Assuming normal cognitive ability, when a horse tells you it is a horse you are quick to agree, yes, this is a horse. When a person suggests that she/he is an entrepreneur, it has become necessary to ask: What is an entrepreneur?
If you seek an answer to the question by looking in a dictionary, searching on the internet, or by asking random individuals, the answer or response typically indicates an entrepreneur is: A person who starts a business and assumes the risks associated therewith. Current usage suggests the answer more correctly would have been a person who starts and manages a business, or a person that is skilled in the practice of innovation.
Given the increasing emphasis on the importance of innovation in business a new word is required to eliminate that communication confusion. This can be accomplished by acknowledging two distinct practices: the practice of entrenovation* and the practice of entrepreneurship.
This graphic illustrates two significant differences in the contributions of the entrenoveur and the entrepreneur: skills and timing. First, the skill set of the entrenoveur is focused on converting an idea into a product or service. The entrepreneur is focused on marketing and selling the product or service and managing the growth of the enterprise. Second: the two skill sets are required at different stages in the life cycle. These distinctions, in part, describe the difference between the practices of entrenovation and entrepreneurship.
While French economist Richard Cantillion (18th century) is credited as the first economist to use the word “entrepreneur”, the initial use describing an economic strategy was by French economist J. B. Say during the 19th century. Skipping ahead about 100 years, Joseph Schumpeter, the acclaimed Austrian economist, brought new light to the word’s usage; and a few decades later, astute business guru Peter Drucker went to great lengths to emphasize his usage of the word entrepreneur. What did these three express in common? To be an entrepreneur it is necessary to employ a specific tool – innovation. It is worth noting that, in their definitions of entrepreneurship, Schumpeter and Drucker appear to have specified innovative practice is different than normal business practice.
Dive a little deeper
Compare the following definitions of entrepreneur as presented by economists and as found in dictionaries:
- J.B. Say was not the first to use the term; he seems to have been the first to pinpoint associated economic activity: “The entrepreneur shifts economic resources out of an area of lower and into an area of higher productivity and greater yield.” J. B. Say as quoted in Innovation and Entrepreneurship,Peter Drucker, 1985.
- Joseph Schumpeter, as written in Prophet of Innovation, Thomas K. McCraw, 2007, specified five innovative actions that define the entrepreneurial act:
- The introduction of a new good…
- The introduction of a new method of production…
- The opening of a new market…
- The conquest of a new source of supply of raw materials or half-manufactured goods…
- The carrying out of the new organization of any industry
- Peter Drucker wrote, “Indeed, entrepreneurs…create something new, something different; they change or transmute values.” Innovation and Entrepreneurship,Peter Drucker, 1985.
Dictionary Definitions of Entrepreneur
- Oxford Dictionary – A person who makes money by starting or running businesses, especially when this involves taking financial risks.
- Merriam-Webster Dictionary – One who undertakes and assumes the risk of a business enterprise; contractor.
- Business Dictionary – Someone who exercises initiatives by organizing a venture to take benefit of an opportunity and, as the decision maker, to decide what, how, and how much of a good or service will be produced.
Well, that doesn’t exactly clear up the entrepreneurship communication confusion. It is like using pudding as a catch-all to describe vanilla pudding and crème brûlée.
Innovation is distinct
Comparing the definitions, however, does serve to distinguish between what has become common usage of entrepreneur as defined in dictionaries, and the additional usage as described by Say, Schumpeter, and Drucker. To assist in that quest, Schumpeter created a phrase that today resonates in the business world: Creative Destruction. From his biography: “At all levels, Schumpeter’s litmus test is whether the players are pursuing innovation and bringing about creative destruction. If they are, then the program is Schumpeterian. If they are not, it isn’t.”
Drucker adds support with: “An entrepreneur is not a capitalist, not an investor, is not an employer. Entrepreneurship is not a personality trait, it is behaviour. And its foundation lies in concept and theory rather than intuition. The entrepreneur upsets and disorganizes – his/her task is creative destruction”.
It is not a surprise the confusion exists around the word entrepreneur. A review of the historical use of the word indicates it was used in radically different ways over the last 500 years. An example from an Oxford Review revealed “during the 18th century, the Oxford Dictionary of 1897 defined entrepreneur simply as “the director or manager of public musical institution, i.e. one who ‘gets up’ entertainments, specially musical performance”.
At this juncture, it is appropriate to rest the case. It is unquestionably clear that the introduction of the practice of entrenovation* will clear the communication confusion.
- Entrenoveurs find and turn innovative ideas into products/services.
- Entrepreneurs use the products/services to grow, or start, a business.
The definitions of entrenovation and entrenoveur follow. In these definitions, entrenovation and entrenoveur have been substituted directly into the Drucker definitions of entrepreneurship and entrepreneur.
[Entrenovation*], n. – The Practice of [Entrenovation] focuses on the institution that is the carrier of innovation. It deals with [entrenoveurial] management. [Entrenovation] is neither a science nor an art. It is a practice. It has a knowledge base. … Entrenovation is not a personality trait, it is behaviour. And its foundation lies in concept and theory rather than intuition.“ Drucker, Peter F. Innovation and Entrepreneurship. HarperCollins e-books. Kindle Edition.
[Entrenoveur*], n. – a business, or person, that employs an initiative intended to create a new venture, or to promote organic growth in a company, that results in the destruction of an existing business paradigm, introduces a new product, or creates a new market. The action endows a resource with the ability to create new wealth. “[Entrenoveurs] innovate. Innovation is the specific instrument of [entrenovation]. An [entrenoveur] is not a capitalist, not an investor, not an employer. The [entrenoveur] upsets and disorganizes – his/her task is creative destruction.” Drucker, Peter F. Innovation and Entrepreneurship. HarperCollins e-books. Kindle Edition.
Example of entrenovation in a Sentence: Entrenoveurs innovate; they are entrenoveurial. Innovation is the specific tool of entrenovation.
Usage: entrenoveur – noun; entrenoveurial – adjective; entrenovation – noun
Jon Constable is the author of – Ready, Set, Start-up: A Practical Guide to Initiating and Managing a Start-up. Available at – Amazon . Be entrenoveurial*. Use Ready, Set, Start-up: validate your idea, launch a start-up project, and get ready to go-to-market.
*Important note: The word “entrenovation” is intended to be available for common use. The word is not subject to copyright, cannot be used as a trademark, cannot be patented, and cannot be reserved in any fashion for the personal, business, or otherwise private use of anyone, anywhere, at any time.