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Importance of Entrepreneurship: Types, Benefits, and Styles

February 12, 2021

Economies are powered by innovation. Much of that innovation derives from forward-thinking individuals who possess the drive, skills, and background to turn a business vision into reality. The importance of entrepreneurs extends beyond the effect those individuals have on their own companies, however. They impact their broader communities, and, in some cases, even the world.

Entrepreneurs have played a pivotal role in the growth of the U.S. economy since the 19th century. They spur industry transformations, create entirely new markets, and help to build resilient communities. Investopedia describes four ways entrepreneurs benefit society:

Economic growth : The success of the products and services created and sold by entrepreneurs cascades to other businesses and markets.
Wealth generation : Entrepreneurs frequently target new markets and tap audiences outside the focus of established firms. This creates new sources of revenue and profits.
Social change : The innovative goods and services entrepreneurs offer reduce dependence on outdated processes and technologies. One example is the way smartphones have affected how businesses communicate with customers, employees, and partners.
Community development : Entrepreneurs foster a sense of community among people with common goals and interests, whether in a single neighborhood or across continents. Their products and services contribute to the communities’ social and economic well-being.

A smiling entrepreneur stands in an office hall

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The companies that entrepreneurs found tend to mirror their founders’ personalities. Entrepreneurs come from every economic and social background. To prepare for the challenges of translating innovation into rewarding business ventures, entrepreneurs rely on the training and experience they receive from programs such as the Master of Arts in Management and Leadership degree.

Successful entrepreneurs make their dreams and the dreams of others come true. They are able to match their personality, skills, and creativity with customer needs and market opportunities. This guide explains the importance of entrepreneurship, presents the various types and styles of entrepreneurship, and describes the skills that are most essential for reaching your entrepreneurial goals.

Types of Entrepreneurship

Most people think of an entrepreneur as someone with dreams of becoming a titan of industry. While many would-be entrepreneurs have lofty goals, most hope only to create a successful business, whether that success spans the globe or reaches no farther than their local community. Types of entrepreneurship range from hometown storefront businesses to technological innovations that can change the world.

These snapshot profiles of various entrepreneur types demonstrate the range of opportunities available to people who dream of starting their own business.

Small-Business Entrepreneurs

The U.S. Small Business Administration (SBA) reports that small businesses generate 44% of all business activity in the country. Small-business entrepreneurs differ from other small-business owners in their company’s legal status: Entrepreneurs generally incorporate their businesses, while owners operate as sole proprietors, partnerships, or other nonincorporated entities.

Small-business entrepreneurs take greater risks than the typical small-business owner, and they tend to rely on a broader set of skills that encompass high-level thinking, analytical reasoning, and complex interpersonal communication.

Investor Entrepreneurs

The roles of investors and entrepreneurs are typically seen as complementary but distinct: Entrepreneurs seek investors to bankroll their new companies. However, some entrepreneurs focus solely on providing financial backing to new business entities. Investor entrepreneurs may start their careers in one of the two roles and segue into a hybrid of both to tap the strengths of each.

For example, entrepreneurs may feel the need to continually tweak their operations, which can prevent business processes from being firmly established. By taking an investor role and purchasing an ownership share in a business, entrepreneurs are likely to address business opportunities more strategically to capitalize on short-term performance as well as long-term goals.

Technology Entrepreneurs

As new technologies permeate industries of all types, it could be said that all entrepreneurs are technology entrepreneurs in some regard. However, over the past 40 years the image of technology entrepreneurs has been dominated by billionaires such as Bill Gates, Jeff Bezos, and Mark Zuckerberg. What distinguishes this type of entrepreneur is their practical application of scientific innovations to solve business problems.

Technology entrepreneurs are characterized by their passion and unshakeable belief in the inherent value of the products or services they create. Becoming a tech entrepreneur typically entails working long hours and making financial sacrifices in the short term for the prospects of long-term gain. Tech entrepreneurs must also possess the ability to sell their ideas, persevere through hard times, and make others feel as enthusiastic about their ideas as they do.

Internal Entrepreneurs

Internal entrepreneurs, or “intrapreneurs,” apply the principles of entrepreneurship to projects within an existing company or organization. One important distinction between entrepreneurs and intrapreneurs is the latter’s lack of personal investment, which reduces the impact of potential failure on any individual.

Intrapreneurs tend to be self-motivated, proactive, and innovative employees who create an entrepreneurial spirit within their team. When companies give employees the freedom to experiment and grow within an organization, they can benefit from the success of their employees’ internal projects. However, firms that fail to personally recognize the work of intrapreneurs risk seeing them leave to become true independent entrepreneurs.

Online Entrepreneurs

Internet-based businesses offer many advantages to entrepreneurs, including low startup costs and the ability to establish an online presence quickly to take advantage of the fast pace of changing markets. However, the low barrier to entry can be a dangerous illusion for online entrepreneurs who fail to realize the hard work and perseverance required to achieve their business goals.

Online enterprises require the same time and effort commitment as other forms of entrepreneurship, and they are subject to their own challenges, many related to technology. For example, an online business will likely rely on partnerships with many different service providers, an outage at any of which could knock the business offline.

Entrepreneurship Styles

Just as no two companies are identical, each entrepreneurial endeavor is as unique as the person behind it. Entrepreneurship styles are as varied as the ideas that spur entrepreneurs to action. One key for entrepreneurial success is to create a company whose strengths match the prominent characteristics of its founder.

Matching Entrepreneurship Approach to Personality

An entrepreneur’s personality, background, and experience influence their approach to starting a business. These are among the most common entrepreneurship styles:

Innovators have the potential to transform entire industries with novel ideas. Inventor Thomas Edison was the prototype for the modern innovative entrepreneur. These entrepreneurs possess extensive knowledge of their industry, including its customers’ needs. They also know how to develop and market their innovative products.
Managers are often considered the antithesis of entrepreneurs, but management skills are paramount in bringing a great idea to fruition as a commercial product or service. Manager entrepreneurs understand the importance of choosing and nurturing a good team of workers, and ensuring that they have the tools and resources to succeed.
Opportunists identify an important business or technical problem, devise a winning solution to the problem, and plot a course to bring that solution to market in the form of a commercial product. Opportunity entrepreneurs tend to have a business background rather than a technical one, so they may focus too much on short-term goals and lose sight of the larger picture.
Revolutionaries are in many ways the antithesis of manager and opportunity entrepreneurs because they typically have technical backgrounds and may show disdain for established business practices. While revolutionary entrepreneurs such as Apple founder Steve Jobs leave a legacy that is both broad and deep, they often need the help of nontechnical business people to realize their world-changing vision.

Entrepreneurs Whose Businesses Match Their Personalities

Just as Steve Jobs’ larger-than-life personality was the perfect fit for his dream of making computers “for the rest of us,” as Apple’s marketing slogan proclaimed, other important entrepreneurs succeed by applying their unique, inimitable style to the task of devising brand-new solutions to real-world problems.

John D. Rockefeller was “the richest man in history,” according to Investopedia, after founding Standard Oil in the late 19th century. Rockefeller’s fortune was due in large part to his focus on running the company as efficiently as possible by creating vertical and horizontal integrations for its operations. However, Rockefeller’s ruthless quest for efficiency bordered on unethical business practices. The social backlash to the Standard Oil monopoly ultimately led to the company’s breakup.
Walt Disney is famous as a pioneering animator and entertainment mogul, but his greatest innovation may have been in recognizing the potential of merchandising his creations in the form of toys, clothing, and other items. The Disney Company remains one of the largest and most successful entertainment enterprises in the world.
Jeff Bezos founded Amazon out of a garage in Seattle in the 1990s. Less than 25 years later, the company is one of the most valuable in the world, and Bezos is a billionaire many times over. Since his school days, Bezos has had a vision that extends beyond our planet, but he also has a practical side that realized the potential of the internet long before the rest of the world did. As Amazon achieved record-breaking growth early this century, Bezos simultaneously invested in a variety of endeavors outside online retail, including the commercial space project Blue Origin.

Entrepreneurs Arise from Diverse Backgrounds

Any field can serve as a springboard for a successful new business enterprise. Entrepreneurs arise from a range of educational, technical, and business experiences that include management, technology, sales and marketing, and scientific research. In addition to an abiding passion to see their innovations realized, entrepreneurs share certain characteristics:

They are independent thinkers.
They are optimistic and confident about their chances for success.
They are creative problem solvers.
They are tenacious, visionary, and focused.
They are more likely to act than to wait, and they attack challenges rather than avoid them.

Entrepreneurship Skills

Growing a business requires a diverse set of skills, but the one trait that ties them all together is leadership. Entrepreneurs transform an idea into a product or service that has value to customers. Each step in the process from creating the business plan to achieving profitability calls for a range of organizational and interpersonal skills, all of which depend on leadership.

Important entrepreneurship skills run the gamut from understanding the risks versus rewards of the business venture, to having a plan in place for responding as circumstances change. These are the capabilities that entrepreneurs need to make their businesses thrive:

Leadership : Entrepreneurs demonstrate their zeal for the enterprise in all of their interactions with investors, employees, and outside parties. They are confident in themselves and in the business, and they are decisive yet adaptable. They listen to and respect the opinions of others, and are always taking advantage of opportunities to study and learn.
Interpersonal communication : Entrepreneurs understand that the lines of communication in an organization must run both ways. Communication is particularly important to entrepreneurs because it makes all their other skills more effective. Communication skills are used to close sales, boost employee morale, resolve conflicts, and negotiate contracts.
Organizational behavior : Technology is a vital part of any new business venture, but the ability to manage people will ultimately determine a company’s success. People management takes many forms, but the key is to match the organizational approach with the characteristics of the business and its employees.
Business strategy : The importance of having a clear business focus and being optimistic and driven to achieve the company’s goals is balanced by the need to be adaptable and acknowledge when industries, markets, and customer preferences change. Entrepreneurs are decisive and passionate, but they are also ready and willing to make changes when necessary to keep the company on a path forward.
Collaboration and project management : Entrepreneurs understand the importance of being a good team member as well as serving as a team leader. They establish relationships with managers, investors, partners, and stakeholders as peers who all have important roles to play rather than as a hierarchy.

Benefits of Entrepreneurship

The benefits of entrepreneurship extend beyond the businesses they establish. Entrepreneurs improve the lives of individuals and communities, as well as the overall economy. Entrepreneurs have been instrumental in spurring social change and improving the way people live and work. They help raise the standard of living for everyone by creating jobs and making products safer, less expensive, and more functional.

Entrepreneurs ’ rewards for taking on the risks entailed in transforming an idea into a business include the earnings their investment generates, as well as the ability to set their own schedule. However, entrepreneurs also gain the satisfaction of seeing their idea transformed into a thriving enterprise, and of knowing their skills and leadership helped to make it happen.
Communities reap the benefit of entrepreneurship because businesses help to foster innovation, promote economic development, and create jobs. A successful company is likely to expand, which generates taxes, jobs, and other benefits for the area. Thriving businesses tend to attract other ventures in the same or related fields, and they often invest in community projects and support local charities.
Entrepreneurs play an important role in growing and sustaining the U.S. economy . The technologies pioneered by entrepreneurs have created entire industries, including smartphones, wireless products, online retail, social media, and streaming entertainment.

Despite the many benefits of entrepreneurship, it has inherent risks. Lack of appropriate government oversight can result in unfair labor practices, corruption, and criminal activity. Also, new business ventures have a high rate of failure: According to data from the U.S. Bureau of Labor Statistics (BLS) cited by Fundera, 20% of small businesses fail in the first year, 50% fail within five years, and 70% fail within 10 years of opening. The benefits of entrepreneurship are realized only after much preparation, planning, and hard work.

An Education Geared to the Needs of Entrepreneurs

Entrepreneurs need the right foundation in business and management. A program such as Maryville University’s online Master of Arts in Management and Leadership can offer the crucial training and skills innovators need to succeed. Courses such as Interpersonal Management Skills, Enterprise Planning and Control, Leadership, and Organizational Behavior and Development prepare tomorrow’s important entrepreneurs for the challenges they will face as they pursue their career goals.

Discover more about how the Master of Arts in Management and Leadership program helps people planning a career in business gain the entrepreneurial skills they’ll need.

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Essay Samples on Entrepreneurship

What is entrepreneurship in your own words.

What is entrepreneurship in your own words? To me, entrepreneurship is the art of turning imagination into reality, the courage to chart unexplored territories, and the commitment to leave a lasting mark on the world. It's a journey of boundless creativity, relentless innovation, and unwavering...

Entrepreneurship

What is Entrepreneurship: Unveiling the Essence

What is entrepreneurship? This seemingly straightforward question encapsulates a world of innovation, risk-taking, and enterprise. Entrepreneurship is not merely a business concept; it's a mindset, a journey, and a force that drives economic growth and societal progress. In this essay, we delve into the multifaceted...

Social Entrepreneurship: Harnessing Innovation

Social entrepreneurship is a transformative approach that merges business principles with social consciousness to address pressing societal challenges. This unique form of entrepreneurship goes beyond profit-seeking and focuses on generating innovative solutions that create positive change in communities. In this essay, we explore the concept...

Evolution of Entrepreneurship: Economic Progress

Evolution of entrepreneurship is a fascinating journey that mirrors the changes in society, economy, and technology throughout history. From humble beginnings as small-scale trade to the modern era of startups, innovation hubs, and global business networks, entrepreneurship has continuously adapted to the dynamic landscape. This...

Importance of Entrepreneurship: Economic Growth and Societal Transformation

Importance of entrepreneurship transcends its role as a mere business activity; it stands as a driving force behind innovation, economic growth, and societal transformation. Entrepreneurship fosters the creation of new products, services, and industries, while also generating employment opportunities and catalyzing economic development. This essay...

Economic Growth

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Entrepreneurship as a Career: Navigating the Path of Innovation

Entrepreneurship as a career is a compelling journey that offers individuals the opportunity to create their own path, shape their destiny, and contribute to the economy through innovation. While the road to entrepreneurship is laden with challenges and uncertainties, it is also marked by the...

Corporate Entrepreneurship: Fostering Innovation

Corporate entrepreneurship represents a strategic approach that empowers established organizations to embrace innovation, take calculated risks, and explore new opportunities. In an ever-evolving business landscape, the concept of corporate entrepreneurship has gained prominence as companies seek to maintain their competitive edge and adapt to changing...

Challenges Faced by Entrepreneurs: Innovation and Success

Challenges faced by entrepreneurs are a testament to the intricate journey of turning visionary ideas into tangible realities. While entrepreneurship is often associated with innovation and opportunity, it's also characterized by a multitude of hurdles and obstacles that test an entrepreneur's resilience and determination. In...

300 Words About Entrepreneurship: Navigating Innovation and Opportunity

About entrepreneurship is a dynamic journey that involves the pursuit of innovation, creation, and the realization of opportunities. It is the process of identifying gaps in the market, envisioning solutions, and taking calculated risks to bring new products, services, or ventures to life. Entrepreneurs are...

Best topics on Entrepreneurship

1. What is Entrepreneurship in Your Own Words

2. What is Entrepreneurship: Unveiling the Essence

3. Social Entrepreneurship: Harnessing Innovation

4. Evolution of Entrepreneurship: Economic Progress

5. Importance of Entrepreneurship: Economic Growth and Societal Transformation

6. Entrepreneurship as a Career: Navigating the Path of Innovation

7. Corporate Entrepreneurship: Fostering Innovation

8. Challenges Faced by Entrepreneurs: Innovation and Success

9. 300 Words About Entrepreneurship: Navigating Innovation and Opportunity

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What Is Entrepreneurship?

Entrepreneurship and Economic Growth
Necessity" vs. "Opportunity"
Other Factors to Consider
Entrepreneurship and Social Progress

The Bottom Line

Business Leaders
Entrepreneurs

Why Entrepreneurship Is Important to the Economy

Entrepreneurship can promote economic growth, even if its benefits are sometimes overhyped

Diane Costagliola is a researcher, librarian, instructor, and writer who has published articles on personal finance, home buying, and foreclosure.

Getty Images, Tara Moore

Entrepreneurship is often cited as a major engine of economic growth, particularly in the United States. But the actual picture is more complicated. Here's what leading scholars have to say about the importance of entrepreneurship around the world.

Key Takeaways

Entrepreneurship can fuel economic growth under the right conditions and when people become entrepreneurs for the right reasons.
It is not, however, a magic bullet for growth, particularly in less-developed economies.
Social entrepreneurship can attempt to deliver both profits and societal good, though often with mixed results.

Entrepreneurship is a general, blanket term related to starting a business. But its precise definition has long been a matter of debate among scholars and policymakers.

"Despite widespread interest in the topic and a broad recognition of its importance to the economy, there remains a lack of consensus about how to specifically define entrepreneurship," the nonpartisan Center for American Entrepreneurship notes. "'Entrepreneur' is an English derivation of the French word 'entreprendre' (to undertake), leaving wide latitude for interpretation and application."

Howard Stevenson, known as "the godfather of entrepreneurship studies" at Harvard Business School (HBS), has defined it as the "pursuit of opportunity beyond resources controlled." As fellow HBS professor Tom Eisenmann elaborates, "'beyond resources controlled' implies resource constraints. At a new venture's outset, its founders control only their own human, social, and financial capital. Many entrepreneurs bootstrap: they keep expenditures to a bare minimum while investing only their own time and, as necessary, their personal funds."

The Stanford Center for Professional Development at Stanford University offers a somewhat simpler definition: "At its most basic level, entrepreneurship refers to an individual or a small group of partners who strike out on an original path to create a new business. An aspiring entrepreneur actively seeks a particular business venture and it is the entrepreneur who assumes the greatest amount of risk associated with the project. As such, this person also stands to benefit most if the project is a success."

How Entrepreneurs Fuel Economic Growth

Innovation and entrepreneurship undeniably contribute to economic growth, making them a particular area of interest for economists and policymakers worldwide. However, some scholars say that the growth created by entrepreneurship can be exaggerated.

For one thing, growth from entrepreneurial activity doesn't occur evenly across an economy. Studies of economic growth have pointed toward an apparent paradox in which the growth in productivity overall in the U.S. has been only modest in recent years, despite the pervasiveness of entrepreneurship, innovation, and innovation ideology. According to studies by the National Bureau of Economic Research (NBER) , this is because innovation affects industries very differently, having a large impact in some sectors of the economy but little impact in others.

