The Entrepreneur: Definitions, Perspectives, and the Essence of Innovation

Different Philosophical Perspectives on Entrepreneurship

2.1. R. Cantillon (Father of Political Economy)

"As a person who pays a certain price for a product to resell it at an uncertain price, thereby making decisions about obtaining and using resources while consequently admitting the risk of enterprise."

- The Focus of Cantillon's definition of an entrepreneur is on:

1. Entrepreneur's function
2. Their role as an uncertainty-bearer in the market

Market-Based Perspectives

Adam Smith (1770) [The Father of Economics]

An entrepreneur is an individual who undertakes the formation of an organization for commercial purposes by recognizing the potential demand for goods and services, and thereby acts as an economic agent, transforming demand into supply.

Leon Walras (1954) [Mathematical Economist]

The entrepreneur is a coordinator and arbitrageur (in fact, an alert arbitrageur).

Knight (1921)

Entrepreneurs attempt to predict and act upon change within markets. The entrepreneur bears the uncertainty of market dynamics.

Schumpeter (1934)

Introducing the concept of the innovator:

• The entrepreneur is the innovator who implements changes within markets by carrying out new combinations, challenging the status quo.

These changes can take several forms:

• The introduction of a new good in a market
• The introduction of a new method of production
• The opening of a new market
• Obtaining a new source of supply of new materials or parts

The Modern Entrepreneur: Key Ingredients

1. Vision: The ability to recognize opportunity where others see chaos, contradiction, and confusion.
2. Initiative Taking: Bringing ideas into action!
3. Business Acumen: The fundamental skills of building a solid business plan based on leveraging the targeted innovation.
4. Organizational Skills: The organizing and reorganizing of social/economic mechanisms to turn resources and situations to practical account (e.g., the ability to formulate an effective venture team).
5. Calculated Risk-Taking: The willingness to take calculated risks—in terms of time, money, equity, or career.

Venture team: The most important asset of the company.

Note: Two key figures in the market are the capitalist (monetary risk-taker) and the entrepreneur. Contractual arrangements are often governed by the government.

Sources of Inspiration for Entrepreneurs

1. Knowledge/skills/abilities
2. Changes in the environment
3. Alternative uses for the productive sector
4. Ideas from other countries

The Process of Opportunity Recognition

1. Identify a Problem: Think about a problem that needs solving.
2. Develop Solutions: Find innovative solutions to address the identified problem.
3. Seek Customer Feedback: Gather feedback from potential customers to validate and refine your solutions.
4. Communicate Effectively: Clearly communicate your vision, value proposition, and solutions to stakeholders.