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Entrepreneurship is the practice of starting new organizations, particularly new businesses generally in response to identified opportunities. Entrepreneurship is often a difficult undertaking, as a majority of new businesses fail. Entrepreneurial activities are substantially different depending on the type of organization that is being started. Entrepreneurship may involve creating many job opportunities.
Many "high-profile" entrepreneurial ventures seek venture capital or angel funding in order to raise capital to build the business. Many kinds of organizations now exist to support would-be entrepreneurs, including specialized government agencies, business incubators, science parks, and some NGOs.
Our understanding of entrepreneurship owes a lot to the work of economist Joseph Schumpeter and the Austrian School of economics. For Schumpeter (1950), an entrepreneur is a person who is willing and able to convert a new idea or invention into a successful innovation. Entrepreneurship forces "creative destruction" across markets and industries, simultaneously creating new products and business models and eliminating others. In this way, creative destruction is largely responsible for the dynamism of industries and long-run economic growth.
For Frank H. Knight (1967) and Peter Drucker (1970) entrepreneurship is about taking risk. The entrepreneur is the kind of person that is willing to put his career and financial security on the line for an idea, spending his time and capital in an uncertain venture. Still another view of entrepreneurship is that it is the process of discovering, evaluating and exploiting opportunities. An entrepreneur could be defined as "someone who acts without regard to the resources currently under his control in relentless pursuit of opportunity " (Jeffry Timmons).
Pinchot (1985) coined the term intrapreneurship to describe entrepreneurial activities inside large organizations.
Howard Stevenson, of Harvard University, believes that entrepreneurship is the "pursuit of opportunity without regard to resources currently controlled".
Entrepreneurship is often regarded as a defining characteristic of American life. Robert N. Sobel published The Entrepreneurs: Explorations Within the American Business Tradition in 1974.
A study published by Regan Sydney and Jacob showed that the characteristics of successful entrepreneurship are perceived in different ways; investors, "intranpreneurs", and founders of young companies agree on many ideas, but have important differences, too. For example, founders tend to believe that tenacity is an important trait more frequently than investors. Investors tend to put slightly more emphasis on personal integrity than founders.
The entrepreneurial personality
Entrepreneurs have many of the same character traits as leaders. They are often contrasted with managers and administrators who are said to be more methodical and less prone to risk-taking. A vast literature studying the entrepreneurial personality has found that certain traits seem to dominate in the case of entrepreneurs:
- According to David McClelland (1961), the entrepreneur is primarily motivated by an overwhelming need for achievement. He has a strong "urge to build".
- Collins and Moore (1970) studied 150 entrepreneurs and concluded that they are tough, pragmatic people driven by needs of independence and achievement. They seldom are willing to submit to authority.
- Bird (1992) sees entrepreneurs as Mercurial, that is, prone to insights, brainstorms, deceptions, ingeniousness and resourcefulness. They are cunning, opportunistic, creative, and unsentimental.
- Busenitz and Barney (1997) claim entrepreneurs are prone to overconfidence and over generalisations.
- According to Cole (1959), there are four types of entrepreneur: the innovator, the calculating inventor, the over-optimistic promoter, and the organisation builder. These types are not related to the personality but to the type of opportunity the entrepreneur faces.
- Burton W. Folsom, Jr. distinguishes between what he calls a "political entrepreneur" and a market entrepreneur. The political entrepreneur uses political influences to gain income through subsidies, protectionism, government-granted monopoly, government contracts, or other such favorable arrangements with government(s) (see crony capitalism and corporate welfare). The market entrepreneur operates without special favors from government.
Typical characteristics of entrepreneurship
- There is a leader, the entrepreneur, who is the driving force behind economic events.
- Inside the mind of this entrepreneur is a vision of a future state that is preferred to the present state.
- Through a semiconscious process of intuition and insight, rooted in experience, the entrepreneur develops this vision and a strategy of how to implement it.
- This vision is promoted diligently and passionately by the entrepreneur. The job for many provides a feeling of being "alive" or the satisfaction of serving society.
- The strategy is deliberate and the overall vision is clear, however details may be malleable, incomplete, and emergent.
- Entrepreneurial strategies tend to go along with simple centralised organisational structures that respond quickly to the entrepreneur's directives.
- Entrepreneurial strategies tend to be used in niche markets that have not been noticed by the large industry leaders.
The above list presents several ideas as to why someone becomes an entrepreneur, some of which belong to the so-called psychological theories of entrepreneurship, which basically suggests that there are a number of psychological traits possessed by the entrepreneur which allow him or her to undertake such a task. Other points of the list belong to the neoclassical equilibrium theories, that assume that markets are made up of maximising agents (see economics) and that there are no unnoticed business opportunities and that only the people who choose to become entrepreneurs do so - not because the opportunities themselves haven't been noticed by anyone else. The third school of thought is the Austrian theories-school that claims business opportunities arise due to the fact that not everyone has the same amount of information and thus are not equipped to "see" the opportunities. For more about entrepreneurial opportunities from an academic standpoint, see for example the works of Scott A. Shane and Jonathan T. Eckhardt.
