Entrepreneur – Someone who has a business idea and develops it. They take the risks m and the profits that come with success and the losses that come with m failure
- Entrepreneurs organise the factors of production in order to set up and create an enterprise
- They also make decisions to operate, expand and develop a business.
- To add value by selling the output by more than the cost of the input.
- Be innovative.
Innovation – Developing a product which is an improvement on an existing one or is changed/altered to fit a new market.
- They also use creative destruction which involves organising factors of production to create and set up an enterprise.
- Creativity leads to new ideas, inventions, and products which means that consumers switch to these newer products whilst the old ones become outdated.
- Creative destruction is linked to technological change which allows new developments to be made in products.
- This can disrupt business that have failed to adapt to changing tastes or new technologies.
- Joseph Schumpeter was an economist who stated
“only those with creative destruction can call themselves