Entrepreneurial Behavior and Perspective
Name: Junie D. Bonifacio Date: December 1, 2012
Topic Title: Entrepreneurial Behavior and Perspective
Material Title: Defining and Measuring Entrepreneurship
Summary
The reading focuses on the definition of entrepreneurship in different contexts and on measuring the level of entrepreneurial activity. Entrepreneurship has been defined differently through neo-classical and economic literatures. Theoretical definitions of entrepreneurship reflect a diverse set of ideas about the role of entrepreneurship in the economy, involving aspects such as innovation, uncertainty-bearing, opportunity-seeking, and management. Entrepreneurship is often used without a precise definition and it may not always be completely clear what the different measures actually measure for entrepreneurship. In the economic literature, Cantillon defines the entrepreneur as responsible for all exchange and circulation in the economy. He explains that the entrepreneur earns an uncertain profit from the difference between a known buying price and an uncertain selling price, and that the entrepreneur equilibrates supply and demand in the economy, bearing risk and uncertainty. Jean-Baptiste Say defines the entrepreneur as the main agent of production in the economy and should have a principal quality of having good judgment assessing the most favorable economic opportunities. Say further differentiates an entrepreneur from a capitalist, explaining that the pay-off to the entrepreneur is not profits arising from risk-bearing but instead a wage accruing to a scarce type of labor. Alfred Marshall introduced an innovating function of the entrepreneur which is to seek opportunities to minimize costs. Joseph Schumpeter opposed the risk bearer and manager definition of an entrepreneur. He argues that an entrepreneur is an innovator with five main tasks: creates new goods, creates a new method of production, opens a new market, captures a new source of supply, and creates a new organization or
Topic Title: Entrepreneurial Behavior and Perspective
Material Title: Defining and Measuring Entrepreneurship
Summary
The reading focuses on the definition of entrepreneurship in different contexts and on measuring the level of entrepreneurial activity. Entrepreneurship has been defined differently through neo-classical and economic literatures. Theoretical definitions of entrepreneurship reflect a diverse set of ideas about the role of entrepreneurship in the economy, involving aspects such as innovation, uncertainty-bearing, opportunity-seeking, and management. Entrepreneurship is often used without a precise definition and it may not always be completely clear what the different measures actually measure for entrepreneurship. In the economic literature, Cantillon defines the entrepreneur as responsible for all exchange and circulation in the economy. He explains that the entrepreneur earns an uncertain profit from the difference between a known buying price and an uncertain selling price, and that the entrepreneur equilibrates supply and demand in the economy, bearing risk and uncertainty. Jean-Baptiste Say defines the entrepreneur as the main agent of production in the economy and should have a principal quality of having good judgment assessing the most favorable economic opportunities. Say further differentiates an entrepreneur from a capitalist, explaining that the pay-off to the entrepreneur is not profits arising from risk-bearing but instead a wage accruing to a scarce type of labor. Alfred Marshall introduced an innovating function of the entrepreneur which is to seek opportunities to minimize costs. Joseph Schumpeter opposed the risk bearer and manager definition of an entrepreneur. He argues that an entrepreneur is an innovator with five main tasks: creates new goods, creates a new method of production, opens a new market, captures a new source of supply, and creates a new organization or