McDaniel, Bruce A. “A Contemporary View of Joseph A. Schumpeter’s Theory of the Entrepreneur.” Journal of Economic Issues , Vol. 39, No. 2 (Jun., 2005), pp. 485-489
This article by Bruce A. McDaniel focuses on the contemporary view of the theory of the entrepreneur as stated by Joseph Schumpeter. This passage introduces the entrepreneur from a neoclassical perspective, viewing the entrepreneur as someone who is driven by profits and a capitalist. Throughout the passage, the idea of an entrepreneur as a risk bearer and a creative innovator is illustrated. Thus, Schumpeter describes that when innovation occurs an entrepreneur is present in any institutional system. Therefore, the entrepreneur is known as, according to Schumpeter, a “sociologically distinct individual”
The approach behind Schumpeter’s theory is, as aforementioned, from a neoclassical economics point of view. Within this point of view, Schumpeter explains that the entrepreneur disrupts an existing equilibrium. This is because of such innovation which makes the economic process chaotic and unpredictable. This idea contrasts with the idea of mainstream economics, which use equilibrium based analytical methods. Finally, when these innovations occur, the world economies are developing and the entrepreneurs emerge to make changes in the institutional system, adding to the theory that the entrepreneur is a sociologically distinct individual.
As all other theories are, this theory of Joseph Schumpeter is agreed with and argued by many. This passage on Schumpeter’s theory is very useful because it highlights many of the major characteristics of the entrepreneur. This article by McDaniel can be a useful tool for someone who wants to be briefly introduced to different theories of the entrepreneur, specifically Schumpeter’s. Many economists may find this article very general because of their knowledge and their experiences. Nonetheless, this article can provoke interesting discussions about theories of the entrepreneur based on the modern entrepreneur.