In a world where ideas drive economies, it’s no wonder that innovation and entrepreneurship are often seen as inseparable bedfellows. The governments round the world are beginning to realize that so as to sustain progress and improve a country’s economy, the people need to be encouraged and trained to think out-of-the-box and be constantly developing innovative products and services. The once feasible ways of doing business are not any longer guarantees for future economic success!
In response to the present inevitable change, some governments are rethinking the way the young are educated by infusing creativity and innovation in their nation’s educational curriculum. within the same vein, they’re putting much emphasis on the necessity to coach future entrepreneurs through infusing entrepreneurship components within the tutorial system, especially at the tertiary level.
Some countries have taken this initiative to a better level by introducing entrepreneurship education at elementary schools and inspiring them to be future entrepreneurs once they are aged . during a series of survey funded by Kauffman Center for Entrepreneurial Leadership, it had been found that almost seven out of 10 youths (aged 14-19) were curious about becoming entrepreneurs.
Being an entrepreneur is now the selection of the new generation as compared to the well-liked career choices of yesteryears like being a doctor, lawyer or a combat pilot . during a recent visit to the bustling city of Shanghai in China, an off-the-cuff survey was administered among Chinese youths by the author. The results of the survey showed that being an entrepreneur, especially within the field of computer and e-commerce, is perceived as a ‘cool’ career and is an aspiration for several Chinese youths before the ‘opening up’ of recent China, being an entrepreneur was perceived because the outcome of one’s inability to carry an honest government job and people who dared to venture, were often scorned at by their peers. Times have indeed changed.
With this alteration in mindset and therefore the relative knowledge that entrepreneurs cause increased job creations, the notice 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 proliferation of jargons like netpreneur, biotechpreneur, technopreneur and multipreneur are coined to stay up with the ever-changing times and business conditions that surround us.
In view of those changes, it’s important that the definition of entrepreneurship be refined or redefined to enable its application during this 21st century. to place it succinctly, “Good science has got to begin with good definitions (Bygrave & Hofer, 1991, p13).” Without the right definition, it’ll be laborious for policymakers to develop successful programs to inculcate entrepreneurial qualities in their people and organizations within their country.
The paper will provide a summary of the definitions of entrepreneurship provided by scholars during this discipline . The author also will expand on one among the definitions by Schumpeter to make a far better understanding of the definition of the term “entrepreneurship” as applied in today’s business world.
Entrepreneurship through the Years:
It was discovered that the term ‘entrepreneurship’ might be found from the French verb ‘entreprende’ within the twelfth century though the meaning might not be that applicable today. This meaning of the word then was to try to to something with none link to economic profits, which is that the antithesis of what entrepreneurship is all about today. it had been only within the early 1700’s, when French economist, Richard Cantillon, described an entrepreneur together who bears risks by buying at certain prices and selling at uncertain prices (Barreto, 1989, Casson 1982) which is perhaps closer to the term as applied today.
In the 1776 thought-provoking book ‘The Wealth of Nations’, Smith explained clearly that it had been not the benevolence of the baker but self-interest that motivated him to supply bread. From Smith’s standpoint, entrepreneurs were the economic agents who transformed demand into supply for profits.
In 1848, the famous economist John Stuart Mill described entrepreneurship because the founding of a personal enterprise. This encompassed the danger takers, the choice makers, and therefore the individuals who desire wealth by managing limited resources to make new business ventures.
One of the definitions that the author feels best exemplifies entrepreneurship was coined by 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 completing of latest combinations. The completing of latest combinations can take several forms:
The introduction of a replacement good or standard of quality;
The introduction of a completely unique method of production;
The opening of a replacement market;
The acquisition of a replacement source of latest materials supply; and
The completing of the new organization in any industry.
Though the term ‘innovation’ has different meanings to different people, several writers attended see “innovation” within the sort of entrepreneurship together not of incremental change but quantum change within the new business start-ups and therefore the goods/services that they supply (egs, Bygrave, 1995; Bygrave & Hofer, 1991).
In the view of Drucker (1985), he perceived entrepreneurship because the creation of a replacement organization, no matter its ability to sustain itself, including make a profit. The notion of a private who starts a replacement business venture would be sufficient for him/her to be labeled as an entrepreneur. it’s this characteristic that distinguishes entrepreneurship from the routine management tasks of allocating resources in an already established business . Though the definition tends to be somewhat simplistic in nature, it firmly attaches the character of entrepreneurial action with risk-taking and therefore the bearing of uncertainty by the individual (Swoboda, 1983)
In a Delphi study, Gartner (1990) found eight themes expressed by the participants that constitute the character of entrepreneurship. They were the entrepreneur, innovation, organization creation, creating value, profit or non-profit, growth, uniqueness, and therefore the owner-manager. The themes might be seen as a derivative and expansion of Schumpter’s earlier concept.
