An entrepreneur is a person who has possession of a new enterprise, venture or idea and assumes significant accountability for the inherent risks and the outcome.[1][note 1] The term is originally a loanword from French and was first defined by the Irish economist Richard Cantillon. Entrepreneur in English is a term applied to the type of personality who is willing to take upon himself a new venture or enterprise and accepts full responsibility for the outcome. Jean-Baptiste Say, a French economist is believed to have coined the word "entrepreneur" first in about 1800. He said an entrepreneur is "one who undertakes an enterprise, especially a contractor, acting as intermediatory between capital and labour."[note 2]
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Entrepreneurs choose a level of personal, professional or financial risk to pursue opportunity.
Entrepreneurs tend to identify a market opportunity and exploit it by organizing their resources effectively to accomplish an outcome that changes existing interactions within a given sector.
Business entrepreneurs are viewed as fundamentally important in the capitalistic society. Some distinguish business entrepreneurs as either "political entrepreneurs" or "market entrepreneurs," while social entrepreneurs' principal objectives include the creation of a net social benefit.
Other entrepreneurs are necessity entrepreneurs. Entrepreneurship, particularly among women in developing countries (Minitti, 2010) seems to offer an improvement in the standard of living as well as a path out of poverty. Entrepreneurship is now growing at nearly three times the rate among women as it is among men.
The entrepreneur is the main person behind a firm; she or he can demonstrate her or his quality as a leader by choosing the right managers for the firm.
Scholar Robert. B. Reich considers leadership, management ability, and team-building as essential qualities of an entrepreneur. This concept has its origins in the work of Richard Cantillon in his Essai sur la Nature du Commerce en (1755) and Jean-Baptiste Say (1803 or 1834)[note 3] in his Treatise on Political Economy.
A more generally held theory is that entrepreneurs emerge from the population on demand, from the combination of opportunities and people well-positioned to take advantage of them. An entrepreneur may perceive that they are among the few to recognize or be able to solve a problem. In this view, one studies on one side the distribution of information available to would-be entrepreneurs (see Austrian School economics) and on the other, how environmental factors (access to capital, competition, etc.), change the rate of a society's production of entrepreneurs.
A prominent theorist of the Austrian School in this regard is Joseph Schumpeter, who saw the entrepreneur as innovators and popularized the uses of the phrase creative destruction to describe his view of the role of entrepreneurs in changing business norms. Creative destruction dealt with the changes entrepreneurial activity makes every time a new process, product or company enters the market..
Schumpeter argues that the entrepreneur is an innovator, one that introduces new technologies into the workplace or market, increasing efficiency, productivity or generating new products or services (Deakins and Freel 2009). Other academics such as Say, Casson and Cantillon, say the entrepreneur is an organiser of factors or production that acts as a catalyst for economic change (Deakins and Freel, 2009). Shackle argues that the entrepreneur is a highly creative individual that imagines new solutions providing new opportunities for reward (Deakins and Freel, 2009). These are a few definitions from the entrepreneurship field but show the complexity and lack of cohesion between academic research (Gartner, 2001). Most research focuses on the traits of the entrepreneur. Cope (2001) argues that although certain entrepreneurial traits are required, entrepreneurs' behaviour are dynamic and influenced by environmental factors.
Shane and VenKataraman (2000) argue the entrepreneur is solely concerned with opportunity recognition and exploitation; however, the opportunity that is recognised depends on the type of entrepreneur which Ucbasaran et al. (2001) argue there are many different types of dependant on their business and personal circumstances.
There is a growing body of work that shows that entrepreneurial behavior is dependent on social and economic factors. The research into female entrepreneurs illustrates this quite clearly. "Countries which have healthy and diversified labor markets or stronger safety nets show a more favorable ratio of opportunity to necessity-driven women entrepreneurs." (Minitti, 2010) What those factors are varies widely, based on local needs. In Somalia, this may be bigger crops or clean water while in the US, technology seems to be the driving factor.
New research regarding the qualities required for successful entrepreneurship is ongoing, with notable work from the Kauffman Institute forming the statistical basis for much of it. Research from Scott A. Shane (2008)[2] summarizes much of the counter-intuitive conclusions of this research while Adrian Perez's research on success attributes for co-founder teams is ongoing.[3]
Social entrepreneurs act within a market aiming to create social value through the improvement of goods and services offered to the community. Their main aim is to help offer a better service improving the community as a whole and are predominately run as non profit schemes. To support this point Zahra et al. (2009: 519) said that “social entrepreneurs make significant and diverse contributions to their communities and societies, adopting business models to offer creative solutions to complex and persistent social problems”. Examples of socially run businesses include the NHS and also the 'Love One Water' drinks brand.