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Entrepreneurship - What is It ?



Entrepreneurship is the process of designing, starting and running a new company, which is often originally a small company. The men and women who create these businesses are called entrepreneurs.

Entrepreneurship was described as the "capability and willingness to grow, organize and manage a company venture alongside some of its dangers so as to make a profit". While definitions of entrepreneurship typically focus on the start and running of companies, because of the large risks involved in launching a startup, a significant percentage of start-up companies have to close because of "lack of financing, bad business decisions, an economic crisis, lack of market demand--or a combination of all of them.

Entrepreneurship is the action of becoming an entrepreneur, or even "an owner or director of a business enterprise who makes money at danger and initiative". Entrepreneurs act as supervisors and manage the launch and growth of a venture. Entrepreneurship is the process by which an individual or a team identifies a business opportunity and acquires and deploys the essential resources needed for its manipulation.

Early 19th century French economist Jean-Baptiste Say provided a broad definition of entrepreneurship, saying that it "shifts economic resources out of an area of lower and into a place of higher productivity and higher return". Entrepreneurs create something new, something different--they change or transmute values. Regardless of the firm size, big or small, they can partake in entrepreneurship opportunities. Four standards are required by the opportunity.

First, there must be opportunities or situations to recombine resources to create profit. Second, entrepreneurship requires differences between people, such as preferential access to specific people or the capability to comprehend details about opportunities. Third, taking on risk is quite necessary. Fourth, the entrepreneurial process demands the organization of resources and people.

The entrepreneur is a element in microeconomics and also the analysis of entrepreneurship reaches back to the work of Richard Cantillon and Adam Smith in the late 17th and early 18th centuries. However, entrepreneurship was largely ignored theoretically until the late 19th and early 20th centuries and empirically until a profound resurgence in economics and business since the late 1970s. From the 20th century, the understanding of entrepreneurship owes considerably to the work of economist Joseph Schumpeter in the 1930s and other Austrian economists like Carl Menger, Ludwig von Mises and Friedrich von Hayek.

According to Schumpeter, an entrepreneur is a person who is willing and ready to convert a new idea or innovation into a successful invention. Entrepreneurship employs what Schumpeter called "the gale of creative destruction" to replace in whole or part inferior innovations across markets and businesses, simultaneously creating new products such as new business models. In this way, creative destruction is largely responsible for the dynamism of businesses and long-term financial development.

The supposition that entrepreneurship results in economic growth is an interpretation of the residual in endogenous growth theory and as such is hotly debated in academic economics. An alternative explanation typified by Israel Kirzner suggests that nearly all innovations may be much more incremental improvements like the replacement of paper with plastic in the creating of drinking straws.


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