What Is an Entrepreneur? A Definition of Entrepreneurship
The words entrepreneur and entrepreneurship has become really popular, but also very few people know what exactly they mean. Often entrepreneur is used instead of businessman, or a man or a woman who starts a company and takes risk. But this is not correct! Nope… Let me try to throw some light on this popular word. In fact, the answer to the question “What is an entrepreneur?” seems to be not so trivial. It looks like its meaning has been evolving since its birth.
The definition of the word in The Oxford Dictionary is word wrong! According to it, entrepreneur means:
A person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so.
And entrepreneurship is:
The activity of setting up a business or businesses, taking on financial risks in the hope of profit
These are not the accurate definitions, because that means that everyone who operates a business is an entrepreneur, but this is not so. A true entrepreneur has to have some more additional qualities than just operating a business and taking risk like leadership, charisma and some more. Peter Drucker (one of the fathers of entrepreneurship) even think that these people are more willing to avoid risks than willing to take risks (in his book ‘Innovation and Entrepreneurship’). Read below for a further explanation.
What Is An Entrepreneur And Where Does The Word Come From
The word “entrepreneur” was invented in France, in the early 18th century. It derives from the French “entreprendre”, which in simple English means “undertake”. The first man using the term for economic purposes and actually building some theory around it was Richard Callington. According to him, an entrepreneur is someone, who practices business judgment in the face of uncertainty of the future. In this first definition, we can clearly recognize the word risk.
Later came the economist Jean-Baptiste Say, who formulated the definition this way: “one who undertakes an enterprise, especially a contractor, acting as an intermediate between capital and labor”. Say also said ( 🙂 ) that an entrepreneur is a guy, “who shifts economic resources out of lower and into higher productivity and greater yield”. That’s how the school of entrepreneurship was founded.
The work of a scientist from Austria was the next big milestone in entrepreneurship as a science. His name was Joseph Schumpeter. He continued the work of his colleagues coming up with some new bright ideas. According to him, the entrepreneur is the ultimate innovator and earns his profits, however temporary, from successful innovations. He also detached the “risk” from the entrepreneur, assigning it to capitalists. This spurred a wave of critics from around the world, but this only helped the future research.