While generally positive, the link between entrepreneurship and improving societal welfare is also complicated, influenced by factors such as regional population, entrepreneurship density, and the specific industry in which the entrepreneurial activity is taking place, according to the scholarly literature.

What's more, some studies have suggested that economic growth may be correlated to an increase in overall inequality in certain circumstances. Scholars say that in the U.S. income inequality and economic growth have been linked since the 1970s.

The number of new business applications in the United States in April 2024.

"Necessity" Entrepreneurs vs. "Opportunity" Entrepreneurs

One interesting way to look at entrepreneurship is to divide it into two broad categories. "Necessity entrepreneurship" is the launching of a business by people who lack other opportunities. "Opportunity entrepreneurship" is the creation of an enterprise in response to a new or previously overlooked opportunity.

In countries where entrepreneurial activity is largely in the form of necessity entrepreneurship, it can be a signal that the economy isn't creating enough jobs or wage opportunities for workers. It may be connected to slow economic growth or lagging economic development overall, scholars say.

Necessity entrepreneurship can be a side hustle for someone who is trying to make ends meet or a way to meet their non-economic needs and goals.

Where Entrepreneurship Aids Growth—and Where It Doesn't

The level of economic development of a country can also affect whether entrepreneurship will lead to greater economic growth there.

In the 20th century, driven by the decline in manufacturing and the shift toward service businesses, industrialized market economies in later stages of economic development—like the United States and parts of Western Europe, such as Germany and Sweden—were able to benefit greatly from entrepreneurship, the economist and management professor Zoltan Acs has noted. Starting in the 1970s, those countries saw a rise in entrepreneurship, which reversed the previous trend in their economies, when workers favored high-paying jobs with big companies over self-employment.

Other factors may be relevant as well. Scholars point out that the U.S., in particular, has benefited from a large and competitive domestic market, a highly developed financial system, and a high level of long-term government support for basic science.

For developing countries, on the other hand, entrepreneurship isn't a panacea for growth. A study of 74 economies across a six-year period concluded that less developed countries should not base their economic policy on "generic entrepreneurship" if they desire to stimulate economic growth. The authors argue that focusing on programs that develop human capital, take advantage of economies of scale, and entice foreign capital are more effective in spurring economic growth.

Italy may provide an additional example of a country where high levels of self-employment have proved to be inefficient for economic development. Research has shown that Italy has experienced large negative impacts on the growth of its economy because of self-employment.

Social Entrepreneurship and Economic Progress

With concerns over sustainability, inequality, and other issues gaining attention, some entrepreneurs have become more interested in the social consequences of their economic activity. In particular, the rise of social awareness among certain entrepreneurs has led to many attempts to use the principles of entrepreneurship to create a more just and sustainable world.

Social entrepreneurship , which has been around as a concept since the 1950s, has become increasingly common. It describes a category of entrepreneurship that can, in some cases, attempt to both make a profit and solve societal problems. It differs from the typical nonprofit model when it pursues both of those ends simultaneously.

From the perspective of social justice, which prizes a world with equal rights and access to opportunity, the reliance of an economic system on entrepreneurship presents both upsides and downsides.

Theoretically, socially conscious entrepreneurship offers the opportunity to generate solutions for marginalized communities, and the motivations for social entrepreneurs around the world tend to come from a genuine desire to fix serious problems. However, it's important to note that sometimes attempts to solve the underlying structural problems lead to murky results. The dual motives of profit and social good can sometimes clash, as the example of microfinancing in India and Bangladesh revealed.

Once popular in international circles, microfinancing is now seen as having a more limited impact on eradicating poverty and sometimes even increasing indebtedness. The practice may have also led to a series of suicides among farmers in Andhra Pradesh in the 2000s.

What Is the Difference Between a Small Business Owner and an Entrepreneur?

In general, small businesses focus on existing products and services, while entrepreneurs look to introduce new ones. However, small business owners can be entrepreneurial in their own way and entrepreneurs may end up as small business owners if their idea catches on.

What Is an Intrapreneur?

An intrapreneur is someone who works within a larger company, typically one they don't own, to foster entrepreneurial ideas and innovation. Intrapreneurship can be another source of economic growth, and intrapreneurs often have access to greater resources than independent entrepreneurs without a company behind them.

What Is a Social Entrepreneur?

A social entrepreneur is someone who launches an innovative enterprise to address a larger social issue. They may or may not also hope to turn a profit from their efforts.

The relationship between entrepreneurship and economic growth is complicated and can vary from one country to another based on their level of economic development. In highly developed economies, entrepreneurs can accelerate growth, while in less-developed ones they may have less of a positive effect.

Some entrepreneurial efforts, often referred to as social entrepreneurship, hold out the promise for new innovations that will address problems such as climate change and structural racism, possibly while making a profit at the same time.

Center for American Entrepreneurship. " What Is Entrepreneurship? "

Harvard Business Review. " Entrepreneurship: A Working Definition ."

Stanford Center for Professional Development. " What Is Entrepreneurship? "

Duke Sanford Center for International Development. " Top 5 Takeaways on the Importance of Entrepreneurship ."

Academy of Entrepreneurship Journal. " The Economic Impact of Entrepreneurship: Setting Realistic Expectations ."

National Bureau of Economic Research. " The Role of Innovation and Entrepreneurship in Economic Growth ."

Management Review Quarterly. " The Impact of Entrepreneurship on Economic, Social and Environmental Welfare and Its Determinants: A Systematic Review. "

AgEconSearch. " Impact of Economic Growth on Income Inequality: A Regional Perspective ."

Federal Reserve Economic Data. " Business Applications: Total for All NAICS Across the United States ."

Innovations: Technology, Governance, Globalization, Massachusetts Institute of Technology Press. " How Is Entrepreneurship Good for Economic Growth? "

Center for MIT Entrepreneurship. " Necessity Vs. Innovation-Based Entrepreneurs ."

European Research on Management and Business Economics. " Entrepreneurial Activity and Economic Growth. A Multi-Country Analysis ."

European Parliament. " The Social and Employment Situation in Italy ," Pages 10–12.

Deloitte. " The Rise of the Social Enterprise ."

Journal of Management, Southern Management Association. " Social Entrepreneurship Research: Past Achievements and Future Promises ."

The Tavistock Institute. " Microfinance and the Business of Poverty Reduction: Critical Perspectives From Rural Bangladesh ."

Economic and Political Weekly. " Microfinance: Lessons From a Crisis ."

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The importance and role of an entrepreneur

An entrepreneur is an individual who sets up and grows a business. They combine different factors of production (such as – land, labour and capital) to try and create a new profitable business venture. Entrepreneurs are themselves an important ‘factor of production’ and an essential aspect of a functioning free market economy.

Importance of entrepreneurs

Free market evolution . Entrepreneurs are important in a free market because they help the market respond to changing prices and consumer preferences. For example, with the rise in the use of the internet, an entrepreneur may see the potential to set up a new home delivery service which uses an app for consumers to buy. Without entrepreneurs, product markets would become static and be slow to changes in new technology and trends

Efficiency improvements . A successful entrepreneur may take revenue from an established business. This can cause ‘ creative destruction ’ A phrase used to describe changes in the economy – which in the short-term could lead to firms going out of business and/or job losses. However, this potential for creative destruction also creates an incentive for an established business to adapt and increase their own efficiency. For example, in response to Uber taxi services, it created an incentive for established taxi-firms to develop their own apps.

Dynamic efficiency . Entrepreneurs can make radical changes and introduce new technologies which significantly move on an industry. For example, Henry Ford’s novel use of assembly lines enabled a drastic cut in the average cost of producing a motor car. His efficiency savings forced other carmakers to follow suit.

New markets. Entrepreneurs can often ‘redefine the rules’ of an established industry. For example, in the 1990s, if you wanted to rent a room, you would scour newspaper ads and have to make a decision based on 40 words of text. However, the new service “Spareroom.co.uk” means you can easily scan through different possibilities and have an opportunity to get to know your potential flatmate before you move in. This has created a new market and new service that increases the efficiency of finding a compatible person to live with.

A similar new product is ‘Room for help.’ Where people can rent a room in return for providing a service such as cleaning/babysitting It was created by Ms Rolando after she came across an advert whilst looking for a room to rent. It is an example of how entrepreneurs often set up a business in response to their individual need.

New Gig economy . The new technological economy offers increased opportunities for entrepreneurs. Low start-up costs give entrepreneurs the potential to find new niche markets to develop. Many of the current large technological firms are relatively young and started as small start-ups – often in someone’s room or garage.

New values. An entrepreneur is not just about price and profit. An entrepreneur may be motivated to enter an industry to offer a more ethical product or provide a service to a community. For example, Anita Roddick set up Body Shop at a time when many cosmetics were tested on animals. Her new set up eschewed animal testing. It proved a successful business strategy and it soon became the industry standard. In other situations, entrepreneurs may take a risk and provide a community service such as a volunteer led railway – offering steam trains for tourists and locals.

The entrepreneur can sell his new business for more than the costs of inputs or continued to grow and develop the business.

Motives of entrepreneurs

Profit . Profit is the biggest incentive. If the business is successful, the entrepreneur can pay themselves a large dividend or sell the product
Income . Unemployed may feel self-employment is the best opportunity to gain an income.
Overcome a particular need . Sometimes, entrepreneurs set up a business to deal with a missing market. For example, Louis Braille was completely blind – this led him to invent the braille system to communicate and read.
Ethical stance. An entrepreneur may wish to do a different type of business, e.g. an organic farm which doesn’t harm the environment.
Independence. An entrepreneur may also be motivated by non-financial factors, such as independence to work for themselves or to choose the hours and not have to listen to another boss.
Social entrepreneurship. Entrepreneurs don’t always act alone. They may form partnerships with other entrepreneurs to create a stronger business or develop a social enterprise which aims at serving the community.

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The magazine of Glion Institute of Higher Education

Why is entrepreneurship important?

Entrepreneurs have long played a key role in the growth of our economy, from designing, launching, and running a new business to taking the initiative to grow an existing business while creating real value for customers and wider society.

But why is entrepreneurship important, and how does it impact our communities, economy, and the hospitality industry? Here we’ll look at what entrepreneurship is, why it’s important, and what skills you need to thrive as an entrepreneur in the hospitality industry.

Why entrepreneurship is important

Entrepreneurship is frequently credited as a major driver of economic growth, spurring transformation, the creation of new markets, innovation, and building wealth. Entrepreneurs are often key to developing ideas and solutions to problems while creating new products.

Starting a business can bring additional resources and money to a region, helping to increase wealth and prosperity. Meanwhile, entrepreneurs often contribute to social and cultural evolution, bringing fresh perspectives and inspiration.

Definition of entrepreneurship and its importance in the hospitality industry

Entrepreneurship is developing and managing a new business venture to make a profit or achieve another aim, such as making an environmental or social impact. Entrepreneurship involves identifying a market opportunity or gap in the market, developing a business plan, securing funding, finding the right staff, launching the business, and then managing its operations.

Entrepreneurship can take many forms. For instance, in hotel management , it can focus on improving hotel operations, services, and guest experiences to give the business a competitive edge. Alternatively, it can be starting a new hotel or restaurant, developing a new type of hospitality experience, or launching a new technology platform for the industry.

Entrepreneurship can also enhance the guest experience by providing innovative products and services to meet their needs and preferences. It drives economic growth and job creation with innovative ways of developing exciting new products and services that meet customers’ changing needs.

The benefits of pursuing a Master’s in entrepreneurship and innovation

A masters in entrepreneurship and innovation gives aspiring entrepreneurs an essential foundation in hospitality and entrepreneurship, combined with the knowledge and skills to succeed in the hospitality industry as an entrepreneur. This hospitality degree provides the fundamentals of innovation as you develop your soft skills, and gives you hands-on experience.

You’ll learn about hospitality operations, finance, marketing, and leadership while developing an entrepreneurial mindset and the skills you need to launch or grow your own business. Thanks to industry projects and internships, you’ll gain invaluable practical experience where you can apply your knowledge and skills in real-world settings and develop a priceless network of industry contacts. The hospitality industry is constantly changing, and you’ll learn how to create products and services to meet the market’s evolving needs.

Key skills and knowledge required for successful entrepreneurship in the hospitality industry

The entrepreneurship skills necessary for a successful career in hospitality luxury management are diverse and require a combination of the following.

Business acumen

Successful entrepreneurs need strong business skills, including strategic planning and financial management.

Leadership skills

Entrepreneurs must successfully lead and motivate teams and build strong relationships with partners, investors, and customers.

Effective entrepreneurs have a strong network of contacts in the industry and can leverage these relationships to grow businesses and access new opportunities.

Entrepreneurs must be able to think of ideas and develop innovative and achievable solutions.

Hospitality industry knowledge

Entrepreneurs in the hospitality industry require a solid understanding of the market, including trends, regulations, and customer needs.

Entrepreneurship can be challenging, and entrepreneurs need to be able to handle setbacks. They must stay motivated, learn from their mistakes, and persevere through difficult times.

Master the fundamentals of entrepreneurship and hospitality

This innovative masters provides everything you need to know about entrepreneurship from expert industry leaders.

Examples of successful entrepreneurship in the hospitality industry

The hospitality industry has long been the home of successful entrepreneurs. For instance, Marriott was originally a root beer stand run by husband and wife J.Willard Marriott and Alice Sheets Marriott until they saw the potential in turning into a restaurant chain and then the Marriott International hotel chain we know today. Meanwhile, the global Hilton Hotels & Resorts brand came about by chance, when Conrad Hilton decided to take a chance on purchasing a hotel after taking advantage of being in the right place at the right time.

More recently, some of the successful entrepreneurs building tomorrow’s hospitality industry include:

Brian Chesky and Joe Gebbia created Airbnb which has since enabled people across 191 countries to rent their properties to travelers
Leo Grifka, a hotelier and entrepreneur saw the potential in a disused 49-room motel and began a project to turn it into a boutique hotel
Anne-Sophie Pic is a Michelin-starred chef and owner of several restaurants
Giuliano Gasparini founded Fratelli Fresh, a group of Italian restaurants in Australia
Eric Favre founded a luxury tea and coffee brand, sold in more than 50 countries

Studying at a luxury hospitality school for entrepreneurship

With the luxury hospitality sector growing faster than any other area, studying at a luxury hospitality school for entrepreneurship can help you launch your career in this highly competitive and lucrative market. You’ll gain the knowledge, skills, and mindset necessary to become a successful entrepreneur in the luxury hospitality industry. You’ll be able to access industry professionals, state-of-the-art facilities, innovations, technologies, and the latest trends while gaining valuable hands-on practical experience through internships and networking events.

Luxury hospitality schools like Glion offer programs that provide a comprehensive understanding of the hospitality industry and the skills necessary to launch and grow a successful business. It will prepare you for the challenges of a competitive marketplace and enable you to create innovative solutions to delight today’s luxury consumers.

Benefits of studying at a luxury hospitality school for entrepreneurship

Studying at a luxury hospitality school for entrepreneurship offers huge advantages for aspiring entrepreneurs to succeed in the luxury hospitality industry. Some of the many benefits you can look forward to include these:

Specialized education delivered by industry experts
Excellent networking opportunities through the school’s connections with industry leaders
Access to state-of-the-art facilities and resources that inspire aspiring entrepreneurs
Exposure to real-world experiences through internships and practical projects
Studying at a world-class luxury hospitality school for entrepreneurship like Glion gives students instant credibility

Overcoming common challenges faced by entrepreneurs in the hospitality industry

Many of the hospitality industry’s most successful entrepreneurs have faced significant obstacles. Entrepreneurs face unpredictable challenges, but overcoming them can be key to long-term results. Here are a few examples.

Competition

Hospitality is a highly competitive industry. Entrepreneurs must find ways to differentiate their businesses, by creating distinctive brands, offering unique services or amenities, or catering to a niche market.

Seasonality

Many sectors within hospitality are seasonal, and businesses will experience periods of high and low demand. Entrepreneurs need to plan accordingly and effectively manage cash flow during slow periods.

High fixed costs

Many hospitality businesses have high fixed costs, from staff to infrastructure, which means entrepreneurs must manage their outgoings carefully and look for ways to reduce costs without sacrificing quality. This can mean negotiating with suppliers, using technology to streamline operations, and implementing energy-saving measures.

Regulations

Becoming an entrepreneur in the hospitality industry can mean navigating red tape and complying with regulations. This means staying current with regulatory requirements, investing in staff training, regularly reviewing policies, and getting legal advice when required.

Customer expectations

Hospitality customers, especially those in the luxury sector, have high expectations. Entrepreneurs must strive to exceed expectations to build a loyal customer base. This can mean responding to customer feedback promptly, offering personalized experiences, and being seen to go above and beyond for customers.

Changing industry trends

The hospitality industry is continuously evolving, and new trends are always emerging, making it challenging to keep up with customer demand and market competition. Studying at a luxury hospitality school such as Glion helps entrepreneurs learn how to identify trends and adjust their businesses accordingly.

Developing innovative products and services in the hospitality industry

Glion offers programs that teach students to develop entrepreneurial skills and think creatively within hospitality. Students learn to identify problems and challenges, develop new products and services, and implement successful business models. They’ll also learn about developing marketing and branding strategies to promote their innovations.

Glion has a network of industry professionals and entrepreneurial alumni to provide valuable insights and connections for aspiring entrepreneurs. They also have access to industry experts through internships, industry events, and guest lectures, providing a broad understanding of the industry and current trends.

Securing funding for a new business venture in the hospitality industry

Studying at a luxury hospitality school provides students with practical knowledge of financial management, business planning, and fundraising techniques through its entrepreneurship curriculum. Students have access to experienced faculty members, industry professionals, and alumni who can offer advice on securing funding for business ventures.

The role of entrepreneurship in economic growth and job creation in the hospitality industry

Entrepreneurship is hugely important for both economic growth and job creation within the hospitality industry. Entrepreneurship leads to the launch of new businesses and innovative products and services that encourage economic growth and create new jobs that support local communities.

Statistics on the economic impact of entrepreneurship in the hospitality industry

Entrepreneurship helps the hospitality industry grow, and contributes over $1.9 trillion to the US economy , including $46.71 billion in local and state taxation , on average, each year. Entrepreneurship in the hospitality industry also accounts for more than 8.3 million jobs and 44% of economic activity in the US.

