Entrepreneurship refers to the mobilization of resources include land, labor, and capital and are called the

factors of production. Sometimes they are referred to as the

six M’s that represent:
M anpower {labor}
M oney {capital}
M aterials {supplies and raw materials}
M ethods {processes and technology}
M achineries {tools, equipment, devices}
M oment {time}

Profit is the motive and reward or the return of investments put in by the entrepreneur.

Innovativeness is one of the hallmarks of the entrepreneur.

Example of a non-business profession that can embody entrepreneurship

o One can be an entrepreneur as a :
o professional
o doctor
o lawyer
o manager
o teacher, etc.

The three basic factors of production:

o Land
o Labor
o capital

Definitions of Entrepreneur to Various People:

Richard Cantillon (1697-1734)

o is an Irish economist of French descent. He defines entrepreneur as some who organizes and
assumes the risk of a business in return for the profits.
o According to Cantillon’s original formulation, the entrepreneur is a specialist in taking on risk.

Frank H. Knight (1885-1972)

o distinguished between risk, which is insurable, and uncertainty, which is not. Risk relates to
recurring events whose relative frequency is known from past experience, while uncertainty
relates to unique events whose probability can only be subjectively estimated.
o For Knight (1967) and Peter Drucker (1970) entrepreneurship is about taking risk.

Joseph A. Schumpeter (1883-1950)

o According to Schumpeter, the entrepreneur is someone who carries out “new combinations” by
such things as introducing new products or processes, identifying new export markets or
sources of supply, or creating new types of organization

Friedrich A. Hayek and Israel M. Kirzner

o The difficulty with the Austrian approach is that it isolates the entrepreneur form the firm. It fits
an individual dealer or speculator far better than it fits a small manufacturer or even a retailer.