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Environmental changes in the economy have led to the emergence of a new entrepreneurial class or business entrepreneurship. Their functions and role have undergone significant changes. In earlier days, entrepreneurship was regarded as individual responsibility and after some time it assumed collective responsibility.
At present, the entrepreneurship is oriented towards the whole economy and the nation.
We can understand the emerging form of business entrepreneurship with the help of the following points:
The first time, this word was used in the 18th century in the French economy.
The French economist, Richard Cantillon used this word when he observed that the businessmen of his country were selling their respective products in a limited market and at an uncertain price.
He also observed the qualities of initiation, capacity to take risks and patience, in them. The French authors made a distinction between employers and the entrepreneurship.
The role of entrepreneurs also has gone on changing with economic development. [the_ad id=”2387″]
Initially, it was individualistic, then it became collective and now it has become industry and nation oriented. Its concept and functions are on changing the path, due to industrialization.
Related: 10 Concept of Entrepreneurship (Updated).
The industrial revolution, technological developments, advertisements in the means of transportation and communications and non-interference by the State in business have resulted in the changes in nature, functions, and roles of entrepreneurship.
The importance of the entrepreneurs is being accepted for the promotion and establishment of the industries.
Now, the entrepreneur is being recognized as the promoter, coordinator, organizer of the enterprises and as the risk taker.
There was no difference between the entrepreneur and the capitalist because the nature of the business was quite simple. In those days, most of the business activities were economical and commercial, except for manufacturing activities.
The economists started thinking in terms of economic class and its nature, as a result of the emergence of companies in the business world and giving more emphasis on organization.
“How the businessmen perform the functions of the entrepreneurial class, takes the risks, assemble capital and labour, prepare the general outline of the business and observe even the minute details”.
Related: 15 Importance of Entrepreneurship (in Modern Economy).
They are the persons who make the forecasts and take care of the inlet and outlet of the commodities. [the_ad id=”4432″]
They also search markets of consumption, keep knowledge about the employees and also of the whole business.
Now, the time has changed. the industrial revolution, development of the means of transportation and communication, increased technical knowledge and state interference in business, etc. have brought several types of changes in the nature of the entrepreneurial class.
The production and distribution of commodities and services, on large scale and rapid advancements in science and technology put emphasis on research and investigations.
Increasing competition in the economy and business on the international level is due to globalization, economic liberalization, privatization, corporatization, customer orientation of marketing activities, mounting production, etc.
All are the offshoots of the industrial revolution and these phenomena have widely increased the necessity and importance of the entrepreneurial class.
Changing the form of business entrepreneurship
The success of business in growing economies, so it has become essential that the products and their qualities be improved by improving production techniques.
Related: 20 Types of Entrepreneurs (Informative Explained).
Economies in the cost of production may also be ensured. consumer satisfaction is to be achieved and efficiencies are increased at all levels, through various types of innovations, so that the enterprise may sustain the growing challenges of competition, the sale of products in high quantities. It will result in success in the business. [the_ad id=”4429″]
In developed economies, the business cannot sustain without introducing innovations.
The person or group of persons responsible for such innovations have been termed as innovating entrepreneur and his ability on this account is known as innovating entrepreneurship.
It is not essential that the owner of wealth be also an entrepreneur. To be an entrepreneur, leadership is required more than ownership.
He has differentiated, outlook than the traditional entrepreneurs who carry out only one type of production and the innovating entrepreneurs, who make production on the basis of new techniques, search new markets and establish the new organization.
Related: 18 Characteristics of an Entrepreneur (Explained).
The innovating entrepreneurs create new demand, reduces the prices and bring changes in the position of traditional economic equilibrium.
Such type of entrepreneurial class maintains circular flow in the economy and earn more profits by making contributions in the process of development.
The entrepreneur should have three qualities,
Achieving success by use of innovations.
Related: 37 Essential Qualities of Successful Entrepreneur (Must Know).
The unique feature of review is that the entrepreneur is not much influenced by the environment.
Rather, he aspires for achieving his own business empire, by being influenced by his own tendencies and he also desires to have the family hold on his business empire and also the feelings of being higher than others.
The arguments are based on the assumption that high business knowledge and human capabilities are confined only to selected persons and families, belonging to higher strata. [the_ad id=”178″]
Such thoughts should have emerged due to the reason that in those days the persons who invented new things earned money by adopting the innovations.
Related: 12 Main Functions of an Entrepreneur (With Examples).
The entrepreneur does not emerge from poor strata. Strong persons with sharp intelligence and abilities exist in the whole society and in all ages. Due to favorable or unfavorable circumstances, some go ahead and some lag behind.
In the foreign ruled countries, the emergence of entrepreneurs has been relatively low, due to adverse circumstances. In Japan, a good number of entrepreneurs have emerged only from the lower strata.
But, the thoughts about the quality for development of the entrepreneurs are always relevant.
Must know: 27 Steps Taken for Development of Entrepreneurship.
Thus, the emergence of the entrepreneurial class has been due to the circumstances and favorable business environment.
Now, the entrepreneur emerges only from high classes has completely vanished.
Although the entrepreneurs may belong to high families, they may be developed also following are the causes of the development of the entrepreneurial class.