Benefits of entrepreneurship for aspiring entrepreneurs studying at a luxury hospitality school

Studying at a luxury hospitality school allows aspiring entrepreneurs to apply the knowledge and skills they’ve developed in a practical setting. They can develop a unique business idea or concept, gain hands-on experience in managing a business and have the flexibility to work on an idea they’re passionate about.

Skills and traits gained through entrepreneurship

A person can gain many valuable skills and qualities through entrepreneurship. Entrepreneurship enhances problem-solving skills and the ability to use creativity to develop innovative and effective solutions.

Entrepreneurship also fosters resilience, as entrepreneurs must be prepared to take calculated risks and overcome obstacles to succeed. Entrepreneurship is also valuable in helping to improve communication and interpersonal skills, time management, and organizational skills while cultivating a strong work ethic and growth mindset.

Factors leading to entrepreneurial success

Alongside hard work, determination, and adaptability, entrepreneurial success depends on attributes such as resilience, innovative thinking, networking, customer focus, and team building. Successful entrepreneurs are typically passionate about their work and can adapt and innovate to market challenges. They successfully build strong relationships with partners, investors, and customers and can manage their business finances effectively.

Entrepreneurship is an exciting and rewarding path that’s also an important driver of innovation, economic growth, and job creation. While entrepreneurs will inevitably face various challenges, it’s important to be resilient and focus on your business or concept. With a strong work ethic, determination, creativity, and a willingness to learn and adapt, you can become a successful entrepreneur who makes a significant impact.

Photo credits Main image: LukaTDB/E+ via Getty Images

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The impact of entrepreneurship on economic, social and environmental welfare and its determinants: a systematic review

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Published: 04 August 2020
Volume 71 , pages 553–584, ( 2021 )

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This paper presents a systematic review of (a) the impact of entrepreneurship on economic, social and environmental welfare and (b) the factors determining this impact. Research over the past 25 years shows that entrepreneurship is one cause of macroeconomic development, but that the relationship between entrepreneurship and welfare is very complex. The literature emphasizes that the generally positive impact of entrepreneurship depends on a variety of associated determinants which affect the degree of this impact. This paper seeks to contribute to the literature in three ways. First, it updates and extends existing literature reviews with the recently emerged research stream on developing countries, and incorporates studies analysing not only the impact of entrepreneurship on economic growth and welfare but also on social and environmental welfare. Second, it identifies and structures the current knowledge on the determinants of this impact. And third, it provides a roadmap for future research which targets the shortcomings of the existing empirical literature on this topic. The review of 102 publications reveals that the literature generally lacks research which (a) goes beyond the common measures of economic welfare, (b) examines the long-term impact of entrepreneurship and (c) focuses on emerging and developing countries. Regarding the determinants of the impact of entrepreneurship, the results highlight the need for empirical research which addresses both already investigated determinants which require more attention (e.g. survival, internationalisation, qualifications) and those which are currently only suspected of shaping the impact of entrepreneurship (e.g. firm performance, the entrepreneur’s socio-cultural background and motivations).

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1 Introduction

Entrepreneurship and its possible impact on the economy have been studied extensively during the past two decades but the research field still continues to develop and grow. The majority of studies from a variety of scientific disciplines have found empirical evidence for a significant positive macroeconomic impact of entrepreneurship (e.g. Atems and Shand 2018 ; Audretsch and Keilbach 2004a ; Fritsch and Mueller 2004 , 2008 ). However, several empirical studies show that the macroeconomic impact of entrepreneurship can also be negative under certain conditions (e.g. Carree and Thurik 2008 ; Andersson and Noseleit 2011 ; Fritsch and Mueller 2004 , 2008 ). Potential explanations for these contradictory results are to be found in the complex relationship between entrepreneurship and economic growth. Already some of the very first empirical studies on the macroeconomic impact of entrepreneurship showed that factors such as industrial affiliation (Fritsch 1996 ), the country’s level of development and the local density of business owners (Carree et al. 2002 ) significantly determine the impact of entrepreneurship. With more entrepreneurship datasets becoming available, researchers found evidence that only a small number of new firms such as particularly innovative new firms and firms with high-growth expectations create economic value and initiate Schumpeter’s process of ‘creative destruction’ (e.g. Szerb et al. 2018 ; Valliere and Peterson 2009 ; van Oort and Bosma 2013 ; Wong et al. 2005 ). However, over the past decade, researchers have identified a multitude of other relevant determinants (e.g. survival rates of new firms, institutional and cultural settings, motivations and qualifications of the entrepreneur), thereby drawing an increasingly complex web of interrelated determinants around the macroeconomic impact of entrepreneurship. This complexity combined with the fact that the research on determinants is scattered and mostly based on separate analyses of determinants leads to a number of hitherto unidentified research opportunities. In order to detect these opportunities and to exploit them in a targeted manner, a structured overview of the current knowledge on the determinants of the macroeconomic impact of entrepreneurship is required. In this context, a structured overview is not only essential for the scientific entrepreneurship community but also for politicians all over the world who need detailed information on the impact of entrepreneurship to promote the right types of entrepreneurship in the right situations.

To ensure that this information prepared for policy makers are truly comprehensive, it is essential that state-of-the-art research considers not only economic outcomes of entrepreneurship but also its social and environmental effects. This demand for a more holistic impact analyses is based on the call of economists who have been emphasizing since the 1970’s that economic development may is a significant part of welfare, but that social and environmental dimensions need to be considered as well (Daly et al. 1994 ; Meadows et al. 1972 ; Nordhaus and Tobin 1972 ). Tietenberg and Lewis ( 2012 , p. 553) summarised the economic, social and environmental effects in a holistic welfare definition and state that a “true measure of development would increase whenever we, as a nation or as a world, were better off and decrease whenever we were worse off”. This understatement is in line with many authors who recently highlighted the importance of entrepreneurship for social and environmental welfare (e.g. Alvarez and Barney 2014 ; Dhahri and Omri 2018 ; McMullen 2011 ). Entrepreneurship research has come to see entrepreneurs as a solution for social inequality and environmental degradation rather than a possible cause of them (Gast et al. 2017 ; Munoz and Cohen 2018 ; Terán-Yépez et al. 2020 ). This scientific consent of the past 50 years clearly illustrates how important it is that econometric research on entrepreneurship incorporates research on the economic as well as on the social and environmental impact of entrepreneurship. Footnote 1

Considering that the research on the macroeconomic impacts of entrepreneurship has been gaining increasing recognition over the last two decades and across a wide range of disciplines (Urbano et al. 2019a ), literature reviews must be conducted periodically to synthesize and reflect recent progress and to stimulate future research. Several high-quality reviews have already summarized the significant amount of research on the impact of entrepreneurship on the economy. Wennekers and Thurik ( 1999 ) were the first who discussed the link between entrepreneurship and economic growth in a narrative literature analysis. With their summary of the theoretical knowledge of that time and the first framework of the entrepreneurial impact the authors laid the groundwork for the following decade of empirical research on that matter. van Praag and Versloot ( 2007 ), extended that first review by systematically reviewing and evaluating the empirical findings of 57 articles published between 1995 and 2007. More precisely, the authors evaluated the various economic contributions of entrepreneurial firms, which have been defined by the authors as either employing fewer than 100 employees, being younger than 7 years or being new entrants into the market, relative to their counterparts. van Praag and Versloot ( 2007 ) thus made the first systematic attempt to distinguish the few new firms which are of economic relevance from the majority of meaningless new firms. Fritsch ( 2013 ), in a non-systematic monograph, exhaustively surveyed and assessed the then available knowledge on how new firms particularly effect regional development over time. Within this review, the author has established the term ‘determinants’ in the field of research on the impact of entrepreneurship and developed first suggestions on which factors may determine the impact of new firms. However, the author has not provided any empirical evidence for the effect of his proposed determinants. In contrast to these three literature reviews, the three most recent reviews also incorporated the latest findings from international studies and on developing countries. However, the three latest reviews all have a narrowly defined research focus. While Block et al. ( 2017 ; systematic literature review of 102 studies published between 2000 and 2015) analysed antecedents, behaviour and consequences of innovative entrepreneurship, Bjørnskov and Foss ( 2016 ; systematic literature review of 28 studies) and Urbano et al. ( 2019a ; systematic literature review of 104 studies published between 1992 and 2016) focused on the relationship between the institutional context, entrepreneurship and economic growth. Accordingly, all the existing reviews are either (1) already outdated, (2) mostly on highly developed countries or (3) focused on specific topics. Furthermore, none of these reviews provided (4) a structured overview on the empirical knowledge on the impact of entrepreneurship on the economy or (5) included research on the social and environmental impact of entrepreneurship.

This paper addresses these five shortcomings through a comprehensive and systematic review of empirical research into the impact of entrepreneurship on economic, Footnote 2 social and environmental welfare. The methodology of the review is based on the current knowledge of systematic reviews (e.g. Fayolle and Wright 2014 ; Fisch and Block 2018 ; Jones and Gatrell 2014 ; Tranfield et al. 2003 ), on narrative synthesis (e.g. Dixon-Woods et al. 2005 ; Jones and Gatrell 2014 ; Popay et al. 2006 ) and on recent examples of best practice (e.g. Jones et al. 2011 ; Urbano et al. 2019a ; van Praag and Versloot 2007 ). Using this approach, this paper aims to contribute to the literature on the impact of entrepreneurship on welfare in three ways. First, it updates and extends the existing literature reviews. More specifically, it follows recent research recommendations (e.g. Block et al. 2017 ; Fritsch 2013 ; Urbano et al. 2019a ) by incorporating the recent empirical stream of research on the impact of entrepreneurship in developing countries and research that goes beyond measures of common economic welfare. In practical terms, this means that this review not only considers measures of economic welfare (e.g. GDP, employment rates, innovative capacity), but also for social welfare (e.g. life expectancy, literacy rates, income inequality), for environmental welfare (e.g. CO 2 emissions, water pollution, soil quality) and for indicators which incorporate all three welfare dimensions (e.g. Index of Sustainable Economic Welfare, Genuine Progress Indicator). Second, this paper, as demanded in previous reviews (Fritsch 2013 ; Urbano et al. 2019a ), aims to provide a descriptive analysis of the factors determining the entrepreneurial impact by critically assessing (a) which determinants of the entrepreneurial impact have (b) what impact on (c) which measures of economic welfare. This paper thus represents the first comprehensive attempt to summarize and structure the empirical knowledge on the determinants of the impact of entrepreneurship. Finally, to encourage future research, this paper indicates shortcomings in the empirical research not only on the impact of entrepreneurship on economic, social and environmental welfare, but also on the described and structured determinants of this impact. It concludes with suggestions for future research avenues to close these research gaps.

To achieve these objectives, this paper is structured as follows. Section 2 describes the methodological approach of the review. Sections 3.1 and 3.2 report the available empirical research into the impact of entrepreneurship on economic, social and environmental welfare. Section 3.3 summarizes the determinants of this impact and Sect. 4 presents a roadmap for future research. Section 5 discusses the limitations of this paper and provides a conclusion.

2 Methodology

In order to clarify not only the macroeconomic impact of entrepreneurship on economic welfare but also the determinants of this impact, this paper provides a broad-ranging systematic, evidence-based literature review including a narrative synthesis. According to Mulrow ( 1994 ), systematic reviews are particularly useful in identifying and evaluating a large volume of evidence published over a long period of time and have been frequently applied in recent state-of-the-art literature reviews (e.g. Li et al. 2020 ; Mochkabadi and Volkmann 2020 ; Urbano et al. 2019a ). The systematic literature review conducted in this paper employs a rather broad empirical definition of entrepreneurship which covers both the entrepreneur, who creates or discovers new businesses (Kirzner 1973 ; Schumpeter 1942 ) and the entrepreneurial firm itself. Entrepreneurship is understood here as new business activity, which includes entrepreneurs in the process of new firm creation as well as recently founded firms. Furthermore, although not necessarily associated with the formation of new firms, self-employed individuals and owner-managers are defined here as entrepreneurs as well. This general definition is consistent with the majority of empirical studies (e.g. Bosma et al. 2011 ; Fritsch and Schindele 2011 ; Mueller et al. 2008 ). The review process comprises three major steps, namely (1) data collection, (2) the selection of relevant studies and (3) data synthesis.

2.1 Data collection

As a first step, to reduce bias and maintain objectivity in all stages of the review, a review panel was set up. The panel consists of the author, a professor and two doctoral students knowledgeable in this field of research. In order to obtain the most relevant terms for the systematic search, the suggestions of Tranfield et al. ( 2003 ) were followed and a number of scoping studies based on combinations of keywords related to the topic were performed. The insights from this initial search phase were used to further develop relevant search terms resulting in the Boolean search string presented in the online appendix. The number of selected search terms was intentionally rather broad to avoid overlooking potentially valuable studies. It included the most common terms and measures of entrepreneurship and of economic, social and environmental welfare. This search string was subsequently used to scan titles, abstracts, and enclosed keywords of studies in the electronic databases EBSCO Business Source Complete, ProQuest ABI/INFORM Global and Web of Science. These databases were selected, because they allow the application of complex search strings and cover an extensive range of scientific journals from a variety of different disciplines. In order to provide a quality threshold, only peer-reviewed journal articles were scanned, since they are considered as validated knowledge (Podsakoff et al. 2005 ; Ordanini et al. 2008 ). Unpublished papers, books, book chapters, conference papers and dissertations were omitted in the initial search. Furthermore, the search was restricted to studies written in English. The main search was conducted in May 2019 and updated once in December 2019. It yielded, after the removal of duplicates, an initial data set of n = 7533 studies.

In addition to the main search, three more steps were conducted to create an exhaustive sample. First, five journals of particular relevance for the discussion were manually searched. Footnote 3 Second, meta-studies and literature reviews on related topics were screened for additional studies. Footnote 4 And finally, based on the guidelines of Wohlin ( 2014 ), an iterative back- and forward snowballing approach was conducted. The whole process of data collection and selection and its results are summarized in Fig. 1 .

Systematic process of data collection and selection

2.2 Data selection and quality assessment

The studies collected during the main search were carefully reviewed to determine whether they were suitable for the objective of this paper. Titles, abstracts and, in doubtful cases, whole studies were checked against the following set of selection criteria.

Studies must analyse the macroeconomic impact of entrepreneurship by applying at least one economic, social or environmental welfare measure on an aggregated regional, national or global level.

Studies must employ definitions of entrepreneurship as discussed in the introduction of Sect. 2 . Studies that solely analysed the impact of small firms, intrapreneurship, corporate-entrepreneurship, institutional entrepreneurship, or entrepreneurial capital were excluded.

Studies must apply adequate quantitative methods to measure the impact of entrepreneurship. Studies that only discuss this matter theoretically, that follow a qualitative approach or that do not go beyond simple correlation techniques were excluded.

Studies must analyse spatial units, as they seem to be considerably better suited to analysing the impact of entrepreneurship (Fritsch 2013 ). Studies that are based on the analysis of industry units were excluded.

Studies must analyse long-term panel data or data on an adequately aggregated level to account for demographic, political and economic events. Studies that analysed single spatial units over a short period of time were excluded.

Due to the broadness of the search string, the main search yielded many studies which solely dealt with the microeconomic performance of new firms or which analyse how the local level of development determines the number of new firms. Studies which were not related to the research questions or did not meet all five selection criteria, were manually removed. This process of selection in the main search led to a total of n = 92 studies. The three additional search steps increased this number by n = 10, resulting in a final data set of n = 102 studies, including two high-quality book chapters which present empirical results of particular relevance to the paper’s objective (namely Stam et al. 2011 ; Verheul and van Stel 2010 ). When comparing the sample size with that of related literature reviews, it appears to be appropriate. Hence, even if the selected sample is not exhaustive, it is very likely to be representative of the relevant literature.

2.3 Data analysis

Given that research in this area employs a variety of measures of entrepreneurship and of economic welfare and is methodologically diverse, it was unfeasible to perform a meta-analysis. Instead, an integrative and evidence-driven narrative synthesis based on the guidelines established by Popay et al. ( 2006 ) was chosen to aggregate, combine and summarise the diverse set of studies. Narrative synthesis is considered particularly useful when, as in this case, research area is characterised by heterogeneous methods, samples, theories, etc. (Fayolle and Wright 2014 ).

Once the final set of studies had been identified, the characteristics and study findings were extracted by carefully reading the methods and results sections. To reduce research bias, a review-specific data-extraction form was employed. The extraction-form is based on the suggestions of Tranfield et al. ( 2003 ) and Higgins and Green ( 2008 ) and contains general information, details about the analysed samples, the applied measures of entrepreneurship and economic welfare, the applied econometric techniques as well as short summaries of the relevant findings and the identified microeconomic impact factors.

3 Results of the literature review

The main results of the literature review regarding the impact of entrepreneurship on economic, social and environmental welfare and the determinants of this impact are presented in Table 5 (see online appendix). The large number of gathered studies on impact of entrepreneurship (n = 102) as well as on its determinants (n = 51) attest to the fact that this field of research has already been studied in great detail. Most of the identified studies were published in high-quality management, economics, social science and environmental science journals. Table 1 illustrates that the main part of the cross-disciplinary scientific discussion, however, took place in the Journals Small Business Economics (24%) and Regional Studies (7%). The number of empirical studies published per year has increased over the last decade, indicating the topicality of the research field and the need for an updated review of the new knowledge.

Figure 2 summarizes the statistics of the large amount of data gathered in Table 5 (see appendix) and illustrates the complexity of the research field. The left-hand-side lists the measures of entrepreneurship used in the analysed studies and shows how often they were applied. The most frequently applied measure of entrepreneurship is new firm formations either (a) per work force (labour market approach), (b) per number of existing firms (ecological approach) or (c) per capita. Another frequently applied measure of entrepreneurship is total early-stage entrepreneurial activity (TEA) based on data from the Global Entrepreneurship Monitor (Reynolds et al. 2003 ) or its subgroups: necessity-driven entrepreneurial activity (NEA), opportunity-driven entrepreneurial activity (OEA), innovative entrepreneurial activity (IEA) and high-growth expectation entrepreneurial activity (HEA). Other authors estimated regional entrepreneurship using self-employment or business ownership rates. The Kauffman Foundation Index for entrepreneurial activity is used less frequently, as it is a specific measure of entrepreneurship for US regions.

