What is entrepreneurship
Although it is true that there is no commonly accepted consensus on what exactly entrepreneurship is, we could summarize it as the effect of undertaking, “to undertake or start a work, a business, an endeavor, especially if they involve difficulty or danger”, according to the RAE.
Therefore, a definition of entrepreneurship could be turning a new idea into a successful innovation through the use of skills, creativity and exposure to risk.
Origin and history of entrepreneurship
The origin is in the French entrepreneur (pioneer)¸a word from the Latin prendere.
In the mid-18th century Richard Cantillon conceptualized the term entrepreneur in his work ‘Essay on the nature of commerce in general’ as “an individual who assumes risks under conditions of uncertainty”, thus considering this French-Irish economist as the first to formally introduce the term entrepreneurship by relating it to the economic factor and its growth.
Already in the early 19th century, another Frenchman, Jean-Baptiste Say, defined the entrepreneur as “an agent of change who gathers and combines the means of production, natural, human and financial resources to build a productive entity and finds the value received from the products, the recovery of the capital invested, of the expenses incurred and of the profits sought”.
At the beginning of the 20th century, the Austrian-American Joseph Alois Schumpeter theorized that entrepreneurs are not in themselves ordinary managers or administrators of a company, but people who act intuitively to implement new economic possibilities.
In the second half of the last century, the Austrian Peter Druker defined entrepreneurship as “the process of obtaining benefits from new, unique and valuable combinations of resources in an uncertain and ambiguous environment”.
Types of entrepreneurship
Depending on the purpose, we find different types of entrepreneurship:
Entrepreneurs who create and manage their own business, usually alone or with family members. They seek to generate sufficient income to maintain their lifestyle without interest in exponential growth.
From large companies
Models focused on generating profits can grow naturally into a large enterprise. The goal is to keep expanding the business model based on the initial idea.
Unlike small companies, this type of entrepreneurship is characterized by the fact that entrepreneurs focus on the search for innovative ideas with which to expand the business and generate higher profits.
Being an intrapreneurship developed within an organization, the employee who is given the support to create new products does not have to worry about whether or not they will become a source of income. Unlike other entrepreneurs, they do not face personal risks in the event that the product or service launched does not prosper.
As the name suggests, these are ventures focused on generating products or services that attempt to solve social problems. They are usually not-for-profit organizations and their purpose is neither wealth nor profit, although this does not always have to be the case.
Arises from the creation of businesses that seek to launch completely new products or ideas and that are characterized by solving needs through innovative products or services.
Mirror or imitation
With previous initiatives or ideas as inspiration, they create or copy a previously existing business by adapting it. This type of venture does not require investment in research as it is a replica, although they must take care to differentiate themselves from the original in order not to be considered mere imitators.
These are ventures developed by people who take advantage of opportunities as they arise, characterized by being able to identify and capitalize on unsatisfied market needs or emerging trends.
From the buyer
The entrepreneur’s wealth is used to promote commercial projects by using their financial resources to buy businesses that they believe can achieve a higher degree of success.
From the researcher
After further data-driven research, this type of entrepreneurship is one in which entrepreneurs aim for success after prior preparation and adequate knowledge.
Characteristics of entrepreneurship
There are different characteristics common to the different types of entrepreneurship that, to a greater or lesser degree, must be met by entrepreneurs:
- Spirit. To have desire, dynamism or creativity, as well as intuition to be able to anticipate the competition when it comes to detecting the needs of the public.
- Skills. To have the necessary technical knowledge for the development of the enterprise.
- Regulation. Knowing the legislation of the environment in which it moves can help to turn the initial idea into reality.
- Financing. It is necessary to have financing for the establishment of the activity.
- Ecosystem. Having a network in which different actors participate is also relevant when it comes to generating synergies with other entrepreneurs.
Thus, we could summarize as entrepreneurship (with its multiple characteristics and numerous typologies) those attitudes and skills that allow people to initiate new challenges or projects, going one step further from where they had previously arrived.