The concept of entrepreneurship is multifaceted. There are assorted, various and considerably contradictory sets of definitions of the term. As a way out the definitional dilemma, this article aims to clarify the economic perspective on entrepreneurship.
The financial perspective rests on certain economic variables which embrace innovation, risk bearing, and resource mobilization.
Innovation/Creativity In this approach, entrepreneurs are people who carry out new mixture of productive resources. The key ingredient, the finishing up of new combination (or innovation) distinguishes entrepreneurs from non-entrepreneurs. While new venture creation seems as the most prevalent type of entrepreneurship, there exist different forms. Entrepreneurship also entails the initiation of changes within the type of subsequent enlargement within the quantity of goods produced, and in present type or structure of organisational relationships.
Within the entrepreneurship literature, some scholars have questioned the usage of group creation as criterion for entrepreneurship. It has been argued that organizations reminiscent of political parties, associations and social groups are always created by people who find themselves not “entrepreneurs.” Fascinating as it might sound, the phrases entrepreneurship and entrepreneur have been adopted by various scholars to fulfill the innovation and spirit of the time. This is evidenced by attempts to use entrepreneurial thinking to up to date team-oriented workplace strategies. Members of such groups – political parties, associations and social teams – subsequently, may very well be called entrepreneurial teams. Besides, activities inherent in such groups have flourished lately, and are increasingly being described as social entrepreneurship.
Risk Taking This is one other financial variable upon which the financial perspective revolves. Risk taking distinguishes entrepreneurs from non-entrepreneurs. Generally, entrepreneurs are calculated risk takers. They bear the uncertainty in market dynamics. This notion has its critics and advocates. Entrepreneurs could not essentially risk her own funds however risk other personal capital such as popularity and the possibility of being more gainfully employed elsewhere.
Resource Mobilization here, entrepreneurship is reflected in alertness to perceived profit opportunities in the economy. This implies the allocation of resources in pursuit of opportunities with the entrepreneur playing the position of an opportunity identifier. This way, entrepreneurs are distinguished by their ability to identify persistent shocks or challenges (of long term opportunities) to the atmosphere, and then to synthesize the information and take decisive actions based mostly upon it.
This article has conceptualized entrepreneurship based mostly on resource mobilization, risk taking, and innovation. Past the above-mentioned economic variables, entrepreneurship can also be seen based on a set of personal characteristics, motives and incentives of the actor within the entrepreneurship act. This is the psychological perspective, the subject of a future article. In addition to the psychological perspective, we shall also examine the process and small business perspectives.
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