Meaning of Entrepreneurship Part I

The term entrepreneurship appears more and more frequently these days. Entrepreneurship stands for creativity, innovation, entrepreneurial risk and entrepreneurial initiative. Entrepreneurship particularly describes the forms of entrepreneurship that represent a new and significant drive for good economic development in difficult economic times, as we are experiencing in many places today. The focus here is primarily on young companies or start-ups.

What does entrepreneurship mean?

According to Percomputer, the word entrepreneurship comes from English and means entrepreneurship when translated into German. However, today’s modern times offer a broader definition of this term. Entrepreneurship means more than just having certain skills and starting a company. Rather, an entrepreneur should find solutions to change the world’s problems, create innovative products and develop or find new business models .

Entrepreneurship according to Schumpeter

Joseph Schumpeter was a major 20th century economist. He described the term “entrepreneur” as a force that not only displaces existing structures in the economy but even destroys them. Its aim is to create new structures. Schumpeter also spoke here of a creative process of destruction, which, however, has many advantages. In this way, existing services or products can be replaced by new ones.

Innovation management – what does innovative mean?

Innovation is the buzzword today. You hear about this term again and again. But what does innovation management and innovation actually mean? The word innovation has its origin in the Latin word innovare and translated means to renew. From the point of view of economics, innovation stands for something new that is of great benefit to society or an organization. Innovation management therefore means systematically promoting innovations in a company. The tasks of innovation management include planning, management and control, as well as organization. The focus is on all measures that promote innovation in a company and bring a high level of benefit. These can be the following examples:

  • Create new sources of income by developing new business models
  • Creation of new services or products in order to serve new markets
  • Improve internal procedures or processes in order to obtain savings potential or to strengthen the company from within
  • Improve products or services to create a unique selling proposition

The tasks in innovation management

Innovation management basically consists of two large pillars.

Pillar Hints
Pillar I. Design of framework conditions that make it possible in the company that new ideas arise and innovations can be successfully implemented from them The focus here is primarily on activities that have to do with the development of the company.
Pillar II The second pillar relates to innovation itself. This means the active search, development and implementation of ideas. This is only possible if there are factors such as creativity and project management in place.

The tasks that arise in innovation management result from these two pillars and their importance:

  • Recognize future trends and derive the opportunities, but also the risks from them
  • Develop an innovation strategy and plan the activities
  • Creation of an idea management system to find ideas, evaluate and develop them
  • Creation of roles and organization within innovation management. This can be a question of process ownership or decision-making structures, for example.
  • Design innovation processes with which an innovation can be successfully implemented. This includes the development of concepts, a business plan, the development of solutions, the creation of prototypes, the implementation of the innovation and its subsequent marketing.
  • In addition, a culture of innovation must be created so that innovation can be promoted at all.

All of these tasks show that the responsibilities go far beyond the area of ​​innovation management. The aim here is to transfer the culture of innovation to the entire company. Innovation is only possible in the first place when one cog in the entirety of a company engages.

What is an entrepreneur?

An entrepreneur is defined as a person who plans to set up a company, successfully founds this company and is then jointly responsible for its management. The word entrepreneur is derived from the French word entrepreneur . This also explains the connection to entrepreneurship.

Who is an entrepreneur within the meaning of the BGB?

From a legal point of view, according to § 14 BGB (civil code), the entrepreneur is defined as a legal or natural person, which can also be a legal partnership . The entrepreneur carries out an activity that is self-employed or commercial. An entrepreneur must act in this sense when concluding legal transactions.

Who is an entrepreneur within the meaning of the UStG?

In the sense of § 2 Abs. 1 UStG ( Value Added Tax Act ), an entrepreneur is a person who, commercially or professionally, carries out an activity that is carried out independently. With professional or self-employed activity are meant all sustainable activities that have the purpose of generating income. This also applies if there is no intention to make a profit.

What qualities should an entrepreneur have?

Entrepreneurs are usually characterized by special characteristics, even if in most cases they have different goals. The most important characteristics for long-term success as an entrepreneur at a glance:

Ability Description
Willingness to take risks An entrepreneur needs a high willingness to take risks as a quality. But he takes these risks with a certain calculation. In his vocabulary words like  “does not work”  or “ is not possible” do not appear.
Passion This quality is one of the most important for an entrepreneur. The passion for one’s own doing and acting has to be present.
Endurance Not every entrepreneur starts from 0 to 100 right at the beginning. That is why perseverance and perseverance are required until entrepreneurial success is achieved despite a few setbacks.
Creativity An entrepreneur must always look for solutions to known problems and eliminate them. Only those who show creativity as a company can stand out from their competitors.
Innovative thinking A successful entrepreneur knows the advantages of innovative technologies long before others deal with it. This enables you to achieve higher productivity and profitability.
Correct self-assessment Only those who know their own limits and weaknesses as a company can run their company successfully. Admitting mistakes and getting help are very important qualities.
Willingness to learn A person never stops learning in life. This also applies to a successful entrepreneur. He must always be ready to learn new things and be open to innovation.

In addition, an entrepreneur must always be entrepreneurial in thinking and trading .

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