Entrepreneur

Entrepreneur is a loan word from French that refers to a person who

undertakes and operates a new venture, and assumes some accountabil-

ity for the inherent risks. Most commonly, the term entrepreneur ap-

plies to someone who establishes a new entity to offer a new or existing

product or service into a new or existing market, whether for a profit or

not for-profit venture, a business entrepreneur. Business entrepreneurs

often have a strong beliefs about a market opportunity and are willing to

accept a high level of personal, professional or financial risk to pursue

that opportunity.

Research has demonstrated that there is such thing as an “entrepre-

neurial type”, with certain characteristics linked to the probability of

someone being an entrepreneur themselves. There is little good evidence,

however, that entrepreneurial type is linked to ultimate success of an en-

trepreneurial venture. Business entrepreneurs are often highly regarded

in US culture as being a critical component of its capitalistic society.

Famous entrepreneurs include: Henry Ford (automobiles), J. Pierpont

Morgan (banking), Thomas Edison (electricity/ light bulbs), Bill Gates

(computer operating systems and applications), Steve Jobs (computer

hardware, software), Richard Branson (travel and media) and others.

There is a question: “Are entrepreneurs born or made?” The answer

lies in what one author writing in Business Horizons calls “the galaxy of

personality traits which characterize individuals who have a propensity

to behave entrepreneurially”. He lists nine as being more salient: a desire

to achieve: the push to conquer problems, and give birth to a successful

venture; hard work: are mostly workaholics; nurturing quality: willing to

take charge of, and watch over a venture until it can stand alone; ac-

ceptance of responsibility: are morally, legally, and mentally accountable

for their ventures; reward orientation: desire to achieve, work hard and

take responsibility, but also want to be rewarded handsomely for their ef-

forts, rewards can be in the forms others than money, such as recognition

and respect; optimism: live by philosophy that is the best of times, and

that anything is possible; orientation to excellence: often desire to achieve

something outstanding that they can be proud of; organization: are good

at bringing together the components (including people) of a venture;

p rofit orientation: want to make a profit, but the profit serves primarily as

a meter to gauge their success and achievement.

The concept of the entrepreneur is intimately associated with three

elements: risk bearing, organizing and innovation. Thus, an entrepreneur

can be defined as a person who tries to create something new, organizes

production and undertakes risks and handles economic uncertainty in-

volved in enterprise.

Entrepreneur as a risk bearer. Richard Cantillon, an Irish man liv-

ing in France was the first who introduced the term entrepreneur and

his unique risk bearing function in the early 18th century. He defined

an entrepreneur as an agent who buys factors of production at certain

prices in order to combine them into a product with a view to selling it at

uncertain prices in future. Uncertainty is defined as a risk, which cannot

be insured against and is incalculable.

Entrepreneur as an organizer. Jean-Baptiste Say, an aristocratic jour-

nalist, developed the concept of an entrepreneur a little further. His defi-

nition associates an entrepreneur with the functions of co-ordination,

organization and supervision. According to him, an entrepreneur is one

who combines the land of one, labor of another and the capital of yet

another, and, thus, produces a product.

Entrepreneur as an innovator. Joseph A. Schumpeter, for the first

time in 1934, assigned a crucial role of innovation to the entrepreneur.

Schumpeter considered economic development as a discrete dynamic

change brought by an entrepreneur by instituting new combinations of

production, i.e. innovation. He also made a distinction between an in-

ventor and an innovator. An inventor is one who discovers new methods

and new materials, and an innovator utilizes inventions and discoveries

in order to make new combinations.

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