Overview of applied measures of entrepreneurship and welfare, and analysed determinants. Note : the numbers in brackets represent the numbers of associated empirical studies

Regarding the right-hand-side of Fig. 2 , it is noticeable that the majority of authors analysed the impact of entrepreneurship on economic welfare, primarily on GDP, growth and employment-related measures. Far fewer studies analysed the impact on the economic measures of national competitiveness or innovativeness, e.g. the number of patent applications. In contrast to the clear research focus on economic welfare, only five studies were found which analysed the impact of entrepreneurship on environmental or social welfare. Although many common measures of social and environmental welfare (e.g. crime rates or ecological footprint) were explicitly included in the search string (see online Appendix), no studies could be found that analyse the impact of entrepreneurship on them.

Independent of the measures of entrepreneurship and welfare used, the reviewed studies test their relationship by applying a very heterogenous set of methods. With the availability of more and more cross-sectional data covering longer and high-frequency time-series, authors started to apply new econometric approaches such as pooled and panel data regressions, fixed effect models, and subsequently, dynamic panel data models. Most authors based their analyses on rather straightforward regression techniques.

Sections 3.1 and 3.2 discuss empirical knowledge relating to the impact of entrepreneurship on economic welfare as well as on social and environmental welfare. Section 3.3 deals with the empirical evidence on the factors which determine this impact of entrepreneurship (see the lower part of Fig. 2 ).

3.1 Impact of entrepreneurship on economic welfare

The analysed literature predominantly confirms the results of previous literature reviews and gives empirical evidence that new firm formations have a generally positive effect on regional development and economic performance. The relationship holds for all tested measures of entrepreneurship and is robust across a broad range of spatial and cultural contexts.

The impact does, however, differ over time. Fritsch and Mueller ( 2004 ) studied the time-lag structure of the impact of entrepreneurship by applying an Almon lag model of different polynomial orders in their study of 326 West German regions. Their results revealed that the impact of entrepreneurship follows a typical time-sequence: an S- or wave-shaped pattern which can be structured into three phases. Phase I is defined by a positive immediate increase of employment (direct effects of new capacities). After approximately 1 year, in phase II, this positive short-term impact becomes smaller, insignificant or even negative (displacement effects and market selection). Around year five, this medium-term impact becomes positive again and reaches a peak in year eight (supply-side and spill-over effects). This positive long-term effect of entrepreneurship on employment, which defines phase III, diminishes after a period of 10 years.

Table 2 presents the findings of all reviewed studies which analysed the impact of new firm formations on employment and GDP in one, two or all three phases. It shows that the findings regarding the impact of entrepreneurship on employment are largely consistent with the wave-pattern theory. The existence of the wave-pattern could be confirmed on different regional levels for Great Britain (Mueller et al. 2008 ), for the United States (Acs and Mueller 2008 ; Henderson and Weiler 2009 ), for Portugal (Baptista et al. 2008 ; Baptista and Preto 2010 , 2011 ), for West Germany (Fritsch and Mueller 2008 ; Fritsch and Noseleit 2013a ), for the Netherlands (van Stel and Suddle 2008 ; Koster 2011 ; Delfmann and Koster 2016 ), for Sweden (Andersson and Noseleit 2011 ), for China (Rho and Gao 2012 ) for Canada (Matejovsky et al. 2014 ) as well as in several cross-country studies on OECD countries (Audretsch et al. 2015 ; Carree and Thurik 2008 ; Koellinger and Thurik 2012 ; Thurik et al. 2008 ). Furthermore, the reviewed studies reveal that this relationship not only holds for new firm formations as a measure of entrepreneurship but also for self-employment (e.g. Matejovsky et al. 2014 ; Rho and Gao 2012 ; Thurik et al. 2008 ) and business ownership (e.g. Carree and Thurik 2008 ; Henderson and Weiler 2009 ; Koellinger and Thurik 2012 ). The latter two measures of entrepreneurship, however, seem to have a less pronounced impact (Acs and Armington 2004 ; Rho and Gao 2012 ; Dvouletý 2017 ). Empirical evidence suggests a similar wave-pattern for the impact of entrepreneurship on GDP. Studies on GDP analysing all three phases confirm the positive short- and long-term peaks. However, in contrast to the results on employment, they find the medium-term impact to be less pronounced and positive (Audretsch et al. 2015 ; Carree and Thurik 2008 ; Koellinger and Thurik 2012 ; Matejovsky et al. 2014 ). The few empirical results displayed in Table 2 , which contradict the wave-pattern theory (e.g. findings of a negative short-term impact of entrepreneurship on GDP), can largely be explained by certain determining factors such as a differing impact in developing countries (see Sect. 3.3.4 ) or of necessity-driven entrepreneurship (see Sect. 3.3.9 ).

The results for other measures of economic welfare are scarce and contradictory. Ferreira et al. ( 2017 ) analysed the short-term impact of entrepreneurship on different measures of competitiveness and found that TEA and IEA positively related to competitiveness. However, they found no significant relationship between OEA and competitiveness. On the contrary, a study by Mrozewski and Kratzer ( 2017 ) found a positive relationship between OEA and competitiveness, but not between TEA and competitiveness.

The empirical results regarding the impact of entrepreneurship on innovativeness are also inconclusive. Acs and Varga ( 2005 ) and Draghici and Albulescu ( 2014 ) found that OEA has a positive impact on patent applications and innovation indices, but that TEA and NEA do not have any significant impact on them. Anokhin and Wincent ( 2012 ) found a positive impact of TEA on innovativeness but a more recent study from Albulescu and Draghici ( 2016 ) found that neither TEA nor OEA have a significant relationship to innovativeness. Similarly, Cumming et al. ( 2014 ) found new firm formations based on the labour market approach have a positive short-term impact on patent applications, but new firm formations based on the ecological approach and business ownership rates do not.

3.2 The impact of entrepreneurship on social and environmental welfare

Contrary to the well-researched impact of entrepreneurship on employment and GDP, little is known about the impact on social and environmental welfare. Three independent studies recently found empirical evidence that entrepreneurship positively affects measures of social welfare. Rupasingha and Goetz ( 2013 ) found that in the short-term self-employment reduces poverty in rural and urban U.S. counties, Atems and Shand ( 2018 ) found that in the medium-term self-employment decreases income inequality in U.S. states and, finally, Dhahri and Omri ( 2018 ) found new firm formations to increase the national modified Human Development Index (MHDI) in developing countries.

The empirical research on the impact of new firm formations on environmental welfare, however, illustrates that entrepreneurship may also come with major drawbacks. Omri ( 2017 ) as well as Dhahri and Omri ( 2018 ) and Ben Youssef et al. ( 2018 ) found that new firms significantly increase the amount of national CO 2 -emissions. According to Ben Youssef et al. ( 2018 ), this unfortunate impact on CO 2 -emissions is in fact so great that, despite the positive impact on GDP, new firms decrease Genuine Savings (also known as adjusted net saving) in African countries. They also found that the impact is more pronounced for informal new firm formations. This finding matches the results of Omri ( 2017 ), who detected the impact on CO 2 -emissions to be lower in developed countries which generally have lower rates of informal entrepreneurship (Williams and Lansky 2013 ). Furthermore, Omri ( 2017 ) discovered that the relationship between new firm formations and CO 2 -emissions is not linear but can be described as exhibiting an inverted U-shape. Thus, at an already high level of entrepreneurship, new firm formations may result in a decrease in CO 2 -emissions.

3.3 Determinants of the impact of entrepreneurship

So far, the empirical results suggest, in many cases, a clear causal macroeconomic impact of new firm formations on economic measures of welfare. However, this topic is reasonably complex, and the complexity increases further when determining factors of this impact are considered. The lower part of Fig. 2 presents an overview of the empirical knowledge on these determinants. A key finding of this review, namely that all of the found analyses of determinants focus exclusively on the economic effects of entrepreneurship, is, however, not illustrated in Fig. 2 . The review revealed that, although they are strongly interdependent, the determinants of the impact of entrepreneurship can generally be categorized into external environmental conditions, firm level characteristics and individual characteristics of the entrepreneurs themselves. Figure 2 illustrates that most empirical research has been conducted on the determining environmental conditions and on the firm level characteristic innovativeness and on the individual level characteristic motivations . In fact, some of the determinants presented have already been thoroughly investigated in highly recommendable earlier literature reviews, namely: industry affiliation (Fritsch 2013 ), regional population - and entrepreneurship density (Fritsch 2013 ), institutions and culture (Bjørnskov and Foss 2016 ; Urbano et al. 2019a ), innovativeness (Block et al. 2017 ). The review for this paper confirms these findings and briefly summarizes the key learnings in the Sects. 3.3.1 to 3.3.3 and 3.3.5 . However, except for a recently emerged empirical research stream on innovativeness , no new insights could be gained on the already reviewed determinants. Therefore, the focus of this section is primarily on the empirical evidence which has not yet been systematically investigated.

3.3.1 Industry affiliation

Fritsch ( 1996 ) was one of the first to analyse how entrepreneurial impact differs between industries. He focused on the impact of new firm formations on employment in West Germany and found it to be significantly higher in the manufacturing sector than in the service sector. Several authors confirmed this finding for the Netherlands (van Stel and Suddle 2008 ), for West-Germany (Fritsch and Mueller 2004 ) and for Sweden (Andersson and Noseleit 2011 ). Other studies, however, found the impact of new firms on economic welfare measures to be higher in the service sector (Bosma et al. 2011 ; Koster and van Stel 2014 ). Fritsch ( 2013 ) reasoned that these contradicting results may be due to considerable differences between the industries in different regions or countries and thus an analysis at the industry level might be not appropriate at all. For more information on the industrial perspective of the entrepreneurial impact on the economy, Fritsch ( 2013 ) provides a comprehensive overview including policy implications and avenues for further research.

3.3.2 Regional population- and entrepreneurship density

In a second wave of literature, researchers analysed how the impact of entrepreneurship differs between regions. They found clear evidence that the magnitude of the entrepreneurial impact is positively related to the population density (Baptista and Preto 2011 ; Fritsch and Mueller 2004 , 2008 ; Fritsch and Schroeter 2011 ; Henderson and Weiler 2009 ; Lee 2017 ; Li et al. 2011 ; van Stel and Suddle 2008 ). In urban regions and agglomerations, new firms have a more pronounced and more positive impact on employment (Baptista and Preto 2011 ; Henderson and Weiler 2009 ; van Stel and Suddle 2008 ) and GDP (Audretsch et al. 2015 ; Belitski and Desai 2016 ) throughout all three previously described phases (see Sect. 3.1 ). On the contrary, in rural and less agglomerated regions, the entrepreneurial impact is weak and often negative (Fritsch and Mueller 2004 , 2008 ).

While the economic relevance of new firm formations seems to increase with the population density, empirical evidence suggests that this is not the case for the relation between firm formations and regional entrepreneurship density. On the contrary, several authors found that the economic effect of another new firm becomes lower the more entrepreneurs are already on the market and even zero for regions with high entrepreneurship rates close to equilibrium rate (e.g. Carree et al. 2002 , 2007 ; Mueller et al. 2008 ). These empirical insights identify entrepreneurship as a regional phenomenon and illustrate that macroeconomic effects of new firms are shaped by local conditions. An in-depth discussion of regional differences in the macroeconomic impact of new firms can be found in the monograph by Fritsch ( 2013 ).

3.3.3 Institutions and culture

To shed light on the complex interactions between institutions, entrepreneurship and economic growth, Urbano et al. ( 2019a ) and Bjørnskov and Foss ( 2016 ) recently conducted thorough literature reviews. The empirical evidence identified in the present paper (Aparicio et al. 2016 ; Audretsch and Keilbach 2004a , b , c ; Bjørnskov and Foss 2016 ) is in line with the findings of these two reviews which suggest that institutions affect the economy indirectly through endogenous factors like entrepreneurship. This holds true for formal institutions like (academic) support systems for new firms, procedures and costs to create a business, property rights or political structures as well as for informal institutions like social norms, cultures or belief systems (Urbano et al. 2019a ). However, in contrast to Bjørnskov and Foss ( 2016 ), Urbano et al. ( 2019a ) suggest that formal and informal institutions are not of equal importance, but that social norms and cultures have higher and more positive effects on the relation between entrepreneurship and economic growth.

3.3.4 Local level of development

While Sect. 3.1 illustrates that the impact of entrepreneurship in developed countries follows a typical wave-pattern, until now, no studies have analysed this time-pattern in developing countries. In general, the empirical evidence on the impact in developing countries is contradictory: some studies found a positive impact of entrepreneurship (Ben Youssef et al. 2018 ; Dhahri and Omri 2018 ; Feki and Mnif 2016 ; Stam et al. 2011 ), others found no or even a negative impact (Anokhin and Wincent, 2012 ; Ferreira et al. 2017 ; Verheul and van Stel 2010 ). However, studies which compared countries in different development stages found that the magnitude of the impact of entrepreneurship depends on the national welfare level and is generally higher in more developed countries (Anokhin and Wincent 2012 ; Carree et al. 2002 , 2007 ; Crnogaj et al. 2015 ; Hessels and van Stel 2011 ; Urbano and Aparicio 2016 ; Valliere and Peterson 2009 ; van Stel et al. 2005 ; Verheul and van Stel 2010 ). Furthermore, little is known on the mechanisms behind the impact of entrepreneurship in developing countries. Most of the few studies which specifically deal with developing countries (n = 19) analysed the impact on a national level (n = 16) based on GEM data (n = 12), focused on the impact on GDP related measures (n = 17), or solely analysed the short- or medium-term impact (n = 16).

3.3.5 Innovativeness

According to the knowledge spillover theory of entrepreneurship, new knowledge results in business opportunities and entrepreneurs exploit these opportunities by turning the new knowledge into innovative products (Acs et al. 2009 , 2013 ; Audretsch and Keilbach 2005 ). Recent studies confirm this theory and provide empirical evidence that entrepreneurship moderates the transformation of new knowledge into innovations (Block et al. 2013 ) and that innovative regions with higher levels of entrepreneurship perform economically better (González-Pernía et al. 2012 ). Accordingly, it is reasonable to assume that particularly innovative new firms are more important to economic welfare than their non-innovative counterparts. These considerations coincide with those presented in the literature review on innovative entrepreneurship by Block et al. ( 2017 ). However, the present systematic literature review extends the review of Block et al. ( 2017 ) by including previously unconsidered as well as recently emerged empirical evidence on the macroeconomic impact of innovative entrepreneurship. The identified empirical studies do indeed confirm the presumed positive impact of innovativeness. Crnogaj et al. ( 2015 ) as well as Du and O’Connor ( 2017 ) and Szerb et al. ( 2018 ) used GEM data to compare the impact of founders who stated their products or services to be new or at least unfamiliar to their customers. All of the previously mentioned authors found that innovative founders have a higher impact on GDP, economic efficiency, gross value added (GVA) and employment than less innovative founders. Furthermore, earlier studies attest to new firms which are in innovative, knowledge- or technology-intensive industries a higher than average impact on both GDP (Audretsch and Keilbach 2004a , b , 2005 , Mueller 2007 ) and employment (Baptista and Preto 2010 , 2011 ).

3.3.6 Firm survival

Empirical evidence suggests that a particularly important determinant of the impact of entrepreneurship is whether new firms are able to survive the first years. Falck ( 2007 ) was the first to find empirical evidence of a positive relationship between new firms which survive for at least 5 years and efficiency of the industry in which they are in. On the contrary, he could not find any significant relationship to industry level efficiency growth for firms which did not survive the first 5 years. Brixy ( 2014 ), Fritsch and Noseleit ( 2013b ) and Fritsch and Schindele ( 2011 ) have confirmed that Falck’s ( 2007 ) findings not only hold for the relationship between entrepreneurship and GDP but also for the relationship between entrepreneurship and employment.

3.3.7 Firm size

Baptista and Preto ( 2010 ) found that new firms of a larger than average initial size have a strong impact on employment and that this impact follows a pronounced wave-shaped time-lag structure (see Sect. 3.1 ). New firm formations which are smaller than average, on the other hand, only have a small impact. Acs and Mueller ( 2008 ) confirmed this finding and show that small new firms have a positive but declining direct impact on employment. The impact of medium and large new firms, however, is much higher and increases till it peaks in year five. Very large new firms (> 499 employees), however, decrease employment in the short- and medium-term, probably due to restructuring processes of incumbents. This empirical evidence suggests that up to a threshold, large new firms have a larger impact on employment.

3.3.8 Degree of internationalization

A less studied but yet empirically significant determinant is a firm’s degree of internationalization. Baptista and Preto ( 2010 ) analyzed 30 Portuguese regions and found that new firms which were, at least, partially owned by foreign investors had a much higher and more pronounced medium- and long-term impact on employment. A second measure of the positive impact of internationally active new firms is the export-orientation of new firms. Hessels and van Stel ( 2011 ) compared the impact of total-entrepreneurial activity and export-driven entrepreneurial activity on GDP per capita in 34 developed and developing countries. They found evidence that new firms for which the share of customers living abroad is above 26% have a more positive impact on GDP—but only in developed countries. González-Pernía and Peña-Legazkue ( 2015 ) confirmed their finding on a regional level by comparing OEA and export-oriented OEA in 17 Spanish regions. Besides a generally higher impact of export-oriented new firms, González-Pernía and Peña-Legazkue ( 2015 ) found that the impact increases with higher shares of foreign customers up to a threshold level. An earlier study by Fryges and Wagner ( 2008 ), who found a positive relationship between firm-level productivity and export-sales ratio, supports the evidence for a more positive impact of internationally active new firms.

3.3.9 Motivation

The literature review conducted for this paper provided eleven studies which empirically tested the macroeconomic importance of the entrepreneur’s motivations. All of these studies applied GEM-based data and definitions for opportunity-driven entrepreneurial activity (OEA) and necessity-driven entrepreneurial activity (NEA). Although four of these studies could not find a significant economic impact of OEA or NEA (Albulescu and Draghici 2016 ; Ferreira et al. 2017 ; Valliere and Peterson 2009 ; Wong et al. 2005 ), the other seven studies found evidence that OEA significantly increases national innovativeness (Acs and Varga 2005 ; Draghici and Albulescu 2014 ), competitiveness (Mrozewski and Kratzer 2017 ) and productivity (Du and O’Connor 2017 ; González-Pernía and Peña-Legazkue 2015 ; Ivanovic-Ðukic et al. 2018 ; Urbano and Aparicio 2016 ). Moreover, six of these seven studies confirmed that the impact of OEA is higher compared to NEA and TEA. Mrozewski and Kratzer ( 2017 ) even found NEA to decrease the national competitiveness.

