WHAT IS DIGITAL ENTREPRENEURSHIP

Digital entrepreneurship is still a new term, which is often not easy to explain in one sentence. It’s a term which describes how entrepreneurship is changing and how it will be changing in the future, as business and society in general is being transformed by digital technology.

Digital entrepreneurship includes everything that is new and different when compared to traditional view on entrepreneurship. Digital entrepreneurship, how JP Allen describes it in article “What is Digital Entrepreneurship?” consists of following:

New ways of finding customers for entrepreneurial ventures. New ways of designing and offering products, and services. New ways of generating revenue, and reducing cost. New opportunities to collaborate with platforms and partners. New sources of opportunity, risk, and competitive advantage.

On a practical level, digital entrepreneurship opens up new possibilities for anyone thinking of becoming an entrepreneur. Some opportunities are more technical, and some are within reach for anyone who learns the basic skills of digital entrepreneurship. These basic skills include finding new customers online, prototyping new business ideas, and improving business ideas based on data (Allen, 2020).

Beyond learning new practical skills, digital entrepreneurship is also about new ways of thinking and understanding what entrepreneurship is. Digital entrepreneurship is bringing new approaches and theories of entrepreneurship. Digital entrepreneurship opens up new questions about strategy, opportunity, and risk. Some of those questions are:

Does the best data win? How can I craft a business idea that can be prototyped digitally? How can I improve my business idea faster than anyone else? Why is there such big competition around my ide, coming worldwide?

When it comes to education, digital entrepreneurship is

opening new possibilities for education of new generations of entrepreneurs. Best way to learn entrepreneurship is experiential learning; learning by doing and reflecting on the experience(s). When we look at traditional entrepreneurship, launching new product or new service in the world is costly and brings a lot of risks for beginner. Digital world offers better opportunities for starting something new by bringing variety of pathways to success.

The exact definition of digital entrepreneurship is still being debated, partly because it’s early days, and partly because it’s a moving target. As digital technology evolves, what is new about digital entrepreneurship will change over time. Perhaps one day, most or all entrepreneurial ventures will be “born digital”, and digital entrepreneurship as a separate topic will cease to

exist. Today, however, there’s a real need to better prepare entrepreneurs for the digital world, and to give more people a new path to entrepreneurship (Allen, 2020).

Theoretical overview of digital entrepreneurship

Digital entrepreneurship is broadly defined as creating new ventures and transforming existing businesses by developing novel digital technologies and/or novel usage of such technologies, (European Commission, 2015).

Digital entrepreneurship can often be seen as a critical pillar for economic growth, innovation and creation of new jobs. This is applicable in many countries worldwide.

The rapid proliferation of digital technologies with new functionalities has profoundly changed competitive environments, reshaping traditional business strategies, structures and processes (Bharadwaj et al. 2013). In an example, in today’s economy where digital entrepreneurship plays an important role, many organisations are getting smaller in terms of number of employees. Today we can find more and more one-person companies and partnerships proliferating.

While it is a rather complex definition, that used by the European Commission (2015, p.1) appears to be good attempt to define digital entrepreneurship:

Digital entrepreneurship embraces all new ventures and the transformation of existing businesses that drive economic and/or social value by creating and using novel digital technologies. Digital enterprises are characterised by a high intensity of utilisation of novel digital technologies (particularly social, big data, mobile and cloud solutions) to improve business operations, invent new business models, sharpen business intelligence, and engage with customers and stakeholders. They create the jobs and growth opportunities of the future.

Digital entrepreneurship is probably the most significant single manifestation of entrepreneurship and has flow-on effects into the structure of business itself. Digital entrepreneurship appears likely to have a profound effect on all advanced economies.

New digital technologies such as social media, big data, and mobile and cloud solutions technologies give rise to new ways of collaborating, leveraging resources, product/service design, development and deployment over open standards and shared technologies (Markus and Loebecke, 2013). These technologies power the digital economy by bringing in a new range of opportunities with substantial potential business value and can dramatically reduce the cost for new ventures (Zhao et al., 2015).

Good example, which can be easily understood, is Alibaba.com. Alibaba helped millions of Chinese to become entrepreneurs and has created many jobs in the process.

Although the opportunities created by digital technologies are enormous, they also bring serious challenges. Digital technologies are reshaping fundamentally the labour market.

Digital entrepreneurship, as an emerging phenomenon, fuses and involves stakeholders from different social and economic sectors. For example, growth in the number of digital entrepreneurs relies on the digital business skills of individuals as well as systemic support through transformative policies and programs from governments, industry/business, education and training institutions and the society as a whole (Zhao and Collier, 2016).

Key message(s) to take:

Digital entrepreneurship includes everything that is new and different when compared to traditional view on entrepreneurship. Digital entrepreneurship consists of following:  New ways of finding customers for entrepreneurial ventures.  New ways of designing and offering products, and services.  New ways of generating revenue, and reducing cost.  New opportunities to collaborate with platforms and partners.  New sources of opportunity, risk, and competitive advantage. Digital entrepreneurship embraces all new ventures and the transformation of existing businesses that drive economic and/or social value by creating and using novel digital technologies. Digital enterprises are characterised by a high intensity of utilisation of novel digital technologies (particularly social, big data, mobile and cloud solutions) to improve business operations, invent new

business models, sharpen business intelligence, and engage with customers

and stakeholders. They create the jobs and growth opportunities of the future. Although the opportunities created by digital technologies are enormous, they also bring serious challenges. Digital technologies are reshaping fundamentally

the labour market.