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112-549: Self-employed people generally find their own work rather than being provided with work by an employer and instead earn income from a profession, a trade, or a business that they operate. In some countries, such as the United States and the United Kingdom, the authorities are placing more emphasis on clarifying whether an individual is self-employed or engaged in disguised employment, in other words pretending to be in

224-399: A profit ". The people who create these businesses are often referred to as "entrepreneurs". In the field of economics, the term entrepreneur is used for an entity that has the ability to translate inventions or technologies into products and services. In this sense, entrepreneurship describes activities on the part of both established firms and new businesses. In the 21st century

336-584: A "rapid growth" in self-employment between 2001 (3.3 million people, or 12% of the workforce) and 2017 (4.8 million people, or 15.1% of the workforce, with London, Yorkshire and the Humber and the South East regions exhibiting the greatest rates of increase. Many people living with disabilities choose to be self-employed. Self-employment, while popular, does come with several legal responsibilities. When remote working , clearance may sometimes be required from

448-506: A business or investments. In the U.S. system, these (as well as certain business or investment expenses) are referred to as " itemized deductions " for individuals. The UK allows a few of these as personal reliefs. These include, for example, the following for U.S. residents (and UK residents as noted): Many systems provide that an individual may claim a tax deduction for personal payments that, upon payment, become taxable to another person, such as alimony. Such systems generally require, at

560-658: A business owner who is affiliated with millennials (also known as Generation Y), those people born from approximately 1981 to 1996. The offspring of baby boomers and early Gen Xers , this generation was brought up using digital technology and mass media. Millennial business owners are well-equipped with knowledge of new technology and new business models and have a strong grasp of its business applications. There have been many breakthrough businesses that have come from millennial entrepreneurs, such as Mark Zuckerberg , who created Facebook. However, millennials are less likely to engage in entrepreneurship than prior generations. Some of

672-864: A clear national definition of self-employment increases the risk of false self-employment" and the European Parliament Resolution on the Renewed Social Agenda invites Member States to take initiatives that would "lead to a clear distinction between employers, genuine self-employed and small entrepreneurs on the one hand and employees on the other". Self-employment is mostly regulated at national level only. Each authority and individual body applies its own legal and regulatory framework provisions, which may vary depending on their remit or policy area (tax law, social security, business law, employment market, insurance). The provisions related to self-employment vary therefore widely between

784-429: A college or university), science parks and non-governmental organizations, which include a range of organizations including not-for-profits, charities, foundations and business advocacy groups (e.g. Chambers of commerce ). Beginning in 2008, an annual " Global Entrepreneurship Week " event aimed at "exposing people to the benefits of entrepreneurship" and getting them to "participate in entrepreneurial-related activities"

896-433: A component of the entity's net income in some jurisdictions. Deductions of flow-through entities may pass through to members of such entities separately from the net income of the entity in some jurisdictions or some cases. For example, charitable contributions by trusts, and all deductions of partnerships (and S corporations in the U.S.) are deductible by member beneficiaries or partners (or S corporation shareholders) in

1008-427: A contractual intra-business relationship to hide what is in fact an employer-employee relationship. Self-employment provides work primarily for the founder of the business. The term entrepreneurship refers to all new businesses, including self-employment and businesses that never intend to grow big or become registered, but the term startup refers to new businesses that intend to provide work and income for more than

1120-456: A corporation. In addition to income taxes, these individuals must pay Social Security and Medicare taxes in the form of a SECA (Self-Employment Contributions Act) tax. In 2016, the median income for individuals self-employed at their own incorporated businesses was $ 50,347. For individuals self-employed at their own unincorporated firms, this figure was $ 23,060. Self-employment is relatively common among new immigrants and ethnic minorities in

1232-406: A cultural authority and leverage it to create and sustain various cultural enterprises"; "tycoons", defined as "entrepreneurs who buil[d] substantial clout in the cultural sphere by forging synergies between their industrial, cultural, political, and philanthropic interests"; and "collective enterprises", organizations which may engage in cultural production for profit or not-for-profit purposes. In

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1344-594: A deduction for the cost of goods sold . This may be considered an expense, a reduction of gross income , or merely a component utilized in computing net profits. The manner in which cost of goods sold is determined has several inherent complexities, including various accounting methods. These include: Many systems, including the United Kingdom , levy tax on all chargeable "profits of a trade" computed under local generally accepted accounting principles (GAAP). Under this approach, determination of whether an item

