An Outline of the Concept of Entrepreneur: Entrepreneurial System
The entrepreneurs are not capitalists, although it is obvious that they need capital, as they need all the economic activities and most of non – economic ones. They are not investors either. They assume the risks, but so does also any employee in any type of activity.
The entrepreneur is not a boss as well, but he may be. He is often an employee or someone that works by himself and on his own. Thus, the entrepreneurial system is a distinctive feature either we are thinking about the individual or about an institution.
To be an entrepreneur is not a personal feature, as Peter Drucker observed, arguing that he had seen in thirty years people having the most diverse personalities and tempers with an appropriate behavior in the entrepreneurial desiderata. Still, it is less probable that the people who need certainties may be good entrepreneurs and the same thing happens with those people who want to manage in a multitude of other activities, such as politics, military service or being captain on a transatlantic ship. All such activities require decision taking for a specific purpose, and the essence of any decision is the uncertainness because anybody may cope with such a situation and anybody can learn how to be a good entrepreneur and to behave accordingly.
Thus, the entrepreneurial system is more connected to the behavior than to the personality, and the grounds rather consist of concept and theory than institution. Any practice is based on theory even if the practitioners themselves are not aware about it. The entrepreneurial system is based on the theory regarding economy and society. Generally, there is a tendency to believe that the entrepreneurial system is extremely risky. Public Service
Indeed, in the extremely prominent areas of innovation, as advanced technology – for example, microcomputers or biogenetics – the failure rates are high and the chances to succeed or even to survive in this field seem quite low. But why does it have to be that way? By definition, the entrepreneurs transfer the possibilities from the low productivity areas to the higher productivity and higher yield areas. Obviously, there is a risk in failing to do that. However, if they have moderate success, the profits will be more than enough to compensate any risk that could exist. Thus, the entrepreneurial system should be considered more or less risky than the optimization. Indeed, nothing can be as risky as optimizing the possibilities in areas where the correct and profitable trend is innovation, i.e. where there are already innovation related possibilities.
Theoretically, the entrepreneurial system should be the least risky compared to the majority of risky methods. Obviously, many people think that the entrepreneurial system with a low risk is a stroke of luck, an accident or just a chance. The success average in initiating new businesses is so high that one may combat the popular belief of a high risk entrepreneurial system for many individual entrepreneurs. The entrepreneurial system is risky because few of the so – called entrepreneurs know what they are doing. They lack the methodology and transgress elementary well – known laws. Such a case is especially encountered for those entrepreneurs that use advanced technologies.
The entrepreneurial system and innovation with advanced technologies are intrinsically more risky and more difficult than the innovation based on economy and market structure, on demography or even something as apparently nebulous and intangible as perceptions and moods. However, even the entrepreneurial system with advanced technologies should not be so risky, as Bell Lab and IBM demonstrate. They must be well administered and based on innovations of a well – determined purpose.