In this tutorial, we will learn about the supply of entrepreneurship, and economic development is the driving element behind the organization.
British economists such as Adam Smith, David Ricardo, and John Stuart Mill briefly explained the concept of entrepreneurship though they referred it under a broad English term business management. Whereas the writings of Smith and Ricardo suggest that they undervalued the importance of entrepreneurship, Mill goes out of his way to stress the significance of entrepreneurship for economic growth.
The necessity of entrepreneurship was first formally recognized by Alfred Marshall in 1890. In his famous treatise Principles of economics, Marshall asserts that there are four factors of production land, labor, capital, and organization. The organization is the coordinating factor that brings the other factors together. Marshall believed that entrepreneurship is the driving element behind the organization. By creatively organizing, entrepreneurs can create new commodities or improve the plan of producing an old product.
Basic types of entrepreneurship
It can say that the starting point of entrepreneurship would define its brand. The two types of entrepreneurship may be classified as:
Opportunity based entrepreneur ships:
An entrepreneur perceives a business opportunity and chooses to pursue this as an active carrier choice.
Necessity based entrepreneurship:
An entrepreneur is left with no other viable option to earn a living. It is not the choice but compulsion, which makes him or her choose entrepreneurship as a career.
Various challenges before entrepreneurship
- There are no rules for protecting employers.
- Global competition.
- Changes around the globe.
- Lack of balance between the projects and personnel.
- Delayed payments.
- Uncertain return to the investors.
Instead of the above challenges, the entrepreneur must possess the following characteristics:
Entrepreneurs must introduce something new to maximize the interest of the business. Innovation means by which entrepreneurs exploit changes the opportunity for a different company or a different service.
An assumption of all possible dangers exposed by the business environment. In entrepreneurship has to undertake and bear all potential risks, and that may arise out of the implementation of plans or projects. Some of the examples of hazards are changing in consumer preferences, tastes, and habits, possible changes in technology, government policies, availability of raw materials, and other uncertain elements.
Achievement orientation is the prime factor that explains the economic behavior of entrepreneurs. Achievement orientation means a quest for success with preset standards of excellence. He measures the interest of entrepreneurs in terms of profit or achievement motive, which remains constant regardless of the change in events.
Involve managerial skills and leadership:
This building entrepreneurship process is not enough; entrepreneurs need to manage the business efficiently and excellently. Leadership and managerial skills are interwoven in entrepreneurship right from the infant stage of an enterprise.
Impact of cultural and regional factors:
Cultural and religious factors determine the mental attitude towards work and the desire to acquire money or wealth. Societies wherein people are more influenced by religion seldom feel attracted to materialistic goals. Such organizations are prone to have a lower degree of adventurism and entrepreneurship.
Entrepreneurship is a practice:
There is neither a science nor an art; it is a practice. It has a knowledge base. Knowledge in entrepreneurship is a means to an end. And indeed, what constitutes knowledge in practice is primarily defined by the terms that are by the method, according to Peter Drucker.
An economic activity:
Entrepreneurship involves establishing and running an enterprise—enterprises created to produce and distribute goods and services. Therefore entrepreneurship is a commercial activity.