entrepreneur

entrepreneur, entrepreneurship

There are at least four distinct meanings given to this term, which overlap only in part. At a basic level, an entrepreneur is a person who owns and runs a business-not necessarily a new, small, growing, or successful business. Economists define the entrepreneur as a person who risks capital and other resources in the hope of substantial financial gain, or as someone who specializes in taking judgemental decisions about the use and coordination of scarce resources. The emphasis is on calculated risk-taking. Sociologists define the entrepreneur as a creative innovator in the business sphere, in contrast to the conventional business-owner, capitalist, or professional manager, who conforms more often to established procedures and objectives. This conception originated with Joseph Schumpeter , who defined entrepreneurs as individuals who develop and implement new combinations of the means of production, a function which he described as fundamental to economic development in his bookThe Theory of Economic Development (1934). Finally, the term is sometimes used more loosely to refer to the owner or creator of a new, small, growing, and successful business, or even to any person who sets up a small business, or changes from an employee job to being self-employed, even though neither need involve any significant degree of innovation or capital investment.

The 1980s saw the development of the concept of intrapreneurs; that is, people working alone or in teams who remained employees within the organization or firm for which they worked, but took responsibility for some innovation, costly exercise or risky development, or even for a routine subset of activities, in the expectation of additional personal financial reward for successful ventures and profitable operations. At the extreme, intrapreneurs shade into employees whose earnings depend heavily on bonus and commission payments, or other incentive payments -such as sales personnel.

Theories about entrepreneurial behaviour concern the relative importance of personality traits, social marginality, the ‘artisan’ or ‘craftsman’ orientation to work, sources of risk capital, the economic environment, and institutions. Theories of economic growth do not always attach importance to entrepreneurs. Sociological interest in entrepreneurship has declined steadily with the emergence of monopoly capitalism and the rise of the modern business corporation . However, the American economic sociologist Ronald S. Burt has conducted a number of analyses of envy and entrepreneurial opportunities in competitive environments, notably via the application of concepts derived from network analysis (see Corporate Profits and Cooptation, 1983, and Social Contagion and Innovation, 1988).