Features of Entrepreneurship
The entrepreneur as an organizer of the process of production is the fore-runner of economic development of a country.
Image Credits © Ken Lennox.
1. Scare human resource
Entrepreneurship is a very scarce human factor as it involves specific talent, organizational capacity, innovative sprit and boldness to bear risk which is not found in every person. In developing countries like India lack of entrepreneurship is a major impediment to development.
2. Heterogeneous factor
Entrepreneurship is a heterogeneous factor of production because efficiency, talents, organizing skills, ability to bear risk, foresights and innovating capacities, etc. vary from entrepreneur to entrepreneur. The nature of enterprise varies with various forms of business organizations like sole trading, partnership, co-operatives, Joint Stock Company and public undertakings. In a small business, the same person may work as an entrepreneur, manager and capitalist.
3. Indispensable factor
In modern business entrepreneur is a very important factor of production as he organizes production of goods & services by coordinating the other factors in an optimum way. He is an organiser & owner of the firm. Production is impossible in his absence.
4. Intangible factor
Entrepreneurship is an abstract phenomenon. It is intangible. Entrepreneurial efforts cannot be measured in quantitative terms while we can measure in terms of hours of work and number of days. We can calculate the number of individual workers and their contribution to the firm but it is not possible to measure entrepreneurship as the firm itself is the enterprise.
5. Highly mobile
Of all factors entrepreneur possess a higher degree of mobility as he can easily move from one industry to another or from one region to another. An entrepreneur's ability to move from one industry to another depends upon his knowledge, experience and specialization.
6. Cannot be Bought & Sold
Land labour and capital can be bought and sold in factor markets but it is not possible to deal with entrepreneurs in a factor market. Since enterprise is an intangible factor, it cannot be bought and sold. Hence, like land, labour and capital market there is no entrepreneurial market where entrepreneurship can be bought and sold. Transaction is not possible in case of enterprise.
We cannot derive the demand and supply curves in case of entrepreneur. Hence, the Demand and Supply Theory of value cannot be applied to the factor enterprise or organization to determine its price.
7. Residual reward
Entrepreneurship is a reward in terms of profit which is a residual reward, i.e. an income which is left after meeting all business expenses from the total sales revenue.