1456-447: A focus on opportunities other than profit as well as practices, processes and purpose of entrepreneurship. Gümüsay suggests a three pillars model to explain religious entrepreneurship: The pillars are the entrepreneurial, socio-economic/ethical, and religio-spiritual in the pursuit of value, values, and the metaphysical . A feminist entrepreneur is an individual who applies feminist values and approaches through entrepreneurship, with

1568-555: A formal employment contract. Schijnzelfstandigheid can lead to legal issues, as it is considered an abuse of labor laws designed to protect workers. In recent years, many countries, including the Netherlands, have tightened regulations to prevent and address this problem, seeking to ensure that workers who should be classified as employees are not wrongly treated as independent contractors. The European Parliament Resolution on Social Protection for All has stated that: "the absence of

1680-444: A gainful activity for their own account, under the conditions laid down by national law". In the exercise of such an activity, the personal element is of special importance and such exercise always involves a large measure of independence in the accomplishment of the professional activities. This definition comes from Directive 2010/41/EU on the application of the principle of equal treatment between men and women engaged in an activity in

1792-444: A government specified life. Alternative approaches are used by some systems. Some systems allow a fixed percentage or dollar amount of cost recovery in particular years, often called "capital allowances." This may be determined by reference to the type of asset or business. Some systems allow specific charges for cost recovery for some assets upon certain identifiable events. Capitalization may be required for some items without

1904-416: A level of risk is a necessity. Fourth, the entrepreneurial process requires the organization of people and resources. An entrepreneur uses their time, energy, and resources to create value for others. They are rewarded for this effort monetarily and therefore both the consumer of the value created and the entrepreneur benefit. The entrepreneur is a factor in and the study of entrepreneurship reaches back to

2016-974: A manner appropriate to the deduction and the member, such as itemized deductions for charitable contributions or a component of net business profits for business expenses. One important aspect of determining tax deductions for business expenses is the timing of such deduction. The method used for this is commonly referred to as an accounting method. Accounting methods for tax purposes may differ from applicable GAAP . Examples include timing of recognition of cost recovery deductions (e.g., depreciation), current expensing of otherwise capitalizable costs of intangibles, and rules related to costs that should be treated as part of cost of goods not yet sold. Further, taxpayers often have choices among multiple accounting methods permissible under GAAP and/or tax rules. Examples include conventions for determining which goods have been sold (such as first-in-first-out, average cost, etc.), whether or not to defer minor expenses producing benefit in

2128-516: A natural fit for self-employment, such as manufacturing, have in fact been shown to have a large proportion of self-employed individuals and home-based businesses. In the United States , any person is considered self-employed for tax purposes if that person is running a business as a sole proprietorship , independent contractor , as a member of a partnership , or as a member of a limited liability company that does not elect to be treated as

2240-435: A period of self-employment of one or more years; one in four may have engaged in self-employment for six or more years. Participating in a new business creation is a common activity among U.S. workers over the course of their careers". In recent years, entrepreneurship has been claimed as a major driver of economic growth in both the United States and Western Europe. Entrepreneurial activities differ substantially depending on

2352-410: A price system). In this treatment, the entrepreneur was an implied but unspecified actor, consistent with the concept of the entrepreneur being the agent of x-efficiency . For Schumpeter, the entrepreneur did not bear risk : the capitalist did. Schumpeter believed that the equilibrium was imperfect. Schumpeter (1934) demonstrated that the changing environment continuously provides new information about

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2464-404: A profitable manner. But before such a venture is actually established, the opportunity is just a venture idea. In other words, the pursued opportunity is perceptual in nature, propped by the nascent entrepreneur's personal beliefs about the feasibility of the venturing outcomes the nascent entrepreneur seeks to achieve. Its prescience and value cannot be confirmed ex ante but only gradually, in

2576-511: A recent statistical analysis of U.S. census data shows that whites are more likely than Asians, African-Americans and Latinos to be self-employed in high prestige, lucrative industries. Religious entrepreneurship refers to both the use of entrepreneurship to pursue religious ends as well as how religion impacts entrepreneurial pursuits. While religion is a central topic in society, it is largely overlooked in entrepreneurship research. The inclusion of religion may transform entrepreneurship including

