Assignment Impact of Entrepreneurship

Running head: IMPACT OF ENTREPRENEURSHIP
Impact of Entrepreneurship
Name of Student:
Name of University:
Author Note:

1IMPACT OF ENTREPRENEURSHIP
Introduction
In recent times, the term entrepreneurship has gained ground in the global business scene.
Over the years, many researchers have provided their own definition of the word and in general,
it is perceived that entrepreneurship is the act of setting up a business in any given industry under
one’s own initiative.
However, entrepreneurship is a broad term and such an explanation is considered to be vague
due to the word’s historical significance (Rahim & Mohtar, 2015). The meaning and
understanding of the term was initially provided by French economist and businessman Jean
Baptiste Say in 19th century and was further defined by Austrian Economist Joseph Schumpeter
in the 20th century around 1934 (Rahim, Zainal, Mohtar & Ramli., 2015). In fact, Schumpeter’s
Theory of Innovation is the pioneer of understanding the concept of entrepreneurship and
innovation to the day (Sledzik, 2013).
The purpose of this essay is to establish an understanding of the definition of entrepreneurship.
The essay also aims to study the impact of entrepreneurship in the present day.
Discussion
Earlier, researchers opined that entrepreneurship was a source of gaining economic profit
from the free market (Feulner, 2013).With time, the concept of entrepreneurship started gaining
popularity and was then considered to be contributing to the economic growth of a country. For
example, new entrepreneurial ventures in Australia added 1.44 million to the full-time equivalent
of jobs in Australian economy between 2006 and 2011 (industry.gov.au, 2015).
According to Joseph Schumpter’s popular Innovative Theory of Entrepreneurship, any
kind of positive economic change or market growth can be introduced by innovation. For him,
entrepreneurship is one such phenomenon that has the capability of bringing a change in the

2IMPACT OF ENTREPRENEURSHIP
economic sector of any country. He believed entrepreneurs have the power to create an
imbalance through their actions in an otherwise static flow of economy (Audretsch, Coad &
Segarra, 2014).Schumpeter’s theory looked at entrepreneurs as innovators or creators, having the
ability to introduce or innovate something entirely new.
Although, certain researchers and theorists like Carolyn Shaw Solo (1951) criticised
Schumpeter’s theory claiming that innovation is much more of an ordinary activity than an
extraordinary ideation.
However, to determine whether entrepreneurship can be considered as a negative or
positive phenomenon, it is essential to consider both the parameters on a personal and broader
front.
In broader terms, the biggest positive impact of entrepreneurship is on economy through
innovative contribution (Galindo & Mendez, 2014). Establishing an entrepreneurial venture can
only be deemed possible when an individual has a niche in the respective industry or market. It is
the urge of introducing something new that enables a person to begin with an entrepreneurship
program. Therefore, an innovative contribution is made to economy through entrepreneurship.
This addition now ends up creating a new job market for another set of individuals and
contributes in bringing down the level of unemployment (Litwin & Phan, 2013). Especially in
developing countries self-employment and small scale business have been successful in being the
source of income for numerous families (Cho & Honorati, 2013).
Now, emerging entrepreneurship endeavours end up creating a competition in any given
domestic market (Kirzner, 2015). While this may have an effect like market diffusion, it also
increases the probability of a greater rate of production, with great efficiency and low cost.