Entrepreneurship – Meaning, Concept and Definition
Entrepreneurship generates employment opportunities to many people besides providing self employment to the entrepreneur. Any business venture started triggers a variety of economic activities like purchasing raw material, creating employment opportunities and so on. Thus, entrepreneurship become crucial for overall economic development of a nation.
Entrepreneurship can be regarded as one of the four major factors of production besides the other three namely land, labour and capital. It is generally believed that entrepreneurs are born. But no country or society can afford to wait for the birth of entrepreneurs to pursue its development agendas. The pace of economic development of any country cannot be accelerated without creating a sense of awareness about entrepreneurship among the people. The latter should be made to take a pride in claiming to be a job provider rather than a job seeker. The Government and various other agencies involved in promoting entrepreneurship should carry on the noble task of engendering a spirit of entrepreneurship among the people who otherwise seek job.
The term ‘entrepreneur’ has been derived from the French language which originally denotes designation of an organiser of musical or other entertainments. Oxford Dictionary (1897) defines an entrepreneur as the director or a manager of a musical institution which organises musical performance. In the early sixteenth Century, the term was applied to refer to those who were engaged in military expeditions. Subsequently, in the seventeenth century it was extended to cover civil engineering activities such as construction and fortification. It was only in the beginning of the eighteenth century, that the term entrepreneurship was used in the realm of economics. Since then the term entrepreneur is used in many ways and various views about entrepreneur began to surface. Accordingly, entrepreneurs are now broadly classified into three groups namely risk bearer, organiser and innovator.
Richard Cantillon, an Irish man described the entrepreneur to be a person who assumes risk inherent in the venture started by him. Entrepreneur acts as an agent combining all factors of production to produce a product or service in order to sell at uncertain price in future. Knight also describes an entrepreneur to be an economic functionary who undertakes the risk of uncertainty which cannot be insured or capitalised or salaried. In nutshell, entrepreneur is described to be a risk taker.
According to Jean Baptize, entrepreneur is one who brings together various factors of production and creates an entity to produce product or service and supervises and co-ordinates several functions in the process. He further elaborates that an entrepreneur faces a great deal of obstacles and misfortunes and undergoes mental agony and anxieties in the process of organising any venture. In sum, entrepreneur is described to be an organiser.
Joseph A Schumpeter in the year 1934 used innovation as a criterion to define an individual as entrepreneur. According to him, entrepreneur is one who
i. Introduces a brand new product in the market
ii. Institutes new technology to produce a product
iii. Discovers new course of supply of raw materials
iv. Discovers new product hitherto untapped
v. Puts in place a new form of organisation by establishing a monopoly or by dismantling existing monopoly.
In all the concept of entrepreneur is intimately connected with three core elements namely risk bearing, organising and innovating.
According to J.A. Schumpeter Joseph A. Schumpeter, “Entrepreneurship is essentially a creative activity. It consists of doing such things as are generally not done in ordinary course of business. An entrepreneur is one who innovates, i.e. carries out new combination or enterprise.”
In the words of A.H. Cole, “The purposeful activity of an individual or group of associated individuals, undertaken to initiate, maintain or earn profits by production and distribution of economic goods and services.”
As per Mary Coulter, “Entrepreneurship is the process whereby an individual or group of individuals use organised efforts to pursue opportunities to create value and grow by fulfilling wants and needs through innovation and uniqueness, no matter what resources the entrepreneur currently has.”