Through referenced literature and examples, examine the range of theories of what an entrepreneur is and how they contribute to the economy and society.
TABLE OF CONTENTS
1 – Introduction ______________________________________________ 3
2 – Concept of Risk/Uncertainty_________________________________
3 – ‘Entrepreneur’ – Who? What?_______________________________ 3.1 – Roles played by an Entrepreneur_____________________ 3.2 – Trait versus Behavioral Approach____________________ 3.3 – Traits of an Entrepreneur___________________________ 3.4 – Types of Entrepreneurs_____________________________
4 – Effects on the economy and society___________________________ 4.1 – Impact on the economy_____________________________ 4.2 – Entrepreneurship and Innovation____________________ 4.3 – ‘Disruptive Technology’____________________________ 4.4 – Impact on the society_______________________________ 4.5 – ‘Sustainopreneurship’______________________________
5 – Conclusion_______________________________________________ 6 – References _______________________________________________
1 – Introduction
Etymologically speaking the term ‘entrepreneur’ starts its journey in France, as it is derived from the word ‘entrependre’, which means ‘to undertake’. Many researchers have, in the past, and to this day define what an entrepreneur means to them. Sometimes, their conceptualizations stem from a particular school of thought; on other occasions they follow a different path (ex: Schumpeter). The result, therefore, is a diverse array of concepts on what the roles and characteristics of an entrepreneur should be; that ultimately, its preventing economists from yielding a clear-cut and unambiguous operational concept of entrepreneurship. As a result of the consistency of diversity in opinions in this subject, three major branches of entrepreneurial research have been created, which as per Hebert and Link (1988: p 41), trace its origin to Richard Cantillon’; namely: the German Tradition, the Chicago Tradition and the Austrian Tradition. Each has its own heavyweights, however, this must not be construed that each school is clear enough about its idea to have a perfectly heterogeneous model of its own. Now lets look at the concept of risk, which is usually a big factor for entrepreneurship.
2 – Concept of Risk/Uncertainty
Bird (1989) divides risk into five types, four of which are clearly relevant to any potential entrepreneur: ‘economic risk, risks in social relations, risks in career development, plus psychological and health risks.’
All throughout economic literature, ample numbers of associations have been drawn between entrepreneur and risk. To understand this concept and its conceptualization we have to refer to Richard Cantillon’s (1931) work. In 18th century, Cantillon created a model market economy, which was based on a principle called ‘mutual need and necessity.’ In this model he mentions three economic agents:
(1) Financially independent landowners
(2) Entrepreneurs who take risks for their personal gains
(3) Managers/(hirelings) who contribute to active decision-making in the business process.
To Cantillon (1931) an entrepreneur is someone who engages in business with an uncertainty, which will eventually generate profits or losses. He stresses on the functions of an entrepreneur and helps generalize the term in order for it to be ‘embraced by many different occupations’ (Hebert and Link, 1988: p 42). Cantillon goes on to make an example, which has been used considerably by research analysts to exemplify the escalation, the definition and scope of entrepreneurship experienced for the first time in Cantillon’s work. Here, he describes the farmer as an entrepreneur who promises to pay fixed sum to the landowner for the farmland without any assurance of the profit he will derive from this enterprise (1931: p 47-49). Thus, acting like an entrepreneur according to