The entrepreneur is sometimes idolized and sometimes seen with distrust. There is no doubt, however, that entrepreneurship has made crucial contributions to economic and social life in modern industrialized countries. The increased role of entrepreneurship, particularly in the realms of high-tech and finances, has come with a number of benefits as well as some new problems and challenges spanning a wide range of economic, social and even ethical dimensions.
There is a very broad range of descriptions, definitions and explanations of what the entrepreneur is. In some of the more modest, the only requisite is starting a new business. In others, the entrepreneur must be alert to previously unnoticed changes in circumstances, revolutionizing patterns of production by exploiting new inventions, technological possibilities or organizational patterns. In most definitions the entrepreneur is seen as a visionary and a risk-taker, profiting from markets and opportunities that others do not see or cannot take the risk of acting on.
Entrepreneurs can benefit society in several ways. While pursuing their own interests, they can create jobs and supply goods and services. They will also generate new knowledge, as collectively they provide a large number of independent experiments on new uses for technology and new business models.
Because they change the existing relations and techniques of production, entrepreneurs can act as destabilizing agents. Many of the experiments will fail, but those that succeed will lead the economy toward a better use of its resources. This instability can show itself as a creative destruction since, in the short term, it may obsolete and destroy whole industries.The importance of this function may be better appreciated by contrast with centrally planned economies in which efforts to produce growth through research and education failed in the absence of entrepreneurship.
Litigation, takeovers, creative tax evasion can be seen as unproductive, often unethical, occasionally illegal but usually lucrative entrepreneurial acts. If unchecked, those activities may become attractors for entrepreneurial talent whose efforts become channeled in unproductive directions. Similarly, economic downturn is often attributed to clusters of entrepreneurial errors, with most entrepreneurs taking a wrong guess or pursuing destructive actions if they are profitable in the short term.
- Entrepreneurship: values and responsibility; Wojciech Gasparski, Leo V. Ryan, Stefan Kwiatkowski 2010
- The Journal of Political Economy; Entrepreneurship: Productive, Unproductive, and Destructive;William J. Baumol 1990
- Economic and financial review;The engine of capitalist process- Entrepreneurs in economic theory; Robert L. Formaini 2001