10 mars 2018 ~ 0 Commentaire

Entrepreneurship – A Short Introduction

Entrepreneurship - A Short Introduction entrepreneur-without-business


Entrepreneurship is the process of designing, launching and running a new company, which is often initially a little business. The men and women who make these companies are known as entrepreneurs.

Entrepreneurship was described as the « capability and willingness to grow, arrange and manage a business venture alongside any of its dangers so as to create a profit ». While definitions of entrepreneurship typically focus on the start and running of businesses, due to the high risks involved in establishing a start-up, a significant percentage of startup companies have to close due to « lack of funding, bad business decisions, an economic crisis, lack of market demand–or a combination of all them.

Entrepreneurship is the action of becoming an entrepreneur, or « an owner or manager of a business enterprise who makes money at risk and initiative ». Entrepreneurs act as supervisors and manage the launch and growth of an enterprise. Entrepreneurship is the process by which an individual or a staff defines a business opportunity and acquires and deploys the necessary resources required for its manipulation.

Early 19th century French economist Jean-Baptiste Say provided a broad definition of entrepreneurship, stating that it « shifts economic resources from an area of lower and into a place of higher productivity and higher yield ». Entrepreneurs create something fresh, something different–they change or transmute values. Irrespective of the business size, big or small, they could partake in entrepreneurship opportunities. The opportunity needs four standards.

First, there needs to be opportunities or scenarios to recombine tools to create profit. Secondly, entrepreneurship requires differences between people, such as preferential access to specific individuals or the ability to recognize details regarding opportunities. Third, taking on risk is quite necessary. Fourth, the entrepreneurial process demands the organization of resources and people.

The entrepreneur is a element in microeconomics and also the study of entrepreneurship reaches into the work of Richard Cantillon and Adam Smith in the late 17th and early 18th centuries. However, entrepreneurship was mostly ignored theoretically before the late 19th and early 20th centuries and empirically before a deep resurgence in economics and business since the late 1970s. From the 20th century, the understanding of entrepreneurship owes much to the work of economist Joseph Schumpeter in the 1930s along with other Austrian economists like Carl Menger, Ludwig von Mises and Friedrich von Hayek.

According to Schumpeter, an entrepreneur is someone who is willing and ready to convert a new idea or invention into a successful innovation. Entrepreneurship employs what Schumpeter called « the gale of creative destruction » to replace in whole or in part inferior innovations across markets and industries, simultaneously creating new products including new business models. This way, creative destruction is largely responsible for its dynamism of businesses and long-run economic development.

The supposition that entrepreneurship leads to economic growth is an interpretation of this remaining in endogenous growth theory and as this is hotly debated in academic economics. An alternate description posited by Israel Kirzner suggests that nearly all innovations could be much more incremental improvements like the replacement of paper with plastic from the making of drinking straws.


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