Impact of risk taking capability on entrepreneurship

The first goal to study entrepreneurship seeks to explain the prevalence of entrepreneurs in terms of innate psychological competencies or how special characteristics enable entrepreneurial development.

The entrepreneur who implements ‘new combinations of means of production ’plays a crucial role in disturbing the status quo through innovation-or ‘creative destruction'-and thereby becomes an agent of change. As such, the ‘dynamic equilibrium ’achieved by a constantly innovating entrepreneur could generate the conditions for:

increasing opportunities for employment (comprising various competitive skill sets);

additional wealth creation;

introduction and dissemination of new methods and technology; and

overall economic growth.

It is in the creation of more wealth, and the risk appetite for constant innovation from prevailing to the next best practices, that the significance and importance of Entrepreneurial development lies.

As such, the Entrepreneurial development in a particular milieu depends not on a single overriding factor but rather on ‘a constellation of factors ’at the individual, societal and national levels. Entrepreneurship depends on individual motivations, individual experiences, socio-cultural (including family) traditions, educational opportunities, availability of relevant skills and attitudes, supporting financial institutions and access to credit, existence of commercial trading centres, supporting infrastructure including trade routes with efficient transport and communication facilities, macro-economic environment and overall political stability. It has also been argued that Innovation and Entrepreneurship flourish best in decentralized systems by empowered people, who are willing to take risk and explore new ideas as well as willing to deal with exogenous influences.