Entrepreneurship relates to the pursuit of risky and innovative business ventures to capture new opportunities.
Define entrepreneurship within the context of standard activities and organizational support
Entrepreneurs are innovators, willing to take risks and generate new ideas to create unique and potentially profitable solutions to modern-day problems. This innovation may result in new organizations or revitalize mature organizations in response to a perceived opportunity. The most obvious form of entrepreneurship is starting a new business (referred as a startup company). In recent years, the term has been extended to include social and political forms of entrepreneurial activity, which are often referred to as social entrepreneurship.
Entrepreneurial activities differ substantially depending on the type of organization and creativity involved. Entrepreneurship ranges in scale from solo projects (that can even involve the entrepreneur working only part-time) to major undertakings that create many job opportunities. Many high-value entrepreneurial ventures seek venture capital or angel funding (seed money) to raise capital for building the business.
When entrepreneurship describes activities within a firm or large organization, it is referred to as intrapreneurship and may include corporate venturing, in which large entities create spin-off organizations. Corporations have become aware of the potential advantages of internal entrepreneurial activity and often have innovation specialists in their organizations to develop creative solutions for complex problems. Google has become well known for allowing all employees to dedicate 20 percent of their time to any new project of their choosing. Entrepreneurs have become an integral part of business.
Many kinds of organizations now exist to support would-be entrepreneurs, including specialized government agencies, business incubators, science parks, and some non-governmental organizations. More recently, the term entrepreneurship has been extended to include elements unrelated to business formation activity. Concepts of entrepreneurship as a specific mindset have emerged, resulting in initiatives like social entrepreneurship, political entrepreneurship, and knowledge entrepreneurship.
Joseph Schumpeter describes an entrepreneur as "a person who is willing and able to convert a new idea or invention into a successful innovation." Entrepreneurship employs what Schumpeter called the gale of creative destruction. Schumpeter's idea encompasses more than single innovations, as he further explains how innovative thinking allows for a sustainable and long-term economic growth for societies that enable it. Creating new goods and new ways of doing things allows for consistent job growth, more consumption, and more economic dynamism. Innovative thinking allows for so-called disruptive innovations—innovations which make leaps and bounds over existing products. One classic example is the iPhone.
Schumpeter's view is not the only one, however. Incremental innovation is also largely recognized as a vital entrepreneurial pursuit. The idea of incremental innovation is simple: large change is a byproduct of small innovations compounded with others. Incremental innovators find ways to improve the efficiency of established processes to drive efficiency. An example of this kind of innovation is Toyota's just-in-time inventory management. Incremental innovations are often process-based, while disruptive innovations are usually new goods or processes themselves.
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