Entrepreneurship as a factor of production. Features of entrepreneurial activity

Entrepreneurship is an integral component of a market economy. A distinctive feature of entrepreneurship as a factor of production is the presence of free competition. Today's understanding of this term has specific features related to the economic realities of society.

Features of the term

The concept of entrepreneurship as a factor of production appeared in the modern economy. In connection with privatization, only a part of enterprises remains in the hands of the state, all the rest have passed into private ownership. For example, Russian entrepreneurship is represented by medium and small businesses.

The main task of any entrepreneur is the full-fledged management of the enterprise, which includes the rational use of resources, organization of work based on innovation, responsibility for the final results of their own activities.

Features of entrepreneurship

Entrepreneurship as a factor of production is associated with the public sector, defined by the conditions of activity. The environment for full work is a combination of personal interest, economic freedom. It is she who is considered the main sign of the business environment.

It is no accident that entrepreneurship is called the fourth factor of production, because it is it that ensures the development of the market and affects the economic condition of the country. The motive for the development of entrepreneurship is personal interest.

The process of transition to a market-based business option involves the emergence of an entrepreneurial economy.

Content

We will find out what is the specificity of entrepreneurship as a factor of production. To do this, consider the specifics of this term. Its essence lies in the ability of economic entities to influence the alleged source of material benefits.

Entrepreneurship is proactive, with economic risk, aimed at identifying the best ways to use resources activities. It leads to additional profit, an increase in ownership.

Entrepreneurship as a factor of production is the relationship between a product and a market economy. It manifests itself in maximizing the benefits of the sale of the finished product. In order for a simple exchange to become a source of entrepreneurship, it must become an integral part of the systemic economic turnover, a function of business entities.

Exchange: features, importance

Exactly exchange is an incentive for the search for new opportunities, characterizes entrepreneurship as a factor of production. In the modern economy, it helps to find the source of potential benefits, is considered as a motive for successful activities.

When exchanging products with other people, the entrepreneur perceives the work not only as a way to make a profit, but also as an opportunity to establish personal contacts.

Entrepreneurship - as a combination of production factors - involves a social character, the interconnection of many factors.

Signs

What are the main features and factors of production? Labor, land, entrepreneurship, profit - all these terms are interconnected.There are certain signs that characterize the economic nature of modern entrepreneurship: commercial risk, initiative, responsibility, innovation, a combination of production factors.

Such activity is impossible without initiative. Only a constant desire to seek new things can contribute to its development. For example, the development of innovative technologies, product sales markets, is a condition for the functioning of entrepreneurship.

Modern entrepreneurship as a factor of production involves the realization of those opportunities that are provided by the process of market exchange, involving the mutual benefit of all participants in the process. Many analysts see entrepreneurship as a factor in production. The profit of the entrepreneur should not be the result of deceiving consumers, but the result of honest and fruitful work.

Despite the fact that the initiative is considered an inalienable quality of the human person, it is not manifested in all people. The very nature of the market form of management contributes to the development of this quality among those who are involved in commercial activities.

Modern entrepreneurship as a combination of production factors involves a certain economic freedom based on information.

You must have reliable information about prices, changes in market conditions, consumer preferences in order to respond to market fluctuations in a timely manner.

Commercial risk

The reality surrounding the modern entrepreneur represents uncertainty beyond his control, so commercial risk arises.

Considering entrepreneurship as a factor of production, we briefly dwell on the characterization of commercial risk. Despite the fact that it is considered a business component, it involves a sober calculation, analysis and accounting of all possible negative consequences from the actions and transactions.

To get real profit from risky transactions, an entrepreneur conducts serious analytical work, attracts specialists who are able to assess possible risks.

It is entirely possible to imagine entrepreneurship as a factor of production, an opportunity for the development of society. In order to reduce the risks that accompany such activities, you can use insurance. When it comes to creating an innovative product, the developer has significant problems with a reliable assessment of the possible risk. To solve this problem, you can combine your efforts with other persons interested in maximizing profit. In this case, not only income from the sale of the created product will be divided, but also a uniform division of possible production risks.

Entrepreneurship, as a factor in the production of new goods and services, is the driving force of technological progress.

Risk management system

In order to avoid contradictions between the desire to minimize risk and the motivated desire for it, a system for managing such situations is created, reflecting entrepreneurship as a factor of production. The essence and features of such a system:

• search for sources of risk and possible consequences of entrepreneurial activity;
• development and implementation of adaptive measures aimed at overcoming undesirable consequences.

Risk also has a certain general economic significance. Its presence makes the owner of the company carefully study all possible alternatives, choose the most promising ways to lead to progressive actions, increase production, which characterizes entrepreneurship as a factor in production. Briefly we can consider commercial risk as a way of a progressive shift in productive forces, effective change and expansion of the economy.

Arbitration

How can factors of production be effectively changed? Labor, land, capital - entrepreneurship is called the main components of a full-fledged activity. To solve this problem, resources are being transferred to markets where they can generate large revenues. Arbitration can be detected in exchange activities and in trading. This process is characterized by the following parameters:

• the use of non-equilibrium market situations as a source of new opportunities;
• search for rational distribution of resources as an opportunity for additional income;
• establishing market equilibrium through the redistribution of material wealth.

In addition, to increase the efficiency of the enterprise, combine production factors, for example, modernize hard work. Information is a factor of production. Social infrastructure, entrepreneurship are concepts that complement each other. Without their combination, economic growth and positive development of society will not occur.

