Entrepreneur Definition

Everything you need to know about the various definitions of entrepreneur. ‘Entrepreneur’ is a French word which means to undertake, to pursue opportunities, to fulfill needs and wants of the people through innovation and starting business.

An entrepreneur undertakes a venture, organizes it, raises capital to finance it, and assumes the whole or major part of the risk of business. In other words, entrepreneurship is the process of giving birth to a new business.

An entrepreneur is one of the most important inputs and segments of economic growth. He/she is one of the responsible person who can set up a business or an enterprise.

In reality, he/she is the one who has the initiative, innovative skills and who aims for high achievements. The entrepreneur is a person who brings overall change through innovation. The entrepreneur is a visionary and integrated man with outstanding leadership qualities.

Learn about the definitions of an entrepreneur as given by eminent authors like Bernard Belidor, Jean Baptiste, Jan Tinbergen, Adam Smith, Alfred Marshall, Joseph A. Schumpeter, Karl Marx, Jan Tinbergen, A. P. Usher, F.H. Knight, David Ricardo, J.S. Mill, Leon Walrus, F. B. Hawley, Francis A. Walker, Richard Cantillon, Noah Webster, Peter F. Drucker, Arthur Dewing, Robert D. Hisrich and Others.

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Entrepreneur Meaning and Definition

Definitions of Entrepreneur – According to Bernard Belidor, Jean Baptiste, Jan Tinbergen, Adam Smith, Alfred Marshall, Joseph A. Schumpeter and Others

The term “entrepreneur” is defined in a variety of ways. Yet no consensus has been arrived at on the precise skills and abilities that make a person a successful entrepreneur.

The concept of entrepreneur varies from country to country as well as from period to period and the level of economic development thoughts and perceptions. A review of research done in different disciplines over the years would improve our understanding of the concept of entrepreneur.

The word ‘entrepreneur’ is derived from the French verb enterprendre. It means “to undertake.” In the early 16th century, the Frenchmen who organised and led military expeditions were referred to as “entrepreneurs.” Around 1700 A.D., the term was used for architects and contractors of public works.

Bernard Belidor applied it to the function of buying labour and material and uncertain prices and selling the resultant product at contracted price.

Quesnay regarded the rich farmer as an entrepreneur who manages and makes his business profitable by his intelligence, skill and wealth.

In many countries, the entrepreneur is often associated with a person who starts his own new and small business. Business encompasses manufacturing, transport, trade and all other self-employed vocations in the service sector. But not every new small business is entrepreneurial or represents entrepreneurship.

The term “entrepreneur” was applied to business initially by the French economist, Cantillon, in the 18th century, to designate a dealer who purchases the means of production for combining them into marketable products. Another Frenchman, J.B. Say, expanded Cantillon’s ideas and conceptualised the entrepreneur as an organiser of a business firm, central to its distributive and production functions. Beyond stressing the entrepreneur’s importance to the business, Say did little with his entrepreneurial analysis.

According to Jean Baptiste Say, an entrepreneur is the economic agent who unties all means of production, the labour force of the one and the capital or land of the others and who finds in the value of the products his results from their employment, the reconstitution of the entire capital that he utilises and the value of the wages, the interest and the rent which he pays as well as profit belonging to himself.

He emphasised the functions of coordination, organisation and supervision. Further, it can be said that the entrepreneur is an organiser and speculator of a business enterprise. The entrepreneur lifts economic resources out of an area of lower into an area of higher productivity and greater yield.

The New Encyclopedia Britannica considers an entrepreneur as “an individual who bears the risk of operating a business in the face of uncertainty about the future conditions.” Leading economists of all schools, including Karl Marx have emphasised the contribution of the entrepreneurs to the development of economies, but Joseph Schumpeter who argues that the rate of growth in an economy depends to a great extent on the activities of entrepreneurs, has probably put greater emphasis on the entrepreneurial function than any other economist.

As Professor Jan Tinbergen points out – “The best entrepreneur in any developing country is not necessarily the man who uses much capital, but rather the man who knows how to organise the employment and training of his employees. Whoever concentrates on this is rendering a much more important service to his country than the man who uses huge capital.”

Adam Smith, the father of classical economics, did not use the term entrepreneur anywhere. Instead, he used the words like employer, the merchant, the undertaker and the master.

