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joyaboldin333   , 45

from Waubay


The Importance of Entrepreneurship in Business



Entrepreneurship is the practice of designing, starting and running a new business, which is often initially a little company. The people who make these businesses are known as entrepreneurs.

Entrepreneurship has been described as the "capacity and willingness to grow, organize and manage a business venture alongside any of its dangers so as to make a profit". While definitions of entrepreneurship typically revolve around the launching and running of companies, due to the large risks involved with establishing a startup, an important proportion of start-up companies must close because of "lack of financing, poor business decisions, an economic crisis, lack of market demand--or even a combination of all of these.

Entrepreneurship is the act of becoming an entrepreneur, or "an owner or manager of a business enterprise who makes money through danger and initiative". Entrepreneurs act as managers and manage the launch and expansion of an enterprise. Entrepreneurship is the process by which an individual or a team defines a business opportunity and acquires and deploys the essential resources needed for its exploitation.

Early 19th century French economist Jean-Baptiste Say provided a broad definition of entrepreneurship, saying that it "shifts economic resources from an area of lower and into an area of higher productivity and higher return". Entrepreneurs create something fresh, something different--they change or transmute values. Regardless of the business size, large or small, they could partake in entrepreneurship opportunities. Four criteria are required by the opportunity to become an entrepreneur.

First, there must be opportunities or situations to recombine tools to create profit. Secondly, entrepreneurship requires differences between individuals, such as preferential access to specific people or the capability to recognize information regarding opportunities. Third, taking on risk is quite necessary. Fourth, the entrepreneurial process demands the organization of people and resources.

The entrepreneur is a factor in microeconomics and the study of entrepreneurship reaches to the work of Richard Cantillon and Adam Smith in the late 17th and early 18th centuries. But, entrepreneurship was largely ignored theoretically before the late 19th and early 20th centuries and empirically before a profound resurgence in business and economics since the late 1970s. From the 20th century, the understanding of entrepreneurship owes much 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 a person who's willing and ready to convert a brand new idea or invention into a successful invention. Entrepreneurship employs what Schumpeter called "the gale of creative destruction" to replace in whole or part inferior innovations across markets and industries, simultaneously creating new products such as new business models. This way, creative destruction is mostly responsible for the dynamism of businesses and long-term financial growth.

The supposition that entrepreneurship leads to economic development is an interpretation of this remaining in endogenous growth theory and as such is hotly debated in academic economics. An alternate description posited by Israel Kirzner implies that nearly all innovations could be more incremental improvements like the replacement of paper with plastic in the creating of drinking straws.