Origin and Meaning of Entrepreneurship and Entrepreneur


Origin and Meaning of Entrepreneurship and Entrepreneur


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

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.


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.


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.



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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