Alfred Marshall wrote about the capitalists and management but he was silent about their difference. As such, the classical economists ignored the term entrepreneur entirely.

According to A. P. Usher, “Specialization or division of labour necessitates an entrepreneurial function the crux of which is to coordinate different economic activities. This view on entrepreneurship was very narrow and it reduced the entrepreneurship activities to no more than a managerial function.”

F. H. Knight, in his article on Risk, Uncertainty and Profit propounded the maxim that “entrepreneur are a specialized group of persons who bear risks and deal with uncertainty.” He also identified social, psychological and economic factors which govern the supply of entrepreneurship.

According to David Ricardo, a contemporary of J. B. Say, “The foremost motive of a risk taker is to mass capital and capital accumulation is the sine qua non of economic development.”

J. S. Mill viewed the word entrepreneur as organizer who was paid for his non-manual type of work. According to him, “Extraordinary skills acted as the bedrock in production process that ought to be possessed by the entrepreneur.”

Leon Walrus, in his papers, The Theory of Social Wealth pointed out that entrepreneur is the coordinator of basic factors of production. He treated ‘entrepreneur’ as the fourth factor of production who combines other factors such as land, labour and capital.

In 1882, F. B. Hawley contemplated risk taking as the prime characteristic feature of the entrepreneur which was comparable to the elementary agents of production like land, labour and capital. All classical and neoclassical economists believed in the significance of entrepreneurial action but did not incorporate the term ‘entrepreneur’ into their theories and thus entrepreneurship remained as a clandestine factor.

With J. A. Schumpeter, the term entrepreneur had received a wide acclaim. He defined the entrepreneur as an innovator who carries out new combinations to initiate the process of economic development through introduction of new products, new markets, conquests of new source of raw materials and establishment of a new organization of industry.

He said, “The carrying out of a new combination we call enterprise, the individuals whose function is to carry them out us call entrepreneurs. He has put emphasis on profit, which is the product of innovation and the prime mover of economic development.” According to Schumpeter, “The process of development is a deliberate and continuous phenomenon which is actively promoted by the escort services of a change agent who provides economic leadership. This change agent is what is called entrepreneur.”

Core described entrepreneur as an individual who undertakes “to initiate, maintain or aggrandize a profit-oriented business unit for production or distribution of economic goods and services.”

Schumpeter’s Definition of Entrepreneur:

Joseph A. Schumpeter thus writes- “The entrepreneur in an advanced economy is an individual who introduces something new in the economy — a method of production not yet tested by experience in the branch of manufacture concerned, a product with which consumers are not yet familiar, a new source of raw material or of new markets and the like.”

He further states the entrepreneur’s function is to “reform or revolutionise the pattern of production by exploiting an invention or more generally, an untried technological possibility for producing a new commodity….”

Briefly, an entrepreneur is one who innovates, raises money, assembles inputs, chooses managers and sets the organisation going with his ability to identify them. Innovation occurs through – (1) the introduction of a new quality in a product, (2) a new product, (3) a discovery of a fresh demand and a fresh source of supply and (4) by changes in the organisation and management.

In the case of a developing economy like India, the concept is being understood differently. An entrepreneur in a developing economy is one who starts an industry (old or new), undertakes risk, bears uncertainties and also performs the managerial functions of decision-making and co-ordination. He also puts the new process based on technological research into operation. Even if he imitates any technique of production from a developed economy, he is called an entrepreneur.

In point of fact, entrepreneurship in developing economies is one form of labour that tells the rest of labour what to do and sees to it that it gets things done. Unlike in the developed industrial world, emphasis is not put (nor is there any need for it) only on “Schumpeterian innovations” in the case of developing countries.

Schumpter’s entrepreneur only exists if the factors of production are combined for the first time. To him, maintenance of a combination is not entrepreneurial activity. As such, he differs from the theory of Rent enunciated by Ricardo. Ricardo included the term “entrepreneurial ability” as an independent factor of production. To Ricardo, profit is the reward for entrepreneurial ability.

Drucker’s Views on Entrepreneur:

Peter Drucker has aptly observed that, “Innovation is the specific tool of entrepreneurs, die means by which they exploit changes as an opportunity for a different business or a different service. It is capable of being presented as a discipline, capable of being learned and practiced. Entrepreneurs need to search purposefully for the sources of innovation, the changes and their symptoms that- indicate opportunities for successful innovation. And they need to know and to apply the principles of successful innovation.”