3.3.10 Growth-ambitions

There are some entrepreneurs who not only seek to exploit a business-opportunity but also have high growth - ambitions for their new firms. All five empirical studies selected for this paper take GEM data on high-growth expectation entrepreneurship (HEA) as a measure of the entrepreneur’s growth - ambitions and found that it has a significantly positive impact on GDP-related measures of welfare. Furthermore, the impact of HEA seems to be more positive compared to TEA, to NEA and even to OEA (Ivanović-Đukić et al. 2018 ; Stam et al. 2011 ; Valliere and Peterson 2009 ; Wong et al. 2005 ). Generally, this macroeconomic impact of HEA seems to increase with the level of growth-aspiration (van Oort and Bosma 2013 ). The positive impact of HEA on economic welfare could be confirmed on the regional- and national-level as well as for developed countries. For less-developed countries, however, the empirical evidence is contradicting. On the one hand, Valliere and Peterson ( 2009 ) only found a significant impact of HEA on GDP for 25 developed countries, but not for the 18 emerging countries. On the other hand, Stam et al. ( 2011 ) found the impact of HEA on GDP in eight analysed lower-income to upper-middle-income economies (World Bank 2002 classification) even higher compared to the impact in the 22 analysed high-income economies.

3.3.11 Qualification

While many microeconomic studies have highlighted that an entrepreneur’s qualifications in terms of education (e.g. Kangasharju and Pekkala 2002 ), skills and experience (e.g. Brüderl et al. 1992 ; Baum et al. 2001 ; Unger et al. 2011 ) play a significant part in the success of new firms, only one of the studies empirically investigated the macroeconomic impact of education. This is an analysis of 3702 German firms conducted by Engel and Metzger ( 2006 ). It suggests that new firms founded by people with an academic degree may have a more positive direct employment effect, than firms founded by people without an academic degree. This finding is, however, based on an old dataset (1990–1993) and a simple descriptive comparison and the authors did not apply control variables such as the regional density of more educated people.

3.3.12 Gender and age

Only one study could be found which empirically analysed the economic impact of the entrepreneur’s gender and age . This study was conducted by Verheul and van Stel ( 2010 ) and was based on a dataset of 36 developed and developing countries. Their results show that there is a positive relationship between young opportunity-driven entrepreneurs between the ages of 18 and 24 and national GDP growth in developed countries, while in developing countries there is only a significant positive relationship between entrepreneurs aged between 45 and 64 and GDP growth (Verheul and van Stel 2010 ). Contrary to the microeconomic literature (e.g. Cliff 1998 ; Kalleberg and Leicht 1991 ; Rosa et al. 1996 ), Verheul and van Stel ( 2010 ) could not find any significant gender differences on the macroscale.

4 Roadmap for further research

The major scientific value and contribution of this paper lies in the groundwork for future research. Despite the extant of the reviewed existing research, many questions still remain unanswered. The following two sections therefore highlight the shortcomings of current research and make suggestions on how to address them. Section 4.1 discusses how remaining gaps in empirical research into the impact of entrepreneurship can be addressed and Sect. 4.2 presents fruitful research avenues on the determinants of the impact of entrepreneurship.

4.1 Implications for future research on the impact of entrepreneurship

4.1.1 more variety in the measures of entrepreneurship.

A high variety of measures of entrepreneurship is required to test the robustness of results but international comparative studies, in particular, are mainly based on just two entrepreneurship datasets: Comparative Entrepreneurship Data for International Analysis (COMPENDIA) based on OECD statistics and data from the GEM research project. The use of a high variety of entrepreneurship definitions and measures of entrepreneurship across studies makes it difficult to compare the results of these studies. While some studies simply estimate entrepreneurship based on self-employment rates or business-ownership rates, others measure entrepreneurship by counting new firm formations and firm exits or use holistic measures based on, e.g., Schumpeter’s understanding of entrepreneurship.

In order to test the robustness of the results and, at the same time, to allow for comparability between different studies, researchers should employ not one but multiple common measures of entrepreneurship in future studies. To make this possible, policy makers need to encourage the creation of internationally harmonized entrepreneurship databases. Furthermore, due to the limited availability of entrepreneurship data, only a few empirical studies have made a distinction between different types of entrepreneurship. That is why, as recommended by many researchers before (e.g. Baptista and Preto 2011 ; Fritsch and Schroeter 2011 ; Urbano et al. 2019a ), this study calls for more diversity in the application of measures of entrepreneurship.

4.1.2 Implementation of measures of social and environmental welfare

Section 3.1 revealed that 95.1% of the examined empirical studies only analysed the impact of entrepreneurship on economic welfare. Politicians who have no information on the impact of entrepreneurship on social and environmental welfare and thus solely rely on this economic information, however, may implement unsustainable development strategies (Tietenberg and Lewis 2012 ). Indeed, the few empirical studies (n = 5) which go beyond a traditional economic analysis indicate that entrepreneurship also has a significant contribution to measures of social and environmental welfare such as HDI, CO 2 emissions or poverty, which must not be neglected by politicians and researchers alike. To fill the immense gap in research on the impact of entrepreneurship on social and environmental welfare, two simultaneous approaches are proposed. First, as mentioned before, future research should generally include a variety of dependent welfare variables—social and environmental as well as economic ones. Second, future research should adopt research designs that have already proved effective in the macroeconomic impact analysis to answer novel research questions that address the impact of entrepreneurship on social and environmental welfare. The required methods for such analyses have been tested many times and, at least at national level, data availability poses no problem. Most countries have not only been collecting specific social and environmental welfare data for many years, but also established more holistic measures of welfare such as the Index of Sustainable Economic Welfare. Accordingly, it is up to the research community to break with traditions and expand the field of research by analysing social and environmental welfare rather than just economic welfare.

4.1.3 More research on developing countries

Section 3.3.4 illustrated that the local level of development is a relevant determinant of the impact of entrepreneurship. Nevertheless, most of the research reviewed for this paper focused solely on developed countries. This can partly be explained by the fact that most of the authors of these studies are based in Europe and the US, as well as by the lack of adequate long-term data for developing countries. However, this has begun to change. In the past 5 years, the number of empirical studies on developing countries has more than doubled to n = 30. Nevertheless, regional-level studies as well as long-term studies for developing countries remain scarce. Because of the growing importance of developing and particularly BRICS countries, it is important to increase the knowledge on how the impact of entrepreneurship manifests in these countries.

4.1.4 More studies on the lag-structure of the impact of entrepreneurship

Section 3.1 illustrates that although the important indirect impact of entrepreneurship requires 5 or more years to unfold, most empirical research focuses on the direct short-term impact. Neglecting the long-term effects of entrepreneurship therefore results in an incomplete picture. Furthermore, the analysis of longitudinal data is required to conduct relevant causality tests. So far, the bottleneck for national-level long-term studies has been the lack of longitudinal data. But, due to more than 20 years of worldwide data collection for the GEM, there is now at least one sufficiently large entrepreneurship database. In line with other authors who have recognised this issue (e.g. Baptista et al. 2008 ; Carree and Thurik 2008 ; Fritsch 2013 ), this paper recommends that all future research should analyse not only the short-term but also the medium- and long-term impact of entrepreneurship.

4.2 Implications for future research on determinants

Table 3 summarizes key statistics for the determinants in the research reviewed for this paper. Comparing the last two rows, it seems that the studies analysing the determinants of the impact of entrepreneurship are a representative share of all reviewed studies. For this reason, the previously presented suggestions for future research also apply to literature on the determinants. On closer examination, however, Table 3 reveals further and more precise research gaps. These include, inter alia, the need to study particularly the environmental and firm level determinants in developing countries, and the analysis of individual level determinants in combination with the lag-structure of the impact of entrepreneurship. The requirement for more long-term studies is further highlighted here. This finding further specifies the previous call for more long-term studies. The following subsections present further research and research implications.

4.2.1 More variety in measures of entrepreneurship

Table 3 shows that research on environmental and firm level determinants are mainly based on new firm formations as a measure of entrepreneurship, and research on individual level determinants almost solely measures entrepreneurship using GEM data.

The only exceptions are studies on the determinants local level of development —which are comparing the entrepreneurial impact across countries and thus are also mostly based on GEM data—and on innovativeness . None of the studies on the determinants apply self-employment (for the sake of clarity not presented in Table 3 ) to estimate entrepreneurship. This illustrates that the research on all individual determinants, except for innovativeness , considerably lacks variety when it comes to the applied measures of entrepreneurship.

4.2.2 More variety in measures of welfare

In addition to the fact that there are no studies examining the determinants of the impact of entrepreneurship on social or environmental welfare, there is also a lack of variety in the studies of measures of economic welfare. Studies on all individual level determinants and particularly on the determinant local level of development almost exclusively analyse the impact of entrepreneurship on GDP-related measures of welfare. Studies on the determinants industry affiliation , population density , firm survival and firm size mainly analyse employment effects of entrepreneurship. Other common measures of economic welfare, such as innovativeness or competitiveness, are rarely studied and need further investigation.

4.2.3 Further research on determinants

Table 3 illustrates that the existing research is imbalanced and that it pays varying degrees of attention to individual determinants. Determinants such as innovativeness , motivations and most environmental level determinants have so far received a great deal of attention, while others have only been analysed in very few studies. However, some of these poorly researched factors promise to be relevant determinants. More specific, the few existing empirical results analysing firm survival , degree of internationalisation and growth - ambitions suggest that these determinants have a comparatively high effect on the relationship between entrepreneurship and economic welfare. Furthermore, these determinants as well as the largely unexplored determinant qualifications are of considerable practical and political relevance. More empirical research on these determinants and their moderating role is required to improve incentives and support programs for entrepreneurs.

4.2.4 New research focus on determinants not yet empirically investigated

Table 4 provides a short overview of determinants which are likely to shape the entrepreneurial macroeconomic impact, but which have not yet been empirically investigated. They are a selection of indicators which are believed to determine the impact of entrepreneurship on economic welfare or which are empirically related to the success and survival of new firms and thus are also likely to be of macroeconomic importance. The overview is based on a non-systematic scan of the microeconomic literature and makes no claim to completeness. Due to their particularly high microeconomic relevance highlighted by the authors listed in Table 4 , this paper specifically proposes additional research on how firm performance, organisational structure and strategies, networking activities and motivations (beyond necessity and opportunity entrepreneurship) determine the impact of entrepreneurship.

4.2.5 Methodological recommendations

Many of the determinants discussed here are highly interdependent, which makes it very difficult to extract and examine their separate effects. Individual level characteristics and environmental conditions are especially likely to affect the impact of entrepreneurship mainly indirectly through firm performance. The complexity is increased further as determinants may be indicators for other macroeconomically relevant effects. For instance, the numbers of highly innovative new firms and of highly qualified entrepreneurs may be positively correlated with the excellence of the regional educational infrastructure. This in turn could mean that the excellence of educational infrastructure is the true reason for economic growth and innovative new firms and highly qualified entrepreneurs have little or no economic impact but are merely indicators for the educational infrastructure. However, little is currently known about such interdependencies and research is required which particularly studies the path dependencies behind the impact of entrepreneurship. This is why future empirical research should examine determinants which are supposed to be interdependent as well as external effects which may be related to the determinants of interest.

5 Limitations and conclusion

This paper has shed light on the impact of entrepreneurship on economic welfare and the determinants of this impact, but it is not without limitations. First, this paper seeks to give a comprehensive overview of the empirical research, but the search was limited by a variety of in- and exclusion criteria as well as by the terms used in the search string. Although the exclusive focus on peer-reviewed articles is common practice in systematic literature reviews, this may have led to the systematic exclusion of potentially relevant research outcomes, e.g. from dissertation, book chapters, conference contributions or working papers. Furthermore, it is possible that individual studies were not identified by the automated search for the search string in keywords, titles and abstracts. These limitations were necessary to reduce the search results to a manageable level and to ensure a certain quality of the results. The additional screening of key journals, meta-studies and reviews as well as the applied back- and forward snowballing approach, however, weaken the effects of these limitations. Second, this paper only deals with empirical studies. The inclusion of qualitative studies might have revealed further studies dealing with the impact of entrepreneurship on environmental and social welfare. Additionally, the exclusion of qualitative studies limits the analytical depth within the discussion of the determinants. Third, the paper focused on research on a few selected measures of entrepreneurship. In doing so, intrapreneurship, entrepreneurship culture or diverse composed entrepreneurial activity measures of entrepreneurship were excluded. Fourth, it needs to be stated that large parts of the data selection and synthesis were only conducted by the author. Although the chosen procedure and the frequent consultation with the research panel reduced the likelihood of biases, the chance remains that the review is burdened with subjectivity and selection biases. Finally, the scope of this paper was to provide a first descriptive summary of the determinants analysed in the empirical literature and to derive research recommendation. Due to this clear focus this paper does not comprise extensive bibliometric- or meta-analyses that describe in detail the general literature on the impact of entrepreneurship.

The systematic review presented in this paper was conducted for three main reasons. First, to summarize the current state of empirical research on the impact of entrepreneurship on economic, social and environmental welfare. Second, to identify the determinants of this impact and third, to develop a roadmap for future research. Due to the application of a broad entrepreneurship definition and due to the incorporation of economic, social and environmental welfare, this paper presents the most comprehensive overview, summary and synthesis of empirical research on this topic to date. The results confirm the findings and theories of previous literature reviews on the impact of entrepreneurship, provide an update and extension to the current knowledge and finally, represent a first attempt to structure the determinants of the impact of entrepreneurship. The new determinants-driven perspective on the research field reveals several shortcomings that would otherwise have gone unnoticed. The developed roadmap for future research—combined with a higher variety of applied measures of entrepreneurship and with an increased awareness of causality and interdependency issues—will allow future researchers to unravel the complex relationship between entrepreneurship and welfare and therewith to provide politicians the comprehensive information they need to promote the right types of entrepreneurship in the right situations.

For purposes of this study, the three welfare dimensions refer to the widely used definition of the three pillars of sustainable development (economic growth, social equality protection, environmental protection) of the Brundtland Report (World Development Commission on Environment and Development 1987 ). However, the reader should note that later sustainability models like the ‘prism model’ or the ‘concentric circles model’ illustrate that the three pillars of sustainable development (resp. the three welfare dimensions) are interlinked and not always clearly separable from one another.

Although the author is fully aware of their different meanings, for simplicity, the more general term ‘economic welfare’ is used throughout this paper as synonymous with the terms ‘economic growth’ and ‘economic development’.

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Acknowledgements

Open Access funding provided by Projekt DEAL. I like to thank Dirk Ludewig, of the Flensburg University of Applied Sciences and Olav Hohmeyer, of the Europa-Universität Flensburg, for their useful and valuable feedback on previous versions of this paper. Furthermore, I would like to express my appreciation to the participants of the G-Forum conference in Wien, Austria (September, 2019) and of the paper development workshop of the FGF e.V. working group on sustainable entrepreneurship in Flensburg, Germany (March, 2020), where earlier versions of the paper were discussed.

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Neumann, T. The impact of entrepreneurship on economic, social and environmental welfare and its determinants: a systematic review. Manag Rev Q 71 , 553–584 (2021). https://doi.org/10.1007/s11301-020-00193-7

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Why Should I Study Entrepreneurship & Innovation?

Businessman studies entrepreneurship and innovation on laptop

29 Sep 2020

Entrepreneurship and innovation are increasingly popular fields in today’s evolving business scene. According to the most recent Global Entrepreneurship Monitor Report from Babson College, entrepreneurial activity in the US rose to over 17 percent in 2019—a 10 percent increase from 2018 and the highest level recorded in 21 years.

The same report states that, while 71 percent of Americans believe it’s easy to start a business, 35 percent wouldn’t for fear of failure. Similarly, 70 percent perceive themselves as innovative, but only 46 percent say they act on opportunities.

When reading the success stories of scrappy startups that have made it big, it can be easy to assume becoming an entrepreneur isn’t particularly challenging. Yet, in reality, entrepreneurship and innovation require education and effort to master. It’s knowledge of the theories and concepts behind entrepreneurship and innovation that gives many business owners the confidence to launch a venture despite the risk of failure.

In addition to entrepreneurs, corporate employees can realize the value of innovation and an entrepreneurial mindset in the workplace. According to data from Microsoft and McKinsey , innovative organizations are more likely to retain employees and experience larger financial gains than their non-innovative counterparts.

Whether you’re an aspiring entrepreneur or a professional in a corporate setting, understanding the basics of entrepreneurship and innovation can position you to succeed in today’s dynamic market. Here are six reasons you should study entrepreneurship and innovation.

Access your free e-book today.

Reasons to Study Entrepreneurship and Innovation

1. start your business on the right foot.

It’s no secret: Entrepreneurship involves inherent risk. Harvard Business School Professor William Sahlman explains this in the online course Entrepreneurship Essentials.

“Though every entrepreneur imagines success, they must act with the full knowledge that the odds are against them,” he says.

Sahlman is referring to the fact that 20 percent of businesses fail within their first year, and 50 percent don’t survive past five years.

With odds like that, beginning your entrepreneurial journey with as much knowledge as possible is imperative. By studying entrepreneurship and innovation, you can learn the underlying principles of starting a business, avoid common pitfalls, pitch ideas more effectively , validate your product, develop a solid business model, and set yourself up for success in a field where failure is common.

2. Hone Your Skills

Although stereotypes of entrepreneurs exist, there’s no specific demographic profile required to launch a successful venture. Regardless of your race, gender, age, socioeconomic status, or other identifiers, you can succeed as an entrepreneur if you possess certain business skills and traits, including:

Financial literacy
Knowledge of how to accept and act on feedback
Strategic thinking skills
A growth mindset

Luckily, these competencies can be learned and honed. Taking a course in entrepreneurship or innovation can help you identify gaps in your knowledge and develop the skills needed to fill them.

Related: How to Find the Right Entrepreneurship Course for You

3. Validate Your Business Idea

When launching a venture, validating your business idea is a vital early step. Taking an entrepreneurship or innovation course can help you learn useful frameworks through which to view your product and identify ways to prove its value to customers.

