Skip to 0 minutes and 10 secondsSince the 17th century, several of our famous economics have addressed the issue of, what it is what and to printers actually do. In our first lecture, we discussed most basic interpretations. That is the entrepreneur is an arbitrageur. This role has been put forward explicitly by Kritchner in the last century, but was also stress much earlier by Marshall and Kontion. An arbitrageur exploits to opportunity to earn a risk-free profit off the transaction costs, such as transportation. And in this way he's taken advantage of price differences between markets. At the present time, we, for example, see arbitrageurs operating on financial markets. There, they buy and sell financial instruments, such as bonds and currencies. Pure arbitrage is free of risk and uncertainty.

Skip to 1 minute and 9 secondsPrice is between markets differ. And these differences are known, so the entrepreneur acts on a sort certain opportunity. However, in practise most opportunities are not certain, and the entrepreneur should try to take an advantage of the of the opportunity while taking risks. And this leads to the role of the entrepreneur as a risk taker. Kontion already focused on this role almost 300 years ago . Another aspect that is inherent to the pure entrepreneur as we just discussed, is that you buy and sell goods and services. One needs money or capital. And if you are ambitions you need a lot of capital. So now we are talking about the role of capitalists.

Skip to 1 minute and 58 secondsC Marshall, he wrote about this in the second half of the 19th century.

Skip to 2 minutes and 4 secondsWhile many entrepreneurs start their activities on their own, with the first success, other people will enter the company, and entrepreneur also becomes a manager. In the 19th century this function played an important role in the theories of, for example, Seay and Marshall. In their view, the entrepreneur is responsible to coordinate the activities within the firm. That means, he's responsible to manage. At present, this rule does not receive much attention anymore. In fact, many studies explicitly make a distinction between entrepreneurs that aim at exchange, opportunity and risk. And managers, who aid as continuity, control, and efficiency. And in fact, they exclude the managerial role from the entrepreneurial function. And finally, there is the role of the entrepreneur as an innovator.

Skip to 3 minutes and 2 secondsAll though Seay already referred to this role around 1800, it was Joseph Schumpeter who became famous with his concept of creative destruction. Stressing the innovative contribution of entrepreneurs, by changing accessing technologies, markets, and organisational forms. The last decennia is probably the innovative role that is perceived to be most closely related to the function of entrepreneurs. Just as we discussed in the first lecture, when we talked about the change to an entrepreneurial economy. So to conclude this lecture, we may summarise the modern economic view of an entrepreneur as someone who operates his or her own company, for its own risk, with it's own money, and demonstrate innovative to behaviour.

Extra: Economists on entrepreneurship

This video explains the view of economists on aspects of entrepreneurship.

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Decision Making in a Complex and Uncertain World

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