Systematic innovation, according to him, consists in the purposeful and organised search for changes and in the systematic analysis of the opportunities such changes might offer scope for economic and social innovation.

According to Drucker, three conditions have to be fulfilled:

1. Innovation at work – It requires knowledge and ingenuity. It makes great demands on diligence, persistence and commitment.

2. To succeed, innovation must build on their strengths.

3. Innovation always has to be close to the market focused on the market, indeed market- driven.

Specially, systematic innovation means monitoring six sources for innovative opportunity.

The first three sources lie within the enterprise, whether it be a business or a public service institution or within an industry or service sector. They are therefore, visible primarily to people within that industry or service sector. They are basically symptoms. But they are highly reliable indicators of changes that have already occurred or can be made to occur with little effort.

These four source areas are:

1. The unexpected — the unexpected success, the unexpected failure, the unexpected outside event.

2. The incongruity — between reality as it actually is and reality as it is assumed to be or as it “ought to be.”

3. Innovation in industry structure or market structure that catches everyone unawares.

4. The second set of sources for innovative opportunity, a set of three, involves changes outside the enterprise or industry –

i. Demographics (population changes).

ii. Changes in perception, mood and meaning.

iii. New knowledge, both scientific and non-scientific.

Walker’s Views on Entrepreneur:

According to Francis A. Walker, the true entrepreneur is one who is endowed with more than average capacities in the task of organising and coordinating the various other factors of production. He should be a pioneer, a captain of industry.

The supply of such entrepreneurship is however quite limited and enterprise in general consists of several grades of organisational skill and capability. The more efficient entrepreneurs receive a surplus reward over and above the managerial wages and this sum constitutes true profit ascribable to superior talent.

New Concept of Entrepreneur:

The term “entrepreneur” has been defined as one who detects and evaluates a new situation in his environment and directs the making of such adjustments in the economic systems as he deems necessary.

He conceives of an industrial enterprise for the purpose, displays considerable initiative, grit and determination in bringing his project to fruition, and in this process, performs one or more of the following:

1. Perceives opportunities for profitable investments;

2. Explores the prospects of starting such a manufacturing enterprise;

3. Obtains necessary industrial licenses;

4. Arranges initial capital;

5. Provides personal guarantees to the financial institutions;

6. Promises to meet the shortfalls in the capital; and

7. Supplies technical know-how.

Some Observations:

The term “entrepreneur” has now been attributed to all small industrialists, small business, traders and industrialists. All people who are gainfully engaged in work — manufacturing, distribution or service and other sectors are called entrepreneurs.

Again, even founder, creator and risk-taker are called entrepreneurs. Each of these terms focus on some aspect of entrepreneur. They have some attributes, but they are not entrepreneurs in the strictness. Many successful people have been good at copying and/or imitating others.

For example, the first commercial manufacturing of two-wheelers is to be called an entrepreneur, who has visualised the importance of two wheelers in modern times for the benefit of the maximum users and all subsequent scores of people engaged in are just imitators. Likewise, a brothel-keeper or a call-girl business organiser cannot be an entrepreneur, though he takes risks, creates a market and gets a reward more than visualised.

So also a bootlegger, drug peddler, black-marketer etc. These occupations are not for the social good. They violate business ethics. The term “entrepreneur” is to be understood in its totality and not in a fabricated manner. The term “entrepreneur” can only be understood with a bearing on economic, psychological, sociological, and cultural bearings. The social responsibility is essentially a part of entrepreneurial outlook on life.

W. Robert Maclaurin divides the elements of technical advances into:

1. Development of pure science,

2. Invention,

3. Innovation,

4. Financing of innovation, and

5. Acceptance of the innovation.

In the less developed economies first three elements of technical advancement can be skipped, and the emphasis should be on the adoption of business practice of discoveries already made. In such countries, the role of the Schumpetarian entrepreneur is somewhat limited. A large number of indigenous Schumpetarian entrepreneurs are trading entrepreneurs whose innovations are the opening of new markets.

In the light of the possibilities of technical transfers from advanced economies, no undue emphasis should be put on the development of entirely new combinations. Hoselitz also remarks that in an underdeveloped economy, not to speak of Schumpetarian innovators, even imitator entrepreneurs have a distinct role to play. Such entrepreneurs provide a fillip to the process of economic growth, sometimes having as strong or perhaps even stronger impact on economic growth as real or alleged innovations.

