Entrepreneurship

Definition and Overview

Entrepreneurship refers to the process of designing, launching, and running a new business, which is often initially a small business. The people who create these businesses are called entrepreneurs. Entrepreneurship has been described as the "capacity and willingness to develop, organize and manage a business venture along with any of its risks to make a profit." While definitions of entrepreneurship typically focus on the launching and running of businesses, due to the high risks involved in launching a start-up, a significant proportion of start-up businesses have to close due to "lack of funding, bad business decisions, an economic crisis, lack of market demand, or a combination of all of these."

A group of people in a modern office brainstorming ideas on a whiteboard.

History of Entrepreneurship

The concept of entrepreneurship has a wide range of meanings. In the Western context, it is often related to self-employment, small business, business creation, and innovative activities. However, entrepreneurship can be defined in different ways based on the cultural, political, and economic background. The history of entrepreneurship is closely related to the economic history of the world. The term "entrepreneur" first appeared in the French language in the 17th century, referring to persons who were engaged in large-scale business activities. It was later adopted by English-speaking countries in the 19th century.

Characteristics of an Entrepreneur

Entrepreneurs are often characterized by their ability to innovate. Innovation is defined as the successful exploitation of new ideas. It is not just the invention of a new idea that is important, but it is actually bringing it to market, putting into practice and exploiting it in a manner that leads to new products, services or systems that add value or improve quality. This is a key distinction between an inventor and an entrepreneur.

Other key characteristics often associated with successful entrepreneurs include: the ability to take calculated risks; a strong internal locus of control, which is the belief that they can control their own destiny; and an ability to exploit networks and resources beyond their immediate control.

Types of Entrepreneurship

There are many different types of entrepreneurship that can be categorized in several ways. Some of the most common types include:

- Small Business Entrepreneurship: These are businesses that are typically family-owned with no intention of becoming large scale. They hire local employees or family. Many small businesses are in traditional sectors like retail, restaurants, and small-scale manufacturing.

- Scalable Startup Entrepreneurship: These are entrepreneurs who start a business based on a unique, innovative idea with the intention of growing it into a large company. They attract venture capital and have plans to scale rapidly.

- Large Company Entrepreneurship: This involves creating new products or ventures within an existing large company. This is also known as intrapreneurship.

- Social Entrepreneurship: These are entrepreneurs who are motivated by a desire to help, improve and transform social, environmental, educational and economic conditions.

Entrepreneurship Ecosystem

An entrepreneurship ecosystem is a socio-economic environment or a community that affects local/regional entrepreneurship. It consists of individual entrepreneurs, venture capitalists, angel investors, mentorship programmes, business schools, business incubators and business accelerators. Entrepreneurship ecosystems are often designed to foster innovation and to speed up the growth of new start-ups and ventures.

Entrepreneurship Education and Research

Entrepreneurship education and research has grown rapidly in the last few decades. Many universities now offer courses on entrepreneurship and there are also many research journals dedicated to the topic. Entrepreneurship education is often aimed at developing the entrepreneurial attitudes and skills of students.

Challenges and Risks

Entrepreneurship comes with a multitude of challenges and risks. Entrepreneurs often face financial risk, career risk, family and social risk, and psychic risk. They also face challenges in terms of business survival, competition, and growth.

Impact of Entrepreneurship

Entrepreneurship has a significant impact on the economy and society. It leads to new job creation, drives innovation, and contributes to economic growth. It also has a social impact as it contributes to social change and development.