The Concept of

Entrepreneurship:
Meaning of
Entrepreneurship
The Meaning of Entrepreneurship
Early Exchange of Goods
 Early usage of the term
“entrepreneurship”
 20th century authors explain
“entrepreneurship”
The Meaning of Entrepreneurship
Early Exchange of Goods
-the early exchange of goods among people
has been practiced for a long time which is
called bartering.
- this kind of exchange, in anticipation of the
needs of other members of the community
became widespread as early as 10,000 BC
- this system eventually give way to the birth
of money or the money system
The Meaning of Entrepreneurship
Early Usage of the Term
“Entrepreneurship”
- it is the term w use today to explain this
activity of gathering, producing, and
exchanging of goods and services, with the
advantage of earning a living for oneself.
- become popular in the early French
philosopher and economist who discussed
the phenomenon of this “give and take”
The Meaning of Entrepreneurship
Early Usage of the Term
“Entrepreneurship”
in the 13th century, word “entrepreneur”
emerged. It was a combination of 2
French words:
entre – “in between”; and
prendre – the verb meaning “to take”
when the two term combine literally, the
new word meant “ to take in-between”
The Meaning of Entrepreneurship
Early Usage of the Term
“Entrepreneurship”
Other translation say that:
entre – means “under” and
prendre – means “to take”
which put together is “to undertake”
The Meaning of Entrepreneurship
Early Usage of the Term
“Entrepreneurship”
Entreprise- first appeared in the French
dictionary Dictionnaire Universel de
Commerce compiled by Jacques Savary
des Bruslons and published in 1723
 Entreprise is the past participle of
entreprendre in French which were later
translated to enterprise in English
The Meaning of Entrepreneurship
Early Usage of the Term “Entrepreneurship”
Richard Cantillon – wrote the book Essay on
the Nature of Trade in General (1755)
◦ entrepreneur - as a person who pays a certain
price for a product and resells it at a given price.
He is also a risk taker “making decisions about
obtaining and using the resources while
consequently admitting the risk of the enterprise.
He adds: Entrepreneurs are non-fixed income
earners who pay known cost of production but
earn uncertain income.
The Meaning of Entrepreneurship
Early Usage of the Term “Entrepreneurship”
Jean Baptiste Say– wrote the book A
treatise on political Economy: The
Production, Distribution and Consumption
of Wealth (1803)
◦ He attributed entrepreneur a combination of
moral qualities seldom found together in one
person: good judgment, perseverance, world
wisdom, not to mention business acumen.
The Meaning of Entrepreneurship
Early Usage of the Term “Entrepreneurship”
Charles Robert Prinsep – translated the
book of Say in economics and published it
in English
◦ Princep preferred to use the term “adventurer”
instead of entrepreneur” because he could not
find suitable English term to mean
entrepreneur. To him it means reminiscent of
investors who had adventured or lent money
to a business undertaking.
The Meaning of Entrepreneurship
Early Usage of the Term “Entrepreneurship”
Charles Robert Prinsep
◦ Adventurer himself provide the necessary
funds to start the enterprise. Not that he must be
already rich.; for he may work upon borrowed
capital; but he must at least be solvent, and
have the reputation of intelligence, prudence,
probity and regularity; and must be able to, by
the nature of his connections, to procure loan of
capital he may happen himself not to possess.
The Meaning of Entrepreneurship
20th Century Authors Explain “Entrepreneurship”
Joseph Alois Schumpeter(1930) -discussed the
concept of entrepreneurship
 one, covered the functions and activities related to
innovation. For him entrepreneur is someone who adds
new features to an existing technology in order to
produce a new commodity or to produce an old
commodity using new technology or someone who
sells existing commodities to new buyers who may
hearing of the product for the first time. For him,
entrepreneurs break with the old tradition and finds
new or novel ways to produce and sell his product.
The Meaning of Entrepreneurship
20th Century Authors Explain “Entrepreneurship”
Joseph Alois Schumpeter(1930) -discussed
the concept of entrepreneurship
 He distinguished between inventor’s invention
and the entrepreneur’s innovation. He pointed
out that entrepreneurs innovate not just by
figuring out how to use invention, but also by
introducing new means of production, new
products, and new forms of organization.
The Meaning of Entrepreneurship
20th Century Authors Explain “Entrepreneurship”
Joseph Alois Schumpeter(1930) -discussed
the concept of entrepreneurship
 also he thought that the entrepreneur might be a
person who is not the owner of a capital. For him,
entrepreneur is innovator, who may borrow capital
from banks or other sources but who thinks of the
whole concept of production or trade, using
borrowed capital, which he promises to repay
later. Thus, banks and other lenders were essential
to innovate side of entrepreneurship
The Meaning of Entrepreneurship
20th Century Authors Explain “Entrepreneurship”
Joseph Alois Schumpeter(1930) -discussed
the concept of entrepreneurship
 For Schumpeter, entrepreneurs is the only one
who carries out new combinations. He adds that
when a person organizes and formalizes his
company, he may lose his entrepreneur function
and become a leader, manager.
The Meaning of Entrepreneurship
20th Century Authors Explain “Entrepreneurship”
Joseph Alois Schumpeter - Capitalism, Socialism
and Democracy (1940)
 Entrepreneur is primarily less “individualistic”
saying explicitly that the entrepreneur does not
have to be one person.
 Creative destruction is the essential fact about
capitalism ( incessantly revolutionizes the
economic structure from within, incessantly
destroying the old one, incessantly creating a new
one
The Meaning of Entrepreneurship
20th Century Authors Explain “Entrepreneurship”
David Clarence McClelland (1961) – researched three
highest needs of individual, which according to him are
the need for achievement, the need for power, and the
need for affiliation
 Need for Achievement (N-Ach) – Achievement
motivated person is moderate risk taker. He seek
attainment of goals that are both realistic and
challenging. This person has a strong need for feedback
to measure his progress. They make the best leader and
results driven people.

