The term entrepreneur is used to describe those who launch new business ventures and bring innovative products or services to market. While entrepreneurship requires hard work and risk, it offers many people an opportunity to pursue their passion and achieve financial independence.
A number of people can be described as entrepreneurs, from the small-town housewife who opens a day care to the tech millionaires who invest in startup companies. While some may see these individuals as pursuing a hobby or making extra money, most successful entrepreneurs have built their business from scratch.
Entrepreneurs are usually self-motivated, possess a high level of creativity and are willing to take risks. They are also good at spotting opportunities and seeing the potential of new ideas. They can be highly disciplined and focused, able to develop and implement a plan of action to execute their vision. They can make quick decisions and are often very persuasive with others. They are also very resourceful and can repurpose or adapt existing technology to create innovative solutions.
Most entrepreneurs will find success by solving a problem or pain point in the market. This could be a problem faced by another company or the public at large. For example, a dental practice that finds it difficult to keep track of patient appointments might be able to save time and money by creating an online appointment scheduling system. This would provide a solution to a real issue and offer significant value for the customer.
Entrepreneurs can help to drive economic growth. By introducing innovative products, they can open up new markets and increase the gross domestic product (GDP). This leads to more jobs and higher wages, which can lead to greater government spending on public projects.
Some entrepreneurs are also social change agents. They break tradition with unique inventions that reduce dependence on old systems and sometimes render them obsolete. The smartphone, for instance, was a disruptive invention that brought about a number of changes to society.
The word entrepreneur is derived from the French verb “entreprendre,” which means to undertake. The first use of the word by an academic was in 1730 by economist Richard Cantillon, who identified an entrepreneur as someone who takes personal financial risk to start a business.
Joseph Schumpeter and Israel Kirzner refined the academic understanding of entrepreneurship. Schumpeter emphasized entrepreneurs as innovators who introduce new products to the economy, leading to the destruction or obsolescence of existing goods and the creation of new ones. Kirzner, on the other hand, viewed entrepreneurship as an opportunity discovery process that is vital to the operation of capitalism. The profit-and-loss system enables new opportunities to be quickly discovered and evaluated, and successes to be celebrated. This allows resources to be quickly redirected from unproductive activities to those with the most potential. A vibrant, growing economy depends on the efficiency with which new ideas are quickly discovered and acted upon. The entrepreneur is the engine that drives this process.