An entrepreneur could perhaps most easily be described as an individual who, in Jean-Baptiste Say’s words, “undertakes an enterprise, especially a contractor, acting as intermediary between capital and labour”. In recent times, however, the entrepreneur might act as the individual who risks his/her own capital in the forming or establishment of a new business, and the above definition could be amended to describe an entrepreneur as an “owner or manager of a business enterprise who makes money through risk and initiative”. Even if the burden of risk might be shared by external investors, in both the above definitions, the entrepreneur is a force of innovation, and either creates new wealth, or changes business norms by responding to market inefficiency.
Keeping in mind the above image of the entrepreneur as a figure who is innovative, perceptive, and an agent of change, Jean-Baptiste Say’s broad description of the role of the entrepreneur in the economy seems to provide a succinct depiction of the entrepreneurial function: “The entrepreneur shifts economic resources out of lower and into higher productivity and greater yield”. Essentially, the entrepreneur is an agent of economic change and efficiency. By employing investment capital in a venture that results in new services or products, or in the streamlining of extant services or products, the entrepreneur is able to use capital resources to maximise the output achieved by a limited capital input. The means of production might be altered, incrementally, by technological forces that exist outside of the market, and it is highly probable that entrepreneurship is most evident in macro systems where the creation of economic goods is executed at a high rate: if present technological development is dependent on continuing economic activity, and the amount of opportunity for entrepreneurship is dependent on, amongst other things, technological evolution, innovation in the means of production is a function of the health and diversity of the economy at large.
Despite much research into the subject, there is little definitive consensus amongst scholars and professionals as to the exact personality traits that combine to make a successful entrepreneur. Some general characteristics could be described as follows:
- Leadership: as much as entrepreneurial success is dependent on the vision, belief, management skills and team building abilities of the entrepreneur, it also dependent on an unwillingness to simply accept the norm and follow in well-trodden footsteps.
- Joseph Schumpeter saw entrepreneurship as a “gale of creative destruction”, in which the norms and practices of the business landscape are re-organised into better, more efficient methods and relations. Schumpeter defined the characteristics of entrepreneurship as: an ability to innovate; an ability to introduce new technologies; the ability to increase efficiency and productivity; the generation of new products and services meeting market demands; and saw the entrepreneur as catalysts for economic change.
- A third theory holds that entrepreneurial success is not as dependent on individual character traits as it is on simple opportunity recognition (which can be developed in any individual), effective exploitation of the opportunity, personal circumstances, and, importantly, on the health and diversity of the labour market of the macro economy: as an example, think of the first businesses that allowed individuals to sell property online…