Finding no clues to the meaning of the term ‘entrepreneur’, Peter Kilby likened entrepreneur with ‘Heffalump’— a large and very important animal which was hunted by many individuals, but no one succeeded in capturing him. All those persons who claim to have seen him describe differently about his particularities and thus no agreement exists in their description about the animal. Hence a detailed note on the entrepreneur’s functions in a developing economy was given by Kilby, which included some of the managerial functions also.

These functions can be delegated to subordinates for efficient performance, which are as follows:

A. Exchange Relationship:

1. Perception of market opportunities (novel or Imitative),

2. Gaining command over scarce resources,

3. Purchasing inputs,

4. Marketing of the products and responding to competition.

B. Political Administration:

1. Dealing with the public bureaucracy (concessions, licenses, and taxes),

2. Management of human relations within the firm,

3. Management of customer and supplier relations,

4. Financial management,

5. Production management (control by written records, supervision, co-ordinating input flows with orders, maintenance).

C. Technology:

1. Acquiring and overseeing assembly of the factory,

2. Industrial engineering (minimising inputs with a given production process),

3. Upgrading process and product quality, and

4. Introduction of new production techniques and products.

Entrepreneurship may be defined in various ways, but the four key elements involved in it are – (i) Innovation, (ii) Risk-taking, (iii) Vision and (iv) Organising skill. All the four elements are inter­related and form a continuous process in business. Entrepreneurial vision encompasses the relentless pursuit for operational excellence, innovative technology and being responsive to the needs of the market place.

A Classic Example:

Since the dawn of civilisation, there have appeared at periodic intervals men who have led mankind shaping the future out of the lessons of the past and the experiences of the present. Visionaries, builders, thinkers, scientists were those who saw ahead of their times and whose presence benefited not only the country, but all mankind.

In this illustrious company of uncommon people a special place is occupied by an Indian who was born 155 years ago — Jamesetji Nusserwanji Tata. His inspired vision of modern industrialised India was to sustain economic growth to support freedom.

To breathe life into his dream, he set about to create steel, electric power and scientific-cum-technical education as the vital ingredients of economic growth. Today, the Tata organisation covers a bright landscape in Indian economy.

To this day, Jamsetji Tata’s industrial philosophy, including his firm belief in the principle of trusteeship, his insistence on absolute standards of integrity and the realisation that to survive and prosper, free enterprise must serve the needs of society, were all remarkably in tune with modern thinking and the ethical and social standards of the most advanced societies’ of today.

Entrepreneurship is not just a way to increase the level of innovation and productivity of organisations, although it will do that. More importantly, it is a way of initiating vast business so that work becomes a joyful expression of one’s contribution to society. The Indian entrepreneur, intrapreneur and/or manager of the 90s have to be moulded in psycho-philosophy rooted in the Indian context and values.

“The crisis in business is spiritual,” says Prof. Sitangshu Kumar Chakraborty, “All management ideas till now have been external-directed paradigms, developing behaviour and skills, not character and values. But meaning and richness must flow from mind to work, not the other way. We need a fundamental shift from the current reductionist, fragmentist, and materialistic paradigm to one which recognises relationships, consciousness and spirit as the right approach.”

The concept of entrepreneur and entrepreneurship incorporates basic qualities of leadership, innovation, enterprise, hard work, vision and maximisation of profits. All his socio-economic, organisational and managerial qualities are always directed towards the well-being of the society and the community. He is committed to progress. He is a catalytic agent of development and change. Personal satisfaction and monetary rewards are blended with social betterment and welfare of mankind.

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Definitions of an Entrepreneur – By Eminent Authors like Richard Cantillon, Marx, Noah Webster, Peter F. Drucker, Arthur Dewing, Robert D. Hisrich and Others

Quesnay recognised a rich farmer as an entrepreneur who manages and makes his business profitable by his intelligence and wealth.

Adam Smith described entrepreneur as a person who only provides capital without taking active part in the leading role in enterprise.

Richard Cantillon considered all persons engaged in economic activity as entrepreneurs.

