What Exactly Does the Term "Entrepreneurship" Mean?

What Exactly Does the Term "Entrepreneurship" Mean?

Innovating and entrepreneurship are frequently seen as linked in a society where ideas drive the economy. There are now governments throughout the globe that understand the need to encourage and educate individuals to think outside the box in order to maintain growth and boost a country's economy. What was once a safe bet for future prosperity has now been shown to be a dud.

A number of nations are reconsidering how their young people are taught in light of this inescapable shift by including creative thinking and innovation in the curriculum. A similar focus is being placed on the need to prepare the next generation of entrepreneurs by incorporating entrepreneurial concepts into the educational curriculum, particularly in the tertiary sector. There are some nations that have taken this program a step further by encouraging children as young as six to learn about entrepreneurship and preparing them to start their own businesses as adults. In a poll financed by the Kauffman Center for Entrepreneurial Leadership, nearly seven out of ten young people (aged 14 to 19) expressed an interest in starting their own business. 

The current generation prefers to be an entrepreneur rather than a doctor, lawyer, or fighter pilot as their chosen professional path. An informal poll of Chinese youngsters was conducted by the author on a recent trip to Shanghai, China. More and more Chinese youngsters are aspiring to be entrepreneurs in the fields of technology, such as computers and e-commerce, according to the findings of a poll. In pre-modern China, becoming an entrepreneur was seen as a sign of one's incapacity to get a high-paying government position, and those who dared to take the risk were often derided by their colleagues. Indeed, times have changed.

As people's perspectives on entrepreneurship have shifted as a source of job creation and economic growth have improved, so too have scholarly investigations into the subject. Entrepreneurship and innovation courses are being created and provided in many educational institutions as a response to the growing demand. In the same way, the word "entrepreneurship" has undergone a number of changes throughout time. Netpreneur, biotechpreneur, technopreneur, and multipreneur are just a few of the terms that have been invented to describe the ever-evolving times and business settings in which we live.

These developments need redefining or refining the notion of entrepreneurship in order to use it effectively in the 21st century. According to Bygrave and Hofer (1991, p. 13), "Sound science must begin with good definitions." Without a clear definition, governments will have a difficult time creating effective initiatives to foster entrepreneurialism among their citizens and organizations.

The study will summarize the definitions of entrepreneurship that have been put out by academics working in this field. The author will also expand upon a definition by Joseph Schumpeter to better comprehend the notion of "entrepreneurship" in today's corporate environment.

The Evolution of Entrepreneurship:

In the eleventh century, the French word 'entreprende' was revealed to be the source of the term "entrepreneurship," albeit the connotation may not be appropriate today. The term "enterprise" had a different connotation in the past; it meant something completely different from what it means now. Richard Cantillon, a French economist, coined the word "entrepreneur" in the early 1700s when he characterized an entrepreneur as someone who takes risks by purchasing at given prices and selling at uncertain ones (Barreto, 1989; Casson, 1982).

Adam Smith's 1776 book, "The Wealth of Nations," made it obvious that the baker was driven by self-interest, not kindness, when he provided bread. He thought that entrepreneurs were the people who shifted demand into supply in order to make money.

Businessman and economist John Stuart Mill coined the term "entrepreneur" in 1848. Risk-takers, those who make decisions, and those who seek money by managing limited resources to launch new businesses were all included in this category.

In the author's opinion (1934), Joseph Schumpeter is credited with coining one of the greatest definitions of entrepreneurship. His definition of "innovation" in the context of a company is that it is used to solve unmet market needs (Liebenstein, 1995). An entrepreneur, according to him, is an inventor who creates change in the market by implementing new combinations. New combinations may be created in a variety of ways:

The development of a new product or a new quality standard;

All of the above, plus the implementation of a new organizational structure in any business, constitutes innovation in the workplace, according to the American Society for Quality.

There are a variety of ways to define "innovation," but some authors have tended to regard entrepreneurship as a paradigm shift that involves not just incremental but also quantum changes in the new businesses and products/services they provide (e.g., Bygrave, 1995; Bygrave & Hofer, 1991).

When it comes to entrepreneurship, Drucker (1985) saw it as the formation of a new company, regardless of its capacity to maintain itself or generate profits. Anyone who launches a new company might be considered an entrepreneur based only on the fact that they did so. Because of this attribute, entrepreneurship is distinct from the usual management chores of distributing resources in an established corporate organization. Although the concept is rather rudimentary in nature, it strongly links the nature of entrepreneurial activity with risk-taking and the individual's willingness to accept uncertainty (Swoboda, 1983).

