Who Is an Entrepreneur?

According to the dictionary, an entrepreneur is someone who "organizes, manages, and assumes the risks of a business." The actual role entrepreneurs play in our countries' economies is much broader than that, even though it's often not a very visible role. Here is a good summary of how economies function, and the role of entrepreneurs within that system:

"All of the economies around the world possess four major resources: land, labor, capital and entrepreneurship. Land represents natural resources—the soil, food crops, trees and lots we build on. Labor represents the farmers, accountants, cab drivers, dry cleaners, assembly-line workers and computer programmers who provide skills and expertise to build products or offer services in exchange for wages and salaries. Capital represents the buildings, equipment, hardware, tools and finances needed for production. Entrepreneurship represents ideas, innovation, talent, organizational skills and risk." [Source: FRB Dallas]

You're probably familiar with some of the more famous entrepreneurs like Bill Gates and Richard Branson, but entrepreneurs come in all ages, genders, shapes and sizes: The kid selling lemonade on your street is an entrepreneur. The man repairing shoes under a tree is one, too. The Bangladeshi woman who sells fish on the street is an entrepreneur, as is the Afghan boy collecting old newspapers to sell for recycling.

In spite of their variety, entrepreneurs have some things in common: They often take risks, and they are self-starters who think creatively.

Why Is Entrepreneurship Important?

Most economists agree that entrepreneurship helps economic growth, in both developed and developing countries. Entrepreneurs start new businesses, creating jobs for themselves and those they employ. Often, entrepreneurial activity increases competition and can increase productivity as well. Entrepreneurs innovate, which is an important ingredient in any country's development.

In many poor countries of the world, entrepreneurship can and does play a big role in improving people's lives. For example, villages that rely only on income from rice-growing are vulnerable because if bad weather damages their crop they have no means of livelihood. The result can be starvation and ruin.  On the other hand, a village where many people have an entrepreneurial spirit means that there will be diverse sources of livelihood, making the village more resilient in case something happens. So, in addition to agriculture, maybe this village earns a side income on cottage industry and carpentry and pickled products, for example.

Entrepreneurship gives people exposure to a wide range of activities, helping them develop a broad skill set. An entrepreneur with a new idea can create something new and wonderful … Look at the guy who came up with cheap laptops that are helping poor kids in the developing world! Following your dream and being creative also allows for more independence and job satisfaction.

For young people in particular, who often face joblessness, entrepreneurship is a good option because it is a way for them to channel their energy, creativity and fresh perspectives into innovations and problem solving, so they can contribute to their community.