2688-592: A self-employed capacity. This is in contrast to an employee, who is subordinate to and dependent on an employer. In addition, Article 53 of the Treaty on the Functioning of the European Union (TFEU) provides for the free movement of those taking up and pursuing activities as self-employed people. It stipulates: "In order to make it easier for persons to take up and pursue activities as self-employed persons,

2800-438: A tax deduction for cost recovery in a future period. A common approach to such cost recovery is to allow a deduction for a portion of the cost ratably over some period of years. The U.S. system refers to such a cost recovery deduction as depreciation for costs of tangible assets and as amortization for costs of intangible assets. Depreciation in these systems is allowed over an estimated useful life, which may be assigned by

2912-536: A tendency towards risk-taking that makes them more likely to exploit business opportunities . "Entrepreneur" ( / ˌ ɒ̃ t r ə p r ə ˈ n ɜːr , - ˈ nj ʊər / , UK also /- p r ɛ -/ ) is a loanword from French. The word first appeared in the French dictionary entitled Dictionnaire Universel de Commerce compiled by Jacques des Bruslons and published in 1723. Especially in Britain,

3024-507: A theoretical standpoint is that they have to "rewire" these temporary ventures and modify them to suit the needs of new project opportunities that emerge. A project entrepreneur who used a certain approach and team for one project may have to modify the business model or team for a subsequent project. Project entrepreneurs are exposed repeatedly to problems and tasks typical of the entrepreneurial process. Indeed, project-based entrepreneurs face two critical challenges that invariably characterize

3136-465: A variety of industries and occupations. The self-employment tax in the United States is typically set at 15.30%, which is roughly the equivalent of the combined contributions of the employee and employer under the FICA tax . The rate consists of two parts: 12.4% for social security and 2.9% for Medicare . The Social Security portion of the self-employment tax only applies to the first $ 132,900 of income for

3248-494: A variety of organizations with different sizes, aims, and beliefs. For-profit entrepreneurs typically measure performance using business metrics like profit , revenues and increases in stock prices , but social entrepreneurs are either non-profits or blend for-profit goals with generating a positive "return to society" and therefore must use different metrics. Social entrepreneurship typically attempts to further broad social, cultural, and environmental goals often associated with

3360-534: Is a fixed allowance for the taxpayer and certain family members or other persons supported by the taxpayer. The U.S. allows such a deduction for "personal exemptions" for the taxpayer and certain members of the taxpayer's household. The UK grants a " personal allowance ." Both U.S. and UK allowances are phased out for individuals or married couples with income in excess of specified levels. In addition, many jurisdictions allow reduction of taxable income for certain categories of expenses not incurred in connection with

3472-713: Is allowed as a deduction against income. The 2010 Tax Relief Act reduced the self-employment tax by 2% for self-employment income earned in calendar year 2011, for a total of 13.3%. This rate will continue for income earned in calendar year 2012, due to the Temporary Payroll Tax Cut Continuation Act of 2011 . Self-employed persons sometimes declare more deductions than an ordinary employee. Travel, uniforms, computer equipment, cell phones, etc., can be deducted as legitimate business expenses. Self-employed persons report their business income or loss on Schedule C of IRS Form 1040 and calculate

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3584-487: Is allowed, for example, on interest paid on student loans. Some systems allow taxpayer deductions for items the influential parties want to encourage as purchases. Nearly all jurisdictions that tax business income allow deductions for business and trade expenses. Allowances vary and may be general or restricted. To be deducted, the expenses must be incurred in furthering business, and usually only include activities undertaken for profit. Nearly all income tax systems allow

3696-555: Is also a vehicle called the Self-Employed 401k (or SE 401(k)) for self-employed people. The contribution limits vary slightly depending on how the business is organized. A defined-benefit plan is a third option that has high contribution limits and acts like a traditional pension plan. Sole proprietors can also opt for a SIMPLE IRA, which allows them to contribute to employee retirement plans as well as their own retirement plan. Research has shown that levels of self-employment in

3808-577: Is also possible for someone to form a business that is run only part-time or concurrently while holding down a full-time job. According to a 2016 study by the McKinsey Global Institute, there are 14 million "independent workers" in the United Kingdom , although the House of Commons Work and Pensions Committee reported in 2017 that 5 million people, 15% of the workforce, were self-employed. The Office for National Statistics referred to

