EDP Notes

The word ‘entrepreneur’ is derived from the French word entreprendre. It means ‘to undertake’.
Thus, entrepreneur is the person who undertakes the risk of new enterprise. Its evolution is as
follows.
 EARLY PERIOD: The earliest definition of the entrepreneur as a go-between is Marco
Polo. He tried to establish trade route to the far East. He used to sign a contract with a
venture capitalist to sell his goods. The capitalist was the risk bearer. The merchant
adventurer took the role of trading. After his successful selling of goods and completing his
trips, the profits were shared by the capitalist and the merchant.
 MIDDLE AGES: The term entrepreneur was referred to a person who was managing large
projects. He was not taking any risk but was managing the projects using the resources
provided. An example is the cleric who is in charge of great architectural works such as
castles, public buildings, cathedrals etc.
 17th CENTURY: An entrepreneur was a person who entered into a contractual arrangement
with the Govt. to perform a service or to supply some goods. The profit was taken (or loss
was borne) by the entrepreneur.
 18th CENTURY: It was Richard Cantillon, French Economist, who applied the term
entrepreneur to business for the first time. He is regarded by some as the founder of the
term. He defined an entrepreneur as a person who buys factor services at certain prices with
a view to sell them at uncertain prices in the future
 19th CENTURY: The entrepreneurs were not distinguished from managers. They were
viewed mostly from the economic perspective. He takes risk, contributes his own initiative
and skills. He plans, organizes and leads his enterprise.
 20th CENTURY: During the early 20th century Dewing equated the entrepreneur with
business promoter and viewed the promoter as one who transformed ideas into a profitable
business. It was Joseph Schumpeter who described an entrepreneur as an innovator.
According to him an entrepreneur is an innovator who develops untried technology.
 21th CENTURY: Research Scientists live De Bone pointed out that it is not always
important that an individual comes up with an entirely new idea to be called an
entrepreneur, but if he is adding incremental value to the current product or service, he can
rightly be called an entrepreneur.