The entrepreneur: actor of entrepreneurship

Innovation is achieved by the entrepreneur who takes risks and who organizes his development, in short who “undertakes”.

The entrepreneur is the essence or the very heart of entrepreneurship. He is the one who innovates according to the opportunities that present themselves, but also who organizes the resources to produce and market, while seeking his interest.

Different characteristics can be attributed to the entrepreneur, even if they are not necessarily specific. It can also be shown that there are different types of entrepreneurs playing different roles in change.

The characteristics of the entrepreneur

Character traits

Some character traits of the entrepreneur relate to values or attitudes towards the socio-economic environment.

These entrepreneurs have the following characteristics.

  • they seek independence.
  • They prefer to receive or earn less, while being their own master.” Their sense of “autonormism” is pushed.
  • They have a strong self-confidence. They are by definition optimistic.
  • They seek to exert a certain control over themselves, to develop their own project, both in the company and in their personal life.

Finally, entrepreneurs are very persistent because they are aware that success will not come immediately, they use various means to achieve their goals.

The entrepreneur is an opportunist

The entrepreneur is an innovator who knows how to discern business opportunities in the economy, by developing a new product, by producing it or by marketing it in a new way, by organizing resources in a different way, in short by being on the lookout for opportunities or novelties, so as to respond better to the market or open up a new market.

He is therefore fundamentally an opportunist, on the lookout for new gaps in the market, to insert himself there and thus create or transform a company.

This is also the origin of the word entrepreneur, as Hélène Vérin explains, “to take between”, To undertake is to conquer a place on the market, it is thus to insert oneself between other firms to winning a case and pursuing it, even at the expense of the competition.

The entrepreneur is an organizer

The entrepreneur is the being who organizes resources in order to develop and commercialize innovation.

The organization is often the obstacle of the innovator who does not know how to go from the idea to the application. He must therefore at this time join forces with an organizer to create a business or quickly acquire his stripes as a manager.

The entrepreneur is motivated

One of the objectives of the entrepreneur is the success marked by the profit, this is why he makes choices, takes decisions to face the obstacles.

Profit contrary to economic theory, is rarely the goal of entrepreneurship.

Profit is, however, a constraint, on the one hand to offset costs and above all to ensure the follow-up to success, on the other hand to make it possible to face new challenges, to support growth and, thus, new investments.

there are also many other objectives or motivations for starting a business or for innovating. It is :

the ambition, the need or the interest to find a job commensurate with one’s ability
assurance of a decent income, or employment for his family,
creation of employment in his region and thus to be well seen by those around him…

These motives are often implicit, complex and complementary. They are inherent to the entrepreneur and conform to his personality and his interests. The business, especially if it is new, is the business of the entrepreneur and, therefore, of his objectives and his constraints.

Thus, Catalan researchers use the term itinerary, which associates the vision and personal (or family) objectives with the vision and objectives of the entrepreneur.

The itinerary, or journey, is the professional and personal vision of the entrepreneur in relation to his business. The medium and long-term strategy of the company will obviously be strongly influenced by the personal and family interests of the entrepreneur.

This is why it is so difficult to measure the performance of a company. Because it depends on the strategy or route followed. For example, a business can be less efficient, while giving full satisfaction to the owner, who prefers to make less money (and work less) in order to be able to devote time to his family and hobbies.

Similarly, the entrepreneur can limit his income, to invest more, in order to ensure a higher profit in the long term, or he can limit his expansion on external markets in order to reduce his risks or better serve a market. close.

Any performance measure must therefore take into account the very objectives of the entrepreneur and, thus, his satisfaction in the short and long term. It must take into account the very evolution of the entrepreneur’s assets,
as financial studies have begun to do, for example, to challenge the still widespread idea that SMEs are undercapitalised.

Types of entrepreneurs

The rise of entrepreneurship was particularly in Italy and the United States in the mid-1960s.

Since then, psychologists, sociologists, ethnologists, economists, managers have endeavored to arrange entrepreneurs into categories, to construct typologies.

We are therefore going to present the most common typologies in the entrepreneurial literature, emphasizing their relative character, and the dominant trait.

According to the conditions of creation: the craftsman and the opportunist

In the 1960s, Norman Smith proposed a classification as an opportunistic entrepreneur, after studying businesses in an area of activity in the United States.

The artisan entrepreneur

Creates his business without much experience, especially in management. Above all, he has a technical skill, and is localized in highly innovative activities.

The opportunistic entrepreneur

Is older and more experienced, particularly in management (he may have been an executive or an engineer). He matures his project, linked to an opportunity for innovation (hence the “opportunist” outfit), and leaves, with significant personal capital, benefiting from solid support.

According to the profile of the manager: the technician and the planner

This classification extends the previous one, emphasizing the management style of the business.

The technician

It is primarily interested in the conditions of manufacture of the product (whether it is a good or a service – for example, a cook – restaurateur).

For him, it is above all a question of highlighting his professional skills, his know-how, his artistic profession.

The manager

He focuses on resource management issues, often because of his training (diploma in management) or/and his professional experience (administrative executive). He is interested in cost reduction, economy of means, but also in non-production investments, administrative computerization, for example.

Depending on the conditions of innovation: from “prospector” to “reactor”

Miles and Snow (two American authors) studied the relationship between entrepreneurship and innovation. They distinguished four types of entrepreneurs

The prospector

He is considered the “pure” innovator. This person is constantly looking for innovations (of product or process), but he is not sure that he will make them profitable and develop them himself. Indeed, it is not very interested in the next phase of organization and marketing.

