What do you mean by the term Entrepreneurship ?

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The word ‘entrepreneur’ has been taken from the French language, where it cradled originally meant to designate an organiser of musical or other entertainments. In the early 16th century, it was applied to those who were engaged in military expeditions. The role industrialization in the 17th century brought the importance of entrepreneurs as a separate factor and a contributor for the production. It was also extended to cover civil engineering activities such as construction and fortification during this century. The industrial revolution gave a special status to the entrepreneur. He was also recognized as the key element generating investment opportunities for new industries.

The word ‘entrepreneur’ was used icier to economic aspects during early 18th century. In this way, the evolution of the concept of entrepreneur evolved over more than four centuries, have undergone drastic changes. Yet the concept is not clear. It is used in various ways and for various views. As the concept is complex in its content, it is influenced by not only economical aspects, but also sociological, political, psychological, ethical, religious and cultural values. Over the years esc views are broadly classified into three groups : risk-bearer, organiser and innovator, ins an entrepreneur is one who tries to create something new, organises production and undertakes risks and handles economic uncertainty involved in an enteiprise. The various definition starting from French language to till date by eminent economists and entrepreneurs are given below.

Definition of an Entrepreneur

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The term ‘entrepreneur’ has been defined in a variety of ways as it is an elusive concept ill cannot be defined precisely. A few important and relevant definitions of the term are given below.

(1) The American Heritage Dictionary defines an entrepreneur as a “person who anises, operates and assumes the risk for a business venture”.

(2) The Oxford English Dictionary defines entrepreneur as “one who undertakes an enterprise, especially a contractor acting as intermediary between capital and labour”.

(3) The new Encyclopedia Britannica considers an entrepreneur as “an individual who bears the risk of operating a business in the face of uncertainty about the future conditions.”

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(4) Richard Cantillon was the first man who introduced the term ‘entrepreneur’ and his unique risk-bearing function in economics in the early 18th century. He defined entrepreneur as “the agent who buys factors of production at certain prices in order to combine them into a product with a view to selling it at uncertain prices in future”.

(5) Jules Backman mentions that “basically, the entrepreneur sees a need and then brings together the manpower, material and capital required to meet that need”.

(6) Joseph A. Schumpetor gives two different views of the term entrepreneur one used by advanced economies and the other by developing economies. He defines the term when used in an advanced economy as, “an individual who introduces something new in the economy- a method of production not yet tested by experience in the branch of manufacture concerned, a product with which consumers are not yet familiar, a new source of raw material or of new markets and the like”. He further states that the entrepreneur’s function is to “reform or revolutionize the pattern of production by exploiting an invention or more generally, and untried technological possibility for producing a new commodity…”.

(7) In the case of developing economy like India, an entrepreneur is one who starts an industry (old or new), undertakes risks, bears uncertainties and also performs the managerial functions of decision making and coordination”.

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Peter F. Drucker, the management ‘guru’, states that an entrepreneur is “one who always searches for change, responds to it and exploits it as an opportunity. Innovation is the specific tool of entrepreneurs, the means by which they exploit changes as an opportunity for a different business or a different service. It is capable of being presented as a discipline, capable of being learned and practiced. Entrepreneurs need to search purposefully for the sources of innovation, the changes and their symptoms that indicate opportunities for successful innovation. They need to know and to apply the principles of successful innovation”.

(8) F. H. Knight described entrepreneur to be a specialised group of persons who bears uncertainty. He defines entrepreneur as “an economic functionary who undertakes such responsibility of uncertainty which by its very nature cannot be insured nor capitalised nor salaried too”.

(9) As per Jean Baptiste entrepreneur is “one who combines the land of one, the labour of another and the capital of yet one other, and, thus produces a product. By selling the product in the market, he pays interest on capital, rent on land and wages to labourers and what remains is his/her profit”.

(10) Francis A. Walker looks entrepreneur as “one who is endowed with more than average capacities in the task organising and coordinating the factors of production i.e., land, labour, capital and enterprise. Entrepreneur is a pioneer, a leader, and a captain of the firm. Hence, profit the entrepreneur gets depends on his efficiency and superior talent”.

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Summing up the above definitions, the commonest definition of entrepreneur could be a person who organises, manages and takes the risk of running a business or enterprise. He perceives a need and gathers together the necessary inputs like manpower, materials and capital to satisfy that need. Thus, and entrepreneur is an originator, organiser and risk-bearer of a new business venture or brings in innovative changes in an existing business and handles economic uncertainties involved in an enterprise.

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