INTRODUCTION TO ENTREPRENEUR : Evoluion, Meaning, Definition

 INTRODUCTION TO ENTREPRENEUR 

1.1 Evolution of the word Entrepreneur 

The word ‘entrepreneur’ is derived from French word ‘Entrependre’ which means undertaking the risk of enterprise and further it was used to designate an organizer of musical or other entertainments. Later in 16th century it was used for army leaders. It was extended to cover civil engineering activities such as construction in 17th century. But it was Richard Cantillon, an Irishman living in France who first used the term entrepreneur to refer to economic activities. According to Cantillon “An entrepreneur is a person who buys factor services at certain prices with a view to selling its product at uncertain prices”. Entrepreneur, according to Cantillon, is a bearer of risk, which is non-insurable. Schum peter gave a central position to the entrepreneur who believed that an entrepreneur was a dynamic agent of change; that an entrepreneur was a catalyst who transformed increasingly physical, natural and human resources into correspondingly production possibilities. Since then the term entrepreneur is used in various ways and various views. 

1.2 Meaning of Entrepreneur 

Entrepreneur is a person who tries to create something new, searches new opportunities, bears risk, unites various factors of production like land, labour and capital carries innovations and from his skill and farsightedness faces unforeseen circumstances and thereby earns profits. Entrepreneurs are the pioneers who are instrumental in the economic development, growth and development of and prosperity of a country. 

1.3 Definition of Entrepreneur 

There are various views about entrepreneur which are broadly classified into three groups, namely risk bearer, organizer and innovator. 

Entrepreneur as Risk Bear : Richard Cantilon defined entrepreneur as an agent who buys factors as production at certain prices in order to combine them into a product with a view to selling it at uncertain prices in future. He illustrated a farmer who pays contractual incomes, which are certain to land owners and labourers and sells at prices that are ‘uncertain’. He includes, merchants also who make certain payments in expectation of uncertain receipts. Hence both of them are risk- bearing agents of production. F.H. Knight described entrepreneur to be a specialized group of persons who bears uncertainly. Uncertainty is defined as risk, which cannot be insured against and is incalculable. He made distinction between certainty and risk. A risk can be reduced through the insurance principle, where the distribution of outcome in a group of instance is known, whereas uncertainty cannot be calculated. 

Entrepreneur as an Organizer : According to J Baptist Say “an entrepreneur is one who combines the land of one, the labour of another and capital of yet another, and thus produces a product. By selling the product in the market, he pays interest on capital, rent on land and wages to laborers and what remains is his/her profit”. Say made distinction between the role of capitalist as a financer and the entrepreneur as an organizer. This concept of entrepreneur is associated with the functions of coordination, organization and supervision. 

Entrepreneur as an Innovator : Joseph A. Schumpeter Peter in 1934 assigned a crucial role of ‘innovation’ to the entrepreneur. He considered economic development as a dynamic change brought by entrepreneur by instituting new combinations of factors of production, i.e. innovations. The introduction of new combination according to him, may occur in any of the following forms. 

(a)  Introduction of new product in market
(b)  Use of new method production, which is not yet tested.
(c)  Opening of new market.
(d)  Discovery of new source of raw materials.
(e)  Bringing out of new form of organization.
Schums Peter also made distinction between inventor and innovator. An inventor is one who discovers new methods and new materials. An innovator utilizes inventions and discovers in order to make new combinations. 

Hence the concept of entrepreneur is associated with three elements risk bearing, organizing and innovating. Hence an entrepreneur can be defined as a person who tries to create something new, organizes production and undertakes risks and handles economic uncertainty involvement in enterprise. 

Some more important definitions of entrepreneur 

1. According to F.A. Walker : “Entrepreneur is one who is endowed with more than average capacities in the task of organizing and coordinating the factors of production, i.e. land, labour capital and enterprises”. 
2. Marx regarded entrepreneur as social parasite. 
3. According to Gilbraith : “An entrepreneur must accept the challenge and should be willing
   hard to achieve something”. 
4. Peter F. Drucker defines an entrepreneur as one who always searches for change, responds to it and exploits it as an opportunity. Innovation is the basic tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or service. 
5. According to E.E. Hagen : “An entrepreneur is an economic man who tries to maximize his profits by innovation, involve problem solving and gets satisfaction from using his capabilities on attacking problems”. 
6. According to Mark Casson : “An entrepreneur is a person who specializes in taking judgement decision about the coordination of scarce resources”. 
7. Frank Young defined entrepreneur as a change agent.
8. According to Max Weber : “Entrepreneurs are a product of particular social condition in which they are brought up and it is the society which shapes individuals as entrepreneurs”. 
9. International Labour Organization (ILO) defines “entrepreneurs as those people who have the ability to see and evaluate business opportunities, together with the necessary resources to take advantage of them and to initiate appropriate action to ensure success”. 
10. Akhouri describes “entrepreneur as a character who combines innovativess, readiness to take risk, sensing opportunities, identifying and mobilizing potential resources, concern for excellence and who is persistent in achieving the goal”.