This special collection begins by answering eight frequently asked questions. In Contemporary Challenge discover why "legal problems" in business usually involve a process or competency screw up. To learn more, use the selected links and references in Entrepreneurship Resources.

Frequently Asked Questions 

1. What is entrepreneurship?

We define entrepreneurship as:

It certainly involves the processes of innovation and sometimes commercialisation. Entrepreneurship also involves taking risk for reward.

In a corporation entrepreneurship is balanced between:

• the shareholders (who carry the risk),
• the directors (who set the policy direction of the corporation), and
• the executives (who manage and implement the corporation's strategies).

2. What are the origins of the term "entrepreneurship"?

In law, as in other disciplines, the origins of a word can help understand its meaning. According to the Oxford dictionary the word "entrepreneur" originates from the Old French word entreprendre or ‘undertake'.

Here's an interesting footnote to the history of the use of the term. The life of Jean-Baptiste Say (1767-1832) involved defining entrepreneurs and being one himself. Say, a French economic theorist, is credited as the first in continental Europe to write about entrepreneurs and entrepreneurship. In his 1803 Treatise on Political Economy he promoted the laissez-faire notions of Adam Smith. This caught the attention of Napoleon Bonaparte who demanded that Say rewrite parts of the Treatise to conform with Napoleon's attempt to create a war economy, built on protectionism and regulation. Say refused. Napoleon proscribed the Treatise and had Say ousted from the Tribunate in 1804. The second and third editions of the Treatise appeared in 1814 and 1817. Larry J. Sechrest writes that "By means of his writing, his influence spread to Italy, Spain, Germany, Russia, Latin America, Great Britain, and the United States...".

3. What do entrepreneurs do?

Say stated that the entrepreneur "shifts economic resources out of an area of lower productivity, into an area of higher productivity and greater yield". Entrepreneurs use their "industry" (a term Say prefers to "labour") to organise and direct the factors of production so as to achieve the "satisfaction of human wants." This involves taking risks in the hope of gaining rewards eg profit.

Effective entrepreneurship requires a continual search for productivity as resources are applied to ventures, and nowadays often for products, services and systems as well.

4. Is entrepreneurship about being an individual?

While historically entrepreneurship was led by individuals (known as entrepreneurs), more often than not nowadays it involves a team working in collaboration. In this context we can speak of entrepreneurial ventures and entrepreneurial organisations.

Whether, entrepreneurs today are individuals, a team or sets of teams in companies or organisations working in collaboration - all of them have to collaborate with others. This seems to be the case more than ever before. Entrepreneurs make their efforts for their opportunity throughout the life cycle of venture, product, service or system development, testing, marketing, distribution, sale, support, upgrade and so on.

Similarly an entrepreneurial or even non-entrepreneurial organisation goes through a business life cycle which classically is split into about five phases - start-up, development, growth, maturity and decline. The accompanying graphic illustrates that life cycle, with money invested indicated in the vertical axis and time in the horizontal axis.

However, as the growth, maturity or decline phase approach, some supremely entrepreneurial organisations have the capacity to re-invent their core business and thus survive through more than one life cycle. For example IBM, Intel, and Apple Computer have all excelled in re-inventing themselves. IBM has gone from being a supplier of various business machines including typewriters, through to producing market-leading mainframe computers, then PCs and now it is largely an IT services company.

The process of re-invention through innovation is illustrated in the accompanying graphic focused on product or venture innovation. As illustrated, each time a version of the product reaches the turning point or crest of success, innovation results in a new wave of revenue generation. That may involve creation of a new product version or a related venture.

Having reached the half way point in this FAQ, we'll focus in the remaining four questions on learning to improve entrepreneurship.