Schumpeter Revisited

Active interaction with the surrounding world and ability to facilitate new ideas, plans, and projects, – that is entrepreneurial spirit.

It seems strange, and at the same time fascinating to see that almost all fundamental conclusions about entrepreneurship were made by Joseph Schumpeter back at the beginning of the twentieth century.

One of the classical researchers of the entrepreneurial personality type was the American economist, Professor at Harvard University (1932–1950), JOSEPH ALOIS SCHUMPETER (1883–1950). Schumpeter became well-known thanks to his research on theory of capitalism and cycles of business activity. Among his works are: Theory of Economic Development (1911); Cycles of Business Activity: Theoretical, Historical, and Statistical Analysis of Capitalism (1939); Capitalism, Socialism, and Democracy (1942).

Schumpeter thought that the entrepreneur (innovator) is the driving force of economic development. An entrepreneur creates new combinations (innovations) of manufacturing factors that make an economy dynamic.

What personal qualities should people who can be entrepreneurs have? Schumpeter wrote that an entrepreneur possesses some special traits of character, such as, first of all, intuition and gut feeling, which are necessary to be able to find new, non-standard ways of acting, and, secondly, a readiness to take risks, energy and will, in order to deny the status quo to overcome the strong inertia of economic and social processes. Being an entrepreneur means acting differently. An entrepreneur has to be able to move ahead on his own.

The main criterion for being a real entrepreneur is their ability to combine different factors and focus on innovation. A person, Schumpeter stated, is an entrepreneur, only if he implements a new combination; he stops being one, when the business he established goes on to function within a circle. Entrepreneurship is creativity. It begins when the “once-established order finishes”, when you have to act differently, in a new way. It is “something in the blood”, something that is stronger than one’s natural laziness and more important than a simple thirst for profit or popularity. Among other qualities that encourage entrepreneurship in a person are a heightened tendency to take risks and depend on one’s own strength , as opposed to just being influenced by external circumstances.

The main motive for an entrepreneur is "the dream and will to start his own private empire and – in most cases, although not always, - his dynasty" One can not imagine an entrepreneur without a will for victory, a high demand in achievement and a joy of creativity. The motive of profit has to be present, but it is not the ultimate goal. Profit is important as a criterion of success: the money an entrepreneur earns shows how well the conceived entrepreneurial project has been realized. The entrepreneur himself, according to Schumpeter, ultimately strives for freedom and self-actualization.

New combinations include the following:

1. Producing a new product;
2. Implementing new equipment;
3. Developing a new market;
4. Obtaining a new source of raw material;
5. Using new organization of manufacturing.