Colloque - Entrepreneurship, Risk, Talent and Innovation : The Welfare Cost of Ignoring the Beta

Philippe Aghion

Collège de France

Économie des institutions, de l'innovation et de la croissance

Année 2022-2023

Colloque - Entrepreneurship, Risk, Talent and Innovation : The Welfare Cost of Ignoring the Beta

Intervenant(s)

David Stromberg, Stockholm University

Entrepreneurs are the chief source of innovation in modern economies, as illustrated by iconic figures like Bill Gates, Steve Jobs, Elon Musk, or Derrick Rossi, the co-founder of Moderna and several subsequent biotech companies. Success at this level hinges on idiosyncratic characteristics of the potential entrepreneur such as talent, inventiveness, and the propensity to take risks, on social origins, parental education, and family influence more generally, and on the environment: in particular the extent to which society favors risk-taking by forgiving early failure while rewarding talent and long-term success.

The semantics of talent have spread at an accelerated rate in the world of work and in human resources management since the end of the 1990s. Today, we no longer talk about personnel management or "human resources" so much as talent management. The concept has been diluted as it has spread across the entire professional skills space, but its core meaning has never been stable.

What exactly are we talking about when we speak of talent? The question is ceaselessly asked in all the scientific and professional publications devoted to talent management. It has been both a persistent enigma and a resource for plasticity in redefining the qualities required to recruit staff, to manage their careers and to find a balance in the competition for the best talent, since poaching by a competitor threatens each employer's investment in recruitment and career development. It is too often forgotten that the notion of talent, which was originally coined metaphorically in the "parable of the talents" in Matthew's gospel, can be read as a praise of risk-taking, which is rewarded, and a criticism of risk-aversion, which is discredited.

This conference will gather economists and sociologists working on talent, risk, entrepreneurship, and innovation, with the goal of improving our understanding of the underpinnings of innovative entrepreneurship and of how entrepreneurship can be favored by appropriate institutions and policies.

Isaiah Berlin once suggested a division of the world between hedgehogs and foxes, where foxes are individuals that engage in multiple projects simultaneously to pool risks, whereas hedgehogs put all their eggs into one basket and are ready to take maximum risk. One view of entrepreneurship is as hedgehogs who pursue a single innovation project, no matter how risky this project might be. This conference will analyze how social norms, the education system, competition, tax incentives and talent reward, and the financial system affect individuals' choice to be hedgehogs rather than foxes and selects the best talents into becoming innovative entrepreneurs.

Colloque coorganisé par les Prs Philippe Aghion et Pierre-Michel Menger avec le soutien de LVMH et de la Fondation du Collège de France.