In the most simple understanding of the word, an entrepreneur is a person who starts a new business, and entrepreneurship is the process of starting and running that new business.
In this article, we’ll discuss the ethos and different types of entrepreneurship, and examine how entrepreneurship fits into our society and economy.
Approaching entrepreneurship broadly, it would seem like any small business owner can be considered an entrepreneur—and realistically, they can be. Typically, two major characteristics of entrepreneurship are risk-taking and forward-thinking.
Risk-taking is the awareness that even though your business may not turn out the way you expect it to, you’re willing to try anyway. Often, this willingness comes from weighing the risks against the potential rewards.
Truthfully, risk-taking is inherent in any new business venture because businesses are predicated on some level of uncertainty. For example, market research may predict certain consumer behaviors, indicating a need for your service—but upon launching your business, you may realize the need wasn’t as great as expected.
Forward-thinking is tied to innovation. Many times, entrepreneurship is fueled by the idea of creating a better future. This can come from a new product that changes the way people interact with the world; it can come from a new process that changes the way businesses interact with consumers; it can come from an improvement to the way a business operates within an established industry; or any other mechanism that can make business better.
Many business owners adopt a level of foresight about the long-term success potential of their business that qualifies them as forward-thinkers. In fact, one significant difference between a small business owner and an entrepreneur might be the degree to which they consider the larger implications of their innovation style.
Entrepreneurship can be further segmented into different categories that describe the organization or innovation driving the business. Four common types of entrepreneurship are small business, scalable start-up, large company, and social entrepreneurship.
Small business entrepreneurship takes place on a localized level, without the expectation of wide-scale expansion. Examples of small business entrepreneurship would be opening a local restaurant, gift shop, or furniture restoration business.
Scalable start-up entrepreneurship is a business largely guided by the idea of innovation that begins on a small scale with long-term plans for widespread growth. Examples of successful scalable start-ups include companies like Meta or Lyft.
Large company entrepreneurship is a business sect launched within an established business. This can occur either with an acquisition of another business or the creation of a new internal division. Examples of large company entrepreneurship would be Disney’s acquisition of Pixar or Google launching Google Maps.
Social entrepreneurship places a heavy emphasis on creating societal change. The overall goal is to benefit humankind and our way of life, and it can occur on a local or global scale. Examples include Seventh Generation, a company guided by environmental responsibility, or Grameen Bank, a microfinance institution that provides collateral-free small business loans to fuel socio-economic development.
Entrepreneurship is important to society because it helps drive innovation and moves us toward an improved state of being. Basically, when entrepreneurs take on risk, they are doing so on behalf of their community at large.
As a business function, entrepreneurship also has close ties to the economy. Entrepreneurial innovations can fuel economic growth as businesses strive toward efficiency, and as entrepreneurial endeavors grow, they can promote job growth and create new opportunities.
In considering entrepreneurship, think about how your business will impact the world outside of your immediate business processes. Broader perspective that incorporates the way your business will interact with your community, society, other businesses, and your industry at large is the difference between starting a business and engaging with entrepreneurship.
With their inclination toward innovation, an entrepreneur never stops learning. To continue your journey toward entrepreneurship, consider the Entrepreneurship Specialization from Wharton. Through five courses, you’ll learn about the process of launching your own business with an entrepreneurial mindset. Or, for even deeper learning, you may be interested in earning a Master of Science in Innovation and Entrepreneurship from HEC Paris. Both are available on Coursera, with classes you can complete from anywhere with an internet connection.
This content has been made available for informational purposes only. Learners are advised to conduct additional research to ensure that courses and other credentials pursued meet their personal, professional, and financial goals.