Who is an entrepreneur?
An entrepreneur is an individual runs a business and assumes all the risk and reward of a given business venture, idea, or good or service offered for sale. The entrepreneur is commonly seen as a business leader and innovator of new ideas and business processes. It is an individual who accepts some sort of risk — usually financial — in the pursuit of new ventures. The word can apply to any person organizing a new project or opportunity, though it is most often used in a business context.
A person in this role is often characterized as innovative, independent, optimistic, creative, and hard-working. A successful entrepreneur is able to determine how much risk is appropriate for a particular endeavor. He or she must accept enough risk to innovate and create, but not so much that the business or activity is not profitable.
Social entrepreneur
Social entrepreneurs are individuals with innovative solutions to society’s most pressing social problems. They are ambitious and persistent, tackling major social issues and offering new ideas for wide-scale change. Rather than leaving societal needs to the government or business sectors, social entrepreneurs find what is not working and solve the problem by changing the system, spreading the solution, and persuading entire societies to move in different directions. Social entrepreneurs often seem to be possessed by their ideas, committing their lives to changing the direction of their field. They are visionaries, but also realists, and are ultimately concerned with the practical implementation of their vision above all else.
Social entrepreneurs present user-friendly, understandable, and ethical ideas that engage widespread support in order to maximize the number of citizens that will stand up, seize their idea, and implement it. Leading social entrepreneurs are mass recruiters of local changemakers— role models proving that citizens who channel their ideas into action can do almost anything.
Characteristics of social entrepreneurs
Social entrepreneurs are:
- Social catalysts – They are visionaries who create fundamental social changes by reforming social systems and creating sustainable improvements. Although they may act locally, their actions have the potential to stimulate global improvements in their chosen arenas, whether that is education, health care, economic development, the environment, the arts, or any other social field.
- Socially aware – Social improvement, as opposed to the creation of profit, should be the ultimate goal of the social entrepreneurs. The success of their endeavours is measured by their social impact, not by the amount of profits generated.
- Opportunity-seeking – They pursue their goals relentlessly, seeing every obstacle as an opportunity to develop and fine-tune their business models.
- Innovative – They are creative, willing to think outside the box and ready to apply ideas to new situations. They understand that not every innovation will be a success, and they see failures as learning opportunities even as they strive for success.
- Resourceful – Their visions are not limited by the resources that they have. Besides optimizing the use of existing resources, they actively expand their resource pool through collaboration with others.
- Accountable – Social entrepreneurs are accountable to their beneficiaries, and they often ask themselves. This is because social entrepreneurs want to know that they are actually making an impact. They are also accountable to investors who want to know that their contributions are indeed stimulating social improvements as promised by the social entrepreneurs.
Technological entrepreneur
The entrepreneurs who establish and run science and technology-based industries are called ‘technological entrepreneurs.’ Speaking alternatively, these are the entrepreneurs who make use of science and technology in their enterprises. Expectedly, they use new and innovative methods of production in their enterprises.
Characteristics of technological entrepreneur
- They are always on the watch for new changes in the technological world and try to learn and incorporate it in their businesses.
- Dedicated and persistence in exploring measures to learn and improve their knowledge.
- They handle their business endeavour with a mindset that everything is possible and they look for various means to solve all their problems.
- They are always vast in technological knowledge.
Other types of entrepreneurs include:
· Innovating entrepreneurs:
Innovating entrepreneurs are one who introduce new goods, inaugurate new method of production, discover new market and reorganise the enterprise. It is important to note that such entrepreneurs can work only when a certain level of development is already achieved, and people look forward to change and improvement.
· Imitative entrepreneurs:
These are characterised by readiness to adopt successful innovations inaugurated by innovating entrepreneurs. Imitative entrepreneurs do not innovate the changes themselves, they only imitate techniques and technology innovated by others. Such types of entrepreneurs are particularly suitable for the underdeveloped regions for bringing a mushroom drive of imitation of new combinations of factors of production already available in developed regions.
Opportunistic entrepreneurs
An opportunistic entrepreneur identifies a need in the marketplace and may or may not have any experience in that particular field but still sets out to fill that need from a business perspective. They usually have a sophisticated business sense or are experienced in managing a business and apply general business skills to their new pursuit. In most cases, they avoid paternalism, delegate authority as necessary for growth, employ various marketing strategies and types of sales efforts, obtain original capitalization from more than two sources, and plan for substantial future growth.
· Fabian entrepreneurs:
Fabian entrepreneurs are characterised by very great caution and skepticism in experimenting any change in their enterprises. They imitate only when it becomes perfectly clear that failure to do so would result in a loss of the relative position in the enterprise.
· Drone entrepreneurs:
These are characterised by a refusal to adopt opportunities to make changes in production formulae even at the cost of severely reduced returns relative to other like producers. Such entrepreneurs may even suffer from losses but they are not ready to make changes in their existing production methods.
