Entrepreneurs and Entrepreneurship: History, Theory and Characteristics

Topics: Entrepreneurship, Factors of production, Entrepreneur Pages: 8 (3017 words) Published: April 27, 2008

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...
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