For instance, in the online course Disruptive Strategy , HBS Professor Clayton Christensen explains his jobs to be done (JTBD) theory , which posits that rather than just purchasing products, people “hire” them to do “jobs.” The job to be done is the customer’s goal, and assessing your product using the framework can illuminate their motivations, needs, and desires.

Leveraging this theory and other innovation concepts to validate your business idea early in your entrepreneurial career can have far-reaching payoff as your business grows.

4. Learn From the Experiences of Others

Studying entrepreneurship and innovation isn’t just about sharpening your skills—it’s also about building your network and support system.

Taking a course enables you to meet like-minded professionals you can rely on for advice and guidance as launch your venture.

Outside your coursework, read about and talk to entrepreneurs with more experience than you. They can share their mistakes, things they wish they’d known when they first started their businesses, and insider best practices you may not be able to glean from a textbook.

Related: How Leaders Develop and Use Their Network

5. Bring Innovative Ideas to Your Organization

At any organization, a conscious effort is required to fight off stagnation. As markets shift and customer needs change, having innovation training can help you keep your business agile.

Maintaining an entrepreneurial mindset can enable you to assess your customers’ jobs to be done and develop new ways to do them—either by creating new products or adapting your current offerings.

Beyond product-market fit, an innovative mindset can improve employee retention rates. Microsoft reports that 86 percent of people who work at innovative companies plan to stay at their current job, as opposed to just 57 percent of people who work at less innovative companies.

According to McKinsey , innovative organizations also experience greater financial returns than their less-innovative counterparts.

Innovation education touches multiple facets of an organization, and it can prove to be worth the investment.

Related: 23 Resources for Mobilizing Innovation in Your Organization

6. Create Disruption-Informed Strategies

Once you’ve studied various innovation theories, you can use them to craft informed strategies for your organization.

For instance, the theory of disruptive innovation , another concept coined by Christensen and discussed in Disruptive Strategy , is the process by which a smaller company—usually with fewer resources—moves upmarket and challenges larger, established businesses.

By studying innovation and mastering theories like this one, you can help your organization strategize to disrupt incumbent companies or prepare for any disruptive technology that could potentially drive it out of the market.

Which HBS Online Entrepreneurship and Innovation Course is Right for You? | Download Your Free Flowchart

Set Yourself up for Success

Whether you’re about to launch a venture or want to make an impact at your organization, studying entrepreneurship and innovation can help you gain the skills, confidence, and competitive edge needed to succeed in an ever-changing business landscape.

If you’re interested in honing your entrepreneurial skills and innovation toolkit, explore our online entrepreneurship and innovation courses . Not sure which course is the right fit? Download our free course flowchart to determine which best aligns with your goals.

About the Author

Student Essays

7 Inspirational Essays on Entrepreneurship-Meaning & Importance

Entrepreneurship is the process, skill, ability to create opportunities, solve problems and contribute into the society. It takes a lot to be an entrepreneur. The following Essay on Entrepreneurship talks about its very concept, meaning & importance in our Lives.

E ssay on Entrepreneurship | Definition, Concept, Importance of Entrepreneurship for a Country

Entrepreneurship is simply the process of designing, launching, and running a new business or enterprise. It can be done by anyone, regardless of their level of experience or education. Many people think that entrepreneurship is all about starting new businesses, but that’s only one aspect of it. You can also be an entrepreneur within an existing organization, by coming up with new ideas and ways of doing things.

Entrepreneurship is not easy. It involves taking risks, making sacrifices, and working hard. But it can be immensely rewarding, both personally and professionally. There are many reasons why people become entrepreneurs. Some want to be their own boss, some want to make a lot of money, and others just enjoy the challenge and excitement of starting something new. Whatever your reasons, there are certain qualities that all successful entrepreneurs share. These include creativity, initiative, risk-taking, determination, and perseverance.

Benefits of Being an Entrepreneur

There are many benefits to being an entrepreneur, including:

1. Freedom and control. As an entrepreneur, you are your own boss and you make your own decisions. This can be a very rewarding experience, both personally and professionally.

2. Opportunity for Growth . As an entrepreneur, you have the opportunity to grow your business and make it as successful as you want it to be. There are no limits to what you can achieve.

3. Pride and Satisfaction. Seeing your business grow and succeed can give you a great sense of pride and satisfaction. Knowing that you built something from scratch and made it successful is an incredible feeling.

4. Financial Rewards. Of course, one of the biggest benefits of being an entrepreneur is the potential for financial rewards. If your business is successful, you can make a lot of money.

These are just a few of the many benefits that come with being an entrepreneur. If you have the drive and determination to succeed, entrepreneurship can be a very rewarding experience.

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Qualities of a Successful Entrepreneur

Creativity. Successful entrepreneurs are creative problem-solvers. They think outside the box and come up with innovative solutions to problems. Initiative. Successful entrepreneurs take initiative. They don’t wait for someone else to tell them what to do; they take the initiative to make things happen.

Risk-taking. Successful entrepreneurs are willing to take risks. They know that there is always the potential for failure, but they are willing to take risks anyway. Determination. Successful entrepreneurs are determined to succeed. They never give up, even when things get tough.

Persistence. Successful entrepreneurs are persistent. They keep going, even when others would have given up. These are just a few of the qualities that successful entrepreneurs share. If you want to be a successful entrepreneur, you need to have these qualities in abundance.

Entrepreneurship is not for a faint heart. It takes a lot of hard work, dedication, and determination. But if you have what it takes to be an entrepreneur, the rewards can be great. So if you’re looking for a challenge, and you’re willing to take some risks, entrepreneurship might be for you.

Therefore, Entrepreneurship is an art of creating something new, whether a new business or enterprise. It can be done by anyone, regardless of their level of experience or education. Many people think that entrepreneurship is all about starting new businesses, but that’s only one aspect of it. You can also be an entrepreneur within an existing organization, by coming up with new ideas and ways of doing things. So if you’re ready to take the plunge into entrepreneurship, go for it! There’s no better time than now.

Reflective Essay on Entrepreneurship:

As I sit down to write this reflective essay on entrepreneurship, I can’t help but think about my own journey as an entrepreneur. It has been a rollercoaster ride full of highs and lows, successes and failures, but most importantly, a learning experience like no other.

Being an entrepreneur is not for the faint of heart. It takes guts, determination, resilience, and a whole lot of hard work. You have to be willing to take risks, think outside the box, and constantly adapt and pivot as the business landscape changes.

But why do people become entrepreneurs? Some might say it’s for the freedom and flexibility that comes with being your own boss. Others might say it’s for the potential financial rewards. While these are certainly perks of entrepreneurship, I believe that the true driving force behind becoming an entrepreneur is passion.

Passion is what fuels entrepreneurs to pursue their dreams and turn them into reality. It’s that fire in your belly that keeps you going even when faced with challenges and setbacks. Without passion, it’s difficult to sustain the motivation and drive needed to build a successful business.

But being passionate about your business is just one aspect of entrepreneurship. You also need to have a solid idea, a sound business plan, and the ability to execute on your vision. These are all skills that can be learned and developed over time.

One of the biggest lessons I’ve learned as an entrepreneur is the importance of surrounding yourself with the right people. This includes mentors, advisors, and a strong team. As the saying goes, “you are only as strong as your weakest link.” Having a support system of knowledgeable and experienced individuals can make all the difference in the success of your business.

Another important aspect of entrepreneurship is embracing failure. No one likes to fail, but it’s inevitable in the world of entrepreneurship. What sets successful entrepreneurs apart is their ability to learn from their failures and use them as stepping stones towards success. Failure is not a setback, but rather an opportunity for growth and improvement.

As I reflect on my own journey as an entrepreneur, I am grateful for the experiences and lessons learned along the way. It has been a challenging yet rewarding path, and I wouldn’t change it for anything. Entrepreneurship is not just about building a business, it’s also about personal growth and development.

In conclusion, being an entrepreneur is not just about making money or being your own boss. It’s about pursuing your passion, taking risks, learning from failures, and constantly growing and evolving. It’s a journey that requires dedication, perseverance, and a willingness to learn. But with hard work and determination, the rewards can be endless. So for anyone considering entrepreneurship, my advice is to follow your passion, surround yourself with the right people, and never be afraid of failure because in the end, it’s all part of the journey towards success

Essay on Entrepreneurship in India:

Entrepreneurship in India has been on the rise for the past few decades, with more and more individuals taking the leap to start their own businesses. This trend can be attributed to a combination of factors such as a thriving economy, government policies that support entrepreneurship, and a growing culture of innovation.

One of the main reasons for the growth in entrepreneurship is India’s rapidly growing economy. Over the years, India has emerged as one of the fastest-growing major economies in the world. This economic growth has created a favorable environment for entrepreneurs to launch their ventures and tap into new markets. With a large and diverse population, there is a high demand for goods and services, providing ample opportunities for entrepreneurs to succeed.

Moreover, the Indian government has taken several initiatives to promote and support entrepreneurship in the country. The introduction of policies like Startup India, Standup India and Make in India has provided a conducive environment for new businesses to thrive. These policies have made it easier for entrepreneurs to start their ventures by simplifying procedures, providing financial aid, and offering tax incentives.

In addition, there is a growing culture of innovation in India that is driving the entrepreneurial spirit. Indians have always been known for their creativity and resourcefulness, and this is now being channeled towards entrepreneurship. With advancements in technology, access to information, and a growing network of mentors and investors, aspiring entrepreneurs are able to turn their ideas into successful businesses.

However, while the entrepreneurship landscape in India is promising, there are still challenges that need to be addressed. One major challenge is the lack of access to funding for startups. Despite the government’s efforts, raising capital remains a significant barrier for many entrepreneurs, especially those from underprivileged backgrounds.

Another challenge is the competitive market in India. With a large number of existing businesses and new ones emerging every day, it can be difficult for entrepreneurs to stand out and make their mark. This requires a high level of resilience and adaptability, which are essential qualities for any successful entrepreneur.

>>>> Read Also: ” Paragraph on Internet & Its Importance “

In conclusion, entrepreneurship in India is a dynamic and ever-evolving landscape. With a strong economy, supportive government policies, and an innovative culture, the potential for growth and success is immense. However, it also requires determination, perseverance, and the ability to navigate challenges. As more and more individuals take the path of entrepreneurship, India is poised to become a hotbed for innovation and economic growth in the years to come.

Benefits of Entrepreneurship Essay:

Entrepreneurship is a hot topic these days, with more and more people opting to start their own businesses instead of working for someone else. And there’s no denying the numerous benefits that come with being an entrepreneur.

Firstly, entrepreneurship allows individuals to pursue their passions and interests. Unlike traditional jobs where you are limited to certain roles and responsibilities, as an entrepreneur, you have the freedom to create and innovate in any field you choose. This not only leads to personal satisfaction but also contributes to the growth of industries and economies.

Secondly, entrepreneurship offers a sense of autonomy and control over one’s own life. Being your own boss means having the freedom to make decisions, set your own schedule, and work towards achieving your goals without external constraints. This can result in a more fulfilling and balanced work-life balance.

Another benefit of entrepreneurship is the potential for financial gain. While starting a business may involve some initial investment, the long-term rewards can be significant. As an entrepreneur, you have the opportunity to build a successful and profitable business that can provide financial stability for yourself and your family.

Moreover, entrepreneurship encourages creativity and problem-solving skills. As an entrepreneur, you are constantly faced with challenges and obstacles that require innovative solutions. This not only helps in personal growth but also contributes to the overall advancement of society.

Lastly, entrepreneurship creates job opportunities for others. As your business grows, you will need to hire employees to assist with various tasks. This not only provides employment opportunities for others but also gives them a sense of purpose and the chance to learn new skills.

In conclusion, entrepreneurship has numerous benefits that go beyond just financial gain. It allows individuals to pursue their passions, have control over their lives, foster creativity, and contribute to society’s growth.

Successful Entrepreneur Essay:

Being a successful entrepreneur is not an easy feat. It requires hard work, dedication, and a unique set of skills. In this essay, we will explore the qualities and traits that make a successful entrepreneur.

Firstly, a successful entrepreneur is someone who has a strong vision and passion for their business. They have a clear understanding of what they want to achieve and are willing to put in the effort and take risks to make it happen. They are not afraid of failure and are persistent in pursuing their goals.

Secondly, an entrepreneur must possess excellent leadership skills. They need to be able to motivate and inspire their team, delegate tasks effectively, and have a clear vision that everyone can work towards. A successful entrepreneur also knows how to handle challenges and adapt to changes in the market.

Furthermore, successful entrepreneurs have excellent communication and networking skills. They know how to build relationships with clients, investors, and other professionals that can help their business grow. They are also great at pitching their ideas and selling their products or services.

In addition to these qualities, a successful entrepreneur is always willing to learn and evolve. They keep up with industry trends and are constantly seeking ways to improve their business. They also know when to seek advice and guidance from mentors or other successful entrepreneurs.

In conclusion, being a successful entrepreneur requires a combination of skills, dedication, and passion. It is not an easy journey, but with the right mindset and determination, anyone can achieve success in the world of entrepreneurship. So if you have a business idea and dream of being your own boss, don’t be afraid to take the leap and become an entrepreneur.

My Favorite Entrepreneur Essay:

As someone who is passionate about entrepreneurship and the power of innovation, there are many successful entrepreneurs that I admire. However, there is one entrepreneur in particular who has always stood out to me as my favorite – Elon Musk.

Elon Musk is a visionary entrepreneur and has been at the forefront of cutting-edge technologies such as electric cars, space exploration, and renewable energy. He is the founder of multiple successful companies including SpaceX, Tesla, Neuralink, and The Boring Company. His relentless drive to push boundaries and revolutionize industries has inspired me in my own entrepreneurial journey.

One of the reasons Elon Musk is my favorite entrepreneur is because he doesn’t just focus on making profits, but also prioritizes creating a positive impact on society. He has a grand vision for a sustainable future and is actively working towards it through his companies. For instance, Tesla’s mission to accelerate the world’s transition to sustainable energy has played a significant role in promoting clean energy solutions.

Another aspect that I admire about Elon Musk is his fearlessness when it comes to taking risks. From investing all his money into SpaceX despite multiple failed launches, to constantly pushing the limits of technology with each new project, he has shown that great success comes with great risk-taking.

Moreover, Elon Musk’s leadership style is also something I look up to. He leads by example and isn’t afraid to get his hands dirty in the day-to-day operations of his companies. He also prioritizes hiring talented individuals and fostering a culture of innovation and collaboration.

In conclusion, Elon Musk’s passion, drive, and fearlessness have made him my favorite entrepreneur. He continues to inspire me to think big and use entrepreneurship as a tool for positive change in the world.

What Make a Good Entrepreneur Essay:

Being an entrepreneur is not an easy task. It requires a combination of skills, traits, and personal characteristics to be successful in this field. In this essay, we will discuss what makes a good entrepreneur and the key factors that contribute to their success.

Firstly, a good entrepreneur must have strong leadership abilities. They should be able to inspire and motivate others towards achieving a common goal. This not only applies to their employees but also to their clients and stakeholders. A good leader knows how to communicate effectively, delegate tasks, and make difficult decisions when necessary.

Secondly, a successful entrepreneur should possess resilience and perseverance. Starting and running a business comes with its fair share of challenges and setbacks. However, a good entrepreneur does not let these obstacles deter them from pursuing their goals. They are determined to overcome any obstacles and learn from their failures.

Next, a good entrepreneur must have a strong passion for what they do. Starting a business requires hard work, dedication, and long hours of commitment. Without passion, an entrepreneur is likely to burn out or give up when faced with challenges. Passion drives them to keep moving forward, even when things get tough.

Moreover, a good entrepreneur must be creative and innovative. In today’s fast-paced world, businesses need to constantly adapt and evolve to stay ahead of the competition. A successful entrepreneur is not afraid to take risks and think outside the box in order to come up with unique solutions or products that meet the needs of their target market.

In conclusion, being a successful entrepreneur requires a combination of skills, determination, and passion. It’s not just about having a great idea, but also about having the drive and ability to turn that idea into a successful business venture. By possessing strong leadership abilities, resilience, passion, and creativity, one can increase their chances of becoming a successful entrepreneur

Speech about Entrepreneurship:

Dear aspiring entrepreneurs,

I am here today to talk to you about entrepreneurship – the art of pursuing your dreams, taking risks and creating something truly remarkable. Now, before I start, let me ask you a question – have you ever thought about starting your own business? Have you ever felt the desire to break free from the 9-5 grind and be your own boss? If your answer is yes, then my friends, you are already on the right path.

Entrepreneurship is not just about making money or being successful. It’s a way of life – a mindset that sets you apart from the crowd. It’s about having the courage to follow your passion and turn it into a reality. It’s about taking control of your own destiny and not being limited by someone else’s expectations.

Now, I know what you’re thinking – entrepreneurship is risky, it’s difficult, it requires a lot of hard work and dedication. And yes, all of that is true. But let me tell you something – nothing worthwhile in life comes easy. If you want to achieve greatness, you have to be willing to push yourself out of your comfort zone, to face challenges head on and to embrace failure as a learning experience.

But the beauty of entrepreneurship is that it’s not just about success or failure – it’s about the journey. It’s about waking up every day with a sense of purpose and passion, knowing that you are working towards something meaningful and fulfilling. It’s about creating something that you can be proud of and leaving a legacy for generations to come.

So my dear friends, don’t let fear or doubts hold you back from chasing your dreams. Don’t let the naysayers discourage you or the setbacks demotivate you. Remember, every successful entrepreneur started with an idea and a dream – and they never gave up on it. So believe in yourself, trust in your abilities and take that leap of faith. Because in the end, it’s not about reaching the destination, it’s about enjoying every step of the journey.

As I wrap up my speech, I urge you to think about what truly excites you, what drives you and what makes you come alive. And then go out there and make it happen. Because the world needs more dreamers who are crazy enough to believe that they can change it for the better. And I have no doubt in my mind that each and every one of you has the potential to do just that.

What is entrepreneurship in your own words essay?

Entrepreneurship is the pursuit of creating, developing, and managing innovative and often risky ventures with the aim of achieving success, typically in the realm of business. It involves identifying opportunities, taking calculated risks, and mobilizing resources to bring new ideas or products to the market.

Who is an entrepreneur (100 words)?

An entrepreneur is a visionary and proactive individual who initiates and organizes a business or venture, assuming significant financial and personal risks in the pursuit of innovation and success. Entrepreneurs are often characterized by their creativity, resilience, and ability to identify opportunities in the market.

