Entrepreneurship

Abstract

While one could search in vain for a definition of entrepreneurship acceptable to all entrepreneurship scholars, dominant approaches share a number of characteristics. Typically, the entrepreneur is portrayed as an agent of change who operates in a world of incomplete and dispersed knowledge while facing uncertainty about the future. What differs in these conceptualizations is the mechanism of overcoming uncertainty and knowledge problems. The three leading approaches portray entrepreneurs as dealing with these challenges through either alertness, creativity, or judgement, with new streams of literature adding hypothesis testing and effectuation to the list. While disagreements on the particulars of what entrepreneurship is and what role it plays in economic theory continue, economists now agree on the strong relationship between entrepreneurship and institutions. In particular, it is now well accepted that whether entrepreneurship produces economic growth depends on the institutional context. The other side of this relationship – impact of entrepreneurship on institutions – only begins to receive attention, as does the role of entrepreneurship outside of the conventional market setting.

Keywords: entrepreneurship, effectuation, uncertainty, judgement, experimentation

JEL Classification: L26, O31