What is Entrepreneur
Entrepreneur as factor of production is basically taken from French and first time used by Richard Cantillon. The term Entrepreneur used for a person who willingly launch an enterprise and take the whole responsibility for the consequences and result from the business in the future. In simple words, entrepreneur as factor of production main function is the reallocation of economic resources to higher output.
Definition of Entrepreneur as Factor of Production
Entrepreneur as factor of production is the owner of any business company or enterprise who is mainly work to earn money by taking initiative and risk.
Entrepreneur in Action
Production does not take place spontaneously but requires land, labour and capital to be employed, regulated and coordinated. This is the function of the entrepreneur or businessman.
He decides what to produce, where to produce and how to produce it, where to sell it, in what quantities and varieties, which factors to employ, and in what proportion. Decision of production must be made before the product is sold; one is, therefore, to anticipate an uncertain demand.
With expansion of corporate enterprise the conception of personal entrepreneur is now dim. Some economists do not recognize enterprise as a separate factor, saying that it is a special form of human effort. But since reward to enterprise is not a fixed wage but a residual and uncertain profit, it is convenient to treat it separately.
Functions of Entrepreneur
1. Organization which can be performed by hired specialists for a wage, salary etc.
i. Insurance against calculable risks;
ii. Management, coordination, and decision making;
2. Functions of true entrepreneur as factor of production bearing risks of uncertainty from undertaking in regard to loss of capital as a result of market hazards.
3. Social significance of entrepreneur. They perform socially valuable services. They cooperate to produce goods that the community desires and sometimes they commit errors in their operations but production cannot be carried out unless it is organized.