They play a pivotal role in driving economic growth, creating jobs, and fostering technological advancements. Entrepreneurs come from diverse backgrounds, but they share the common trait of a willingness to take calculated risks and a relentless drive to turn their ideas into reality.

What are 3 reasons why entrepreneurship is so important?

Entrepreneurship is crucial for economic growth, job creation, and innovation. It promotes:

a. Economic Growth: Entrepreneurs stimulate economic development by creating new businesses and markets, leading to increased production and consumption.

b. Job Creation: New businesses founded by entrepreneurs generate employment opportunities, reducing unemployment rates and enhancing social well-being.

c. Innovation: Entrepreneurs drive innovation by introducing new products, services, and processes that can lead to technological advancements and improved quality of life.

What is entrepreneurship and its importance?

Entrepreneurship is the process of identifying and exploiting opportunities to create and manage new ventures, typically in the business context. Its importance lies in its ability to drive economic growth, create jobs, foster innovation, and adapt to changing market conditions, ultimately contributing to a dynamic and prosperous society

Essay on Entrepreneurship: Top 9 Essays | Business Management

Here is a compilation of essays on ‘Entrepreneurship’ for class 11 and 12. Find paragraphs, long and short essays on ‘Entrepreneurship’ especially written for school and college students.

Essay on Entrepreneurship

Essay Contents:

Essay on the Benefits of Entrepreneurship

Essay # 1. Introduction to Entrepreneurship:

Entrepreneurship is the name given to the factor of production which performs the functions of Enterprise. In economics, Land, Labour, Capital, Organisation and Enterprise are the five factors which are thought to be the basis of all the production activities.

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Entrepreneurship in a broader sense can be considered as a process of action undertaken by an entrepreneur (Person) to establish his enterprise. It is a creative and innovative response to the environment.

Entrepreneurship can be described as a creative and innovative response to the environment. Such responses may take place in any field of social endeavour may be business, agriculture, social work and education etc.

For the entrepreneur it is important to have knowledge about the economic and political environment, more particularly about the economic policies of the government and the financial as well as commercial institutions.

Thus a simple definition of entrepreneurship is doing new things or doing things which are already being done in a new way.

According to Dr. J.E. Stepenek, “Entrepreneurship” is the capacity to take risk; ability to organise and desire to diversify and make innovations in the enterprise.

According to Higgins, Entrepreneurship is meant for the function of seeing investment and production opportunity, organising in enterprise to undertake a new production process, raising capital, hiring labour, arranging the supply of raw materials, finding site, introducing new techniques and commodities, discovering new sources of raw materials and selecting top managers for day to day operation of the enterprise.

It may be concluded that entrepreneurship is a composite skill, the resultant of many qualities and traits. These include, imagination ready to take risk, ability to bring together and utilize other factors of production such as capital, land and labour along with intangible factors such as capability to mobilise scientific and technological developments.

Entrepreneurship thus involves taking risk and making essential investments under conditions of uncertainty. At the same time it is connected with innovation, planning and taking decisions so as to increase productivity in industry, business and agriculture etc. It thus plays a key role in the process of economic development.

Essay # 2. Definition of Entrepreneurship:

Entrepreneurship is a process of action an entrepreneur undertakes to establish his enterprise. Entrepreneurship is a resultant mix of many qualities and traits of an entrepreneur.

Entrepreneurship can be defined as a process undertaken by entrepreneur to augment his business interests. It is an exercise involving innovation and creativity that will go towards establishing his/her enterprise.

Entrepreneurship is the inclination of mind to take calculated risks with confidence to achieve a predetermined business or industrial objectives.

Essay # 3. Growth and Success of Entrepreneurship :

Entrepreneurship has opened avenues of great scope in the Indian economy. Our national economy is most suited to the growth of small business enterprise. Small business units offer a more convenient means of nurturing and developing entrepreneurship by providing the means of entry into business for new entrepreneurship talents. Small-scale industries are labour-intensive and can play an important role in solving the problem of unemployment.

Success of Entrepreneurship :

Following aspects are necessary for the successful entrepreneurship:

1. Regular inflow of information related to buyers, consumers, distributors, dealers, retailers, transporters etc., about raw material, quality aspects, government organisations, employees and competitors.

2. Satisfying the needs of customers.

3. Generation of adequate cash flow.

4. Regular objective assessment of the enterprise.

5. Improving productivity.

6. Maintenance of quality.

7. Use of technology of the time.

8. Be innovative.

9. Keep employees motivated.

10. Scrap or waste material be utilised properly.

11. Time management.

Essay # 4. Entrepreneurial v/s Managerial Styles :

An entrepreneur is a person who is motivated to satisfy a high need for achievement in innovative and creative activities. This creative behaviour and innovative spirit forms a process of an endless chain and is termed as entrepreneurship. An entrepreneur is also required to manage his business. He has to perform both entrepreneurial and managerial functions. After the start of the business he becomes more as manager.

Manager is one who specialises in the work of planning, organising, leading and controlling the efforts of others. He does it through systematic use of his classified knowledge and principles. He should have an insight of job requirement, which he should continuously update.

An entrepreneur must adopt the style of professional management. He must organise managerial functions by setting long term objectives, formulating strategic policies, developing management information system, monitoring and evaluation systems. He is required to possess management knowledge related to technical, economical, financial, human and administrative aspects.

There is a vast difference between owner-manager and professional-manager. The owner- manager is identified with individuality, flair, strong motivation to achieve success and prosper, while the professional-manager is concerned with the planning, organising, motivating and controlling. Owner-manager builds the organisation, assumes all business risks, and also loses his reputation and prestige in the event of failure of business, whereas professional-manager is not exposed to such risks.

Thus entrepreneurship is a process of combining resources to produce new goods or services and reappears to initiate another change. Entrepreneurs are also required to play other roles, especially those of capitalist and manager. Managerial function of an entrepreneur is a continuous process of combining the factors related to production.

Essay # 5. Entrepreneurial Development :

For the economic development, entrepreneurial development is necessary. For the purpose of entrepreneurial development, rapid growth of small scale sector is necessary. Entrepreneurial development programmes are designed to help a person in strengthening his entrepreneurial motive and in acquiring skills and capabilities necessary for playing his role effectively.

Main objective of the entrepreneurial development programme is to motivate and assist prospective and potential entrepreneurs to set up small scale units of their own and thus become self-employed and contribute significantly to production and employment in the country.

Entrepreneurial development programme must be designed properly and should incorporate the following:

(i) Developing, achievement, motivation and sharpening entrepreneurial traits and behaviour.

(ii) Project planning and development, and guidance on industrial opportunities, incentives and facilities, rules and regulations.

(iii) Developing managerial and operational capabilities.

Keeping the target group and target area in view various strategies and approaches are adopted. The process of entrepreneurial development is designed very carefully and starts from identifying the potential and right candidates, linking suitable project with each one, and then training and developing the managerial and entrepreneurial capabilities, counseling and motivating them, and then providing the required follow-up support to help them in establishing their venture.

Objectives :

Objectives of entrepreneurial development programme are to help to:

(i) Develop and strengthen their entrepreneurial quality.

(ii) Analyse environment related to small business and small industry.

(iii) Select product and its project.

(iv) Formulate projects.

(v) Understand the procedure for setting up of small enterprise.

(vi) Support needed for launching the enterprise.

(vii) Acquire basic management skills.

(viii) Appreciate the social responsibilities.

(ix) Let him set the objectives of his business.

(x) Prepare him to accept risks.

(xi) Take strategic decisions.

(xii) Develop communicating skills.

Training for Entrepreneur :

Proper training is essential for the success of any industry in production techniques, management, marketing and other aspects.

Small Industries Service Institutes and their Extension Centres are organising trainings:

(i) To improve technical skills of workers,

(ii) For acquainting the entrepreneurs with advanced production and management techniques.

The courses for workers are organised in the following areas:

(a) Shop practice courses such as machine shop practice, tool room practice, foundry, blacksmithy, electrical shop practice etc.

(b) Trade oriented courses, such as tool making, fitter, sheet metal, pattern making, carpentry etc.

(d) Product oriented courses, sport goods, foot wear, paint, varnish making etc.

Training programmes for entrepreneurs are of two types namely:

(i) For graduate and diploma holder engineers, physics and chemistry graduates and

(ii) For rural artisans, educated unemployed, ex-servicemen, weaker sections of the society, women entrepreneurs etc. with special courses for each of the categories of persons.

For providing training and upgradation of technology and managerial skills, specialised institutions have been set up.

For conducting entrepreneurship development programmes, the lead was given by Small Industries Development Organisation through its small industries service centres. Entrepreneurship Development Institute of India (EDII) was established in 1983 at Ahmedabad as a resource organisation at the national level for the purpose of creating the institutional infrastructure for entrepreneurship development.

National Institute for Entrepreneurship and Small Business Development (NIES BHD) was established by the central Government at New Delhi, with the objective of coordinating activities related to entrepreneurship and small business development.

In addition, institutions established by the Government are:

(i) Rural Entrepreneurship Development Institute (RED) at Ranchi.

(ii) Rural Management and Management Centres (RMEDC) at Maharashtra.

Other organisational actively conducting entrepreneurship development programmes are:

(i) State Bank of India

(iii) Centre for Entrepreneurship Development at Ahmedabad and Hubli.

(iv) State financial corporations.

(v) Industrial consultancy organisations in various states.

(vi) Small Industries Extension Training Institute, Hyderabad.

(vii) Institute of Entrepreneurship Development (IEDs) in Uttar Pradesh, Bihar and Orissa.

(viii) Management Development Institute (MDI) at Gurgaon (Haryana) near Delhi.

Some of the other institutions for entrepreneurial development are:

1. Central Institute of Tool Design, Hyderabad.

2. Central Tool Room and Training Centre, Calcutta.

3. NI SIET, Guwahati.

4. Institute for Design of Electrical Measuring Instruments, Bombay.

5. Electronic Service and Training Centre, Ramnagar.

6. Process-cum-Product Development Centre for Glass and Ceramic Industry, Ranchi.

7. Process and Product Development Centre, Agra.

8. Process and Product Development Centre, Meerut.

9. Central Institute of Hand Tools, Jalandhar.

10. Hand Tool Design Development and Training Centre, Nagpur.

11. New Indo-Danish Tool Rooms, Jamshedpur and Bhubaneswar.

12. Ino-German Tool Rooms-Indore, Ahmedabad and Aurangabad.

13. National Institute for Entrepreneurship & Small Business Development, New Delhi.

14. National Institute of Design, Ahmedabad.

15. Centre for the Improvement of Glass Industry, Firozabad.

16. National Council for Cement and Building Materials, Delhi, Ballabgarh, Hyderabad, Patna and Madras.

17. Indian Plywood Industries Research Institute, Bangalore.

18. Central Pulp and Paper Research Institute, Saharanpur.

19. National Federation of Industrial Cooperatives Limited, New Delhi.

20. Central Machine Tool Institute, Bangalore.

Essay # 6. Beliefs Regarding Entrepreneurship:

According to literature there are many myths about entrepreneurship:

But myths and realities about its are different as follows:

1. Myth about entrepreneurs is that they are born not made but “reality” is that entrepreneur characteristics and traits may be acquired through properly structured learning.

2. Myth regarding entrepreneurs is that all required is money but generally it is observed that excessive and surplus money reduces the risk taking opportunities, scarce for care resources and grasp for opportunities.

3. Myth regarding entrepreneurship is that it is profile of traits and characteristics but practically it is a combination of situational issues.

4. Myth about entrepreneurs is doer not thinkers whereas the reality is that frequent thinking in planning, creativity, innovation and risk taking is required.

5. As per myth “Business schools have no place in entrepreneurship” but in actual practice most of the successful entrepreneurs have come from engineering courses and business schools.

Essay # 7. Financing of Enterprise :

Finance is the main input of any enterprise. The entrepreneur needs capital to start with, and he also needs financial assistance at every stage of the project. Project finance is required for both short term and long term.

(a) Short-term Finance:

These usually refer to the funds required for a period of less than one year. These are usually required to meet variable, seasonal or temporary working capital requirements. Main sources for short term finance are borrowing from banks, trade credit, installment credit and customer advances.

(b) Medium-term Finance:

Period of one year to five years are regarded as a medium- term. These are generally required for permanent working capital, small expansions, replacements, modifications etc. These can be raised by issue of shares and debentures, borrowing from banks and other financial institutions, ploughing back of profits.

Periods more than 5 years are regarded as long-terms. These are required for procuring fixed assets, for substantial expansion, modernisation etc. Important sources of long-term finance are issue of shares and debentures, loans from financial institutions and ploughing back of profits.

Sources of Finance :

The sources from which the entrepreneurs can meet their financial needs for their projects are grouped as:

(a) Internal source, and

(b) External source.

In addition, the entrepreneur raises his finance by availing of available subsidies, state aid to industries etc. A judicious mix of funds from these sources should be given priority.

(a) Internal Sources of Finance:

(i) Personal and family savings.

(ii) Loans from L.I.C. and Provident Fund Account.

(iii) Loans against assets like land and property.

(iv) Loans against shares and debentures.

(v) Loans from relatives and friends.

(b) External Sources:

Substantial amount is required by an enterprise to buy machinery and equipment and to purchase land and buildings.

These finances are generally arranged from following sources:

(i) Borrowing from Banks.

(ii) Term-lending from institutions like IDBI; IFCI, Industrial Development Corporations etc.

(iii) From Government and Semi-Government agencies.

(iv) Other sources.

Institutional Finance :

Institutional finance is available for large, medium, small and tiny industries by commercial banks. Commercial banks include the State Bank of India group, nationalised banks, private sector banks and development corporations which have been especially established to provide industrial finance.

In addition, the Reserve Bank of India gives credit guarantees and the ECGC gives export guarantees to the small-scale sector. Industrial Development Bank of India (IDBI), by its refinance operations, plays a significant role in the promotion of the small scale- sector. The National Small Industries Corporation (NSIC) offers financial assistance in the form of its hire-purchase schemes.

Besides, new institutions like mutual funds, lease companies, financial service institutions, investment companies, merchant banks etc. provide financial assistance and financial services to industries.

Essay # 8. Factors Essential for Successful Entrepreneurship:

The following aspects/factors are essential for successful entrepreneurship:

1. Regular inflow of information concerning consumers or buyers, distributors and dealers/retailers, transporters, etc., about raw materials, quality aspects, competitors, government organization and employees.

2. Aspects regarding satisfaction of consumer requirements.

5. Aspects concerning productivity improvement.

6. Quality maintenance.

7. Utilization of upto date technology.

8. To be innovative in view of competition.

10. Proper utilization of scrap or waste material.

11. Proper time management.

Essay # 9. Benefits of Entrepreneurship :

Entrepreneurship has following three benefits for society:

1. Economic Growth:

These provide economic upliftment of society and generate labour employment.

2. Productivity Improvement:

It helped in improving the productivity, which means the ability to produce more goods and services with less labour and other inputs.

3. New technologies, products and services:

It helps in promoting innovative technologies, products and services.

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Entrepreneurial Personality Essay: Traits & Characteristics

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What personal traits are considered important to the entrepreneur? Find the answer here! This entrepreneurial personality essay focuses on the importance of characteristics necessary for a successful business career.

Introduction

Personal Traits

Reference List

An entrepreneur is an individual who sets up and administers a business for the main purpose of making profit. In the present world, entrepreneurship is paramount in fueling the growth of the economy and providing employment opportunities.

Anyone can become an entrepreneur but not everyone is suited for successful entrepreneurship. Most successful entrepreneurs share certain personality traits that give them a comparative advantage over their competition. This essay explores the personality traits required to be a successful entrepreneur.

Personal Traits Important to the Entrepreneur

Determination is one of the personality traits that an entrepreneur should possess in order to increase their chances of being successful. Determination is a very intense longing to achieve success. The trait requires a lot of persistence and the ability to recover in case of a period of downturn.

It is not easy to attain success within a short time. Therefore, an entrepreneur should exercise a lot of patience and should not easily give up when things go wrong .

Dedication is another important personality trait of a successful entrepreneur. Entrepreneurs should dedicate themselves towards the accomplishment of their objectives and visions. Having focus and being dedicated enables an entrepreneur to be more successful in his or her business ventures.

Starting a business requires hard work and a lot of effort. Regardless of numerous difficulties, an entrepreneur should be dedicated to all tasks by working towards a positive outcome and to be willing to ask for assistance once in a while.

Self confidence, being another personality trait enables an entrepreneur to be assertive in achieving their own interests in a way that is socially recognized. Self confidence usually results from thorough planning which decreases uncertainty rates and risk levels.

Self confidence should be sufficient enough in order to successfully achieve planned profits. When an entrepreneur is skilled and knowledgeable, self confidence comes naturally. The confidence also gives them the ability to listen to the opinions of other people without feeling intimidated .

Creativity and innovation are very important traits that an entrepreneur should possess. Being innovative enables an entrepreneur to develop fresh and improved products to be able to survive in the competitive world of business.

This trait also encourages the entrepreneur to constantly learn, question and think outside the box in order to be in line with the ever changing technology. With fresh and improved products and services, an entrepreneur is more likely to be successful in the world of business.

Interpersonal reactivity is essential in entrepreneurial life because it enables an entrepreneur to put himself or herself in the position of another person.

The entrepreneur who possesses this trait has the ability to approach other business people and develop a relationship that is intended to be beneficial.

Research says that sufficient levels of interpersonal reactivity enables an entrepreneur to produce products that are client oriented hence success in the business is more likely .

All business ventures have their fair share of upturns and downturns. Success does not come immediately to an entrepreneur instead it takes a lot of time. Every entrepreneur possesses the above personality traits but in different degrees. Every skill and trait can be achieved through practice and learning.

Therefore, any entrepreneur can achieve the above traits after some time. The entrepreneur can also hire a person who has the admirable strengths to take care of his or her business to better and greater heights.

Action Coach . (n.d). 12 Essential Characteristics of an Entrepreneur . Web.

Caliendo, M., & Kritikos, A. (2007). Is Entrepreneurial Success Predictable? An Ex-Ante Analysis of the Character-Based Approach . Web.

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Principles of Fords’ Theory
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Entrepreneurial Personality and Decision to Start a Business
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9 Reasons Why You Should Study Entrepreneurship and Innovation

What is one benefit of studying entrepreneurship and innovation?

