Etymology: “Entrepreneur” is a loanword from French:
- “Entreprende” (a verb in French) means “to undertake“
- In Sanskrit, “Antha Prerna” (which sounds close to entrepreneur) means “Self motivated“
Thus, we can deduct that in ancient times when a person is called as “an entrepreneur”, that person is perceived “as a someone who undertakes some responsibility and pursues a goal with self motivation”. Originally, the word does not neccessarily reflects a merchant.
Richard Cantillon (1680-1734), an Irishman, who lived in French, was the first person to use the term “entrepreneur” in an economic sense in his book “Essai sur la Nature du Commerce au General (Essay on the Nature of Commerce)” which was published in 1755 after his death. In his words, “entrepreneur” applied to anyone who bought or made a product at a certain cost to sell at an uncertain price. In his description, it described the work of any self-employed people such as farmers, water-carriers, brewers, hatmakers, chimneysweeps and so forth.
Jean Baptiste Say (1767-1832), French economist, is often believed to have coined the word “Entrepreneur” because he had provided a definitive explanation of the entrepreneurial role as “the one who undertakes an enterprise, especially a contractor, acting as intermediatory between capital and labour”. He said that “The Entrepreneur shifts economic resources out of an area of lower and into an area of higher productivity and greater yield”.
According to Peter Drucker (1909-2005), there has been total confusion over the definitions of “entrepreneur” and “entrepreneurship”. The clarification of entrepreneurship in his words:
“In the United States, for instance, the entrepreneur is often defined as one who starts his own, new and small business. Indeed, the courses in “Entrepreneurship” that have become popular of late in American business schools are the linear descendants of the course in starting one’s own small business that was offered thirty years ago, and in many cases, not very different.
But not every new small business is entrepreneurial or represents entrepreneurship.
The husband and wife who open another delicatessen store or another Mexican restaurant in the American suburb surely take a risk. But are they entrepreneurs? All they do is what has been done many times before. They gamble on the increasing popularity of eating out in their area, but create neither a new satisfaction nor new consumer demand. Seen under this perspective they are surely not entrepreneurs even though theirs is a new venture.
Admittedly, all new small businesses have many factors in common. But to be entrepreneurial, an enterprise has to have special characteristics over and above being new and small. Indeed, entrepreneurs are a minority among new businesses. They create something new, something different; they change or transmute values.
Drucker suggested that “entrepreneurs see change as the norm and as healthy. Usually, they do not bring about the change themselves. But – and this defines entrepreneur and entrepreneurship – the entrepreneur always searches for change, responds to it, and exploits it as an opportunity.
1. The History of Management Thought, by Daniel A. Wren
2. “Innovation and Entrepreneurship” by Peter Drucker