3920-637: Is carried out in addition to paid employment (e.g. Belgium)". “Schijnzelfstandigheid” is a Dutch term that refers to false self-employment or bogus self-employment . It occurs when a person is officially classified as a freelancer or self-employed worker but, in practice, works as a regular employee under the same conditions, without the rights or benefits of an employee, such as paid leave, social security, or protection against dismissal. This situation often arises when employers try to avoid taxes, social security contributions, or labor regulations by hiring workers as independent contractors instead of offering them

4032-418: Is commonly seen as an innovator , a source of new ideas, goods , services, and business/or procedures. More narrow definitions have described entrepreneurship as the process of designing, launching and running a new business, often similar to a small business , or (per Business Dictionary ) as the "capacity and willingness to develop, organize and manage a business venture along with any of its risks to make

4144-429: Is deductible depends upon accounting rules and judgments. By contrast, the U.S. allows as a deduction "all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business..." subject to qualifications, enhancements, and limitations. A similar approach is followed by Canada, but generally with fewer special rules. Such an approach poses significant definitional issues. Among

4256-423: Is largely responsible for long-term economic growth. The idea that entrepreneurship leads to economic growth is an interpretation of the residual in endogenous growth theory and as such continues to be debated in academic economics. An alternative description by Israel Kirzner (born 1930) suggests that the majority of innovations may be incremental improvements – such as the replacement of paper with plastic in

4368-509: Is the process by which either an individual or a team identifies a business opportunity and acquires and deploys the necessary resources required for its exploitation. In the early 19th century, the French economist Jean-Baptiste Say provided a broad definition of entrepreneurship, saying that it "shifts economic resources out of an area of lower and into an area of higher productivity and greater yield". Entrepreneurs create something new and unique—they change or transmute value. Regardless of

4480-541: The Federal Court ruled in Commissioner of Taxation v La Rosa that a heroin dealer was entitled to a tax deduction for money stolen from him in a drug deal. Many systems require that the cost of items likely to produce future benefits be capitalized. Examples include plant and equipment, fees related to acquisition, and developing intangible assets (e.g., patentable inventions). Such systems often allow

4592-695: The German Reich . However, proof of competence was not required to start a business. In 1935 and in 1953, greater proof of competence was reintroduced ( Großer Befähigungsnachweis Kuhlenbeck ), which required craftspeople to obtain a Meister apprentice-training certificate before being permitted to set up a new business. In the Ashanti Empire , successful entrepreneurs who accumulated large wealth and men as well as distinguished themselves through heroic deeds were awarded social and political recognition by being called "Abirempon" which means big men. By

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4704-423: The voluntary sector in areas such as poverty alleviation, health care and community development . At times, profit-making social enterprises may be established to support the social or cultural goals of the organization but not as an end in itself. For example, an organization that aims to provide housing and employment to the homeless may operate a restaurant, both to raise money and to provide employment for

4816-440: The "cradle of political economy". Cantillon defined the term as a person who pays a certain price for a product and resells it at an uncertain price, "making decisions about obtaining and using the resources while consequently admitting the risk of enterprise". Cantillon considered the entrepreneur to be a risk taker who deliberately allocates resources to exploit opportunities to maximize the financial return. Cantillon emphasized

4928-572: The 1930s and other Austrian economists such as Carl Menger , Ludwig von Mises and Friedrich von Hayek . According to Schumpeter, an entrepreneur is a person who is willing and able to convert a new idea or invention into a successful innovation . Entrepreneurship employs what Schumpeter called "the gale of creative destruction" to replace in whole or in part inferior innovations across markets and industries, simultaneously creating new products, including new business models . Extensions of Schumpeter's thesis about entrepreneurship have sought to describe

5040-626: The 2000s, story-telling has emerged as a field of study in cultural entrepreneurship. Some have argued that entrepreneurs should be considered "skilled cultural operators" that use stories to build legitimacy, and seize market opportunities and new capital. Others have concluded that we need to speak of a 'narrative turn' in cultural entrepreneurship research. The term "ethnic entrepreneurship" refers to self-employed business owners who belong to racial or ethnic minority groups in Europe and North America. A long tradition of academic research explores

5152-514: The 2000s, the term "entrepreneurship" has been extended to include a specific mindset resulting in entrepreneurial initiatives, e.g. in the form of social entrepreneurship , political entrepreneurship or knowledge entrepreneurship . According to Paul Reynolds, founder of the Global Entrepreneurship Monitor , "by the time they reach their retirement years, half of all working men in the United States probably have

