Saras Sarasvathy, a Professor at the University of Virginia Darden School of Business, recently added another prestigious honor to her illustrious career by delivering the Schumpeter Innovation in Enterprise Lecture at the European Union’s SME Week in Bilbao, Spain. This annual event aims to showcase the work of small and medium-sized enterprises and provide them with the necessary tools and knowledge to transition towards sustainability and digitalization. The Schumpeter lecture, delivered by a leading figure in entrepreneurship, marked the conclusion of the first day of the conference.
Sarasvathy is renowned for her groundbreaking theory of Effectuation, which she first introduced in a 2001 paper. This theory, which explains how entrepreneurs make decisions and navigate the entrepreneurial process, has gained global recognition and has been widely adopted in academic circles and by entrepreneurs worldwide. Effectuation offers practical tools for dealing with the uncertainty inherent in starting a new venture, emphasizing working with what is within one’s control to create new opportunities.
In an interview with the European Commission prior to the lecture, Sarasvathy explained that effectual reasoning provides a systematic approach to decision-making in the face of true uncertainty, where the future is not only unknown but unknowable. Rather than trying to predict and plan for every contingency, effectuators focus on leveraging their existing resources to co-create new possibilities. Sarasvathy believes that entrepreneurship should not be limited to business professionals or business schools but should be taught to everyone, as it equips individuals with valuable problem-solving and decision-making skills that can be applied in various aspects of life.
The European Commission highlighted Sarasvathy’s vision of empowering society with the skills of effectual action to build enduring socio-economic communities based on a thriving middle class of businesses, not just start-ups and unicorns. They emphasized that entrepreneurship is a method that transcends the business world and can be applied to diverse areas of life.
Sarasvathy’s Schumpeter lecture is the latest in a series of accolades she has received for her contributions to entrepreneurship. In 2019, she was honored with the Global Consortium of Entrepreneurship Centers’ Legacy Impact Award, and in 2020, the journal Small Business Economics dedicated an entire issue to her theory of Effectuation. In 2022, she was awarded the Global Award for Entrepreneurship Research in Sweden, further solidifying her reputation as a leading figure in the field.
The University of Virginia Darden School of Business, where Sarasvathy teaches, was recently ranked as the No. 8 graduate program in the world for entrepreneurship by Entrepreneur and The Princeton Review, underscoring the institution’s commitment to fostering innovation and entrepreneurial thinking among its students.
For those interested in learning more about Effectuation and Sarasvathy’s work, the 2023 Schumpeter Lecture can be watched online, and a collection of resources on Effectuation is available on Darden Ideas to Action. Sarasvathy’s impact on the field of entrepreneurship continues to inspire and educate aspiring entrepreneurs around the world.