Jean Baptiste Say opined that the entrepreneur was a person endowed with the qualities of judgement, perseverance and a knowledge of the world as well as of business. The entrepreneur shifts economic resources out of an area of lower and into an area of higher productivity and greater yield. The definition included the concept of bringing together the factors of production.

French tradition regard an entrepreneur as a person translating a profitable idea into a productive activity.

Marx regarded entrepreneur as a social parasite.

Joseph A. Schumpeter recognised person who introduces innovation changes is an entrepreneur. He treated entrepreneur as an integral part of economic growth. The fundamental source of equilibrium was the entrepreneur.

Frank Young describes entrepreneur as a change agent.

Noah Webster thinks entrepreneur is one who assumes the responsibility of the risk and management of business.

Francis A. Walter observes that the true entrepreneur is one who is endowed with more than average capacities in the risk of organising and coordinating the various other factors of production.

Peter F. Drucker defines an entrepreneur as one who always searches for change, responds to it and exploits it as an opportunity. Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or service.

Arthur Dewing conceptualised the function of the entrepreneur as one that promotes ideas into business.

Clarence H. Dantrof considers entrepreneur as a person who makes decision under alternative courses of action.

Entrepreneur has become the focal point in economic activities. He is viewed as an initiator of action, a stimulant of socio-economic change and development.

Robert D. Hisrich says, “The person who is going to establish a successful new business venture must also be a visionary leader — a person who dreams great dreams. Although there are many definitions of leadership, the one that best describes the needed intrapreneurial leadership is, A leader is like a gardener. When you want a tomato, you take a seed, put it in fertile soil, and carefully water under tender care. You don’t manufacture tomatoes, you grow them.”

Martin Luther King said, “I have a dream, and thousands followed in spite of overwhelming obstacles. In order to establish a successful new business venture the intrapreneurial leader must have a dream and work against all obstacles to achieve it.”

Entrepreneur is one who distinguishes as a person who undertakes to organise, manage and assume the risk of running a factory and/or a business or an enterprise.

Entrepreneurship is neither a science nor an art. It is a practice. It has a knowledge base. Knowledge in entrepreneurship is a mean to an end. Indeed, what constitutes knowledge in practice is largely defined by the ends that is by practice.

According to Mark Casson – “An entrepreneur is a person who specialises in taking judgemental decision about the coordination of scarce resources.”

According to Max Weber – “Entrepreneurs are a product of particular social condition in which they are brought up and it is the society which shapes individuals as entrepreneurs.”

International Labour Organisation (ILO) defines entrepreneurs as those people who have the ability to see and evaluate business opportunities, together with the necessary resources to take advantage of them and to initiate appropriate action to ensure success.

According to E. E. Haggen, an entrepreneur is an economic man who tries to maximise his profits by innovations. Innovations involve problem-solving and the entrepreneur gets satisfaction from using his capabilities in attacking problems.

The New Encyclopedia Britannica considers an entrepreneur as “an individual who bears the risk of operating a business in the face of uncertainty about the future conditions.” Leading economists of all schools, including Karl Marx, have emphasised the contribution of the entrepreneurs to the development of economies, but Joseph Schumpeter, who argues that the rate of growth in an economy depends to a great extent on the activities of entrepreneurs, has probably put greater emphasis on the entrepreneurial function than any other economist.

Robert E. Nelson defined entrepreneur as a person who is able to look at the environment.

According to David McClelland – “An entrepreneur is someone who exercises some control over the means of production and produces more than what he can consume in order to sell (or exchange) it for individual (or household) income.”

An entrepreneur, as defined by Robert E. Nelson, is a person who is able to look at environment, identify opportunities to improve the environment, marshal resources and implement action to maximize those opportunities.

According to J. K. Galbraith – “An entrepreneur must accept the challenge and should be willing hard to achieve something.”

Akhouri, M.M.P. describes entrepreneur as a character who contributes innovativeness, readiness to take risk, sensing opportunities, identifying and mobilising potential resources concern for excellence, and who is persistent in achieving the goal. The term entrepreneur contain notions of newness, innovation, vision, organising, creating wealth, mobilising resources, risk taking and achievement. A driving force of economic development.

Not every new small business is entrepreneurial or represents entrepreneurship. To be entrepreneurial, an enterprise has to have special characteristics over and above being new and small. Indeed, entrepreneurs create something new, something different, they change or transmute value.

