Entrepreneurship is the process of designing, starting and running a new business, which is often originally a little business. The people who create these businesses are called entrepreneurs.
Entrepreneurship was described as the "capacity and willingness to grow, arrange and manage a business enterprise alongside some of its risks in order to make a profit". While definitions of entrepreneurship typically revolve around the launching and running of companies, due to the high risks involved in launching a start-up, a significant proportion of startup businesses have to close because of "lack of funding, bad business decisions, an economic crisis, lack of market demand--or even a mixture of all them.
Entrepreneurship is the action of being an entrepreneur, or "an owner or director of a business enterprise who makes money at risk and initiative". Entrepreneurs act as managers and oversee the launch and growth of a venture. Entrepreneurship is the process by which an individual or a team defines a business opportunity and acquires and deploys the necessary resources required for its exploitation.
Early 19th century French economist Jean-Baptiste Say provided a broad definition of entrepreneurship, saying that it "shifts economic resources out of an area of lower and into an area of higher productivity and higher yield". Entrepreneurs create something fresh, something different--they change or transmute values. Irrespective of the business size, big or small, they could partake in entrepreneurship opportunities. The opportunity needs four criteria.
First, there must be opportunities or scenarios to recombine resources to generate profit. Secondly, entrepreneurship requires differences between individuals, such as accessibility to specific individuals or the capability to comprehend details about opportunities. Third, taking on risk is a necessary. The entrepreneurial process demands the organization of people and resources.
The entrepreneur is a element in microeconomics and also the study of entrepreneurship reaches back into the work of Richard Cantillon and Adam Smith in the late 17th and early 18th centuries. However, entrepreneurship was largely ignored theoretically until the late 19th and early 20th centuries and empirically until a profound resurgence in business and economics since the late 1970s. From the 20th century, the understanding of entrepreneurship owes considerably to the work of economist Joseph Schumpeter from the 1930s along with other Austrian economists such as Carl Menger, Ludwig von Mises and Friedrich von Hayek.
According to Schumpeter, an entrepreneur is someone who is willing and ready to convert a new idea or invention into a successful invention. Entrepreneurship employs what Schumpeter called "the gale of creative destruction" to replace in whole or in part inferior innovations across markets and industries, simultaneously creating new products including new business models. In this manner, creative destruction is mostly responsible for its dynamism of businesses and long-run economic development.
The supposition that entrepreneurship leads to economic development is an interpretation of this residual in endogenous growth theory and as this is hotly debated in academic economics. An alternate description posited by Israel Kirzner suggests that the majority of innovations could be much more incremental improvements such as the replacement of paper with plastic from the making of drinking straws.