Entreprenurship

Entrepreneurship

Entrepreneurship is how a lot of businesses get started but the vast majority of the businesses started fail after a short time. The definition of entrepreneurship is the practice of starting a new organization or revitalizing mature organizations. Entrepreneurship has been a key part to how businesses have developed. This paper is going to be about the history of entrepreneurship and theories of what entrepreneurship is, the characteristics of an entrepreneur and what an entrepreneur is, the contributions of entrepreneurs and the advantages of entrepreneurship, and some businesses that were started by entrepreneurs. After I touch on those topics I am going to talk about the top 10 entrepreneurs of all time.

Entrepreneurs have been around since the beginning of time. But the term was first introduced by a French economist by the name of Richard Cantillon in the 18th century. Cantillon defined the entrepreneur as the agent who buys means of production at certain prices in order to combine them" into a new product. Over the next century British economists like Adam Smith, David Ricardo, and John Stuart Mill briefly touch upon the concept of entrepreneurship. In writings by both Smith and Ricardo they suggest that they undervalued the importance of entrepreneurship. But Mills on the other hand goes out of his way to stress the significance of entrepreneurship on economic growth.

In 1890 Alfred Marshall recognized the necessity of entrepreneurship for production. In Marshall’s famous treaties of Principles of Economics he asserts that there are four factors to production which are: land, labor, capital, and organization. Marshall believed that entrepreneurship was the driving force behind organization. For the entrepreneur to be the driving force behind organization Marshall believed that entrepreneurs had to have a thorough understanding about their industries, and that they must be natural leaders. He also thought they must also have the ability to foresee changes in supply and demand and must also be willing to act on such risky forecasts.

But since the time of Marshall the concept of entrepreneurship has gone through some theoretical evolution. An example of this evolution is whereas Marshall thought entrepreneurship drove organization many economist but not all think that entrepreneurship by itself should be the fourth factor in production that coordinates the other three factors. Although many economists agree that entrepreneurship is necessary for economic growth, they still argue over the actual role of entrepreneurship in generating economic growth. One thought about entrepreneurship is that its role is a risk-bearer in the face of uncertainty and imperfect information. One economist by the name of Knight believes that an entrepreneur is willing to bear the risk of a new venture if he or she believes there is a good chance for a profit. Many current theories on entrepreneurship agree that there is a component of risk, but the risk-bearer theory alone can’t explain why some people become entrepreneurs. Risk is one characteristic of an entrepreneur.

Altogether there are eight characteristics that can be found in an entrepreneur. The first one is having an enthusiastic vision. This enthusiastic vision is the driving force of the enterprise. This enthusiastic vision is also where the entrepreneur’s idea starts to take shape. The second characteristic is having ideas no one else on the market has. The entrepreneur’s ideas are one of a kind and hopefully realistic. The next characteristic is having the ability to make a blueprint of your idea in your head. The blueprint that is made is just the start the blueprint is most likely incomplete and should be flexible to change and evolving. Next on the list of characteristics is being able to promote his/her vision/idea with enthusiastic passion. Being able to promote your idea so other people can understand it is a very important because if you can’t promote your idea then you won’t get any backers to help you. The fifth characteristic is having the ability to develop strategies to change the vision into reality. This is also another important ability because being able to develop an idea is one thing and having the idea in your head is nothing if you can’t figure out how to turn it into reality. The sixth characteristic is the ability to make his or his vision into a successful one. This is one of the biggest if not the biggest characteristics of an entrepreneur because if they can’t turn there vision into a successful one than in the end they will lose money and have wasted time. Seventh characteristic which I have already talked about briefly is the risk of being an entrepreneur. This is a big factor in being an entrepreneur because entrepreneur’s take a big risk when trying to turn an idea in to a real life business that makes money. The eighth and final characteristic is being a positive thinker and a decision maker. This is an important attribute because an entrepreneur is going to be but in situations where he is going to have to make key decisions that could greatly affect his vision and how it will succeed.

Entrepreneur’s have a lot of the same traits that leaders have. But entrepreneurs are going more to a team based operation than a single person operation. Several economists have come up with ideas on what entrepreneur’s are and in 1959 Arthur Cole found that there are four types of entrepreneur’s: the innovator, the calculating inventor, the over-optimistic promoter, and the organization builder. These types have nothing to do with personality but deal with the type of opportunities the entrepreneur might face. In 1961 David McClelland said the entrepreneur was motivated by an overwhelming need for achievement and the urge to build. In 1997 Lowell Busenitz and Jay Barney claimed entrepreneurs are prone to overconfidence and over generalizations. But I think one of the best descriptions of an entrepreneur is by Barbara Bird and she said entrepreneurs as mercurial, that is, prone to insights, brainstorms, deceptions, ingeniousness and resourcefulness, they are cunning, opportunistic, creative, and unsentimental. I think these people give some of the best descriptions of what an entrepreneur is.

Next on the list of things to talk about is the contributions entrepreneur’s make. The first contribution they make is developing new markets. This makes entrepreneurs different from regular business man because they only perform traditional functions of management like planning, organization, and coordination. Entrepreneur’s can also create customers and buyers when they develop new markets. The second contribution they make is discovering new sources