entrepreneur [key] [Fr.,=one who undertakes], person who assumes the organization, management, and risks of a business enterprise. It was first used as a technical economic term by the 18th-century economist Richard Cantillon. To the classical economist of the late 18th cent. the term meant an employer in the character of one who assumes the risk and management of business; an undertaker of economic enterprises, in contrast to the ordinary capitalist, who, strictly speaking, merely owns an enterprise and may choose to take no part in its day-to-day operation. In practice, entrepreneurs were not differentiated from regular capitalists until the 19th cent., when their function developed into that of coordinators of processes necessary to large-scale industry and trade. Joseph Schumpeter and other 20th-century economists considered the entrepreneur's competitive drive for innovation and improvement to have been the motive force behind capitalist development. Richard Arkwright in England and William Cockerill on the Continent were prominent examples of the rising class of entrepreneurial manufacturers during the Industrial Revolution. Henry Ford was a 20th-century American example. The entrepreneur's functions and importance have declined with the growth of the corporation.
See J. Schumpeter, The Theory of Economic Development (1934); J. W. Gough, The Rise of the Entrepreneur (1969); O. F. Collins, The Organization Makers (1970).
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2024, Columbia University Press. All rights reserved.
See more Encyclopedia articles on: Economics: Terms and Concepts