Expanding on Schumpeter’s Definition:
After digesting the various definitions of entrepreneurship, one would tend to ascertain a robust link between these two terms: entrepreneurship and innovation. on reflection , most of the definitions attended be, to some extent, a re-work and expansion of Schumpeter’s definition of entrepreneurship (which is that of innovation being applied during a business context).
As defining the term of ‘innovation’ is very debatable and would merit a paper on its own, the author has thus, for convenience, summarised the definition of innovation. Innovation are often perceived simply because the transformation of creative ideas into useful applications by combining resources in new or unusual ways to supply value to society for or improved products, technology, or services.
In the author’s opinion, the difficulties of defining “innovation” might be the rationale for the quandary one finds in attempting to reach a clear-cut definition of the term ” Entrepreneurship”.
Take for instance , if someone starts another run-of-the-mill hot dog substitute the streets of latest York, will he termed as an entrepreneur? consistent with Drucker’s definition, he are going to be seen together . However, if the above definition by Schumpeter was used as a suggestion , the solution is perhaps ‘NO’.
Why? The core of the matter lies in what’s so innovative about fixing another hot-dog stand which are in abundance in ny . On the contrary, if he’s the primary one to start out a stand selling hot-dogs with Oriental Sweet and Sour sauce topping; he might be termed as an entrepreneur (even supported Schumpeter’s requirement) as he has done what others haven’t done before. within the context of entrepreneurship, creativity and innovation are key points within the whole scheme of things.
In this manner, by adding “innovative” features to a product or services and fixing a business supported these additional features to compete within the existing market, new entrants could also be ready to gain this competitive advantage over existing market players.
In the case of the hot-dog seller, it’s going to be argued that his addition of Oriental Sweet and Sour sauce toppings could also be seen as nondescript. This runs in contrary to some scholars’ definition of entrepreneurship as requiring quantum changes within the products/ services to be justified as being entrepreneurial (Bygrave, 1985; Bygrave & Hofer, 1991).
Consistent with creating new products purchasable , someone who starts a business by providing a completely new way of serving his customers/ clients is taken into account to be entrepreneurial too. Though, it’s often argued that there are not any real new products or services during a case where one doesn’t look to the past products and services for ideas for improvements. Thus, the notion of incremental improvements should be accepted as being innovative too.
Innovation within the business sense might not necessarily involve, within the physical sense, the introduction of a replacement product or service. It are often within the sort of what’s commonly referred to as creative imitations. for instance , if a private starts selling a product that’s already common in his area or country, he won’t be seen as being entrepreneurial. However, if he’s the primary to sell an equivalent product during a virgin locale or to an untouched market segment, he are going to be seen as an entrepreneur in his own rights.
Take Muhammad Yunus, for example. Yunus became an entrepreneur when he started a micro-loan program for the poor villagers during a rural a part of Bangladesh named Grameen, with only US$26. The loan was divided among 42 villagers to help them to shop for small items like combs, scissors, needles and other necessities to start out their house businesses. within the past 22 years, Grameen Bank has grown with over $2 billion loans granted. it’s now become a model for several micro-loan facilities.
>From the subsequent example, Yunus created banking and lending facilities in Grameen specifically for the poor villagers. Banking and lending money activities aren’t new but Yunus was the primary to supply such facilities during a rural a part of Bangladesh which is certainly innovation and risk-bearing on his part as a social entrepreneur. In short, innovation needn’t arise mainly from a replacement product or service but it might be an old product or service finding a replacement marketplace for penetration.
An individual might be termed as an entrepreneur if he or she sells a product or service using new systems and/ or mediums of selling , distribution or production methods as a basis for a replacement business venture. He was one among the primary to sell books on an outsized scale using a web store and also patented the one-click system for online buying. Though selling books isn’t an innovation in itself, Jeff Bezos was innovative within the use of the web then as a viable marketing and sales channel for selling books.
Another example from the sector of e-commerce is Stuart Skorman, the founding father of Reel.com [http://Reel.com]. Reel.com [http://Reel.com] is actually one among the primary cyber movie store with a really large inventory of over a 100 000 videos. Though setting a movie store was revolutionary then, Reel.com [http://Reel.com] main distinction was being referred to as the primary online store to expand by opening an offline store. The founder felt that by doing so, the web store might be a billboard for the offline store and the other way around , thus strengthening this click and mortar business venture- an example of creativity and innovation applied during a profitable business context.
This paper has started as an effort to redefine the term of entrepreneurship but ended up ‘updating’ the wheel, supported the definition as proposed by Schumpeter. The paper expanded on this influential work by giving examples for instance what innovation in entrepreneurship was and hope that along the way, new insights were unearthed within the study of defining entrepreneurship.