Laura Parkin – Entrepreneurs are both born and made. While some people are born with natural talent and risk tolerance. Entrepreneurship is a discipline and entrepreneurship skills can be learned by everyone.

Albert Shapero observes that the entrepreneur takes initiative, organises some social and economic mechanisms, and accepts risks of failure.

Karl Vesper affirms that the entrepreneur is seen differently by economists, psychologists, business persons and politicians.

Robert C. Ronstadt considers that the wealth is created by individuals who assume the major risks in terms of equity, time, commitment, and value for some product or service.

According to David Ricardo, the foremost motive of a risk taker is to a mass capital and capital accumulation is the sine qua non of economic development.

John Stuart Mill viewed the world entrepreneur as organiser who is paid for his non-manual type of work.

Leon Walrus pointed out that entrepreneur is the coordinator of basic factors of production. He treated ‘entrepreneur’ as the fourth factor of production who combines other factors such as land, labour and capital.

Carl Menger (1840-1921) considers the entrepreneur as the change agent who transforms resources into useful goods and services, often creating the circumstances that lead to industrial growth.

Frank H. Knight points out that entrepreneurs are a specialised group of persons who bear risk and deals with uncertainty.

Mark Cassons opines that an entrepreneur is a person who specialises in taking judgemental decision about the coordination of scarce resources.

Max Weber states that the entrepreneurs are a product of particular social condition in which they are brought up and it is the society which shapes individuals as entrepreneurs.

A. David Silver described the entrepreneur as energetic, single minded, and having “a mission and clear vision; he or she intends to create out of this vision a product or service in a field many have determined is important to improve the lives of millions.”

Henry Ford who created the manufacturing miracle that launched a modern era in industry, said that. Entrepreneur can do anything with passion and enthusiasm. Enthusiasm is the yeast that makes his hopes rise to the stars.

Enthusiasm is the spark in his eye, the swing in his gait, the grip of his hand, the irresistible surge of his will and his energy to execute his ideas. Enthusiasts are fighters, they have fortitude, and they have strong qualities. Enthusiasm is at the bottom of all progress. With it there is accomplishment. Without it there are only alibis.

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Definitions of Entrepreneur – According to Alfred North White Head, Forest Frantz, Richard Cantillon, Alfred Marshall, James Burna, Gerld A. Silver, Peter F. Drucker and Others

“A good entrepreneur is one who is capable of inspiring confidence in people and has the ability to motivate them to work with him in fulfilling the economic goals set by him.”

“The greatest invention of all is the inventions of inventing inventions.”- Alfred North White Head

“The entrepreneur is more than a manager. He is an innovator and promoter as well.”- Forest Frantz

An entrepreneur is one of the most important inputs and segments of economic growth. He/she is one of the responsible person who can set up a business or an enterprise. In reality, he/she is the one who has the initiative, innovative skills and who aims for high achievements. The entrepreneur is a person who brings overall change through innovation. The entrepreneur is a visionary and integrated man with outstanding leadership qualities. The entrepreneur is also known as a category of economic development. The term ‘entrepreneur’ is defined in various ways. The concept of entre­preneur varies from one country to another country, period to period and level of economic development thoughts and perception. In few countries, the entrepreneur is associated with a person who creates his own new and small business. The characteristic features of an entrepreneur includes urge, skill, vision, growth, management, enterprise, risk and innovation.

“An individual who bears the risk of operating a business in the face of uncertainty about the future conditions.”- New Encyclopedia Britannica

Alfred North White Head, “The greatest invention of all is the inven­tions of inventing inventions.”

Forest Frantz, “The entrepreneur is more than a manager. He is an innovator and promoter as well.”

The word entrepreneur is derived from a French word ‘Entreprendre’ which refers to ‘undertake’. During 16th century the French man who orga­nized and led military tradition was called an entrepreneur. After 17th century, the term was used for adventurers, civil engineers, who were involved in construction work.

According to Bernard F. De. Bolidar, “An entrepreneur is one who performs the task of bringing labour and material at certain price and selling the resultant products at contracted price”.

During 18th century, according to Richard Cantillon, “An entrepreneur is a person who buys factor services at certain prices with a view to sell its product at certain prices in future”.

According to Richard Cantillon, “An entrepreneur is an agent who buys means of production at certain prices in order to combine them into a product which he is going to sell at prices that are uncertain.”

