One of the best ways to understand entrepreneurship is to examine what entrepreneurs do. Entrepreneurship can be practiced in new ventures as well as existing corporations. While the principles are the same, the practice differs. The article explains the basic building blocks of entrepreneurship and highlights some of the common entrepreneurial traits.
Entrepreneurship has been described in many ways. In the 18th century, a Parisian banker, Richard Cantillon, introduced the term `entrepreneur' literally meaning `undertaker'. He pointed out that the entrepreneur bears the risk of buying at one price and selling at another. At the turn of 19th century, the French economist, Jean Baptiste Say argued that " the entrepreneur shifts economic resources out of an area of lower to higher productivity and yield". While Say broadened the definition to include the factors of production, the Austrian economist Joseph Schumpeter introduced the `innovation' concept into entrepreneurship. He emphasized the role of the entrepreneur in creating and responding to economic discontinuities. The supply side approach looks at the psychological and sociological sources of entrepreneurship. Common traits include the need for achievement, the propensity to take risks and internal locus of control. However, the search for a single psychological profile of an entrepreneur has not met with success.
Entrepreneurs see change as the norm and as healthy. Usually they do not bring about the change themselves. But - and this defines an entrepreneur and entrepreneurship - the entrepreneur always searches for change, responds to it, and exploits it as an opportunity.
Howard Stevenson a leading theorist of entrepreneurship at Harvard Business School suggests that "the pursuit of opportunity without regard to resources currently controlled" lies at the heart of entrepreneurship. |
