Theories of Entrepreneurship

• Innovation Theory

  Joseph Schumpeter, 1883-1950
• Risk And Uncertainty-Bearing Theory


  Frank Hyneman Knight, 1885-1972, American Economist
• Sociological Theory

  • Social Cultures are primary driving elements of entrepreneurship
  • Entrepreneur expected to align activities with good customs, traditions, religious beliefs, and morals
• Keynesian theory emphasizes the role of the government in entrepreneurial and economic development, especially during economic depressions. It attributes Economic Growth
• Theory


  A generalization that explains a set of facts or phenomenon. It is not absolute truth. It can be supported by another observation or proven to be otherwise
• Risk And Uncertainty-Bearing Theory


  • Entrepreneur as an agent connecting producers and consumers
  • Entrepreneur faces risks of uncertainty in connecting Supplier and Buyer
• Alfred Marshal Theory


  Alfred Marshal, 1842-1925, English Economist
• Gap-Filling Theory


  Henry Leibenstein, 1824-1891, American Jewish Economist
• Learning-Alertness Theory


  • Spontaneous learning and alertness are major attributes of entrepreneurship in any economy
• Innovation Theory


  • New product
  • New Production Method
  • New Market
  • New Supplier
  • New Industry Structure
• Gap-Filling Theory


  • Entrepreneur responsible for recognizing market trends
  • Entrepreneur expected to possess abilities to connect different markets
• Technological Theory

  Nicholas Kaldor, 1908-1986, Cambridge Economist
• Factors of Production

  • Land
  • Labor
  • Capital
  • Organization
• Scholars who develop theories mostly anchor their concepts on the economic events happening at that time
• Keynesian Theory


  John Maynard Keynes, 1883-1947, British Economist
• Sociological Theory

  Max Weber, 1864-1920, German Economist
• Technological Theory


  • Modern technology is essential in production
  • Entrepreneur expected to keep up with modern technology and apply it in entrepreneurial endeavors
  • Advancement of Technology is an element of production
• Learning-Alertness Theory

  Israel Kirzner, February 13, 1930, Austrian Economist