An entrepreneur as a person with foresight and competence to operate in conditions on uncertainty. Richard was a particular about an entrepreneur being a person who performed in uncertain environments because the market demand is not perfectly predictable not necessarily that his products are untested an untried Cantilon contributed to the contention that an entrepreneur is somebody who has foresight and confidence to operate under conditions of uncertainty.He associated risks and uncertainties with administrative decisions of entrepreneurs.
He identified the facto that profit to the entrepreneur arises out of decision making and risk taking.
Entrepreneurs coordinate and combine the factors of production John described the entrepreneur as a rare phenomenon who is able to coordinate and combine the factors of production. He places emphasis on the variety of markers and inputs which the entrepreneur has to deal with “ successfully” in effect, the entrepreneur is expected to “ perceive and realize potential arbitrage” in addition to
taking risks associated with uncertainty. According to say, the entrepreneur must surmount abundant obstacles, suppress anxieties, repair misfortunes and devise expedients.
As a result, the entrepreneur accommodates the unexpected and overcome problems successfully in dealing both the input and consumer market. A possible conclusion form this contention is that the entrepreneur is a locator of resources in the adjustment process during equilibrium, during equilibrium, towards equilibrium.
Carl Menger,(1950) and the Austrian School
Carl Menger and what is known as the Autrian school in economics emphasizes the locative role in directing that entrepreneurs role is that of risk taker in an uncertain environment. They added that the entrepreneur needs information and has to have the ability to analyze and use this information to make the correct decision in allocating resources.
Other followers of the Austrian school of Thought went on to add that the alertness, superior perception and leadership of the entrepreneur cause factors of production to be allocated and continuously allocated.
Joseph Schumpeter (Innovation)
He in the early 20th century provided perhaps one of the most comprehensive analyses of entrepreneurship within the context of economic development. He introduced the notion that the entrepreneur is not just an allocate or director of resources, but combines
inputs in untried combinations (innovator). Schumpeter asserted that the entrepreneur only remained an entrepreneur for as long as he is innovative, and losses that characteristics as soon as he falls into the routine management of the business.
Schumpeter described this process as discrete rather than constituting a gradualist change or evolution.
MC Cleland (a function of High Achievement)
According to MC Cleland, the characteristics of entrepreneur have two features- first doing things in a new better way and second making under uncertainty. He emphasizes achievement orientation as most important factor for entrepreneurs.
Individuals with high achievements orientation are not influenced by considerations of money or any other external incentives. He argues that profit and incentives are merely yardsticks of measurement of success of entrepreneurs with high achievement orientation. The achievement orientation can be taught and increased by deliberate efforts.
He finally observed that the individual with high achievement orientation take calculated risks and can make decisions where there are incomplete information or have tolerance for ambiguity Psychologists call this behavior a type –Abehaviour.
Role of Entrepreneurship in Economic Development
Economic development is the process of structural transformation of an economy towards a modern technologically advanced economy based on services and manufacturing.
This process involves not only qualitative changes but also accompanied by quantitative changes to improve welfare.
Entrepreneurship contribute greatly to economic development both;
The Positive Role of Entrepreneurship
1.Entrepreneurship facilitates structural transformation, innovation – driven growth by Facilitating transformation from traditional agricultural based economy to modern industrial economy. And production for the market.
2.Entrepreneurs are seen as capitalists with more to save than salaried people and therefore facilitate increased savings through which capital accumulation is stimulated for investment
- Entrepreneurs save to start up businesses
- Entrepreneurs save to expand their businesses
- Entrepreneurs to reduce need for expensive borrowings
- Entrepreneurs save for precautionary reasons.
3.Entrepreneurs provide an environment where human capital is accumulated in the form of;
- workers specialized and non-specialized
- Managers of all levels.
4.The entrepreneurial ability determines the sizes of firms and the general growth of an economy by;
- The limitative role and ability to take risks
- Ability to trigger investments.
5.Entrepreneurship facilitates re-allocation of production factors from less productive areas to productive areas.
- They cause an increase in the demand for education of labour
- Facilitates adoption of improved technology.
6.Through entrepreneurship creation of new firms through, which
- Increased production
- Production for expert market
- Employments are achievable.
7.Through entrepreneurship need to knowledge accumulation generalization and commercialization has had to cooperation between researchers and institutions, private firms (sector) and the government.
8.Through entrepreneurship development and production of;
- variety of consumer goods
- producers goods or intermediate goods has greatly increased hence
- new products are bought to the market
- Application of new technology and profit multiplication.
9.Through entrepreneurship information if provided on what an economy can be good at producing which in the context of LDCS information is lacking.
10.Thorough entrepreneurship a vast growth of the private sectors tends to automatically check the large government sector facilitating to development a greater free market economy.
The Negative Impact of Entrepreneurship to Economic Development.
1. Perverse allocation towards activities which are for private profitability and socially destructive or un productive due to;
- absence of good institutions
- Slow economic growth which will result to unemployment hence low levels of entrepreneurship ability.
- Production for the few rich or exploitative activities during hardships.
2. Misallocation of entrepreneurial talents during low development levels affecting
- Resource utilizations especially human capital.
Entrepreneur Contribution to Economic Development.
Through establishment of businesses of all level which lead to distribution chain of;
- Producers, warehousing, transport, insurance e.t.c Which are basically levels of employment
Facilitates use of local resources through which
- local and international transactions are established
- production of more goods and services
Rural development which in effect.
- Promotes change to the formal sector from informal sector
- Equitable development
- Reduced rural-urban migrations.
Development of technology through
- establishment of research institutions
- education systems
- through taxes
- from domestic borrowing (TBs)
Facilitating community development through
- Establishment of small businesses
- Participation in community dev. Projects
Providing a positive role model and facilitating.
- Competition between domestic entrepreneurship and imported
- Stimulating dev. Of entrepreneurship.
Reducing dependence on imported goods and services.
Stimulates competition through
- Quality production methods are adopted
- Quality products are produced
- Variety goods and services are produced.
Facilitated development of the financial sector through which;
- Capital accumulation is possible through savings
- Loaning is facilitated
- Development of the capital market.