What Is Entrepreneurship?
The concept of entrepreneurship was first established in the 1700s and the meaning has evolved ever since. Many people simply define entrepreneurship as the practice of starting one’s own business. However, most economists believe it is more than that. (par. 1) To some economists, the entrepreneur is one who is willing to bear the risk of a new venture if there is a significant chance for profit. Others emphasize the entrepreneur’s role as an innovator who markets his or her innovation. Still other economists say that entrepreneurs respond to unsatisfied market demands by developing new goods or services. (par. 2)
In the 20th century, economist Joseph Schumpeter (1883-1950) focused on how the entrepreneur’s desire to innovate and improve creates change. Schumpeter viewed entrepreneurship as a force of “creative destruction. ” The entrepreneur creates “new combinations,” and renders old industries obsolete. Basically, an entrepreneur destroys old and established ways of doing business by creating new and better ways to do them. (par. 3) Business expert Peter Drucker (1909-2005) took this idea further, describing the entrepreneur as someone who actually searches for change, responds to it, and exploits it as an opportunity.
A quick look at changes in communications – from typewriters to personal computers to the Internet – illustrates how entrepreneurs can exploit change to create new businesses. (par. 4) Most economists today agree that entrepreneurship is a necessary ingredient for stimulating economic growth and employment opportunities in all societies. In the developing world, successful small businesses are the primary engines of job creation, income growth, and poverty reduction. Therefore, government support for entrepreneurship is a crucial strategy for economic development. (par. 5)