Entrepreneurship is one of the factors of production, adding to the three already known. According to the International Labor Organization (ILO), it refers to the skills, as well as the knowledge, that employers need, as well as anyone who creates or owns a company.
Entrepreneurship, therefore, is included within the known factors of production, along with land, labor and capital. This capacity can be defined as all the knowledge, as well as the tools, that an entrepreneur possesses to manage and generate wealth through the activity that he exercises. In this way, entrepreneurs possess ideas, carry them out and assume the risks that these approaches entail.
Entrepreneurship, although there are discrepancies depending on the author, is considered one of the four existing production factors.
Elements of Entrepreneurship
Among the elements that define entrepreneurship, the following should be highlighted:
- Observation of the environment or the environment.
- Meeting of the physical and psychological tools necessary to carry out a certain activity.
- Identification of the opportunity, as well as the potential benefits.
- Implementation and start-up of the determined economic activity.
- Obtaining benefits and profits, both own and collective.
Finally, we could add academic training and experience as elements that include entrepreneurship.
Entrepreneurship as a factor of production
Entrepreneurship has been considered by many economists as another factor of production. Along with land, capital and labor, this capacity has been indicated as a key variable for the connection of the three factors discussed above.
In this way, this factor is understood as the contribution made by the entrepreneur who organizes the production, thus obtaining a higher yield.
Although the entrepreneurial capacity has been a factor questioned by some economists, especially of the Marxist current, the books on economic history, as well as on economics, include it as one more factor of production. Even, many academics define it as a production factor without which part of the tasks where the other three main production factors come into play could not be coordinated or carried out.