5264-589: The 2000s, usage of the term "entrepreneurship" expanded to include how and why some individuals (or teams) identify opportunities, evaluate them as viable, and then decide to exploit them. The term has also been used to discuss how people might use these opportunities to develop new products or services, launch new firms or industries, and create wealth. The entrepreneurial process is uncertain because opportunities can only be identified after they have been exploited. Entrepreneurs exhibit positive biases towards finding new possibilities and seeing unmet market needs, and

5376-552: The 2010s, ethnic entrepreneurship has been studied in the case of Cuban business owners in Miami, Indian motel owners of the U.S. and Chinese business owners in Chinatowns across the U.S. While entrepreneurship offers these groups many opportunities for economic advancement, self-employment and business ownership in the U.S. remain unevenly distributed along racial/ethnic lines. Despite numerous success stories of Asian entrepreneurs,

5488-421: The 2019 tax year. There is no limit to the amount that is taxable under the 2.9% Medicare portion of the self-employment tax. In fact, there is an additional Medicare tax rate of 0.9% when a self-employed individual earns above $ 200,000 (single). Generally, only 92.35% of the self-employment income is taxable at the above rates. Additionally, half of the self-employment tax, i.e., the employer-equivalent portion,

5600-558: The Council shall… issue Directives for the mutual recognition of diplomas, certificates and other evidence of formal qualifications". The self-employment form of work does not group homogenous workers. As indicated by the European Commission in 2010, there are "different understandings and definitions of the term self-employment across the countries, with a number of different subcategories defined: for instance, according to

5712-515: The EU, employers', employees' and self-employment representatives should adopt a Europe-wide joint recognition of genuine self-employment and a common definition that includes a shared terminology for the various sectors. A self-employed person in the United Kingdom can operate as a sole trader or as a partner in a partnership (including a limited liability partnership or "LLP") but not through an incorporated limited (or unlimited ) liability company. It

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5824-444: The U.S. Bureau of Economic Analysis , the absolute number of people registered as non-farm proprietors (NFPs) or self-employed in metropolitan counties grew by 244% between 1969 and 2006, and by 93% in non-metropolitan counties. In relative terms, the share of self-employed within the labor force grew from 14% in 1969 to 21% in 2006 in metropolitan counties, and from 11% to 19% in non-metropolitan counties. In non-metropolitan counties,

5936-555: The United States are increasing, and that under certain circumstances this can have positive effects on per capita income and job creation. According to a 2017 study by MBO Partners, the self-employed workforce generates $ 1.2 trillion in revenue for the U.S. economy, which is equal to about 6% of national GDP. A 2011 study from the Federal Reserve Bank of Atlanta and Pennsylvania State University looked at U.S. self-employment levels from 1970 to 2000. According to data from

6048-509: The United States limits deductions related to passive activities to income from passive activities. In particular, expenses that are included in COGS cannot be deducted again as a business expense. COGS expenses include: In 2005, the Australian government amended its taxation legislation to remove deductions for expenses incurred in conducting criminal business activities. This came after

6160-531: The United States. In the United States, immigrants tend to have higher rates of self-employment than native-born Americans regardless of race or ethnicity. But, self-employment in the United States is unevenly distributed across racial/ethnic lines. Immigrants and their children who self-identify as White have the highest probability of self-employment in lucrative industries such as professional services and finance. In contrast, racial and ethnic minorities are less likely than native-born Whites to be self-employed, with

6272-424: The barriers to entry for entrepreneurs are the economy, debt from schooling, and the challenges of regulatory compliance. A nascent entrepreneur is someone in the process of establishing a business venture. In this observation, the nascent entrepreneur can be seen as pursuing an opportunity , i.e. a possibility to introduce new services or products, serve new markets, or develop more efficient production methods in

6384-544: The changes and "dynamic economic equilibrium brought on by the innovating entrepreneur [were] the norm of a healthy economy". While entrepreneurship is often associated with new, small, for-profit start-ups, entrepreneurial behavior can be seen in small-, medium- and large-sized firms, new and established firms and in for-profit and not-for-profit organizations, including voluntary-sector groups, charitable organizations and government . Entrepreneurship may operate within an entrepreneurship ecosystem which often includes: In

6496-515: The collective nature of entrepreneurship. She mentions that in modern organizations, human resources need to be combined to better capture and create business opportunities. The sociologist Paul DiMaggio (1988:14) has expanded this view to say that "new institutions arise when organized actors with sufficient resources [institutional entrepreneurs] see in them an opportunity to realize interests that they value highly". The notion has been widely applied. The term "millennial entrepreneur" refers to

