Entrepreneur vs. Entrepreneurship
An entrepreneur is a person who identifies a societal need and seeks to meet it with a solution, a product or a service. Whereas, entrepreneurship is the process of forming a business entity with the intention of making a profit.
In other words, an entrepreneur has an idea and takes every step to turn the idea into reality while enduring the risks. Entrepreneurship is the act of starting a company that normally starts a business, providing exclusive products and services to the target customers that may or may not be successful.
Peter Drucker argues in his book, Innovation and Entrepreneurship, “that what defines an entrepreneur is their attitude to change: ‘the entrepreneur always searches for change, responds to it and exploits it as an opportunity’. To exploit change is to innovate.”
“The word ‘entrepreneur’ is derived from the French word ‘enterprendre’ which means ‘to undertake’. In early 16th century, the Frenchmen who led military expeditions were referred to as ‘entrepreneurs’. Around 17th century this term was used for architects and contractors for public works. Later it was applied to the function of engaging labour and buying materials and selling the resultant products at contracted prices. In fact, it was in 18th century that the term ‘entrepreneur’ was applied initially to business by the French economist Cartillon who designated him as a dealer who purchases the means of production for combining them into marketable products. Another Frenchman J. B. Say, expanded Cartillion idea and conceptualised entrepreneur as an organiser of a business firm. In case of a developing economy like India, it refers to one who starts a new business, undertakes risk, bears the uncertainties and performs the managerial functions of decision making and coordination. In many countries, the entrepreneur is associated with a person who starts his own new and small business”.
– Course Hero, Aarhus University, DenmarkLorem
Characteristics of Entrepreneurship
A successful entrepreneur is a creative problem solver who thinks outside the box. He is confident, action-oriented, and highly motivated, and he is not afraid to take risks. He develops into a result-oriented individual with a sense of responsibility as he becomes more committed and determined.
Classifications of Entrepreneur
Entrepreneurs, according to Arthur H. Cole, are:
- Empirical: does not bring anything new to the table and adheres to the rule of thumb
- Rational: is well aware and knowledgeable about general economic conditions and implements more radical changes
- Cognitive: well-informed, and expert in seeking and using expert advice and services, and implementing changes that are a complete departure from the established scheme of things.
Clarence Danhof classified entrepreneurs based on his research into American agriculture.
- Innovating: one who collects and synthesises data and introduces novel combinations of variables He is a forceful figure as well as a business leader..
- Imitative/Adoptive: Uses successful innovations previously introduced by others.
- Fabian: When it comes to adopting or innovating new technologies in their enterprise, they are skeptical, and incapable of adapting to changes in the environment. They prefer to stay in the same business as before, using the same old production method. They only adopt new technology when it is clear that not doing so would result in significant losses.
- Drone: They are adamant about making changes, even if it means some profit loss. They favour to keep the business running as it is, regardless of market trends or changes in demand.
Motivation Factors for Entrepreneurship
There are two types of factors that motivate entrepreneurs: internal and external factors.
- A desire to try something new.
- Become self-sufficient.
- Achieve the goals that one desires in life.
- Recognise one’s contribution
- Academic background
- Work experience and background in the relevant field.
- Assistance and support from the government.
- Raw material and Labor availability.
- The support of large corporations.
- The product’s demand appears to be promising.
The Importance of Entrepreneurship
The role of entrepreneurs in market economies is vital because they can act as engines of economic growth. For economies based on market forces, they can drive business growth. Their contribution includes:
- Creating more jobs
- Developing the country’s economy
- Raising living standards
- Facilitating proper resource usage
- Fueling the market growth
- Fueling technological innovation
- Increasing productivity
A person who is an entrepreneur is one who has an innovative idea and is willing and capable of molding that idea into a reality through the entrepreneurial process. An entrepreneur makes decisions that affect the organization’s fate.