With the rational replacement of one production factor by another, the entrepreneur not only guarantees a transition to a more efficient use of the resource, but also to the use of new technologies that can significantly simplify hard work. Information is a factor of production.

Social infrastructure - a new type of business that allows you to get the desired profit - is accompanied by high-quality and affordable services for the population. The combination of the "principle of substitution" with the "spirit of rationalism" is a characteristic feature of modern entrepreneurship, its distinguishing characteristic.

Motives and goals of entrepreneurship

Since such activities are aimed at meeting the needs of society, it is expressed not only in obtaining material income by the entrepreneur himself, but also in obtaining satisfaction from consumers.

Not every income can be considered the result of full-fledged entrepreneurship. He acts as such only in those situations where he suggests the best result of the application of production factors. That is why interest on capital and profit on rent are not considered as income from entrepreneurial activity.

What is the main goal of a modern entrepreneur? The hypothesis that it consists only in maximizing sales profits is refuted by analysts.

After a significant modernization of the structure of firms, functional features were dispersed between the participants in the entrepreneurial process. Therefore, the goal of the activity is based on the interests of representatives of various parties who are actively involved in the implementation of the entrepreneurial function. We have to constantly respond to all external changes, adapt to the market situation, based on differentiation, specification of installations for medium-term, short-term, long-term forecasts.

The result of this work is the modification of the entrepreneur’s actions, the development of new market segments, the increase in sales, and the economic growth of the company.

Of course, the new realities do not mean that profit ceases to be the target benchmark of modern entrepreneurship. Despite the differences in the target settings of different companies, any of them is acceptable only if the acceptable minimum benefits are ensured. Such a restriction is far from accidental, because it is profit that is important for the development of production, the launch of new technologies, and the development of innovative products.

The business executive always strives to create ideal conditions for the development and full implementation of the entrepreneurial function. Its task is to balance the forces that allow you to effectively carry out an entrepreneurial function in the long run.As well as ensuring maximum profitability from the used resources.

Entrepreneurship development

It is not considered a frozen and formed phenomenon. Constantly observed changes in the form, content, scope of application of this term. Entrepreneurship is connected with the state of the market economy, as well as with numerous social aspects. The starting point for him was always trade. Merchants evaluated the demand for products and correlated it with their capabilities, made adjustments depending on changes observed in the market.

The main source of income in those days was the difference in price obtained from the sale of the same products in different markets. A similar option suggested serious rice, so when the demand for goods fell, merchants went bankrupt, completely lost their production.

In the transition to industrial production, the branches of material production began to be considered as a priority area of ​​entrepreneurship. Instead of attractive sales markets, attention began to be paid to the rational use of various factors of production. At this stage, the entrepreneurial function has ceased to be the monopoly of the owner.

The post-industrial stage was characterized by the growth of intangible activity, socialization, which caused new priorities and guidelines in managing. They began to pay special importance in entrepreneurial activity not to adapting to constantly changing market conditions, but to transforming the essence of managing, predicting the prospects for the development of social production.

In addition to the rational use of resources, the forms of their use began to appear as a key entrepreneurial activity. As new areas that began to cover the activities of business executives, we single out science and finance. Setting strategic goals allows you to maximize the result by mobilizing efforts to involve many participants in the business process.

In any historical era, entrepreneurship was an indispensable element of a market economy. It is also customary to consider it as an economic category, a type of economic thinking.

To assess the relationship of entrepreneurship with the economy, it is necessary to note the existence of a relationship between objects and entities. The latter types can be not only private individuals, but also representatives of large-scale production who work independently, or involve other individuals in the activities. For example, cooperatives, rental groups, joint-stock companies engaged in a certain type of economic activity are being created.

In a market economy, private, collective as well as state-owned enterprises are possible.

The object is the most effective combination of factors of production, which allows minimizing costs and increasing revenues.

Thanks to a variety of new combinations of economic resources, improvement of technological processes, the search for new technologies, the entrepreneur is constantly changing his production, has advantages over an ordinary business executive.

The main condition for the fruitful work of small or medium-sized businesses is independence, the complete independence of the subjects, the formation of an algorithm of work, the choice of sources of financing, the method of marketing of finished products, the rational management of profit.

Conclusion

In modern conditions, entrepreneurship is a driving factor for the economy. An entrepreneur constantly depends on the market, the dynamics of supply and demand, the level of prices, commodity-money relations. Due to the high risk associated with the constant fluctuations of the economy, many entrepreneurs are forced to close their production or are unable to develop their business, forced to “stagnate” to withstand competition.

In countries with high entrepreneurial potential, medium and small companies are of particular importance. For example, in the USA they are considered a “forge” of personnel, therefore they are supported by various state programs.

In our country, the entrepreneurial potential is characterized by an intermediate state of the economy. Russia has already shown its ability to create entrepreneurial infrastructure, but there are still many problems to be solved before the share of small and medium-sized businesses becomes significant, noticeable on a national scale.

Real programs that would have a positive impact on the development of domestic entrepreneurship do not yet exist. This is what negatively affects the speed of distribution of entrepreneurship at the initial and intermediate levels, and is the reason for “stagnation” in the economy.

With effective measures of state regulation of the economy, it is possible to stimulate market development and increase the quality and standard of living of the country's population. Otherwise, it will be difficult to talk about positive changes in the social, political, scientific sectors, and economic stability.

Regardless of the form of ownership used in the state, the main driver of the development of society has always been trade, which is nowadays represented by entrepreneurship.