The Key Roles of Entrepreneurs in

Society
by Alan Valdez; Updated September 26, 2017
The entrepreneur is sometimes idolized and sometimes seen with distrust. There is no
doubt, however, that entrepreneurship has made crucial contributions to economic and
social life in modern industrialized countries. The increased role of entrepreneurship,
particularly in the realms of high-tech and finances, has come with a number of benefits
as well as some new problems and challenges spanning a wide range of economic,
social and even ethical dimensions.

Definition
There is a very broad range of descriptions, definitions and explanations of what the
entrepreneur is. In some of the more modest, the only requisite is starting a new
business. In others, the entrepreneur must be alert to previously unnoticed changes in
circumstances, revolutionizing patterns of production by exploiting new inventions,
technological possibilities or organizational patterns. In most definitions the
entrepreneur is seen as a visionary and a risk-taker, profiting from markets and
opportunities that others do not see or cannot take the risk of acting on.

Creation
Entrepreneurs can benefit society in several ways. While pursuing their own interests,
they can create jobs and supply goods and services. They will also generate new
knowledge, as collectively they provide a large number of independent experiments on
new uses for technology and new business models.

Reform
Because they change the existing relations and techniques of production, entrepreneurs
can act as destabilizing agents. Many of the experiments will fail, but those that succeed
will lead the economy toward a better use of its resources. This instability can show
itself as a creative destruction since, in the short term, it may obsolete and destroy
whole industries.The importance of this function may be better appreciated by contrast
with centrally planned economies in which efforts to produce growth through research
and education failed in the absence of entrepreneurship.

Destructive Entrepreneurship
Litigation, takeovers, creative tax evasion can be seen as unproductive, often unethical,
occasionally illegal but usually lucrative entrepreneurial acts. If unchecked, those
activities may become attractors for entrepreneurial talent whose efforts become
channeled in unproductive directions. Similarly, economic downturn is often attributed to
 clusters of entrepreneurial errors, with most entrepreneurs taking a wrong guess or
pursuing destructive actions if they are profitable in the short term.

References
Entrepreneurship: values and responsibility; Wojciech Gasparski, Leo V. Ryan, Stefan
Kwiatkowski 2010

The Journal of Political Economy; Entrepreneurship: Productive, Unproductive, and

Destructive;William J. Baumol 1990

Economic and financial review;The engine of capitalist process- Entrepreneurs in economic

theory; Robert L. Formaini 2001

About the Author

Alan Valdez started his career reviewing video games for an obscure California retailer in
2003 and has been writing weekly articles on science and technology for Grupo Reforma
since 2006. He got his Bachelor of Science in engineering from Monterrey Tech in 2003 and
moved to the U.K., where he is currently doing research on competitive intelligence applied
to the diffusion of innovations.