What is Entrepreneurship?

What is Entrepreneurship?

Simply put, entrepreneurship is the capacity and willingness to develop, organize and manage a business venture, along with any of is risks, in order to make a profit. The entrepreneur develops a business model, acquires the human and other required resources, and is fully responsible for its success or failure.

Entrepreneurship is the process of discovering new ways of combining resources. When the market value generated by this new combination of resources is greater than the market value these resources can generate elsewhere individually or in some other combination, the entrepreneur makes a profit.

An entrepreneur is someone who organizes, manages, and assumes the risks of a business or enterprise. An entrepreneur is an agent of change. They are leaders willing to take risk and exercise initiative, taking advantage of market opportunities by planning, organizing and employing resources. The entrepreneur is commonly seen as an innovator - a generator of new ideas and business processes, where management skills and strong team building abilities are often displayed. 

One of the remaining disagreements is the perception on what really constitutes entrepreneurship. Should a stay-at-home housewife who opens her own nail spa be counted the same as someone like a Bill Gates or a Manny Pangilinan? If not, how are these different activities classified? The point is whether someone who open their own businesses primarily for non-monetary benefits with being their own bosses or someone who move from one start-up business to another with a well-defined growth plan and exit strategy, should be considered entrepreneurs regardless of the intention or type of activity.

What role can the government take to further promote entrepreneurship? The recent academic research shows that government policy should focus on reforming basic institutions to create an environment in which creative individuals can flourish.  That environment is one of well-defined and enforced property rights, low taxes and regulations, sound legal and monetary systems, proper contract enforcement and limited government intervention.  These are indicators of economic freedom, the best policy that fosters entrepreneurship.