The Meaning of Entrepreneurship
20th Century Authors Explain
“Entrepreneurship”
David Clarence McClelland (1961)
 Need for power (N-Pow) - Authority-
motivated. This person needs to be
influential, effective, and make an impact.
There is strong motivation and need for
increasing personal status and prestige.
The Meaning of Entrepreneurship
20th Century Authors Explain
“Entrepreneurship”
David Clarence McClelland (1961)
 Need for affiliation (N-Aff) or emotional
attachment - affection is manifested in a
strong need for friendly relationship. The
person with high need for affiliation is
strongly motivated toward positive
interaction with other people.
The Meaning of Entrepreneurship
20th Century Authors Explain
“Entrepreneurship”
Peter F. Drucker (1964)
 Entrepreneurship is the maximization of
opportunities. He implies that
effectiveness rather than efficiency is
essential in business.
 (1970) Drucker wrote entrepreneurship is
about taking risk. The
The Meaning of Entrepreneurship
20th Century Authors Explain “Entrepreneurship”
Peter F. Drucker (1964)
 (1970) Drucker wrote entrepreneurship is
about taking risk. The behaviour of the
entrepreneur reflects a kind of person
willing to put his career and financial
security on the line. He takes risks in the
name of an idea, spending much time as
well as capital on an uncertain venture.
The Meaning of Entrepreneurship
20th Century Authors Explain
“Entrepreneurship”
Peter F. Drucker (1964)
 (1970) Drucker also said that an
entrepreneur seraches for change, responds
to it and exploits opportunities. Innovation
is a specific tool of an entrepreneur; hence
an effective entrepreneur converts a source
into a resource.
The Meaning of Entrepreneurship
20th Century Authors Explain “Entrepreneurship”
Howard H. Stevenson(1983) – Harvard Business
School
 Entrepreneurship is the pursuit of opportunity
without regards to resouces currently controlled.
For him, entrepreneurship as a process, see an
opportunity, and pursue it; they don’t feel
constrained from pursuing it because they lack
resources. They're used to making do with out
resources.
The Meaning of Entrepreneurship
20th Century Authors Explain “Entrepreneurship”
Howard H. Stevenson(1983)
 Opportunity implies an offering that is novel
one or more of four ways:
 pioneering a truly innovative product
 devising a new business model
 Creating a better or cheaper version of an
existing product
 Targeting an existing product to new sets of
customer
The Meaning of Entrepreneurship
20th Century Authors Explain
“Entrepreneurship”
Howard H. Stevenson(1983)
 Pursuit- implies a singular, relentless
focus
 Beyond resources controlled – implies
overcoming resource constraint. At the
beginning, the entrepreneur controls only
his human, social, and financial capital.
The Meaning of Entrepreneurship
20th Century Authors Explain
“Entrepreneurship”
Howard H. Stevenson(1983)
“pursuing opportunity beyond resources
controlled” – you need to be inventive,
creative, opportunistic, and persuasive,
because you rarely have enough resources.
 Thank you!

Reference: Entrepreneurship Study and Practice (2015) by Paz and Fajardo. Small Enterprises
Research and development Foundation