The Entrepreneur in Theory and Practice

Introduction The objective of this article is to advocate that economists devote more attention to factors concerning the supply of entrepreneurs both over time and across industries. The article has four main sections which reflect the structure of our case. First we follow the well-trodden track in pursuit of the entrepreneur within economic theory. Like others, we find a degree of definitional flexibility but also some indications that the track itself may be circular. However, the main point we wish to establish is that the emphasis has been on the entrepreneurial function and not on availability. The second section of the article acknowledges the plethora of empirical studies, couched in the neoclassical tradition, which equate the entrepreneurial function with the act of achieving entry to an industry. On balance we conclude that such studies have been rather unsuccessful in explaining new entry in part because they presume an unlimited supply of omniscient entry candidates. In the next section we develop the notion of the supply of entrepreneurs by considering the rather sporadic attempts to develop the microeconomics of entrepreneurial supply. The penultimate section adopts a different tack by going beyond the economics literature. Unlike the situation in economics, psychology and sociology have tended to concentrate on the supply of entrepreneurs. Consequently, we address the issue of what, if anything, economists can learn from psychological and sociological studies of entrepreneurship. Our conclusions outline an agenda for future research into the supply of entrepreneurs and pose practical questions which economists may wish to include in the work that they do.