The word ” Entrepreneur ” has been defined severally in different ages. Obviously, this article is on the verge to enlighten you more about who an entrepreneur is, the origin, earlier, and the latest definition and concept.
What Is The Origin Of Entrepreneur
The term “entrepreneur” was coined from the French word entrepreneur (verb), which means “to undertake”. Albeit, entrepreneur as a concept has been in existence for centuries yet, the classical and neo-classical economists couldn’t include entrepreneurs in their formal models.
They believe that pure information would be exposed to absolutely rational actors, with little or no mention for discovery and risk-taking. However, by the middle of the 20th century, serious attempts were made by economists to incorporate the concept of entrepreneurship into their models.
Paradoxically, three scholars of eminent personalities were pivoted to the inclusion of entrepreneurs into the economic model they are: Schumpeter, Frank Knight, and Israel Kirzner.
Schumpeter proclaimed that entrepreneurs – rather than companies – were saddled with the responsibilities of creating new things in other to maximize profit.
Knight advanced that entrepreneurs are the brunt bearers of uncertainty plus, they were risking takers in the financial markets.
While Kirzner on the other hand was of the opinion that entrepreneurship is a process that often led to the beautiful discovery.
Read Also: How To Become A Successful Entrepreneur
Who is An Entrepreneur Definition:
Informatively, it has previously been defined as a person who operates a business (either small or large). Essence, an open-minded individual who identifies, creates, innovate, takes risks, and solves problems is known as an entrepreneur.
Essentially, entrepreneurs play a vital role in any country’s economic build-up. They possess the skills and initiative required to anticipate the current and future unseen needs. They bring exciting ideas to the labor market.
The present-day definition has taken a wider dimension. An entrepreneur is seen as a person who, instead of working as an employee, build and operate a business (either small or large), take the risks and profit of the venture. Usually, an entrepreneur is always seen as a creator, innovator, the aboriginal of the new concepts, ideas, and business or procedures.
Moreover, an entrepreneur who is willing and able to take risks during startup is usually rewarded with profits and growth opportunities. The brunt bearer is those who fail to take risks and they become less prevalent in the entrepreneurial world.
Concept of Entrepreneur
The word Entrepreneur was believed to be used first by an Irish banker operating in Franco Ricardo. Another belief has it that the word was first used in economics by the French Economist J.B Say in 1824.
The word has been adopted into the Oxford English Dictionary since 1897 and giving the meaning “director or manager of a public musical institution”. The term has since then undergone several evolutionary changes of meaning. Up till now, no concrete consensual concept of entrepreneurs.
Within the 16th century, the term Entrepreneur was applied to the individual that engaged in military expeditions. In the 17th century, it was extended to Civil engineering activities.
It was only in the 18th century was the word began finding expressions in economic aspects. As seen above, the evolution of the concept of an entrepreneur is over four centuries. Since the 18th century, the term has been used in various views which we will broadly classify into three groups namely, Risk Bearer, organizer, and innovator.
Entrepreneur as a Risk Bearer
In the 18th century, the term Entrepreneur was introduced into economics with its unique risk-bearing functions by an Irish man – Richard Cantillon.
Richard defined Entrepreneur as an agent that combines factors of production which he buys at certain prices, combines them into a product, and resells at uncertain prices in the future. He referred to the agent as a “risk bearer “.
The entrepreneur was also described by Knight as a person or specialized group of persons who bear uncertainty. He went further to differentiate between uncertainty and risk.
Where risk is can be calculated and insured, uncertainty is incalculable and cannot be insured against.
Thus, According to Knight, the entrepreneur is a functionary who undertakes such uncertainty which cannot be insured against, capitalized nor salaried.
Entrepreneur as an Organizer
According to Jean-Baptiste, an Entrepreneur is one who combines the land of one, the labor of another, the capital of another and thus produces a product from these combinations and then goes ahead to sell the products in the market and pays rent on land, Wages to Laborers, interest on capital and what remains is her profit.
Jean made a clear distinction between a capitalist as a financed and an Entrepreneur as an organizer.
Entrepreneur as an Innovator
In 1934, Joseph A, Schumpeter for the first time assigned a role of innovation to the Entrepreneur in his Magnum Opus “Theory of Economic Development.
He considered economic development as a dynamic change brought by an entrepreneur by instituting innovation.
According to him, Innovations in the combination of production may occur in forms such as:
1. Introduced of entirely new product on the market
2. Instituting of new production technologies
3. Opening of a new market into which the product has not entered in time past.
4. Discovery of new supply source for factors of production
Schumpeter also succeeded in making a distinction between an investor and an innovator. The former he describes as one who discovers new methods and new materials while the latter as one who utilizes inventions to make new and better combinations.
Characteristics of an Entrepreneur
Considering all the conceptual viewpoints from the inception of the word till date, we have the following characteristics of Entrepreneur:
2. Profit maker
4. Achievement motivator
5. Capital Provider
7. Reward Receiver
8. Challenge Taker
9. Determinants the nature of the business
Types of Entrepreneurship
So, there are three types and they are; social, serial, and lifestyle entrepreneur.
This is an entrepreneur who is after innovative ideas and solutions to every social problem. Usually, social entrepreneurs involve in non-profit engagement and are carried away by social responsibilities.
They are motivated to enhance socio-economic well-being, environmental, health conditions, etc. of others. Great social entrepreneurs include; Maria Montessori, Bill Clinton, Florence Nightingale, Ibrahim Abouleish, Abraham M. George, and others.
This is another type who develops new ideas, starts and builds businesses, and at times transact with investors or prosperous shareholders.
Serial entrepreneurs are premium risk-takers with a series of exciting ideas. They have no interest in a company or a particular business career.
According to Forbes, serial entrepreneurs include Craig McCaw, Steve Blank, Andy Bechtolsheim, Michael Rubin, The Samwer brothers, Janus Friis the Skype pair, etc.
Those who are found in this category maximize profit from their personal passion. They recognize their lifestyle before every opportunity.
Some may be motivated to grow a business to a certain level and sell it to investors, but the lifestyle types catch fun in growing a business they’re in love with and build such business into a free flow residual income that is sustainable.
In conclusion, the bedrock of any society is entrepreneurs. Their dealings bring about economic development. Therefore, an individual that could think or innovate an idea and implement it for humanity should never be taken for granted.