For many municipalities, regions and nations creating an environment to foster all things entrepreneur and enterprise is a key policy priority. We will talk more in the future about ecosystems and enterprise policy but today I just want to clarify the different parts; a guide to all things entrepreneur and enterprise. Many people working in municipalities, regional and national governments have not come from an economics background so this article will define the difference between an entrepreneur, entrepreneurship and an enterprise.
What is an Entrepreneur? A simple question…someone who sets up and runs a business. Not so simple, there are at least 3 schools of thought on how to define an entrepreneur. One suggests that they are defined by traits they are born with (a propensity for risk-taking for example) but the evidence isn’t very supportive. One suggests that they are defined by the actions and activities they do (time management or goal setting for example) but these are the same for high-performance individuals whether they are self-employed or employed. The third school of thought is the one we sign up to; opportunities perspective. Here, entrepreneurs are defined by their ability to identify, assess and execute a business idea. Shout out to Shane and Venkataraman (2000) who started this line of thought. So, if you put a new technology or innovation in front of 5 entrepreneurs, they will all see the opportunity differently. They will see how it can help different potential customers in a multitude of different ways. Different uses, for different clients in different industries. Entrepreneurship is therefore something very personal; it is how you identify, assess and execute your business opportunity that counts. An entrepreneur is, therefore, someone who sees business opportunities and can then assess its viability and executes a business plan to make the business opportunity a reality.
What is an Enterprise? This is easier to define as the enterprise is the formal legal and organisational structure of the business. It is the sum of the legal structure, people, assets, IP and culture. It is the organisation. It is the company.
What is Entrepreneurship? Entrepreneurship is the process of engaging in enterprising activity. Entrepreneurship is the process of constantly identifying opportunities, assessing their viability and then implementing the business idea and executing the business plan successfully. Being a process, it can be utilised in a number of settings and this is why we have different types of entrepreneurs, such as…
What is a Nascent Entrepreneur? A nascent entrepreneur is someone who has the ‘entrepreneur’ bug but is not currently setting up or running a business. The surveys tell us that only around 10% of the adult population have an inclination to being self-employed or entrepreneurial. Thus, at any one time there are a lot of people who are interested in entrepreneurship but are not active; they may be studying, working too hard, raising children, caring for family members etc. However, these are the pool from which we draw the next generation of entrepreneurs and thus they are very important.
What is a private-sector entrepreneur? This is the mainstream understanding of an entrepreneur; someone setting up and running a business.
What is a Serial Entrepreneur? A serial entrepreneur is someone who sets up a series of enterprises or businesses. They tend to set up businesses one after the other. Say someone sets up a business and then sells that business when successful and then takes the money and sets up another new business from scratch…that’s a serial entrepreneur.
What is a Portfolio Entrepreneur? This is an entrepreneur who starts or invests in a portfolio of businesses at the same time. They tend to be strategic and leave day-to-day management of the businesses to business managers and they oversee the set of enterprises.
What is an Intrapreneur? This is someone who identified opportunities, assesses their viability and then executes the business plan but within a larger corporate organisation. Larger corporations actually find it hard to naturally innovate internally and many buy up smaller innovative companies and then mainstream these into the larger corporates reach. However, some are trying to encourage internal innovation and entrepreneurial activity within the corporate entity. Those engaging in these activities are defined as Intrapreneurs.
What is a Social Entrepreneur? This is someone who identifies a specific social or community-based need, identifies a solution to this social problem, brings other people and resources together to address the solution, sets up an organisation of some type to implement the solution and then manages this organisation to implement the solution to address the social issue. It is the ‘identify, assess and implement’ process, thus entrepreneurship, but done to address a social need rather than a commercial or profit-driven need. We will deal with social enterprise and social innovation in a different ‘Guide to’.
The purpose of this blog was to define entrepreneurship, an entrepreneur and an enterprise and the different types of entrepreneur. We will move on to building ecosystems, building policies and structures in future articles but I hope you found the definitions useful.
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