Concept of Entrepreneur:
The word “Entrepreneur” comes from the French word “Entreprendre”. Entreprendre means "to undertake", take responsibility, to do work, to think or to take some steps for doing something. In a business context, it means to start a business. The Merriam-Webster Dictionary presents the definition of an entrepreneur as one who organizes, manages, and assumes the risks of a business or enterprise.
There is a debate on the definition of entrepreneurs.
From the view points of Economist: An entrepreneur is one who brings resources, labor, materials and other assets into combinations that make their value greater than before , and also one who introduces changes, innovations, and a new order.
From the view points of psychologists: Entrepreneur is such a person is typically driven by certain forces- the need to obtain or attain something, to experiment, to accomplish, or perhaps to escape the authority of others.
Although being an entrepreneur means different things to different people, there is agreement that we are talking about a kind of behavior that includes:
• Initiative taking
• The organizing and reorganizing of social and economic mechanisms to bundle resources in innovative ways, and
• The acceptance of risk, uncertainty, and/or the potential for failure.
So an entrepreneur is an individual who takes initiative to bundle resources in innovative ways and is willing to bear the risk and/or uncertainty to act.
Some expert definitions:
According to Oxford Dictionary (1889), “Entrepreneur is a person who starts or organizes a commercial enterprise, especially involving financial risk”.
American Heritage Dictionary, “Entrepreneur is a person who organizes, operates and assumes the risk for business venture”.
According to New Encyclopedia Britannica, “Entrepreneur is a person or individual who bears the risk of operating a business in the face of uncertainty about future conditions and who is rewarded accordingly by his profit or loss”.
According to Richard Cantilon, “Entrepreneur is an agent who purchases factors of production at certain price in order to combine them into a product with a view to selling it at uncertain prices in future”.
According to French Economist Jean Baptiste, “Entrepreneur is a person who shifts economic resources out of an area of lower and into an area higher productivity and yield”.
According to Austrian Economist Joseph A. Schumpeter, “Entrepreneur as primarily innovator whose dynamic creative response makes him central to the promotion of material growth and material development and who is engaged in producing new commodity or producing old one in new way”.
In the light of above discussion, we can define entrepreneur as a person who tries to create something new organizes production, undertake risks and handles economic uncertainty involved in enterprise.
Evolution of the concept of entrepreneur/who is entrepreneur:
The evolution of the concept of entrepreneur is considered over more than four centuries. Since then the term entrepreneur is used in various ways and various views. These views are broadly classified into three groups, namely, risk bearer, organizer and innovator, which are discussed in below-
1. Entrepreneur as a risk bearer: According to Richard Cantillon- Entrepreneur is an agent who buys factor of production at certain prices in order to combine them into a product with a view to selling it at uncertain prices in future. For example- a farmer who pays out contractual incomes which are certain to the landlords and labourer and sell at prices that are uncertain. So, they are risk bearing agents of production.
2. Entrepreneur as an organizer: Jean Baptist defined entrepreneur associates with the functions of co-ordination, organization and supervision. He/she is one who combines the lands of one, the labour of another and the capital of yet another and thus produces a product. By selling the product in the market, they pays interest on capital, rest on land and wages to labourer and what remain is his/her profit. An organizer should have the below characteristics-
a. Moral qualities of work judgment, perseverance and knowledge about business world.
b. Command over sufficient capital.
c. Uncertainty of profits.
3. Entrepreneur as innovator: An entrepreneur is one who discovers new method and new material. He utilizes inventions and discovers in order to make new combinations. Joseph A Schumpeter considered, economic development as a discrete/isolate dynamic change brought by entrepreneur by instituting new combinations of production i.e. innovation. Introduction of new combination of factor of production can be occurred in the following ways-
a) The introduction of a new product in the market.
b) The instituting of new production technology which is not yet tested by experience in the branch of manufacture concerned.
c) The opening of a new market into which the specific product has not previously entered.
d) The discovery of new source of supply of raw materials.
e) The carrying out of the new form of organization of any industry by creating of a monopoly position or the breaking up of it.
At last we can say, entrepreneur as a person who tries to create something new, organizes production and undertakes risks and handles economic uncertainty involves in enterprise.
