Entrepreneurship Explained
Why Entrepreneurship
“Entrepreneurship is a global phenomenon. The future to an even greater degree than the past, will be driven by innovation and entrepreneurship,” World Economic Forum. Additionally, Angel Cabrera, Chair of the Global Agenda Council on Entrepreneurship, notes “only by letting thousands and millions of entrepreneurs try new ideas, to innovate, to create businesses that put those ideas to work in a competitive and open way, only by doing those things are we going to be able to tackle some of the world’s big problems.”
Entrepreneurship has been a foundation to the American dream since before the country was born. However, entrepreneurship gave way to the Industrial Revolution that defined the American career to encompass a 40 hour work week and developing skills around a specific job in a specific company that operated in a specific market.
In the late 1970’s an economic shift began to occur in the U.S. as other countries began to produce products at a lower cost than known before. During the 1980’s the economic shift began to grow as communities started seeing manufacturing plants close and state’s fought each other over attracting new manufacturing plants. By the mid-1990’s a new wave of economic development began to emerge through the use of technology. Entrepreneurship started becoming an idea again, and many young businesses started to replace many of the traditional businesses on the Forbes 500 list.
By 2001, entrepreneurship began to show promise in the U.S. economy. However, many economists and political leaders remained skeptical about the impact of small business. After the studies from the 2001 recession recovery were completed, the data showed that small businesses were the cause of all the net new jobs during that time frame. Entrepreneurship is the reason for the 2001 recession recovery, yet skepticism still existed as to the long term sustainability of entrepreneurship activity on the economy.
Since 2001, additional studies from various sources have uncovered the critical need for innovation and entrepreneurship in any economy (especially in today’s global marketplace). Technology has changed the rules in business, and entrepreneurship has proven its’ flexibility is better suited to meet the changing global needs.
Define Entrepreneurs and Entrepreneurship
The World Economic Forum defines entrepreneurship in the following ways:
Entrepreneurs are those persons (business owners) who seek to generate value through the creation or expansion of economic activity, by identifying and exploiting new products, processes or markets.
Entrepreneurial activity is enterprising human action in pursuit of the generation of value through the creation or expansion of economic activity, by identifying and exploiting new products, processes or markets.
Entrepreneurship is the phenomenon associated with entrepreneurial activity.
Meanwhile, others define entrepreneurship as “the process through which ventures are created” (Deb Markley, Center for Rural Entrepreneurship) and entrepreneurs as “a person who creates and grows a venture” (Jay Kayne, Miami University).
Types of Entrepreneurs
Aspiring – a person interested and curious about entrepreneurship who hasn’t started a business.
Start-up – someone who has an idea and is actively working towards or has recently started a business.
Lifestyle – a small business owner who has started a business with no intention of growing much past providing jobs/income for that person/family.
Growth – someone who is interested in growing a company quickly. Sometimes growth entrepreneurs are referred to as Gazelles as they are distinguished by their ability to double the size of their company either by number of employees or in gross profit every two to four years.
Serial – an entrepreneur who has the passion to start one company after another. The serial entrepreneur may start a company, work towards making the company profitable, sell it, then start their next business. Others may start a business, realize they need to close it, then try again.
Civic/Social – this type of entrepreneur is someone who is passionate about civic or social causes and works towards starting and growing a non-profit or civic minded organization focused on serving a social sector.
Intrepreneur – is a person who works for a company, but uses entrepreneurial skills to develop new products, services or programs to benefit the employing company.
Paths to Entrepreneurship