Chapter 4: Entrepreneurship and Small Business
Entrepreneurship is one of the most popular topics in the business press and popular economics of the 21st century and is often casually identified with small business. But there is less to this than meets the eye. Entrepreneurship and small business certainly are interrelated, and this chapter will discuss some of the interrelations. More importantly, there are a number of different definitions of entrepreneurship. The most popular definition — one associated with the ideas of Joseph Schumpeter — is the one that is least useful for the study of small business, however important it is for other purposes. For the American Internal Revenue Service, an entrepreneur is simply the person who receives the net proceeds of a business. This is a key point! The one thing all definitions agree on is that the entrepreneur is the recipient of the profits, if there are any. This chapter will review some of the definitions of the word “entrepreneur,” including Schumpeter’s, and will then consider some of the evidence on the relation of Schumpeter’s conception in particular to small business in the American economy.
