In economics, entrepreneurship is regarded as the fourth production factor, after capital, labour, and land. The term entrepreneur is derived from the French word “entreprendre”. It entails trying, innovating, and creating something new. The concept of an entrepreneur is fundamental to understanding entrepreneurship. An entrepreneur is someone who finds and capitalises on a profitable opportunity to launch and grow a new business.
An entrepreneur makes decisions and takes risks, and organises production functions for maximum efficiency. Employs innovative ideas and oversees the development of entrepreneurial initiatives to generate ideas. Employs effective strategies and seek lucrative opportunities.
Entrepreneurship is classified into two types. The first is pure, while the second is mixed entrepreneurship.
Further, there are two types of pure entrepreneurship: social and collaborative. The latter type has two distinct groups, namely internal and external collaborative entrepreneurship. General and specific are two more classes of external entrepreneurship.
Mixed entrepreneurship is further classified into two types. Employee entrepreneurship is one, and capitalist entrepreneurship is another.
1. Pure Entrepreneurship
This type involves actions that are not as successfully carried out by full-time employees or managed by other intermediaries as by the entrepreneur. Pure entrepreneurialism encompasses all tasks identified by the entrepreneur as high-efficiency decisions that may not produce the same results if performed by other individuals or entities. In the pure entrepreneurial role, the prospective entrepreneur does not own production components. He only needs to apply the key elements of his entrepreneurial mindset critical to the creation and execution of a profitable idea.
1a. Social Entrepreneurship
It refers to entrepreneurialism that seeks to meet societal and humanitarian needs. Most of its objectives can be accomplished by effectively incorporating all aspects.
1b. Collaborative Entrepreneurship
The collaborative type is primarily motivated by the economic benefits of cooperative enterprises. The key operational areas of this type are specific sectors of the economy like business units of agricultural products.
There are two types of collaborative entrepreneurship: internal and external.
1b (i). Internal collaborative entrepreneurship
Internal entrepreneurship refers to innate entrepreneurial capabilities in large corporation employees. In this type senior management personnel are solely responsible for running their departments as independent individual businesses in terms of financial planning and control. The internal entrepreneur acts as if he is the owner of a division within the company, focusing on action plans and entrepreneurialism.
As a result, internal entrepreneurship is a mindset with distinct characteristics. For instance, he takes on challenges after extensive research into the likelihood of success. Identifies new opportunities based on an understanding of how the market works. Refuse to be bound by norms and a maze of bureaucratic regulations. He demonstrates both optimism and emotional commitment to an institution. Further, he exhibits the ability to instil trust in colleagues, trust in outsourcing and other intermediaries, and a desire for hard work.
1b (ii). External collaborative entrepreneurship
It refers to the external business landscape, either directly or indirectly. External entrepreneurship is classified as general and specific.
1b (ii.1). General entrepreneurship
This is concerned with the dimensions and influences that impact the lives and work of the aforementioned agencies. However, it is difficult to define these aspects and their impact on business. Every business is affected by the prevailing circumstances and primary drivers. This is a distinctive feature of general entrepreneurship.
The following are the primary drivers for general external entrepreneurship:
- The overall economic scenario: The overall economic scenario comprises the wealth levels and overall prosperity of the specific region in which the company operates.
- Technology: Technology is a broad knowledge base, methodologies, and strategies used in the manufacture and distribution of goods. Technological progress causes shifts in customer choices.
- Moral norms and societal attitudes: People’s choices of merchandise or services, as well as their behaviour, are influenced by their social way of life. Employees’ social lives, in turn, influence their company perceptions.
- Political situation: The level of political consistency in a place has a significant impact on business activity.
- Constitution and laws: These lay the foundation for social coexistence as well as what may or may not affect businesses.
- Population: Besides the overall population size of the area in which the business is located, socio-demographic variables like age, gender, and social class have a direct influence on the survival and growth of a business.
- Natural wealth: The variety of natural wealth in one region creates ideal conditions for business development.
- Competitors business: Competitors are the driving force behind business growth. Attracting customers is the most obvious field for the development of competition.
- Customers: Customer service is among the most challenging issues businesses face.
- Suppliers: A supplier can be anyone or any institution that provides goods or services to the business.
- Professional associations: Trade associations exercise regulatory control over the company to ensure peaceful coexistence.
- Pressure groups: These are organisations such as the Environmental Protection Agency that seek restrictions on any unlawful or unethical activities to protect the arbitrariness of companies.
- Employees’ associations: Such unions legally operate and have negotiating rights with a company on issues affecting their members. Their existence is significant and powerful.
2a. Employee entrepreneurship
In the mixed type, this is also called intrapreneurship or internal entrepreneurship. Employee entrepreneurship implies employees perform tasks that would otherwise be performed by the entrepreneur without compromising their overall responsibilities. It means that the entrepreneur is not solely responsible for the success of the business. An executive director of a company, for example, can supervise his subordinates using innovative methods to improve their performance and involvement in the organisation. Similarly, an executive can be an entrepreneur when he proposes new ideas to management for improving services or products.
2b. Capitalist entrepreneurship
A capitalist entrepreneur is someone who invests his own money in a business. He may also borrow funds to invest in the business when necessary. This entrepreneur is a capitalist investor who believes that placing his money in the business itself is the right way to go.
Entrepreneurship needs sustainability
Sustainable refers to entrepreneurialism that fosters innovation systems by jointly sharing knowledge domains. It ultimately leads to robust competitiveness. Government, non-government, and high technology entities must complement and strengthen one another to achieve robust competitiveness.
The most influential success factors for sustainable entrepreneurship and robust competitiveness are:
- Incorporation of entrepreneurial characteristics such as culture, personality, and charisma.
- Entrepreneurial skills such as cooperation, persuasion, information exchange, and communication.
- Essential components like innovating, awareness, accessibility, and affordability.
Road map to Entrepreneurship
An entrepreneur’s career path has five distinct phases. These are foundation, awareness, specialisation, creativity, and maturity. The foundation stage is the establishment and strengthening of entrepreneurial values for society and individuals in their entirety. In the second stage, individuals realise the entrepreneurial spirit as an alternative to other career paths. The individual is recognised as entrepreneurial upon acquiring the skills needed for business creation. An individual progresses from learning and knowledge to creative acts, such as starting a business or monetising his entrepreneurial skills. Then, a person’s career matures because of knowledge-based development, networking, external validation, and monetisation as an entrepreneur.