What Is Entrepreneurship? A Guide

In the simplest understanding of the word, an entrepreneur is a person who starts a new business, and entrepreneurship is the process of starting and running that new business. According to data from Global Entrepreneurship Monitor, nearly one in three people of working age plan to start a business in the next three years or already own one [1].

Delve into the ethos and different types of entrepreneurship and examine how entrepreneurship fits into society and the economy.

What is entrepreneurship?

Approaching entrepreneurship broadly, it would seem that you could consider any small business owner an entrepreneur—and realistically, they can be. Two significant characteristics of entrepreneurship typically include risk-taking and forward-thinking.

Risk-taking is the awareness that even though your business may not turn out the way you expect it to, you’re willing to try anyway. Often, this willingness comes from weighing the risks against the potential rewards.

Truthfully, risk-taking is inherent in any new business venture because businesses are predicated on some level of uncertainty. For example, market research may predict certain consumer behaviours, indicating a need for your service—but upon launching your business, you may realise the need wasn’t as great as expected.

Forward-thinking and innovation go hand in hand. Many times, the idea of creating a better future fuels entrepreneurial ideas. This can come from a new product that changes the way people interact with the world, a new process that changes the way businesses interact with consumers, an improvement to the way a business operates within an established industry, or any other mechanism that can make business better.

Many business owners adopt a level of foresight about their business's long-term success potential that qualifies them as forward-thinkers. In fact, one significant difference between a small business owner and an entrepreneur might be the degree to which they consider the larger implications of their innovation style.

Types of entrepreneurship

You can further segment entrepreneurship into different categories that describe the organisation or innovation driving the business. Four common types of entrepreneurship are small business, scalable start-up, large company, and social entrepreneurship.

Small business entrepreneurship

Small business entrepreneurship takes place on a localised level without the expectation of wide-scale expansion. Examples of small business entrepreneurship would be opening a local restaurant, gift shop, or furniture restoration business.

Scalable start-up entrepreneurship

The concept of innovation that begins on a small scale with long-term plans for widespread growth guides scalable start-up entrepreneurship. Examples of successful scalable start-ups include companies like Meta or JustPark.

Large company entrepreneurship

Large company entrepreneurship is a business sector launched within an established business. This can occur either with an acquisition of another business or the creation of a new internal division. Examples of large company entrepreneurship would be Disney’s acquisition of Pixar or Google launching Google Maps.

Social entrepreneurship

Social entrepreneurship places a heavy emphasis on creating societal change. The overall goal is to benefit humankind and our way of life, and it can occur on a local or global scale. Examples include 10 Million Women, a female-owned marketplace for buying corporate gifts and supporting gender equality, or Action for the People, a mobile team that provides training, events, and projects to benefit organisations and communities across the UK.

The importance of entrepreneurship

Entrepreneurship is vital to society because it helps drive innovation and moves us toward an improved state of being. Basically, when entrepreneurs take on risk, they are doing so on behalf of their community at large.

As a business function, entrepreneurship also has close ties to the economy. Entrepreneurial innovations can fuel economic growth as businesses strive toward efficiency, and as entrepreneurial endeavours grow, they can promote job growth and create new opportunities.

When considering entrepreneurship, consider how your business will impact the world outside of your immediate business processes. A broader perspective that incorporates the way your business will interact with your community, society, other businesses, and your industry at large is the difference between starting a business and engaging with entrepreneurship.

Keep learning

With their inclination toward innovation, an entrepreneur engages in continual learning. To continue your journey toward entrepreneurship, consider the Entrepreneurship Specialisation from Wharton. Through five courses, you’ll learn about the process of launching your own business with an entrepreneurial mindset. Or, for even deeper learning, you could consider earning a Master of Science in Innovation and Entrepreneurship from HEC Paris. Both are available on Coursera, with classes you can complete from anywhere with an internet