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A Theory of Entrepreneurship

Published online by Cambridge University Press:  03 February 2011

George Herberton Evans Jr
George Herberton Evans Jr
Affiliation:
The Johns Hopkins University
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Extract

While definitions of terms must vary with the purposes of their use, several studies of American entrepreneurship might be started with the word entrepreneur confined to those business executives who are associated with (a) the organization of new business units, (b) substantial expansions of established units, and (c) strenuous efforts to adapt established units to a changing environment. Such a conception, which uses terms that would obviously have to be made more precise as a study progressed, excludes from the term entrepreneur those business executives who carry on more or less routine operations, and it directs attention to the dynamic activities of businessmen. It is a little broader than a strict interpretation of the term innovator and fits fairly well the idea implicit in many definitions of the term entrepreneur, namely, that the entrepreneur is the businessman who introduces new ideas and changes the rate at which the wheels of enterprise go ‘round. Moreover, it utilizes three types of business activity concerning which there are data available for studies of the policy-determining executive. I should perhaps add that those who attempt to organize, expand, or adapt business units should be called entrepreneurs as well as those who achieve these goals. Attempts often reveal new ideas that successors are able to put into operation.

Type
Symposium on Profits and the Entrepreneur
Information
The Journal of Economic History , Volume 2 , supplement S1: The Tasks of Economic History , December 1942 , pp. 142 - 146
Copyright
Copyright © The Economic History Association 1942

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References

1 See Schumpeter, Joseph A., Business Cycles, New York and London, 1939, I, 73.Google Scholar

2 Compare the following sentence written by Marshall, Alfred: “And though an inventor, or an organizer, or a financier of genius may seem to have modified the economic structure of a people almost at a stroke; yet that part of his influence, which has not been merely superficial and transitory, is found on inquiry to have done little more than bring to a head a broad constructive movement which had long been in preparation.” Principles of Economics, 8th edition, London, 1927, xiii.Google Scholar

3 The term “economic opportunity” needs clarification. As a first approximation it may be defined as a situation in which there is a reasonable expectation that proper application of the factors of production will produce at least minimum rewards for all factors. Adherence to this definition carries with it the admission that mere business manipulation is not entrepreneurial activity.