Entrepreneurship: What does it REALLY mean?
~ Executive Summery about Entrepreneurship Course by Alvin Chan ~
Introduction:
In a world where ideas drive economies, it is no wonder that innovation and entrepreneurship are often seen as inseparable bedfellows. Some countries have taken this initiative to a higher level by introducing entrepreneurship education at elementary schools and encouraging them to be future entrepreneurs when they are of age. Times have indeed changed.
With this change in mindset and the relative knowledge that entrepreneurs bring forth increased job creations, the awareness and academic studies of entrepreneurship have also heightened. In many tertiary institutes, many courses of entrepreneurship and innovation are being developed and offered to cater to the increasing demand. The term “entrepreneurship” has also evolved with numerous variations. The paper will provide a summary of the definitions of entrepreneurship provided by scholars in this subject area. The author will also expand on one of the definitions by Joseph Schumpeter to create a better understanding of the definition of the term “entrepreneurship” as applied in today’s business world.
Entrepreneurship through the Years:
From Smith’s standpoint, entrepreneurs were the economic agents who transformed demand into supply for profits. This encompassed the risk takers, the decision makers, and the individuals who desire wealth by managing limited resources to create new business ventures.
One of the definitions that the author feels best exemplifies entrepreneurship was coined by Joseph Schumpeter (1934). He stated that the entrepreneur is one who applies “innovation” within the context of the business to satisfy unfulfilled market demand (Liebenstein, 1995). In elaboration, he saw an entrepreneur as an innovator who implements change within markets through the carrying out of new combinations. Though the term ‘innovation’ has different meanings to different people, several writers tended to see “innovation” in the form of entrepreneurship as one not of incremental change but quantum change in the new business start-ups and the goods/services that they provide (egs, Bygrave, 1995; Bygrave & Hofer, 1991).
It is this characteristic that distinguishes entrepreneurship from the routine management tasks of allocating resources in an already established business organization. Expanding on Schumpeter’s Definition:
After digesting the numerous definitions of entrepreneurship, one would tend to see a strong link between these two terms: entrepreneurship and innovation. In retrospect, most of the definitions tended to be, to some extent, a re-work and expansion of Schumpeter’s definition of entrepreneurship (which is that of innovation being applied in a business context).
In the author’s opinion, the difficulties of defining “innovation” could be the reason for the quandary one finds in attempting to arrive at a clear-cut definition of the term “ Entrepreneurship”.
Take for example, if someone starts another run-of-the-mill hot dog stand in the streets of New York, will he termed as an entrepreneur? In the context of entrepreneurship, creativity and innovation are key points in the whole scheme of things.
This runs in contrary to some scholars’ definition of entrepreneurship as requiring quantum changes in the products/ services to be justified as being entrepreneurial (Bygrave, 1985; Bygrave & Hofer, 1991).
Innovation in the business sense may not necessarily involve, in the physical sense, the introduction of a new product or service. Yunus became an entrepreneur when he started a micro-loan program for the poor villagers in a rural part of Bangladesh named Grameen, with only US$26. In short, innovation need not arise mainly from a new product or service but it could be an old product or service finding a new market for penetration.
An individual could be termed as an entrepreneur if he or she sells a product or service using new systems and/ or mediums of marketing, distribution or production methods as a basis for a new business venture. Though selling books is not an innovation in itself, Jeff Bezos was innovative in the use of the Internet then as a viable marketing and sales channel for selling books.
The founder felt that by doing so, the online store could be an advertisement for the offline store and vice versa, thus strengthening this click and mortar business venture- an example of creativity and innovation applied in a profitable business context.
In summary, the author hopes that this paper would further encourage the infusion of creative thinking and innovation within the educational system to nurture future entrepreneurs with a competitive edge. Innovation needs to be the cornerstone of entrepreneurship as opposed to the mere setting up of another new enterprise without implementing changes or adding features of improvements to the products and services provided and/ or its business processes.
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