Monday, March 23, 2009

What is an Entrepreneur?

If you are looking for a text book definition here then I suggest you look elsewhere. For those non-academics out there I invite cordially to read on, please.


Some will tell you that the term "entrepreneur" is derived from the french word "entreprendre"- meaning: to undertake. Transliterally, this is true. But the simple notion of just "doing things" is entirely inadequate. Yet this concept of action is crucial in making an entrepreneur distinct from similar entities, take that of a manager.

Some will track back further in attempting to define an entrepreneur, suggesting that we need to divide the french into two distinct elements, being "entre" and "prendre" meaning "to enter" and "to take" respectively. But from this meagre attempt we could just as easily conclude that an entrepreneur is a thief. Indeed, some may ironically laugh at this suggestion. Personally, My mind is cast back to early 1990's Yeltsin-Era gangster capitalism where capable criminal-businessmen essentialy looted the people's and government's assets under the guise of "entrepreneurship".

Jumping forward, yet as a sidenote, I would suggest that some of the most enterprising entrepreneurs were not (and are not) found in the regulated and legitimate world of commerce.

Indeed they lurk beneath the surface where tempting greed-fuelled
profit-margin-seekers dance with the best in the legitimate business.

This is a an interesting topic for another time.

Entrepôt: a better word

More helpful in defining this identity is the word "Entrepôt". Whilst most often applied to an international trading context- specifically to trading of spices in the Middle Ages- this term provides a very visual example for us. Countries such as Hong Kong and Singapore are definitive entrepôts. To borrow an economic phrase, they don't have significant factor endowements (ie resources with which to conduct business) but have been able to flourish due to trade. They act as middlemen. To the uneducated, this means "buy low, sell high!" More comprehensively, it means organising resources in such a way to generate a profit.

Yes, this involves action. Yes, it is reasonable to draw a comparison to management. Indeed, both are crucial elements in defining an entrepreneur. But it is not enough. Please, read on....
(to be continued...)

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