Introduction to Entrepreneurship

MEANING OF THE WORD ENTREPRENEURSHIP & ENTREPRENEUR The word Entrepreneurship is derived from the French verb “ENTERPRENDRE” and it literally means “between taker “or “go between”. According to Oxford Dictionary, Entrepreneur can be defined as “one who undertakes an enterprise, especially a contractor – acting as intermediary between capital and labour” EVOLUTION OF THE CONCEPT OF ENTREPRENEURSHIP Earliest Period An early example of the earliest definition of an entrepreneur as a go between is Marco Polo, who attempted to establish trade routes to the Far East. As a go between, Marco Polo would sign a contract with a money person (forerunner of today’s venture capitalists) to sell his goods. A common contract during this time provided a loan to the merchant adventurer at a 22.5 percent rate, including insurance. While the capitalist was a passive risk bearer the merchant adventurer took the active role in trading, bearing all the physical and emotional risks. When the merchant adventurer successfully sold the goods and completed the trip, the profits were divided with the capitalist taking most of them (up to 75 percent), while the merchant adventurer settled for the remaining 25 percent. Middle Ages In the middle ages, the term entrepreneur was used to describe both an actor and a person who managed large production projects. In such large production projects, this individual did not take any risks but merely managed the project using the resources provided, usually by the government of the country. A typical entrepreneur in the middle ages was the cleric – the person in charge of great architectural works, such as castles and fortifications, public buildings, abbeys and cathedrals. 17th Century The reemerging connection of risk with entrepreneurship was developed in the 17 th century, with an entrepreneur being a person who entered into a contractual arrangement with the government to perform a service or to supply stipulated products. Since the contract price