Text a Development of entrepreneurship

Millions new enterprises start each year despite more than a 50% failure rate. Consumers, business people, and government officials take an interest in this activity. This interest is evidenced in the increasing research in the subject, the increased number of courses in entrepreneurship, and the increased coverage by the media.

Starting and managing a new business involves considerable risk and effort to overcome all the inertia against creating something new. In creating and helping a new venture to grow the entrepreneur has all the responsibility for its development, growth, and survival, as well as corresponding risks and rewards.

Who wants to accept all the risks and effort involved in creating a new venture? The person may be a man or a woman, come from an upper – class or a lower – class background, have a college or a university degree or be a high school dropout. The person may have been a student, a teacher, an engineer, a salesperson, a manager, a retired person, etc.

Who is an entrepreneur? What is entrepreneurship? These frequently asked questions reflect the increased international interest in the field. In spite of all this interest, a concise, universally accepted definition has not yet emerged. The word entrepreneur is French and literally translated means “between – taker” or “go – between”. Let’s take a look at the entrepreneurship from a historical perspective.

Earliest period

One early example of a go – between is Marco Polo, an Italian, who was one of the first Europeans who sailed to the Far East. He attempted to establish trade routes to China. He signed a money contract with a money person to sell his goods. That money person was a forerunner of today’s capitalist. A common contract during that time provided a loan to the merchant – adventurer at a 22.5 percent rate, including insurance. While the money person was a passive risk taker, the merchant – adventurer took the active role in trading, bearing all the physical and emotional risks. After the successful completion of a journey by the merchant – adventurer, the money person took most of the profits (up to 75 percent), while the entrepreneur merchant settled for the remaining 25 percent.

Middle ages

In the Middle Ages the term entrepreneur was used to describe both an organizer of musical performances and a manager of large business projects. In such projects, this person did not take any risks, but merely managed the project using the resources provided. A typical entrepreneur in the Middle Ages was the cleric – the person in charge of great architectural works, such as castles and fortifications, public buildings, abbeys, and cathedrals.

17^thCentury

The connection of risk with entrepreneurship developed in the 17^th century. At that time an entrepreneur was a person who entered into a contract with the government to perform a service or to supply stipulated products. Since the contract price was fixed, any resulting profits or losses reflected the efforts of the entrepreneurs – the better they worked the more profit they had. One of the entrepreneurs in this period was John Law, a Frenchman, who was the founder of the royal bank of France and the Mississippi Company, which had an exclusive franchise to trade between France and the New World. Unfortunately, the monopoly on French trade led to Law’s downfall when he attempted to push the company’s stock price higher than the value of the assets; this eventually led to the collapse of the company. Richard Cantillon, a well – known English economist at the beginning of the 17^th century, understood Law’s mistake. Cantillon developed one of the first entrepreneur definition. He is regarded by some researchers as the founder of the term. He viewed the entrepreneur as a risk taker because merchants, farmers, craftsmen, and other sole proprietors “buy at a certain price and sell at an uncertain price, therefore operating at a risk”