24 Questions
Who is credited with assigning a crucial role of innovation to the entrepreneur in 1934?
Joseph A. Schumpeter
What are the three elements associated with the concept of an entrepreneur?
Risk-bearing, organizing and innovating
What is the primary difference between an inventor and an innovator according to Schumpeter?
An inventor discovers new methods, while an innovator utilizes inventions
What is an example of innovation, according to Schumpeter?
The introduction of a new product in the market
What is a key characteristic of an entrepreneur, according to Schumpeter?
Risk-bearing
What is an example of a new combination of factors of production, according to Schumpeter?
The discovery of a new source of raw material
What is the role of an entrepreneur in economic development, according to Schumpeter?
To introduce new combinations of factors of production
How does Schumpeter define an entrepreneur in an advanced economy?
An individual who introduces something new in the economy
What is an important function of an entrepreneur?
Innovation
What is the primary focus of an entrepreneur's results?
Long-term and very long-term
Who is accountable for producing results?
Both the Entrepreneur and the Manager
What is a key difference between an entrepreneur and a manager?
The entrepreneur is the owner, and the manager is a servant
What is an example of innovation in entrepreneurship?
Introduction of different kinds of electronic gadgets
What do entrepreneurs and managers have in common?
All of the above
What is a key characteristic of an entrepreneur's decisions?
They are long-term oriented
What is essential for entrepreneurs and managers to be effective in their respective roles?
Following sound principles of management
Who is credited with introducing the term 'Entrepreneur' and defining it as an agent who takes risks?
Richard Cantillon
What is the literal meaning of the French verb 'entreprendre' from which the word 'entrepreneur' is derived?
To undertake
Which of the following views of entrepreneurship emphasizes the ability to combine resources such as land, labor, and capital?
Entrepreneur as Organizer
In what century did the term 'entrepreneur' start being used to refer to economic aspects?
18th century
Who is associated with the view that an entrepreneur is one who buys factories of production to combine them into a product?
Richard Cantillon
What is the primary function of an entrepreneur according to Richard Cantillon?
Taking risks
How many views of entrepreneurship are mentioned in the content?
3
What is the common association of the term 'entrepreneur' in many countries?
A person who starts their own, new and small business
Study Notes
Schumpeter's Contribution to Entrepreneurship
- Assigned a crucial role to innovation in economic development in his 1934 book "Theory of Economic Development"
- Defined an entrepreneur as an individual who introduces new combinations of production, i.e., innovations
Entrepreneurship Definition
- An entrepreneur is one who innovates, raises money, assembles inputs, chooses managers, and sets an organization going
- Innovations occur through the introduction of new combinations of factors of production in five forms:
- New product in the market
- New production technology
- New market
- New source of raw material
- New form of organization or industry
- An entrepreneur can be defined as a person who creates something new, organizes production, and undertakes risks and handles economic uncertainty
Innovator vs. Inventor
- An inventor is one who discovers new methods and materials
- An innovator utilizes inventions and discoveries to make new combinations
Functions of an Entrepreneur
- An important function of an entrepreneur is innovation, which involves conceiving ideas for improvement, considering economic viability and technological feasibility
- Innovation is an ongoing function rather than a once-for-all or intermittent activity
Managers and Entrepreneurs
- An entrepreneur and a manager are not synonymous terms
- An entrepreneur is the owner, while a manager is a servant
- Both are accountable for producing results, but the results are different
- Both have to produce results through people working with them, but they deal with different sets of people
- Both have to operate under constraints, but the constraints are different
Similarities between Managers and Entrepreneurs
- Both have to produce results
- Both have to delegate and are accountable for results
- Both have to operate under constraints
- Both have to follow sound principles of management like planning, staffing, delegation, and control
Origin of the Term "Entrepreneur"
- The word "entrepreneur" comes from the French language, where it meant to designate an organizer of musical or other entertainments
- The word is derived from the French verb "entreprendre," meaning "to undertake"
- It was first used in the 18th century to refer to economic aspects
Views of Entrepreneurship
- Richard Cantillon viewed an entrepreneur as a risk-bearer
- Jean-Baptiste Say viewed an entrepreneur as an organizer
- Joseph A. Schumpeter viewed an entrepreneur as an innovator
Learn about Joseph Schumpeter's role in entrepreneurship, his definition of an entrepreneur, and the importance of innovation in economic development.
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