Entrepreneurship

Entrepreneurship studies the creation of new ventures and the discovery and exploitation of opportunities to create value.

Scope

It covers opportunity recognition, new-venture creation and financing, innovation and entrepreneurship, and entrepreneurial ecosystems.

Core questions

• What is entrepreneurship and who are entrepreneurs?
• How are opportunities discovered or created?
• How are new ventures founded and financed?
• What conditions foster entrepreneurship?

Key concepts

• Opportunity recognition
• Creative destruction
• Innovation
• New-venture creation
• Risk and uncertainty
• Entrepreneurial ecosystems

Key theories

Innovation and creative destruction

Schumpeter cast the entrepreneur as the innovator driving creative destruction.

Alertness to opportunity

Kirzner emphasized entrepreneurial alertness to profit opportunities in disequilibrium.

History

Entrepreneurship theory runs from Schumpeter's innovator and Kirzner's alert entrepreneur to modern research on opportunity, venture creation, and ecosystems.

Debates

Opportunity discovery versus creation

Whether opportunities are discovered (pre-existing) or created by entrepreneurs.

Key figures

• Joseph Schumpeter
• Israel Kirzner

Seminal works

• schumpeter-1934
• kirzner-1973

Frequently asked questions

What is creative destruction?

Schumpeter's term for the process by which innovation continually replaces existing products, firms, and methods.