When we think of entrepreneurship, what immediately comes to mind are businessmen, and small scale enterprise or businesses.
The definition of entrepreneurship varies depending on the perspective used. It may be a field in business or it may be an activity in which people engage in. Describing the processes involved within it defines what entrepreneurship is.
Understanding and seeking innovations, like improving an existing product line, is one of the processes in entrepreneurship. But it is not merely innovating, this process should be taken a step further for it to be considered as part of entrepreneurship.
The step further would be to transform the innovation into economic goods, something that will generate income. In entrepreneurship, an individual or a group of individuals identify a business opportunity by finding a prospective or valuable item, product or activity that can be utilized for business and generate sustainable profit.
When the market value generated by the business opportunity or innovation is greater than the value of the value of the combination of resources used to create the opportunity or innovation, then there is profit. Profit occurs when the value of the resources used to create a product is increased through innovation.
The definition of entrepreneurship lies in a single but most important concept: Discovery.
Without discovery and innovation, there will be a stagnation in the market economy as there will be no improvement. Entrepreneurship paves way for economic growth, as it supports economic growth through its discoveries and innovation. Through entrepreneurship, new and better things, processes and systems are created, recreated and uncovered.
The creation or discovery does not need to be isolated to new product lines or existing product lines. It can also be applied to methods of production, market, resources or an organization or even an industry. Entrepreneurship can provide solutions for economic stability as it continuously seeks improvement and development of our resources to give them a greater value.
Let’s take the following situations as example of understanding what entrepreneurship is.
Check out the following situations:
· A downsized employee found another use for old vehicles, designs and fixes them, and made a playground for her pet day care center.
· A scientist discovers a new element but does not attempt to identify practical uses for it.
All of the situations except for that of the scientist show entrepreneurship. Remember that entrepreneurship is discovering or improving new product lines, market, processes, resources or organization. The stay at home mom found a new market in her neighborhood, the nearby school, and she took advantage of it by generating income.
The downsized employee developed a new use for old vehicles. The situation with the scientist cannot be considered as entrepreneurship. There was no attempt to generate a market value for the new element as the scientist did not attempt to identify its practical uses. If he created a product with the use of the new element, then that could be identified as entrepreneurship.