6608-431: The construction of a drinking straw – that require no special qualities. For Schumpeter, entrepreneurship resulted in new industries and in new combinations of currently existing inputs. Schumpeter's initial example of this was the combination of a steam engine and then current wagon-making technologies to produce the horseless carriage . In this case, the innovation (i.e. the car) was transformational but did not require

6720-561: The context of the actions that the nascent entrepreneur undertakes towards establishing the venture as described in Saras Sarasvathy 's theory of Effectuation , Ultimately, these actions can lead to a path that the nascent entrepreneur deems no longer attractive or feasible, or result in the emergence of a (viable) business. In this sense, over time, the nascent venture can move towards being discontinued or towards emerging successfully as an operating entity. The distinction between

6832-637: The countries. As indicated by the European Foundation for the Improvement of Living and Working Conditions (Eurofound) in 2014, the diversity of the self-employed has attracted diverse forms of regulation, mainly decided at national level: "EU employment law addresses the self-employed mainly in narrowly specific areas such as free movement and equal treatment". As recommended by the European Forum of Independent Professionals (EFIP),

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6944-410: The creation of a new venture: locating the right opportunity to launch the project venture and assembling the most appropriate team to exploit that opportunity. Resolving the first challenge requires project-entrepreneurs to access an extensive range of information needed to seize new investment opportunities. Resolving the second challenge requires assembling a collaborative team that has to fit well with

7056-425: The definitional issues often addressed are: Note that under this concept, the same sorts of expenses are generally deductible by business entities and individuals carrying on a trade or business. To the extent such expenses relate to the employment of an individual and are not reimbursed by the employer, the amount may be deductible by the individual. Business deductions of flow-through entities may flow through as

7168-543: The demands of the consumer revolution that helped drive the Industrial Revolution in Great Britain, Josiah Wedgwood , the 18th-century potter and entrepreneur and pioneer of modern marketing, which includes devising direct mail , money back guarantees , travelling salesmen and "buy one get one free" , was named by the historian Judith Flanders as "among the greatest and most innovative retailers

7280-451: The development of dramatic new technology. It did not immediately replace the horse-drawn carriage, but in time incremental improvements reduced the cost and improved the technology, leading to the modern auto industry . Despite Schumpeter's early 20th-century contributions, traditional microeconomic theory did not formally consider the entrepreneur in its theoretical frameworks (instead of assuming that resources would find each other through

7392-535: The eighteenth and nineteenth centuries AD, the appellation "Abirempon" had formalized and politicized to embrace those who conducted trade from which the whole state benefited. The state rewarded entrepreneurs who attained such accomplishments with Mena(elephant tail) which was the "heraldic badge" In the 20th century, entrepreneurship was studied by Joseph Schumpeter in the 1930s and by other Austrian economists such as Carl Menger (1840–1921), Ludwig von Mises (1881–1973) and Friedrich von Hayek (1899–1992). While

7504-406: The entrepreneur . These scholars tend to focus on what the entrepreneur does and what traits an entrepreneur has. This is sometimes referred to as the functionalistic approach to entrepreneurship. Others deviate from the individualistic perspective to turn the spotlight on the entrepreneurial process and immerse in the interplay between agency and context. This approach is sometimes referred to as

7616-458: The entrepreneur as a multi-tasking capitalist and observed that in the equilibrium of a completely competitive market there was no spot for "entrepreneurs" as economic-activity creators. Changes in politics and society in Russia and China in the late 20th century saw a flowering of entrepreneurial activity, producing Russian oligarchs and Chinese millionaires . In the 2000s, entrepreneurship

7728-485: The entrepreneur typically aims to scale up the company by adding employees, seeking international sales and so on, a process which is financed by venture capital and angel investments . In this way, the term "entrepreneur" may be more closely associated with the term "startup". Successful entrepreneurs have the ability to lead a business in a positive direction by proper planning, to adapt to changing environments and understand their own strengths and weaknesses. Meeting

7840-478: The exception of Asian immigrants who have a high rates of self-employment in low prestige industries such as retail trade and personal services. Much like the regular labor market, self-employment in the United States is stratified across racial lines. In general, self-employment is more common among immigrants than their second-generation children born in the United States. However, the second-generation children of Asian immigrants may continue to seek self-employment in

