Entrepreneurship
Origin various scholars have written extensively on the origin of
entrepreneurship.
What
is interesting is that most of the scholars who wrote about the origin of
entrepreneurship are either economists or historians. Basically, the concept
entrepreneur is derived from the French concept “entreprendre” which literarily
is equivalent to the English concept “to undertake”. From the business point of
view, to undertake simply means to start a business (QuickMBA, 2010). From the
historical point of view, Schumpeter (1951) opined that the French economist
Richard Cantillon, was the first to introduce the concept
"entrepreneur" in his work in 1755. He viewed the entrepreneur as a
risk taker (Burnett, 2000).
However,
some scholars contend that it was an economist, Jean-Baptiste Say, who analysed
the concept in an advanced way in his work in 1821 where he identified
entrepreneur as new economic phenomenon (Wikipedia, 2010). Given the foregoing,
we can infer that the concept “entrepreneur” is almost as old as the formal
discipline of economics itself (Schumpeter, 1951) especially given the fact
that it was economists such as Adam Smith, David Ricardo, and John Stuart Mill
who have written extensively on it, albeit referring to it as "business
management”. However, unlike Smith and Ricardo, Mill stressed the significance
of entrepreneurship for economic growth. Another renowned economist, Alfred
Marshall buttressed Mill’s view by formally recognizing entrepreneurship as an
important factor of production in 1890; he viewed entrepreneurship as
organization creation and believed that entrepreneurship is the driving element
behind organization (Schumpeter, 1951; Burnett, 2000).
Schumpeter
(1951) contends with this view and opined that though many economics scholars
agree that entrepreneurship is necessary for economic growth, they do not agree
on the actual role that entrepreneurs play in generating economic growth. These
debates, notwithstanding, entrepreneurship theory has kept on evolving over the
years and throughout its evolution different scholars have put forward
different characteristics that they believe are common among most
entrepreneurs. Entrepreneurship theoretical foundations extend from economics
to other disciplines such as history, politics, education, ecology, culture,
experience, and networking and so on.
To
this effect, Schumpeter (1951) concludes that by combining the various
disparate theories, a generalized set of entrepreneurship qualities can be
developed. He then listed the characteristics of entrepreneurs as:
risk-bearers, coordinators and organizers, gap-fillers, leaders, and innovators
or creative imitators. He submits that though not exhaustive, this can help
explain why some people become entrepreneurs while others do not (Burnett,
2000).
· Why is entrepreneurship
important according to the various scholars?
· It is generally agree that
entrepreneurship is important because of it create utility, increase society’s
welfare, promote economic growth and development.
An Overview of the Definitions of
Entrepreneurship and Entrepreneur
Entrepreneurship
There
are many definitions of the concept ‘entrepreneurship’. For instance, Putari
(2006) observes that scholars had not been in agreement in their definitions of
entrepreneurship and chronicled the definitions of entrepreneurship by various
scholars (Brockhaus & Horwitz, 1986, Sexton & Smilor, Wortman, 1987;
Gartner, 1988). Cantillon (circa 1730) views entrepreneurship as: “self-employment
of any sort”. In 1934, Joseph Schumpeter equated entrepreneurship with the
concept of innovation and applied it to a business context, while emphasizing
the combination of resources. Penrose (1963) views entrepreneurship as the
activity that involves identifying opportunities within the economic system.
While Leibenstein (1968, 1979) perceives entrepreneurship as involving
"activities necessary to create or carry on an enterprise where not all
markets are well established or clearly defined and/or in which relevant parts
of the production function are not completely known”. Gartner (1988) conceives
entrepreneurship as the creation of new organizations. Okpara (2000) defines
entrepreneurship as the willingness and ability of an individual to seek out
investment opportunities in an environment and be able to establish and run an
enterprise successfully based on the identifiable opportunities.
In
addition, Nwachukwu (1990) regards entrepreneurship as a process of seeing and
evaluating business opportunities, gathering the necessary resources to take
advantage of them and initiate appropriate action to ensure success.
After
critically studying the above definitions, we can summarize by concluding that
entrepreneurship is a function which involves the exploitation of opportunities
which exist within a market.
Meaning of Entrepreneurship
Self
-employment of any sort; the activity that involves identifying opportunities
within the economic system; the creation of new organizations; the willingness
and ability of an individual to seek out investment opportunities in an
environment and be able to establish and run an enterprise successfully based
on the identifiable opportunities.
Thus,
from the definitions above we can see that while defining the concept
‘entrepreneurship’, laid emphasis on a wide spectrum of activities such as:
· Self-employment of any
sort.
· Creation of organizations.
· Innovation applied to a
business context.
· The combination of
resources.
· Identification and
exploitation of opportunities within the economic system or market.
· The bringing together of
factors of production under uncertainty.
