The entrepreneurial function is based on the special intellectual and psychological basis, which main features
Schumpeter believed were:
1) unsaturated acquisitive energy, not associated with a sense of direct satisfaction from the consumption of goods, and which motivates the desire to assert dominance, influence, success itself (in the form of profits);
2) The inventive intellect;
3) the intuition, which replaces the lack of information;
4) a strong will, which can overcome the inertia of own behavior, and environmental resistance, allowing to lead other people. (Casson, 1982)
Entrepreneurship, by Schumpeter, is a “creative destruction”¯, because for implementation of new combinations of production factors it must be destroyed old ones, in order to implement innovations. But Entrepreneur is not the inventor or owner of capital as per se, but the one who introduces new combinations of economic reality. Such innovative activities of entrepreneurs is, according to Schumpeter, the “engine”¯ of economic development. (Casson, 1982)
In the modern world entrepreneurship, according to the experience of developed countries, is indeed an important force of economic dynamics, competitiveness and social prosperity. After all, an entrepreneur is:
– always an innovator, who implements on a commercial basis new technologies, new forms of business organization;
– an initiator who puts into a single process the production of goods and services for profit,
– the organizer of production, who configures and sets the tone of the company;
– a person who is not afraid of risk, and consciously takes it in order to achieve his goal.
The modern entrepreneur should have a good understanding of the nature of economic processes, to navigate in a changing environment, to predict, calculate the probability of certain losses, that is, to take a risk consciously. Combining the factors of production, the entrepreneur must choose the best option at a minimal cost, to get the maximum possible profit.
All these properties are the essence of the entrepreneurship, aimed at growth of the public wealth and the prosperous market economy.
Entrepreneurship as an economic resource
Functioning of national economies and the world economy is based on economic resources (factors of production) – natural, labor, capital, business, as well as scientific resources (scientific, technical, information knowledge). Taken together, they form a potential economic resources of the national economy, region of the world or the world economy. Entrepreneurial resource in modern circumstances is becoming more and more important economic resource.
Entrepreneurial resources (entrepreneurial potential, entrepreneurial skills, business) – is the ability to
effective organization of the interaction of other economic resources – labor, land, capital and knowledge – to conduct economic activity. This resource is realized in the field of management of companies and organizations. The structure of the business resource consists of: its carriers (entrepreneurs), its infrastructure (market institutions), its ethics and culture.
Entrepreneur is a person engaged in the organization of economic processes at the micro level. The second part of the entrepreneurial resource of any country is a market infrastructure, that are such institutions and norms of a market economy as: stock exchanges and banks, insurance and accounting firms, consulting and law firms, courts, state economic agencies, commercial law. The last part of the national entrepreneurial resource is it’s ethics and culture, the very entrepreneurial spirit of society. If
business ethics and an entrepreneurial culture has a long
history and much of society tends to it, such an
atmosphere contributes to development of entrepreneurial resources in the country. (Casson, 1982)
In general we can conclude that in a country
entrepreneurial resource is developed, if there are many skilled and educated entrepreneurs, developed market infrastructure, business ethics and culture. Such characteristics have the developed countries, most of which cultivated entrepreneurial resource for centuries (Europe) or are descendants of old business culture (North America and other resettlement countries), as well as some of the new
industrialized countries with deep traditions of the trade (this is primarily states of Eastern and South-East Asia). The world experience also shows that enterprising id actively developing in these countries, if a strong degree of
liberalization of economic activity is combined with high
efficiency of public institutions, as well as an active state
support for small and medium business, and policy of promoting competition in the domestic market.