According to Frank H. Knight, “A specialized group of persons who bears risk and meet the uncertainty.”

According to J.B. Say, “The entrepreneur is a person who shifts economic resources out of an area of lower and into an area of higher productivity and greater yield.”

According to Alfred Marshall, “Entrepreneur is an individual who ‘adventures’ or ‘undertakes’ risks, who brings together the capital and labour required for the work, who arranges or engineers its general plan, and who superintendents minor details.”

According to James Burna, “Entrepreneur is a person or group of persons responsible for the existence of a new industrial enterprise.”

According to Gerld A. Silver, “An entrepreneur is an individual who conceives an idea for a new product or service, then finds some way of raising capital to form a business to produce the product or service.”

According to R.T. Ely, “Entrepreneur is the person who organises and directs the productive factor.”

According to Peter F. Drucker, “The Entrepreneur always searches for change, responds to it, and exploits it as an opportunity.”

Division of Definition of Entrepreneur:

Thus, the definitions of Entrepreneur may be divided into three parts:

1. Based on Traditional Approach

2. Based on Modern Approach

3. Based on Synthesised Approach.

1. Based on Traditional Approaches:

Alfred Marshall, “Entrepreneur is an individual who brings together the capital and labour required for the work, who adventures or undertake risks, who arrange or engineers its general plan.”

J.B. Say, “The entrepreneur is a person who shifts economic resources out of the area of lower yield and into an area of higher and greater yield.”

Frank H. Knight, “The Entrepreneur is a specialised person or group of persons who bear risks and meet the uncertainty.”

2. Based on Modern Approaches:

Peter F. Drucker, “Entrepreneurs create something new, something different, they change and transmute value.”

Arthur dewing, “Entrepreneur is one who transforms ideas into a profitable business.”

3. Based on Synthesised Approaches:

Joseph A. Schumpeter, “Entrepreneur is a person who foresees the opportunity and try to exploit it by introducing a new product, a new method of production, new market, new source of raw material or new combination of factors of production.”

Frantz, “Entrepreneur is an innovator and promoter as well as generally he is more than a manager.”

An entrepreneur may be defined as an individual who intends to add value to the economy by creating a new business venture through the able utilisation of his knowledge, passion, dream, and desire.

An entrepreneur is thought to be a person who intends and evaluates the new situation in the environment and directs the making of such adjustments or alteration in the economic or manufacturing system as he thinks necessary for achieving desired results.

He conceives the industrial enterprises as the purpose of new creation, display consideration, initiates courage and determination in bringing his new project into existence perform one or more of the following-

(i) Perceiving opportunities for profitable investments.

(ii) Exploring the prospects of a manufacturing concern.

(iii) Obtains necessary industrial licenses.

(iv) Arranges initial capital.

(v) Providing personal guarantees.

(vi) Supplies technical know-how.

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Definitions of an Entrepreneur

‘Entrepreneur’ is a French word which means to undertake, to pursue opportunities, to fulfill needs and wants of the people through innovation and starting business. An entrepreneur undertakes a venture, organizes it, raises capital to finance it, and assumes the whole or major part of the risk of business. In other words, entrepreneurship is the process of giving birth to a new business.

B. Higgins has defined entrepreneurship as, “Entrepreneurship is the function of seeking investment and production opportunities, organising an enterprise to undertake a new production process, raising capital, hiring .labour, arranging the supply of raw materials, finding site, introducing a new technique, discovering new sources of raw materials and selecting top managers for day-to-day operations of the enterprise.”

This definition highlights risk-taking, innovation and resource organising aspects of entrepreneurship. In other words of Kao, “Entrepreneurship is the attempt to create value through recognition of business opportunity, the management of risk-taking appropriate to the opportunity and through the communicative and management skills to mobilize human, financial and material resources necessary to bring a project to fruition.”

This definition recognises that entrepreneurship involves the fusion of capital, technology and human talent to complete a project successfully and with reasonable degree of risk.

Therefore, the main characteristic features of entrepreneurship can be summed up as under:

(a) It relates to economic activity.

(b) It involves creativity or innovation.

(c) It involves dynamism or flexibility.

(d) It means taking decision under uncertainty.

(e) It involves bringing together the difference means of production.

(f) It involves risks.

(g) It involves ability to organised and administer.

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