Question

According to Schumpeter, which of the following is the primary function of a new age entrepreneur

• A. Creativity
• B. Innovation
• C. Invention
• D. Skill

Answer 1

The Correct Option is B

To determine the primary function of a new age entrepreneur according to Schumpeter, we need to delve into Schumpeter's theory and perspective on entrepreneurship.

Joseph Schumpeter, a prominent economist, is best known for his theory on entrepreneurship, which he detailed in his book "The Theory of Economic Development." According to Schumpeter, the entrepreneur is a key figure in the capitalist process, whose role is primarily characterized by:

• Innovation: Schumpeter emphasized that the primary role of an entrepreneur is to introduce innovations into the market. Innovation, in Schumpeter's view, includes the introduction of new products, new methods of production, the opening of new markets, the conquest of new sources of supply, or the reorganization of an industry.

Let's evaluate each of the options:

1. Creativity: While creativity is an essential trait for entrepreneurs, it refers more to the ability to think of new ideas. However, for Schumpeter, it is the action of implementing these ideas into successful innovations that defines entrepreneurship.
2. Innovation: This is directly aligned with Schumpeter’s concept of entrepreneurship. Entrepreneurs are seen as innovators who carry out new combinations of means of production, leading to economic development.
3. Invention: While invention refers to the creation of new products or processes, Schumpeter distinguished between inventors (who create) and entrepreneurs (who apply these inventions innovatively in the marketplace).
4. Skill: Skills are certainly important for entrepreneurship, but Schumpeter focused on the transformative impact of innovation rather than the specific skills involved.

Therefore, according to Schumpeter, the correct answer is Innovation. This function is the distinguishing feature of entrepreneurs who drive economic growth and change.