By: S. Herojit Singh
Faculty Member, ICM
The concept of entrepreneurship has a long and rich tradition within economic theory and has a wide range of meanings. On one extreme, an entrepreneur is a person of very high aptitude who pioneers changes, possessing characteristics found in only a very small fraction of the population. On the other extreme of definitions, anyone who wants to work for him or herself is considered to be an entrepreneur.
The work entrepreneur originates from the French word “entreprendre” which means, “to undertake”. In a business context, it means to start a business. The Merriam Website dictionary highlights the definition of an entrepreneur as one who organizes, manages and assumes the risks of a business or enterprise. The Collins Cobuild dictionary defines it as “a person who set up business and business deals”
The concept of entrepreneur was highlighted by different scholars from time to time and is an important to discuss how these concepts is considered in the past.
In the early 16th century, the Frenchman who organized and led military expeditions were referred to as “Entrepreneurs”. In the 17th century, it was applied to others types of adventures mainly civil engineering like construction of roads, bridges, harbor and building etc. However, it was in the 17th century the connection of risk with entrepreneurship developed.
Then in 18th century, Richard Cantillon (1725) a French economist of Irish descent was the first person to use the term “Entrepreneur” in economic theory. He describes “an entrepreneur as a person who pays a certain price for a product to resell it at an uncertain price, thereby making decision about obtaining and using resources while consequently assuming the risk of enterprise.
In the 19th century, Francis Walker (1876) distinguished between those who supplied funds and received interest and those received profit from managerial capabilities.
In the 20th century, another economics, Joshep A Schumpeter (1934) was the first economist to identify the human agent as a centre of the process of economic development.
According to Joshep, an entrepreneur is an innovator who introduces a new product, a new production process, and find out new market, a new source of raw material or introduces a new type of organization.
At a conference and entrepreneurship in the United States, entrepreneurship was defined as follows:
“Entrepreneurship is the attempt to create value through recognition of business opportunity the management of risk taking appropriate to the opportunity, and through the communicative and management skills to mobilize human financial and material resources necessary to bring a project to function.”
The definitions recognize that entrepreneurship involves the fusion of capital, technology and human talent. It is a dynamic and risky process.
Entrepreneurship is both an art as well as sciences.
Though people call it by various names or interpret according to their choice such as adventurism risk taking, thrill seeking, innovating etc., let us try to interpret in a very simpler form.
Who is an Entrepreneur?
An entrepreneur is a person who perceives a need and then brings together the manpower, materials and capital required to satisfy that need. An entrepreneur either originates a new business. Venture or carries out productive changes in an existing venture.
In the definition, entrepreneurs identify a need required by the masses or an opportunity identified for which he organized and coordinate various factors to fulfill the needs. He either creates a new business or makes changes in an existing venture as per requirements.