7952-581: The experiences and strategies of ethnic entrepreneurs as they strive to integrate economically into mainstream U.S. or European society. Classic cases include Jewish merchants and tradespeople in both regions, South Asians in the UK, Koreans, Japanese, and Chinese in the U.S. and the Turks and North Africans in France. The fish and chip industry in the UK was initiated by Jewish entrepreneurs, with Joseph Malin opening

8064-417: The firm size, big or small, it can take part in entrepreneurship opportunities. There are four criteria for becoming an entrepreneur. First, there must be opportunities or situations to recombine resources to generate profit. Second, entrepreneurship requires differences between people, such as preferential access to certain individuals or the ability to recognize information about opportunities. Third, taking on

8176-783: The first mail order business, with the BBC summing up his legacy as "The mail order pioneer who started a billion-pound industry". A 2002 survey of 58 business history professors gave the top spots in American business history to Henry Ford , followed by Bill Gates ; John D. Rockefeller ; Andrew Carnegie , and Thomas Edison . They were followed by Sam Walton ; J. P. Morgan ; Alfred P. Sloan ; Walt Disney ; Ray Kroc ; Thomas J. Watson ; Alexander Graham Bell ; Eli Whitney ; James J. Hill ; Jack Welch ; Cyrus McCormick ; David Packard ; Bill Hewlett ; Cornelius Vanderbilt ; and George Westinghouse . A 1977 survey of management scholars reported

8288-459: The first fish and chip shop in London in the 1860s, while Samuel Isaacs opened the first sit-down fish restaurant in 1896 which he expanded into a chain comprising 22 restaurants. In 1882, Jewish brothers Ralph and Albert Slazenger founded Slazenger , one of the world's oldest sport brands, which has the longest-running sporting sponsorship in providing tennis balls to Wimbledon since 1902. In

8400-495: The founders and intend to have employees and grow large. In summary: Although the common perception is that self-employment is concentrated in a few service sector industries, like salespeople and insurance agents , research by the Small Business Administration has shown that self-employment occurs across a wide segment of the U.S. economy. Furthermore, industries that are not commonly associated as

8512-408: The gap could be due to underreporting of income by the self-employed. Alternatively, low-productivity workers could be losing their jobs and are forced to be self-employed. Further, some research shows that higher local unemployment rates lead workers to self-select into self-employment, as does past unemployment experience. The European Commission defines a self-employed person as someone: "pursuing

8624-466: The goal of improving the quality of life and well-being of girls and women. Many are doing so by creating "for women, by women" enterprises. Feminist entrepreneurs are motivated to enter commercial markets by desire to create wealth and social change, based on the ethics of cooperation, equality and mutual respect. These endeavours can have the effect of both empowerment and emancipation. The American-born British economist Edith Penrose has highlighted

8736-422: The government for numerous classes of assets, based on the nature and use of the asset and the nature of the business. The annual depreciation deduction may be computed on a straight line, declining balance, or other basis, as permitted in each country's rules. Many systems allow amortization of the cost of intangible assets only on a straight-line basis, generally computed monthly over the actual expected life or

8848-516: The governments of nation states have tried to promote entrepreneurship, as well as enterprise culture , in the hope that it would improve or stimulate economic growth and competition . After the end of supply-side economics , entrepreneurship was supposed to boost the economy. As an academic field, entrepreneurship accommodates different schools of thought. It has been studied within disciplines such as management, economics, sociology, and economic history. Some view entrepreneurship as allocated to

8960-498: The holding of assets to produce income. In such systems, there may be additional limitations on the timing and nature of amounts that may be claimed as tax deductions. Many of the rules, including accounting methods and limits on deductions, that apply to business expenses also apply to income producing expenses. Many systems allow a deduction for loss on sale, exchange, or abandonment of both business and non-business income producing assets. This deduction may be limited to gains from

9072-454: The homeless people. Tax deduction A tax deduction or benefit is an amount deducted from taxable income, usually based on expenses such as those incurred to produce additional income. Tax deductions are a form of tax incentives , along with exemptions and tax credits . The difference between deductions, exemptions, and credits is that deductions and exemptions both reduce taxable income, while credits reduce tax. Above and below

9184-427: The idea that flexibility in employment can only be secured through self-employment, and that such misuse of self-employment status "passes the burden of safety net support to the welfare state at the same time as reducing tax revenue". Comprehensive Employment and Training Act Entrepreneurship Entrepreneurship is the creation or extraction of economic value in ways that generally entail beyond