Eight concepts revealed by participants in Delphi research were identified by Gartner (1990) as defining the essence of entrepreneurship. They were the owner-manager, the entrepreneur, the innovator, the creator of organizations, the creator of value, for profit or non-profit. It's possible that Schumpter's prior ideas are reflected in these topics.

Revisiting Schumpeter's Original Concept:

The many definitions of entrepreneurship lead one to conclude that entrepreneurship and innovation are closely linked. According to Schumpeter's concept, most definitions of entrepreneurship were reworked and expanded upon (which is that of innovation being applied in a business context). An in-depth discussion of what constitutes "innovation" is beyond the scope of this article, hence the author has summarized the concept. It's easy to think of innovation as the process through which creative ideas are transformed into practical applications by combining resources in new or unique ways to give societal benefit or better goods, technologies, or services.

Trying to come up with a precise description of the word "entrepreneurship" might be challenging because of the author's belief that it is difficult to define "innovation."

Will he be considered an entrepreneur if he sets up a hot dog stand on the streets of New York and it fails? He'll be considered one if we go by Drucker's definition. In other words, if Schumpeter's concept of innovation is taken as a guide, the answer is probably "no". Why? It is precisely the novelty of opening yet another New York hot-dog shop that makes it so novel.It is possible for him to be labeled as an "entrepreneur" (even by Schumpeter's definition) as the first person to open an Oriental Sweet and Sour sauce-topped hot dog stand. Creative and innovative thinking are essential to a successful entrepreneur's success.

Thus, new entrants to the market may be able to obtain a competitive edge over established companies by introducing "innovative" features to a product or service and then starting a company around these features.

It's possible that the hot dog vendor's use of Oriental Sweet and Sour sauce toppings isn't very noteworthy. According to some academics, entrepreneurship is defined as needing a significant change in the product or service to be considered entrepreneurial. This contradicts this definition (Bygrave, 1985; Bygrave & Hofer, 1991).

People that create their own businesses by offering their customers or clients an entirely new experience are regarded as being entrepreneurial as well. The argument goes something like this: there are no meaningful new goods or services if you don't consider how you can improve on existing ones. Since gradual improvements are also innovative, it is time to adopt this idea.

When it comes to innovation in the business world, the launch of a new product or service is not always necessary. What is usually referred to as "creative imitations" may be used as an example. There is a difference between being entrepreneurial and just selling a product that is already widely available in your region or nation. It is possible, however, for someone to be recognized as an entrepreneur by virtue of his product's first sale in a new location or to an untapped market group.

Consider the case of Muhammad Yunus. With only US $26, Yunus began a microloan program for the destitute inhabitants of Grameen, a rural district of Bangladesh. 42 villagers received a loan to help them acquire modest products like combs, scissors, and needles so that they could start their own enterprises from the comfort of home. More than $2 billion in loans have been disbursed by Grameen Bank over the previous two decades. Grameen has now become a model for other micro-loan organizations. Yunus, as a social entrepreneur, was the first to offer banking and lending services in a rural area of Bangladesh, which required innovation and risk-taking on his part. However, innovation does not have to be a new product or service, but rather an existing one that has found a new market.

An entrepreneur is someone who creates a new business endeavor by selling a product or service utilizing novel means of marketing, distribution, or manufacturing. Jeff Bezos, the man behind Amazon.com, a very successful online bookshop, is an excellent example. Online book sales were pioneered by him, as was the one-click method for online purchases. Jeff Bezos was inventive in his use of the Internet as a viable marketing and sales channel for selling books, even if selling books is not an invention in and of itself.

Another e-commerce entrepreneur is Stuart Skorman, the creator of Reel.com. Reel.com is one of the earliest online video stores, offering a selection of more than 100,000 titles. Reel.com's key distinction was being regarded as the first online retailer to grow by having a physical store, even if it was novel at the time. As a result, the creator hoped that the internet shop would serve as a marketing tool for the brick-and-mortar store and vice versa, enhancing this example of entrepreneurial ingenuity and innovation in action.

Conclusion

In the beginning, this study was meant to redefine the word "entrepreneurship," but it ended up "updating" the wheel, based on Schumpeter's definition of the term. The authors of this article want to add to the already rich body of knowledge on the topic of entrepreneurship's definition by providing instances of how the concept of "innovation" is used in the field.

The author thinks that through promoting creative thinking and innovation inside schools, this article can help cultivate future entrepreneurs who have the ability to compete in today's global marketplace. According to the author, people who are good at launching new businesses based on doing things that have never been done before should be supported. Entrepreneurship must be built on innovation, not just the creation of another new firm with the same goods and services and/or business procedures as before with no alterations or enhancements.