We
can therefore conclude that whatever activity that involves any or all of the
above activities can be regarded as entrepreneurship. Entrepreneurship refers
to all the processes and activities involved in establishing, nurturing, and
sustaining a business enterprise.
Entrepreneur
Scholars
have also given several definitions of the concept ‘entrepreneur’. For instance
in 1816, Putari (2006) quoted Say who asserts that the entrepreneur is the
agent "who unites all means of production and who finds in the value of
the products...the reestablishment of the entire capital he employs, and the
value of the wages, the interest, and rent which he pays, as well as profits
belonging to himself." He views entrepreneurs as change agents (Say,
1816). Knight (1921) views entrepreneurs as individuals who attempt to predict
and act upon change within markets. Schumpeter (1934) conceives the
entrepreneur as the innovator who implements change within markets through the
carrying out of new combinations such as introduction of new techniques of
production, reorganization of an industry and innovation. He further argues
that the entrepreneur is an innovator, one that introduces new technologies
into the workplace or market, increasing efficiency, productivity or generating
new products or services (Deakins and Freel, 2009).
Cantillon
(circa 1730) conceptualized the entrepreneur as: the "agent who buys means
of production at certain prices in order to combine them" into a new
product (Schumpeter, 1951). In Quick MBA (2010), the entrepreneur is defined as
one who combines various input factors in an innovative manner to generate
value to the customer with the hope that this value will exceed the cost of the
input factors, thus generating superior returns that result in the creation of
wealth. The entrepreneur is the person who perceives the market opportunity and
then has the motivation, drive and ability to mobilize resources to meet it
(Di-Masi, 2010).
An
entrepreneur is a person who has possession of a new enterprise, venture or
idea and assumes significant accountability for the inherent risks and the
outcome (Wikipedia, 2010). The entrepreneur is anyone who has the capacity and
willingness to undertake conception, organization, and management of a
productive venture with all attendant risks, while seeking profit as a reward
(Business Dictionary, 2010). Interestingly, small business experts also have
their definitions of the concept ‘entrepreneur’ (Thinking like, 2010) for
instance: Reiss (2010), views the entrepreneur as the person that recognizes
and pursues opportunities without regard to the resources he/she is currently
controlling, with confidence that he/she can succeed, with the flexibility to
change course as necessary, and with the will to rebound from setbacks.
Pinson
(2010) visualized the entrepreneur as a person who starts a business to follow
a vision, to make money, to be the master of his/her own soul (both financially
and spiritually) and is an "educated" risk taker. Murphy (2010)
conceives an entrepreneur as a person who is dynamic and continues to seek
opportunities and/or different methods of operation and will do whatever it
takes to be successful in business.
Given
the above wide range of factors and behaviorur which are used to define the
concept ‘entrepreneur’, we can see the difficulty and impossibility of finding
a unified definition of the ‘entrepreneur’. Hence, to Di-Masi (2010), the
concept ‘entrepreneur’ can be best used in the past tense to describe a
successful business person. Thus, entrepreneurs are business persons who
identify the existence of business opportunities and based on this they create
businesses thereby creating new products, new production methods, new markets
and new forms of organization to satisfy human needs and wants mostly at a
profit.
It
should also be noted that though most entrepreneurial businesses start small,
entrepreneurs are not only small business owners; they can also be big business
owners. This is because successful entrepreneurs, unlike small business owners,
are innovative and, when operating in an enabling business environment, can
rapidly create a large amount of wealth while bearing very high risk. In fact,
innovation is considered to be the strategic tool of entrepreneurs; this is one
of the tools that enable them gain strategic advantage over competitors
(QuickMBA, 2010). Entrepreneurs are individuals or groups of individuals who
carryout entrepreneurship activities to build business empires.
Intrapreneurs
There
are given situations where an entrepreneur is not able to establish his or her
own business and as such has to work in an organization. In this case they are
referred to as ‘Intrepreneurs’ i.e. entrepreneurs within an organization. These
individuals are entrepreneurs in their own right because they pursue the
exploitation of business opportunities as they emerge and are also visionaries
within a given organization. Thus, once identified, these individuals should be
encouraged to manifest their entrepreneurial abilities to the benefit of the
organization otherwise they will be frustrated and may leave the organization
or start their own businesses. Entrepreneurship is the processes and activities
by which corporate organization behave entrepreneurially.
· How is entrepreneur differ
from intrapreneur
· An entrepreneur is a
person who create a venture or startup a business and nature it, takes risks of
bringing together the factors of production to meet the society’s need at a
profit, while an intrapreneur work within an existing organization to pursue
the exploitation of business opportunities.
Technopreneur
We
could also have technopreneur, who is an individual whose business is in the
realm of high technology, who at the same time has the spirit of an
entrepreneur. A technopreneur’s business involves high technology or to put it
more clearly a technopreneur is a technological innovator and a business man
all combined in one individual (Ogundele, 2007).
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