society. The more successful we are in generating entrepreneurs in our society, the more dynamic our world will likely become, and the faster it will change, creating a need for even more entrepreneurs. Those who remain wedded to the outmoded practices of the employee society will suffer.<\/p>\n The accelerating pace of change and growing uncertainty has spawned a backlash by established interests, who, in a quest for stability, seek to confine and constrain entrepreneurs into small corners, where they pose little threat to large, established institutions. But this is ultimately a futile effort. Make no mistake about it:\u00a0We\u2019re on the cusp of a Big Shift from an employee society to an entrepreneurial one, as Peter Drucker so perceptively predicted. The forces driving it are too big, too inexorable to turn back.<\/p>\n That might be frightening to employees, but it\u2019s exciting to entrepreneurs.<\/p>\n <\/p>\n About the author:<\/strong><\/p>\n John Hagel III<\/a>\u00a0is Founder and Chairman of the Deloitte Center for the Edge<\/a>, a research center based in Silicon Valley. A long-time resident of Silicon Valley, he is also a compulsive writer, having written 7 books. His latest, with John Seely Brown and Lang Davison, is The Power of Pull: How Small Moves, Smartly Made, Can Set Big Things in Motion<\/em><\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" The great entrepreneurs of the last century \u2014\u00a0folks like Henry Ford, John D. 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