Entrepreneurship

Behind every new venture is someone willing to create value where none existed, under deep uncertainty and with no guarantee of reward. That activity is entrepreneurship.

Entrepreneurship is the pursuit of opportunity to create new value, typically by founding and building a venture, under conditions of uncertainty and risk. It is the activity through which new businesses, products, and ways of doing things come into being, and it is a central engine of innovation, economic dynamism, and growth.

Creating value under uncertainty

The essence of entrepreneurship is creating new value where it did not exist before, by identifying an opportunity and mobilising resources to pursue it, in the face of genuine uncertainty about whether it will succeed. The entrepreneur acts without knowing the outcome, committing effort and resources to a venture that may fail, on the conviction that an opportunity is worth pursuing. This combination, the pursuit of opportunity, the creation of new value, and the acceptance of uncertainty and risk, distinguishes entrepreneurship from merely running an established business along known lines.

More than starting a company

Entrepreneurship is often equated with founding a startup, but it is broader: it is a way of acting that can occur in many settings. It happens when an established firm pursues a new opportunity, corporate entrepreneurship, when a social venture creates value for a community, and when an individual builds something new in any domain. What defines it is the entrepreneurial act, spotting an opportunity to create value and pursuing it under uncertainty, rather than the particular legal or organisational form it takes. The mindset, alert to opportunity and willing to act on it despite the risk, is the heart of the matter.

Why it matters

Entrepreneurship matters because it is a primary engine of innovation, renewal, and economic growth. New ventures introduce new products, methods, and business models, challenging incumbents and driving the creative destruction through which economies renew themselves. Entrepreneurs turn ideas into realities, create jobs, and push the boundaries of what is offered, and the dynamism of an economy depends heavily on how readily and successfully entrepreneurial activity occurs within it. A society that enables entrepreneurship, with the capital, institutions, and culture to support it, tends to be more innovative and prosperous than one that stifles it.

Entrepreneurship is the pursuit of opportunity to create new value under uncertainty, the activity through which the new enters the economy and the central engine of innovation and growth. Broader than founding a startup, it is a mindset of spotting and acting on opportunity despite the risk, and its importance, as the source of new ventures, products, and the creative destruction that renews economies, makes the conditions that enable it among the most consequential determinants of a society's dynamism and prosperity.