To help you determine if studying entrepreneurship and innovation is right for you, we asked Eller Alumni and experienced entrepreneurs this question for their best insights. From expanding your entrepreneurial toolbox to leveraging your creativity, there are several reasons why studying entrepreneurship and innovation can benefit your personal development and future careers.

Here are nine reasons you should study entrepreneurship and innovation:

Expand Your Entrepreneurial Toolbox

Live a life you will love, entrepreneurship forces you to continue learning, learn business skills for every aspect of your venture, apply your knowledge to various roles, become more business agile, ability to recognize opportunity , solve daily-life problems , leverage your creativity.

To me, the biggest benefit of studying entrepreneurship and innovation is the chance to expand and enhance what I call your "entrepreneurial toolbox." Being a successful entrepreneur requires a mix of knowledge, strategy, discipline, experience and other things that you aren't just born with. Studying entrepreneurship and ways to innovate can help you develop new ways to solve problems and gain insights on ways to navigate the path to success from ideation to market adoption.

Outside of on-the-job training, the best way to achieve your entrepreneurial aspirations is to learn from others who can impart the necessary knowledge and tools to help you become more well-rounded in whatever endeavor you decide to embark upon. Having a well-rounded toolset has made starting companies, navigating challenges and achieving success a lot easier throughout my career.

Josh Benveniste MBA and BA (Economics), Chief Marketing Officer of Paydala

My parents started their advertising agency in our garage when I was just six years old. Growing up around their business I always felt entrepreneurship was "in my blood." I love running businesses, wearing many hats and building great teams! The right school will give you the breadth of knowledge needed to run a business, but it is passion and persistence that will make you succeed. This can't be learned in the classroom, rather it comes from being around like-minded, big-thinkers who feed your "energy". While the life of an entrepreneur can feel like a roller coaster, the energy you experience translates into living a life you will love!

Eric Lituchy ‘91 BSBA (Marketing), CEO of Hunter Digital

I spent over a decade at Merrill Lynch in a variety of roles, and I learnt more in my first year as an entrepreneur than my entire time at Merrill combined, and that’s not to say I didn’t learn a lot at Merrill! Entrepreneurship keeps you on your game. You are forced to continue learning and innovating ; by giving you ownership over every aspect of your company, it instills an incredible drive to learn. This continuous learning is not just within one specific area you focus on, but entrepreneurship allows you to learn about all the different divisions within your company and most importantly, learn about yourself—what drives you, what makes you happy! It’s an unbelievable benefit of being an entrepreneur that leads to incredible opportunities in life.

Rishi Ramchandani ‘07 BSBA (MIS/Operations Management), Founder of Cafe Cash Flow

No specific type of person is best suited to become an entrepreneur and launch a successful business venture. It takes determination, perseverance and tenacity. But it also requires that you understand your specific area of focus, such as your major in college, in addition to a wide variety of business skills that will all be leveraged every single day in your business. This includes financial literacy, marketing, leadership, product management, negotiation, strategic thinking, soft skills and so much more. Studying entrepreneurship and innovation gives you a well-rounded training that focuses on all of these areas, and more, to help you become well-versed in all of the areas that will impact your business venture.

Elyse Flynn Meyer ‘07 BSBA (Marketing/International Business), President and Founder of Prism Global Marketing Solutions

The job market is continuously changing, and companies of all sizes have to offer innovative solutions to stay competitive. That's why a professional who studied "entrepreneurship and innovation" will always be needed . A big plus of holding this degree is that you will be able to pursue a career in many different industries and fields, in big companies as well as startups. Or, if you are interested in starting your own business, you will have the right skills and knowledge to do so successfully.

Jessica Ulloa, MyPerfectResume

Develop your business leadership agility skills by studying entrepreneurship and innovation. Knowing the latest trends in entrepreneurial startups and innovations in business planning and implementation refutes ineffective people management and sales and marketing strategies. With a more agile and innovative entrepreneurial mindset, you can take your business to greater heights, thriving, adapting and outperforming others in the competition.

James Parsons, Content Powered

One major benefit of studying entrepreneurship and innovation is the gained ability to recognize opportunity. Entrepreneurial studies focus on the application of one’s knowledge and skills to commercial opportunities. Being able to determine a company’s worth through analysis of their strategies, practices, etc. can be critical for those who want to invest. Being able to describe one’s own vision thereafter becomes priceless when one is ready to leap into business ownership.

Phillip Akhzar, Arka

Educating students about innovation and entrepreneurship can help them develop real-world skills to lead extraordinary lives in this time-paced and fast-changing world. The future is uncertain, and everyone should be ready to face and conquer. Entrepreneurship and innovation help individuals become independent and channel their creativity into creating something of their own in this competitive world. Studying entrepreneurship and innovation enhances one's analytical and logical skills that enable one to solve any problem. Entrepreneurship mainly helps solve daily-life problems and eases pain points with the help of innovative products and services provided. Entrepreneurs secure their futures and secure the world's future by making it a better place with simple solutions to complex problems.

Madhurima Halder, Recruit CRM

Human beings are all born with creativity that can be used to solve many complex problems of life. But to be able to use it takes a certain level of skill. Learning entrepreneurship and innovation helps people learn a lot about using creativity to simplify things in daily life. In entrepreneurship, your creativity and out-of-the-box thinking are used as a necessity. They are seen as the means to function more efficiently. And what is true success if it isn't being able to implement in real life what you learn from the books?

Samantha Odo, Precondo

Expand both your entrepreneurial thinking and the skills to bring your best ideas to fruition. Whether your goal is to launch your own venture or apply your skills in a corporation, nonprofit or public organization, you’ll emerge ready to confidently lead and make a lasting impact.

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Five Benefits of Entrepreneurship Education to Students

Did you know that students can take advantage of the benefits of entrepreneurship education even before they enter college?

An entrepreneurship-focused education can help middle and high-school age girls develop crucial life skills that will serve them well beyond the classroom walls.

In this article, we will share five benefits of entrepreneurship education to help you decide if it’s the right choice for your child’s future.

What Is Entrepreneurship Education?

Entrepreneurship education focuses on developing real-world skills that will help students to lead exceptional lives in a rapidly changing world.

Entrepreneurship education teaches students crucial life skills, such as:

How to collaborate and work with a team
How to speak in public and prepare an effective presentation
How to collect and analyze data
How to use social media as an advocacy tool
How to solve real, complex problems that don’t have a definitive answer
How to use curiosity and creativity to find an innovative approach to difficult problems

Students learn to understand the product development cycle, come up with their own unique business proposals, and deliver multiple pitch presentations.

This process results in a superior college prep experience that serves our students long after they've graduated high-school.

Entrepreneurship education does not just benefit those entering the fields of science, technology, and business.

Students of art, music, and humanities can develop their imagination and learn how to apply creative thinking skills to real-world problems.

Five Benefits of Entrepreneurship Education for Students

1. prepare students for an uncertain future..

We live in an age of unprecedented global and technological transformation.

Today's students face an uncertain future full of complex global, social, and environmental issues.

According to the World Economic Forum's Future of Jobs survey , half of today's work activities could be automated by 2055, creating completely new roles, responsibilities, and challenges for the future workforce.

Therefore, we cannot predict exactly what our students will need to know after they graduate.

Entrepreneurship-focused programs teach students crucial life skills that will help them navigate this uncertain future.

These skills include problem-solving, teamwork, empathy, as well as learning to accept failure as a part of the growth process.

2. Leave room for creativity and collaboration.

As standardized testing has become more common in public schools, opportunities for students to innovate and collaborate with others have become more scarce.

Entrepreneurship education encourages creativity, innovation, and collaboration.

These attributes are highly valued by the top colleges in the world and will serve your child well beyond middle school and high school.

3. Teach problem identification.

Students need to learn how to identify problems before they learn how to solve them.

Problem-solving has been taught in schools for decades — but the same cannot be said for problem identification.

Traditionally, problem-solving is taught by presenting students with issues that are already clearly defined by someone else.

In the real world, problems can only be solved when they have been properly identified and described.

Entrepreneurship education teaches children to identify problems they have never encountered before — a skill that will be very useful in tomorrow’s world.

4. Develop grit.

In her bestselling book “Grit,” researcher and professor of psychology at the University of Pennsylvania, Angela Duckworth states that “grit” may be the single most important factor in a person’s long term success.

Her research shows that grades, intelligence, and socioeconomic status do not stack up to the characteristic she defines as “grit.”

According to Duckworth, grit consists of passion and sustained persistence applied toward long-term achievement.

The demanding and uncertain entrepreneurship journey requires more passion and sustained persistence than most other activities.

This makes an entrepreneurship-focused program ideal for developing grit in your students.

5. Make the world a better place.

Entrepreneurs seek to solve problems, meet needs, and ease pain points with the help of their products and services.

They are hard-wired to make a difference and make the world a better place.

By participating in entrepreneurship programs, students don’t just become ready to create their own futures — they become ready to change the world.

Why Entrepreneurship Education is Important for Girls

While every student can benefit from entrepreneurship-focused education, girls (especially middle-school and high-school-age girls) stand to gain the most from it.

The underrepresentation of qualified women in leadership positions has created a gender gap that exists in almost every industry.

Entrepreneurship education lets girls develop their leadership skills, embrace their competitive side, and learn to take more risks.

It can be especially effective when practiced in a single-sex classroom setting, which lets girls explore their interests and passions in an environment free from gender stereotypes and social pressure.

Why Choose Marlborough

Marlborough is exclusively devoted to the education of young women.

Weaving together engineering, digital arts, robotics, media, academic research, and entrepreneurship, the Shari and Ed Glazer Center for Entrepreneurship and Innovation at Marlborough encourages academic excellence, leadership skills, and confidence.

Here at Marlborough, we don’t just teach girls to keep pace with the changing future.

Instead, we teach them to boldly pursue ideas which set the pace for the future.

Your Next Steps

There are numerous benefits to entrepreneurship education -- especially for young girls!

If you think an entrepreneurship-focused education could be the right choice for your child, there’s no better place to pursue it than the Center for Entrepreneurship and Innovation at Marlborough.

Want to learn more about the Marlborough experience?

Get in touch now

Entrepreneurship
Faculty Spotlight

Exploring the Intersection of Gaming and Entrepreneurship: A Decade of Trends and Growth Patterns Insights

Description.

One area of study that has become increasingly important in recent years is gaming entrepreneurship. The present research attempts to investigate the historical trends and growth patterns in this area over an entire decade. Author employed a bibliometric method based on an analysis of 580 papers in the Scopus database from 2014 to 2023 which contained keywords about gaming and entrepreneurship. Our results show an average increase rate of 27.2 percentage point in the number of annual publications, this reflects a rising recognition of gaming and its importance within entrepreneurial context. The international collaborative nature of this research is highlighted with 88 countries contributing and an international collaboration rate of 24.3%. This paper has covered thematic analyses in various research areas - game development, strategies for monetization and the role of gaming on human entrepreneurial skills. The high average citation rate of 14.11 per document is an indicator that the field has academic and industry relevance. Further research is also needed on emergent themes and where video gaming intersects with areas such as education, healthcare, or sustainable development requiring strong cross-cultural collaborations to understand regional differences. Implications is apparent that the intersection of gaming and entrepreneurship in a broader sense represents an important area for continued research with significant real-world applications from informing investments to policy-making as well as potentially inspiring future generations of gaming entrepreneurs.

Institutions

IMAGES

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COMMENTS

Importance of Entrepreneurship: Types, Benefits, and Styles
The importance of entrepreneurs extends beyond the effect those individuals have on their own companies, however. They impact their broader communities, and, in some cases, even the world. Entrepreneurs have played a pivotal role in the growth of the U.S. economy since the 19th century. They spur industry transformations, create entirely new ...
Entrepreneurship Essay Examples for College Students
Social entrepreneurship is a transformative approach that merges business principles with social consciousness to address pressing societal challenges. This unique form of entrepreneurship goes beyond profit-seeking and focuses on generating innovative solutions that create positive change in communities. In this essay, we explore the concept...
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Entrepreneurship is important to the economy for a number of reasons, including creating jobs and promoting social change. ... These include white papers, government data, original reporting, and ...
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Entrepreneurs may have common characteristics such as determination and resilience that help them in the market (Ratten, 2021). In addition, being proactive and having a need to achieve can help entrepreneurs (Ratten and Jones, 2021). The importance of entrepreneurship in society has become increasingly relevant in the post COVID-19 environment.
Role of Entrepreneurship in Economic Development: Top 9 Points
By starting new firms and businesses, entrepreneurs play a key role in shaping the economy and creating a more dynamic and diverse business landscape. Entrepreneurship also promotes innovation and competition, leading to new and improved products and services that contribute to economic growth and development. 4. Creation of Jobs.
The importance and role of an entrepreneur
An entrepreneur is an individual who sets up and grows a business. They combine different factors of production (such as - land, labour and capital) to try and create a new profitable business venture. Entrepreneurs are themselves an important 'factor of production' and an essential aspect of a functioning free market economy.
Why is entrepreneurship important?
Conclusion. Entrepreneurship is an exciting and rewarding path that's also an important driver of innovation, economic growth, and job creation. While entrepreneurs will inevitably face various challenges, it's important to be resilient and focus on your business or concept. With a strong work ethic, determination, creativity, and a ...
Entrepreneurship and Innovation: [Essay Example], 2055 words
Entrepreneurship and innovation is the topic of this essay, as it is of utmost importance in today's society. These two concepts are intertwined and can lead to great success. The exchange of ideas, which is often diverse, is the foundation of innovation. Entrepreneurship and innovation can create new products and services that satisfy the ...
The impact of entrepreneurship on economic, social and environmental
Unpublished papers, books, book chapters, conference papers and dissertations were omitted in the initial search. Furthermore, the search was restricted to studies written in English. ... The literature review conducted for this paper provided eleven studies which empirically tested the macroeconomic importance of the entrepreneur's ...
Free Entrepreneurship Essay Examples & Topic Ideas
This paper examines the similarities and differences of independent entrepreneurship, intrapreneurship, and social entrepreneurship. When it comes to the process, intrapreneurship and entrepreneurship are similar in terms of value creation and undertaking risks. Pages: 5. Words: 1531.
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By studying entrepreneurship and innovation, you can learn the underlying principles of starting a business, avoid common pitfalls, pitch ideas more effectively, validate your product, develop a solid business model, and set yourself up for success in a field where failure is common. 2. Hone Your Skills.
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Entrepreneurship is the process, skill, ability to create opportunities, solve problems and contribute into the society. It takes a lot to be an entrepreneur. The following Essay on Entrepreneurship talks about its very concept, meaning & importance in our Lives.
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Here is a compilation of essays on 'Entrepreneurship' for class 11 and 12. Find paragraphs, long and short essays on 'Entrepreneurship' especially written for school and college students. Essay on Entrepreneurship Essay Contents: Essay on the Introduction to Entrepreneurship Essay on the Definition of Entrepreneurship Essay on the Growth and Success of Entrepreneurship Essay on ...
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The trait requires a lot of persistence and the ability to recover in case of a period of downturn. It is not easy to attain success within a short time. Therefore, an entrepreneur should exercise a lot of patience and should not easily give up when things go wrong . Dedication is another important personality trait of a successful entrepreneur.
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These analytical and interpersonal skills transcend the workplace, which is why entrepreneurship is so important for students. This article will explore the top three reasons why students should enroll in entrepreneurship courses, particularly during high school: Develop Innovative Thinking. Lead through Collaboration.
9 Reasons Why You Should Study Entrepreneurship and Innovation
Ability to Recognize Opportunity. One major benefit of studying entrepreneurship and innovation is the gained ability to recognize opportunity. Entrepreneurial studies focus on the application of one's knowledge and skills to commercial opportunities. Being able to determine a company's worth through analysis of their strategies, practices ...
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Entrepreneurship is the ability to innovate, whether in an established company, a government agency or a new business. It is the process that either generates new wealth-producing resources or enhances the potential of existing resources to create more revenue. It creates new product lines and improves product quality, ideas, technologies and ...
The Entrepreneurial Story and its Implications for Research
Traditionally, the story was one of technological salvation, where entrepreneurship is the source of technological change and progress. A typical example is opening statements in research articles such as the following: Small firm growth is the most important source of new jobs ( Wiklund & Shepherd, 2003: 247).
Full article: The role of innovation and knowledge for entrepreneurship
Introduction. The impact of entrepreneurial activity on regional economic growth continues to be a focus of research and policy-makers throughout our global environment (Carree and Thurik 2000; Agarwal, Audretsch, and Sarkar 2007). Entrepreneurial activity requires innovation when entrepreneurs move from initial disequilibrium towards ...
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Entrepreneurs provide solutions to the gaps in the market economy by using organisational skills such as planning, coordinating and controlling. The contribution of entrepreneurship to the economy needs small businesses to contribute to employment, innovations, competition and social and political stability.
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As Garud et al. note in their essay, an important aspect of this process is to create narratives for themselves and other social actors to justify their actions and mobilize resources. Entrepreneurs typically use heuristics to make such judgments. There is a need for further understanding of how different contexts affect the heuristics that ...
Full article: Entrepreneurship education: A systematic literature
A systematic literature review is used as a method to handle this problem. By so doing, the paper helps researchers in this area to know the findings of the most important articles in the field of entrepreneurship education. It also helps the entrepreneurship's instructors to develop their curricula and teaching methods.
Five Benefits of Entrepreneurship Education to Students
Entrepreneurship-focused programs teach students crucial life skills that will help them navigate this uncertain future. These skills include problem-solving, teamwork, empathy, as well as learning to accept failure as a part of the growth process. 2. Leave room for creativity and collaboration. As standardized testing has become more common in ...
Psychological Factors Affecting Female Entrepreneurship Success: A Case
This article mainly explores the psychological factors that contribute to women entrepreneur's success. This study focuses on 10 Chinese Muslim women entrepreneurs on WeChat. This article uses qualitative in-depth interviews. This study reveals the psychological factors that influence the success of female entrepreneurs. This research found that for Muslim female WeChat business ...
Exploring the Intersection of Gaming and Entrepreneurship: A Decade of
One area of study that has become increasingly important in recent years is gaming entrepreneurship. The present research attempts to investigate the historical trends and growth patterns in this area over an entire decade. Author employed a bibliometric method based on an analysis of 580 papers in the Scopus database from 2014 to 2023 which contained keywords about gaming and entrepreneurship.