The concept of entrepreneurship is multi-dimensional. You will find varied, diverse and somewhat contradictory sets of definitions of the term. As a way out the definitional dilemma, this article aims to explain the financial perspective on entrepreneurship.
The economic perspective rests on certain economic variables which include innovation, risk bearing, and resource mobilization.
Innovation/Creativity Within this approach, entrepreneurs are people whom perform 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 type of entrepreneurship, there exist other forms. Entrepreneurship also involves the initiation of changes in the type of subsequent expansion in the quantity of goods produced, as well as in existing form or structure of organisational relationships.
Within the entrepreneurship literature, some scholars have questioned the usage of organization creation as criterion for entrepreneurship. It's been argued that organizations for example political parties, associations and social groups will almost always be created by those who are not "entrepreneurs." Interesting as it might sound, the terms entrepreneurship and entrepreneur are already adopted by varied scholars to meet the innovation and spirit of the time. This is evidenced by attempts to apply entrepreneurial thinking to contemporary team-oriented place of work strategies. Members of such groups - political parties, associations and social groups - as such, could possibly be called entrepreneurial teams. Besides, activities inherent in such groups have flourished lately, and also are increasingly being described as social entrepreneurship.
Risk Taking This really is another financial variable upon which the economic 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 might not necessarily risk her own funds but risk other personal capital such as reputation as well as the possibility of being more gainfully employed elsewhere.
Resource Mobilization here, entrepreneurship is reflected in alertness to perceived profit opportunities within the economy. This implies the allocation of resources in quest for opportunities with the entrepreneur playing the role of the opportunity identifier. This way, entrepreneurs are distinguished by their ability to identify persistent shocks or challenges (of long term opportunities) to the environment, industry professionals (isa.edu.sg`s latest blog post) and after that to synthesize the information and take decisive actions based upon it.
This article has conceptualized entrepreneurship according to resource mobilization, risk taking, and innovation. Beyond the above-mentioned economic variables, entrepreneurship could also be viewed determined by a set of personal characteristics, motives and incentives of the actor in the entrepreneurship act. This is the psychological perspective, the subject of a future article. Along with the psychological perspective, we shall also examine the process and small business perspectives.
The economic perspective rests on certain economic variables which include innovation, risk bearing, and resource mobilization.
Innovation/Creativity Within this approach, entrepreneurs are people whom perform 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 type of entrepreneurship, there exist other forms. Entrepreneurship also involves the initiation of changes in the type of subsequent expansion in the quantity of goods produced, as well as in existing form or structure of organisational relationships.
Within the entrepreneurship literature, some scholars have questioned the usage of organization creation as criterion for entrepreneurship. It's been argued that organizations for example political parties, associations and social groups will almost always be created by those who are not "entrepreneurs." Interesting as it might sound, the terms entrepreneurship and entrepreneur are already adopted by varied scholars to meet the innovation and spirit of the time. This is evidenced by attempts to apply entrepreneurial thinking to contemporary team-oriented place of work strategies. Members of such groups - political parties, associations and social groups - as such, could possibly be called entrepreneurial teams. Besides, activities inherent in such groups have flourished lately, and also are increasingly being described as social entrepreneurship.
Risk Taking This really is another financial variable upon which the economic 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 might not necessarily risk her own funds but risk other personal capital such as reputation as well as the possibility of being more gainfully employed elsewhere.
Resource Mobilization here, entrepreneurship is reflected in alertness to perceived profit opportunities within the economy. This implies the allocation of resources in quest for opportunities with the entrepreneur playing the role of the opportunity identifier. This way, entrepreneurs are distinguished by their ability to identify persistent shocks or challenges (of long term opportunities) to the environment, industry professionals (isa.edu.sg`s latest blog post) and after that to synthesize the information and take decisive actions based upon it.
This article has conceptualized entrepreneurship according to resource mobilization, risk taking, and innovation. Beyond the above-mentioned economic variables, entrepreneurship could also be viewed determined by a set of personal characteristics, motives and incentives of the actor in the entrepreneurship act. This is the psychological perspective, the subject of a future article. Along with the psychological perspective, we shall also examine the process and small business perspectives.