Community entrepreneurship is entrepreneurial education. Educational systems must be as concerned with family and community health as they are with individual students in classrooms and the health of the educational system itself.
Too often entrepreneurship is seen as the process of finding capable individuals and providing nourishment (venture capital and know-how). Yet we know that some communities are far more successful than others in entrepreneurship and that such communities are also thriving economically even during times of economic downturn (Florida, 2002). We know that there are social entrepreneurs who invent new cultural systems, from the John Muir's work which led to the U.S. Park System to Florence Nightingale's fight for better patient conditions led to the field of nursing. Community entrepreneurship is about applying entrepreneurial principles to the process of creating a community that is highly supportive of entrepreneurship itself, both within classroom walls and without. We need new social entrepreneurs to invent those designs.
Community entrepreneurship seeks answers to related questions and seeks further related questions.
What are the characteristics of communities that best support entrepreneurship? What measurements can we take to better make comparisons? What needs to be done to better address these factors in public school crriculum? How does the need for entrepreneurial inventiveness and creativity get supported with inventive and creative attitudes and skills in the schools? How much of the gifted and talented curriculum agenda is directly related to the needs and skills of entrepreneurs? How does the growth of creativity in the classroom lead to the growth of a creative (entrepreneurial) class? Given the strong digital foundation of the modern economy, how do computer literacy skills contribute? How is the heterarachical decentralized nature of Internet enterprise changing the nature of economic activity? What aspects of this digital economy need digital entrepreneurial skills? How should school curriculum weave computer literacy, creativity and entrepreneurship across the grade levels?
- Business management
- Entrepreneurial education
- List of management topics
- Private sector
- Self employment
- Social Entrepreneur
- Bird, B. (1992)"The Roman God Mercury: An Entrepreneurial Archetype", Journal of Management Enquiry, vol 1, no 3, September, 1992.
- Busenitz, L. and Barney, J. (1997) "Differences between entrepreneurs and managers in large organizations", Journal of Business Venturing, vol 12, 1997.
- Cantillon, R. Essai sur la Nature du Commerce in Général. 1759 
- Casson, M. (1982) The Entrepreneur: An Economic Theory Reprint. 1991.
- Cole, A. (1959) Business Enterprise in its Social Setting, Harvard University Press, Boston, 1959.
- Collins, J. and Moore, D. (1970) The Organization Makers, Appleton-Century-Crofts, New York, 1970.
- Corrigan, S (2005) "The Entrepreneur's Guide to the Business cycle" 
- Drucker, P. (1970) "Entrepreneurship in Business Enterprise", Journal of Business Policy, vol 1, 1970.
- Florida, R. (2002) The Rise of the Creative Class: And How It's Transforming Work, Leisure, Community and Everyday Life. Perseus Books Group.
- Hebert, R.F. and Link, A.N. (1988) The Entrepreneur: Mainstream Views and Radical Critiques. New York: Praeger, 2nd edition.
- Knight, K. (1967) "A descriptive model of the intra-firm innovation process", Journal of Business of the University of Chicago, vol 40, 1967.
- McClelland, D. The Achieving Society, Van Nostrand, Princeton NJ, 1961.
- Pinchot, G. (1985) Intrapreneuring, Harper and Row, New York, 1985.
- Schumpeter, J. (1950) Capitalism, Socialism, and Democracy, 3rd edition, Harper and Row, New York, 1950.
- Shane S., (2003) A general theory of entrepreneurship : the individual-opportunity nexus / Scott Shane New horizons in entrepreneurship series, Edward Elgar Pub
- Young Entrepreneur Forum with resources
- Young Entrepreneur Forum
- Young Go Getter
- Young Entrepreneurs Magazine
- Definitions of entrepreneuership
- Funding Universe StrategyTree Wiki is a network for angel investors and entrepreneurs, to extract thousands of successful ideas and business tactics used by actual entrepreneurs, and to place them in a decision tree.
- Reference article on Entrepreneurship by Mark Casson
- Award-winning film, LEMONADE STORIES, on entrepreneurs and their mums by Mary Mazzio
- Asian-Nation: Asian American Entrepreneurship by C.N. Le, Ph.D.
- Entrepreneur Interviews nPost.com
- Entrepreneurship Properly Understood
- University and College Entrepreneur Societies
- US Small Business Administration
- Artistic Entrepreneurship
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