He creates the company, starts it up, then sells it. This case is frequent in high-tech activities (biotechnology, for example), insofar as the investments, manufacturing and marketing exceed the capacities of an individual; these companies are often taken over by powerful industrial groups, which make them a subsidiary.

The innovator

It goes much further in the entrepreneurial process. His attitude towards innovation is deliberate: he systematically seeks innovations (of product or process) which he fully exploits himself.

This attitude is developing strongly, due to the pressure exerted by the principals and the distributors.

This person has a very strong technological and competitive watch activity, and has a research and development budget that can be high.

The follower

He imitates, systematically follows, proactively and deliberately, the innovations that appear on the market. This approach, well known for example by Japanese companies, can prove to be very competitive: innovators “open the new track”, and bear the costs of innovation.

Followers focus on improving innovation, management issues, thereby lowering costs. This strategy is all the more profitable as the innovation is difficult to protect; at the limit, the lawsuit, if it is brought, will arrive very late…

The reactor

It adopts an emergent and reactive strategy. The entrepreneur adapts afterwards and on a case-by-case basis. This passive “opportunistic” attitude can pay off when the degree of turbulence in the sector is quite low, and when customer loyalty to innovative products is less important than loyalty to the company or its boss.

According to the logic of action: the PIC and the CAP

This typology is based on the major socio-economic aspirations of the entrepreneur seeking;

The sustainability of his business, that is to say the concern for duration, in particular in the hope of passing it on to a buyer or to a member of the family or the company.

Independence: the entrepreneur wishes to be independent, in terms of capital ownership and/or autonomous, in terms of decision-making.
Growth is equated with the will to power and the desire for power.

From these three major aspirations, we can show two logics of action, and therefore, two major types of entrepreneurs:

A logic of heritage action: the PIC

In this case, the entrepreneur seeks above all to accumulate heritage, assets with a value of transfer or use, he therefore gives priority to the sustainability of his business.

He also wishes to preserve the independence of his assets, by refusing partners, even external loans.

This type of behavior is of course widespread in family business… or when the entrepreneur sees his family grow!

The PIC shows, for example, a strong preference for material investments (machines, land, buildings, etc.) and a relative distrust of the outsourcing of activities and immaterial investments (training, innovation, promotion and marketing).

It is therefore a question of favoring a logic of accumulation, often to the detriment of apparent profitability and with an apparent under-capitalization

A logic of entrepreneurial action: the CAP

In this logic of valuation, the entrepreneur favors activities with strong growth, and undoubtedly risky (while the PIC avoids risk).

He seeks decision-making autonomy and does not worry about problems of capital independence (he will seek outside capital, even if it means being “subsidized” by a large company, while remaining the boss, for example as an exclusive subcontractor )..

On the other hand, he is not concerned about the sustainability of his business, that is to say, he easily changes activity, except for exceptional success.

The CAP is located in turbulent, evolving, expanding activities. IT tends to outsource functions to give priority to immaterial investments, such as research and development, advertising and communication, staff training. He gives preference to light, adaptive structures.

the factors of the emergence of the entrepreneur

For the potential of the entrepreneur to be expressed, there must be favorable circumstances in the environment, i.e. a climate open to entrepreneurship.

if it is frowned upon in some circles to go into business, to become rich, the potential entrepreneur will have to overcome additional obstacles.

Thus, certain prejudices or religious taboos can entrepreneurship or lead to the creation of substitute institutions; for example, as interest on loans remains prohibited in some Islamic circles, banks have had to be set up using other means to control and make their loans to small businesses profitable.

Among the advantages of the environment we can mention:

1- Information

It allows ideas to be generated and evaluated. Regions with extensive information networks promote entrepreneurship.

2- The presence of skills

It is another often crucial resource in suitable manpower, in adequate supplies, in efficient consulting services.

But there are barriers to entrepreneurship such as:

  • excessive taxation,
  • operating rules that are too strict,
  • an excessively finicky state intervention,

The environment, and particularly the market, creates opportunities. If the market is too small or the “cash” economy not widespread, as in some parts of developing countries, it is difficult to start a business.

3- The situation

She can play both ways. Thus, in low economic conditions, that is to say when the economy is doing badly, it seems more difficult to start a business since the market is slowing down and the financial system is cautious.

However, resources in men, equipment and savings are often less expensive; a good project can therefore more easily find the necessary resources.

Plus, the time to streamline and come up with new ideas for existing businesses is more available than when the order book is full and customers are complaining about delays.

This assumes that the market is open and that the barriers to entry are lower. This explains why SMEs are not very present and create few innovations in certain industrial sectors, such as petrochemicals or the automotive industry, because of the enormous initial investment costs, but also because of various barriers entry due, for example, to control of distribution in consumer markets.

Another type of barrier to entry can be institutional, as in the case of large public markets or regulated markets, which is how the “deregulation” of air transport in the United States has, on the one hand, increased the monopolies on the very profitable main lines following a strong price war, but also allowed the development of a good number of small regional airline companies on the secondary markets.

But for the entrepreneur to enter the market, “triggers” are needed. These can be individual, family, social, or organizational.

Individual triggers are, for example, job dissatisfaction or the feeling that one’s skills are being misused. It is also in a period of high unemployment, the difficulty of finding a job.

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