General characteristics of entrepreneurs
The following are the most common characteristics of entrepreneurs:
- Motivation: Entrepreneurs are enthusiastic, optimistic and future-oriented. They believe they’ll be successful and are willing to risk their resources in pursuit of profit. They have high energy levels and are sometimes impatient. They are always thinking about their business and how to increase their market share.
- Creativity and persuasiveness: Successful entrepreneurs have the creative capacity to recognize and pursue opportunities. They possess strong selling skills and are both persuasive and persistent.
- Superb business skills: Entrepreneurs are naturally capable of setting up the internal systems, procedures and processes necessary to operate a business. They are focused on cash flow, sales and revenue at all times. Successful entrepreneurs rely on their business skills, know-how and contacts.
- Risk tolerance: Launching any entrepreneurial venture is risky. Entrepreneurs are willing to take risk and also look for measures to reduce risk by thoroughly researching your business concept, industry and market.
- Drive: As an entrepreneur, you are in the driver’s seat, so you must be proactive in your approaches to everything.
- Flexibility and open-mindedness: While entrepreneurs need a steadfast vision and direction, they will face a lot of unknowns. You will need to be ready to tweak any initial plans and strategies. New and better ways of doing things may come along as well.
- Decisiveness: As an entrepreneur, you won’t have room for procrastination or indecision. Not only will these traits stall progress, but they can also cause you to miss crucial opportunities that could move you toward success. Can you make decisions quickly and seize the moment?
Contributions of entrepreneurs to the economy
The major roles played by an entrepreneur in the economic development of an economy are discussed in a systematic and orderly manner as follows:
(1) Promotes capital formation:
Entrepreneurs promote capital formation by mobilising the idle savings of public. They employ their own as well as borrowed resources for setting up their enterprises. Such type of entrepreneurial activities leads to value addition and creation of wealth, which is very essential for the industrial and economic development of the country.
(2) Creates large-scale employment opportunities:
Entrepreneurs provide immediate large-scale employment to the unemployed which is a chronic problem of underdeveloped nations. With the setting up of more and more units by entrepreneurs, both on small and large-scale numerous job opportunities are created for others. As time passes, these enterprises grow, providing direct and indirect employment opportunities to many more. In this way, entrepreneurs play an effective role in reducing the problem of unemployment in the country which in turn clears the path towards economic development of the nation.
(3) Promotes balanced regional development:
Entrepreneurs help to remove regional disparities through setting up of industries in less developed and backward areas. The growth of industries and business in these areas lead to a large number of public benefits like road transport, health, education, entertainment, etc. Setting up of more industries leads to more development of backward regions and thereby promotes balanced regional development.
(4) Reduces concentration of economic power:
Economic power is the natural outcome of industrial and business activity. Industrial development normally leads to concentration of economic power in the hands of a few individuals which results in the growth of monopolies. In order to redress this problem a large number of entrepreneurs need to be developed, which will help reduce the concentration of economic power amongst the population.
(5) Wealth creation and distribution:
It stimulates equitable redistribution of wealth and income in the interest of the country to more people and geographic areas, thus giving benefit to larger sections of the society. Entrepreneurial activities also generate more activities and give a multiplier effect in the economy.
(6) Increasing gross national product and per capita income:
Entrepreneurs are always on the lookout for opportunities. They explore and exploit opportunities, encourage effective resource mobilisation of capital and skill, bring in new products and services and develops markets for growth of the economy. In this way, they help increasing gross national product as well as per capita income of the people in a country. Increase in gross national product and per capita income of the people in a country, is a sign of economic growth.
(6) Improvement in the standard of living:
Increase in the standard of living of the people is a characteristic feature of economic development of the country. Entrepreneurs play a key role in increasing the standard of living of the people by adopting latest innovations in the production of wide variety of goods and services in large scale that too at a lower cost. This enables the people to avail better quality goods at lower prices which results in the improvement of their standard of living.
(7) Promotes country’s export trade:
Entrepreneurs help in promoting a country’s export-trade, which is an important ingredient of economic development. They produce goods and services in large scale for the purpose earning huge amount of foreign exchange from export in order to combat the import dues requirement. Hence import substitution and export promotion ensure economic independence and development.
References
Hisrich, R. D. (2011). Entrepreneurship. New York: McGraw-Hill Education
James, W. H. (2014). Your Small Business Adventure: Finding Your Niche and Growing a Successful Business. Ontario: ALA/Huron Street Press.
Narayanan, V. K. & Colarelli, G. (2010). Encyclopedia of Technology and Innovation Management. London: John Wiley & Sons.
Shane, S. (2013). “The genetics of entrepreneurial performance”. International Small Business Journal 31 (5): 473–495.
Shane, S. (2000). A General Theory of Entrepreneurship: The Individual-opportunity Nexus. Dublin: Edward Elgar Publishing.
