A writer at the Economist raised the interesting point in a February 2014 article about who do we mean when we use the word entrepreneur. Is it the recent immigrant, who starts a self-sustaining, low-tech business, such as a dry-cleaners or a restaurant, and works mostly or completely by his or herself? Is it the young graduate of a top business school, ready to put his best and most brilliant ideas to the test in some high-tech industry? Is it the young singer who unwittingly puts together a song that captures culture in a way that could not have been predicted?
Each of these could reasonably be construed as entrepreneurs, and each (or the type they represent) is necessary to a fully functional and healthy economy. Each of these entrepreneurs contributes to healthy economic growth differently, based on some fundamental characteristic. The Economist article provides a good entry point for understanding this characteristic difference and the effect it has on growth.
The Economist’s A.W. makes a thought-provoking distinction between two types of entrepreneurs. The first type, called replicative entrepreneurs, is the stereotypical self-employed, self-sustaining businesses, usually run by individuals that do not have grand plans for expansion and growth. The second type, the innovative entrepreneur, represents those engaged in Schumpeterian creative destruction. They are Clay Christensen’s innovative disruptors, and the leaps that they make can alter whole industries and result in wildly more productive (and profitable) activity.