The idea of entrepreneurship is multifaceted. There are different, diverse and considerably contradictory sets of definitions of the term. As a way out the definitional dilemma, this article aims to elucidate the economic perspective on entrepreneurship.
The financial perspective rests on sure economic variables which include innovation, risk bearing, and resource mobilization.
Innovation/Creativity In this approach, entrepreneurs are people who carry out new combination of productive resources. The key ingredient, the finishing up of new mixture (or innovation) distinguishes entrepreneurs from non-entrepreneurs. While new venture creation appears as essentially the most prevalent form of entrepreneurship, there exist other forms. Entrepreneurship also involves the initiation of adjustments in the type of subsequent expansion in the quantity of goods produced, and in existing type or construction of organisational relationships.
In the entrepreneurship literature, some scholars have questioned the use of organization creation as criterion for entrepreneurship. It has been argued that organizations reminiscent of political parties, associations and social teams are always created by people who find themselves not «entrepreneurs.» Attention-grabbing as it would possibly sound, the phrases entrepreneurship and entrepreneur have been adopted by different scholars to meet the innovation and spirit of the time. This is evidenced by attempts to apply entrepreneurial thinking to contemporary crew-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 teams have flourished in recent years, and are increasingly being described as social entrepreneurship.
Risk Taking This is another financial variable upon which the economic 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 but risk other personal capital similar to status and the possibility of being more gainfully employed elsewhere.
Resource Mobilization here, entrepreneurship is reflected in alertness to perceived profit opportunities within the economy. This implies the allocation of resources in pursuit of opportunities with the entrepreneur enjoying the function 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, after which to synthesize the information and take decisive actions based mostly upon it.
This article has conceptualized entrepreneurship based on resource mobilization, risk taking, and innovation. Past the above-talked about economic variables, entrepreneurship can be considered based on a set of personal characteristics, motives and incentives of the actor within the entrepreneurship act. This is the psychological perspective, the topic of a future article. In addition to the psychological perspective, we will additionally look at the process and small enterprise perspectives.
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