ENTREPRENEUR. In economics, a term describing the person who assembles the various means of production, and by mobilizing them, renders them operative and useful. He is a pro moter or initiator of production. The derivation is from Fr. entre, between ; prendre, to take.
By making the factors of production operative, the entrepreneur earns a profit. What he needs in his operations are: (1) the use of land (a site) for which he pays rent; (2) the use of capital, for which he pays interest ; (3) labour, for which he pays wages. By organizing the use of these to advantage, he seeks to make his own remuneration. What he buys for his operations constitutes the cost of production; that cost, plus his profit, amounts to the expenses of production.
The function of the entrepreneur is thus of the first importance.
He may or may not be a landlord ; he may or may not use in his operations his own capital; his essential function is that of indus trial organizer. The owner of a site may or may not know how to use it ; the owner of capital may or may not know how to make it fruitful ; the worker with hand or brain may or may not know how to use his energies to advantage ; it is the special business of the entrepreneur to know how best to make use of site, capital and labour. His is the function of enterprise, and in functioning he causes land, capital and labour to function. (See ECONOMICS.)