The concept of entrepreneurship is multifaceted. There are varied, diverse and somewhat contradictory sets of definitions of the term. As a way out the definitional dilemma, this article aims to describe the economic perspective on entrepreneurship.
The financial perspective rests on certain economic variables including innovation, risk bearing, and resource mobilization.
Innovation/Creativity Inside this approach, entrepreneurs are people whom carry out new combination of productive resources. The key ingredient, the carrying out of new combination (or innovation) distinguishes entrepreneurs from non-entrepreneurs. While new venture creation appears as the most prevalent form of entrepreneurship, there exist other kinds. Entrepreneurship also involves the initiation of changes in the form of subsequent expansion in the amount of goods produced, and in existing form or structure of organisational relationships.
In the entrepreneurship literature, some scholars have questioned the utilization of organization creation as criterion for entrepreneurship. It's been argued that organizations for example political parties, associations and social groups are always created by those who are not "entrepreneurs." Interesting as it might sound, the terms entrepreneurship and entrepreneur happen to be adopted by varied scholars to meet the innovation and spirit of the time. This really is evidenced by attempts to apply entrepreneurial thinking to contemporary team-oriented place of business strategies. Members of such groups - political parties, associations and social groups - as a result, could be called entrepreneurial teams. Besides, activities inherent in such groups have flourished at this point, and are increasingly being described as social entrepreneurship.
Risk Taking This is another financial variable upon which the financial perspective revolves. Risk taking distinguishes entrepreneurs from non-entrepreneurs. Often, entrepreneurs are calculated risk takers. They bear the uncertainty in market dynamics. This notion has its critics and advocates. Entrepreneurs may not necessarily risk her own funds but risk other personal capital such as reputation and the possibility of being more gainfully employed elsewhere.
Resource Mobilization here, entrepreneurship is reflected in alertness to perceived profit opportunities in the economy. This implies the allocation of resources in quest for opportunities with the entrepreneur playing the role of a chance identifier. This way, entrepreneurs are distinguished by their capability to identify persistent shocks or challenges (of long term opportunities) to the environment, and then to synthesize the information and company management (straight from the source) take decisive actions based upon it.
This article has conceptualized entrepreneurship according to resource mobilization, risk taking, and innovation. Beyond the previously mentioned financial variables, entrepreneurship could also be viewed according to a set of personal characteristics, motives and incentives of the actor within the entrepreneurship act. This is the psychological perspective, the topic of a future article. In addition to the psychological perspective, we shall also examine the process and small business perspectives.
The financial perspective rests on certain economic variables including innovation, risk bearing, and resource mobilization.
Innovation/Creativity Inside this approach, entrepreneurs are people whom carry out new combination of productive resources. The key ingredient, the carrying out of new combination (or innovation) distinguishes entrepreneurs from non-entrepreneurs. While new venture creation appears as the most prevalent form of entrepreneurship, there exist other kinds. Entrepreneurship also involves the initiation of changes in the form of subsequent expansion in the amount of goods produced, and in existing form or structure of organisational relationships.
In the entrepreneurship literature, some scholars have questioned the utilization of organization creation as criterion for entrepreneurship. It's been argued that organizations for example political parties, associations and social groups are always created by those who are not "entrepreneurs." Interesting as it might sound, the terms entrepreneurship and entrepreneur happen to be adopted by varied scholars to meet the innovation and spirit of the time. This really is evidenced by attempts to apply entrepreneurial thinking to contemporary team-oriented place of business strategies. Members of such groups - political parties, associations and social groups - as a result, could be called entrepreneurial teams. Besides, activities inherent in such groups have flourished at this point, and are increasingly being described as social entrepreneurship.
Risk Taking This is another financial variable upon which the financial perspective revolves. Risk taking distinguishes entrepreneurs from non-entrepreneurs. Often, entrepreneurs are calculated risk takers. They bear the uncertainty in market dynamics. This notion has its critics and advocates. Entrepreneurs may not necessarily risk her own funds but risk other personal capital such as reputation and the possibility of being more gainfully employed elsewhere.
Resource Mobilization here, entrepreneurship is reflected in alertness to perceived profit opportunities in the economy. This implies the allocation of resources in quest for opportunities with the entrepreneur playing the role of a chance identifier. This way, entrepreneurs are distinguished by their capability to identify persistent shocks or challenges (of long term opportunities) to the environment, and then to synthesize the information and company management (straight from the source) take decisive actions based upon it.
This article has conceptualized entrepreneurship according to resource mobilization, risk taking, and innovation. Beyond the previously mentioned financial variables, entrepreneurship could also be viewed according to a set of personal characteristics, motives and incentives of the actor within the entrepreneurship act. This is the psychological perspective, the topic of a future article. In addition to the psychological perspective, we shall also examine the process and small business perspectives.