The word derives from the French "entre" (to enter) and "prendre" (to take), and in a general sense applies to any person starting a new project or trying a new opportunity.

Many societies place great value on the entrepreneur. To encourage their activity, they are offered access to inexpensive capital, tax exemptions and management advice. An entrepreneur has the greatest chance of success by focusing on a market niche either too small or too new to have been noticed by established businesses. To help new technologies come to market, many universities establish business incubators for entrepreneurs hoping to turn leading edge research into marketable products.

Characteristics of an entrepreneur include spontaneous creativity, the ability and willingness to make decisions in the absence of solid data, and a generally risk-taking personality. An entrepreneur may be driven by a need to create something new or build something tangible. In the Austrian school of Economics, entrepreneurs are described as being engaged in the creative destruction of existing products and services. As new enterprises have low success rates, an entrepreneur must also have considerable persistence.

Entrepreneurs are generally highly independent, which can cause problems when their ventures succeed. In a small company the entrepreneur is able to personally manage most aspects of the business, but this is not possible once the company has grown beyond a certain size. Management conflicts often arise when the entrepreneur does not recognise that running a large stable company is different from running a small growing company.

The problem is often resolved by the entrepreneur either leaving to start a new venture, or being forced out by shareholders. At Apple Computer, for example, one founder, Steve Wozniak, left to pursue other interests, while the other, Steve Jobs was ultimately fired and replaced with a CEO from a much larger company. Not that many years later, Jobs returned to the helm.

As much as one-third of the differences in national economic growth is due to differences in entrepreneurial activity. Small businesses account for over 50 per cent of employment outside the public sector, and contribute half the GDP of UK Plc. It follows logically from this, therefore, that entrepreneurs and their ability to create such wealth and employment should be focused on more favourably by our government. For our new report Entrepreneurship: Let Your Hopes Shape Your Future click here.

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