9296-462: The immediately succeeding period, etc. Accounting methods may be defined with some precision by tax law, as in the U.S. system, or may be based on GAAP, as in the UK system. Many systems limit particular deductions, even where the expenses directly relate to the business. Such limitations may, by way of example, include: In addition, deductions in excess of income in one endeavor may not be allowed to offset income from other endeavors. For example,

9408-458: The inter-relationships between activities, between an activity (or sequence of activities) and an individual's motivation to form an opportunity belief, and between an activity (or sequence of activities) and the knowledge needed to form an opportunity belief. With this research, scholars will be able to begin constructing a theory of the micro-foundations of entrepreneurial action. Scholars interested in nascent entrepreneurship tend to focus less on

9520-400: The legal status of the enterprise, whether the business has employees or not (employers versus own-account workers) and/or the sector in which the business operates. Some countries also make the distinction between self-employed status and the status of 'dependent self-employed' (e.g. Spain, Italy), where the self-employed person works for only one client. Others distinguish self-employment which

9632-661: The line refers to items above or below adjusted gross income, which is item 37 on the tax year 2017 1040 tax form. Tax deductions above the line lessen adjusted gross income, while deductions below the line can only lessen taxable income if the aggregate of those deductions exceeds the standard deduction, which in tax year 2018 in the U.S., for example, was $ 12,000 for a single taxpayer and $ 24,000 for married couple. Often, deductions are subject to conditions, such as being allowed only for expenses incurred that produce current benefits. Capitalization of items producing future benefit can be required, though with some exceptions. A deduction

9744-642: The loan from French of the English-language word "entrepreneur" dates to 1762, the word "entrepreneurism" dates from 1902 and the term "entrepreneurship" also first appeared in 1902. According to Schumpeter, an entrepreneur is willing and able to convert a new idea or invention into a successful innovation . Entrepreneurship employs what Schumpeter called the "gale of creative destruction " to replace in whole or in part inferior offerings across markets and industries, simultaneously creating new products and new business models , thus creative destruction

9856-515: The local authority to use part of the home as business premises. If the self-employed person holds records of customers or suppliers in any electronic form they are required to register with the Information Commissioner's Office . Other legal responsibilities include statutory public liability insurance cover, modifying premises to be disabled-friendly, and the proper recording and accounting of financial transactions. Free advice on

9968-492: The majority of innovations may be much more incremental improvements such as the replacement of paper with plastic in the making of drinking straws . The exploitation of entrepreneurial opportunities may include: The economist Joseph Schumpeter (1883–1950) saw the role of the entrepreneur in the economy as " creative destruction ", Which he defined as launching innovations that simultaneously destroy old industries while ushering in new industries and approaches. For Schumpeter,

10080-405: The minimal amount of risk (assumed by a traditional business), and potentially involving values besides simply economic ones. An entrepreneur ( French: [ɑ̃tʁəpʁənœʁ] ) is an individual who creates and/or invests in one or more businesses, bearing most of the risks and enjoying most of the rewards. The process of setting up a business is known as "entrepreneurship". The entrepreneur

10192-435: The novice, serial and portfolio entrepreneurs is an example of behavior-based categorization. Other examples are the (related) studies by, on start-up event sequences. Nascent entrepreneurship that emphasizes the series of activities involved in new venture emergence, rather than the solitary act of exploiting an opportunity. Such research will help separate entrepreneurial action into its basic sub-activities and elucidate

10304-435: The optimum allocation of resources to enhance profitability. Some individuals acquire the new information before others and recombine the resources to gain an entrepreneurial profit . Schumpeter was of the opinion that entrepreneurs shift the production-possibility curve to a higher level using innovations. Initially, economists made the first attempt to study the entrepreneurship concept in depth. Alfred Marshall viewed

10416-494: The particular challenges of the project and has to function almost immediately to reduce the risk that performance might be adversely affected. Another type of project entrepreneurship involves entrepreneurs working with business students to get analytical work done on their ideas. Social entrepreneurship is the use of the by start up companies and other entrepreneurs to develop, fund and implement solutions to social, cultural, or environmental issues. This concept may be applied to

10528-499: The physiocrats. Dating back to the time of the medieval guilds in Germany, a craftsperson required special permission to operate as an entrepreneur, the small proof of competence ( Kleiner Befähigungsnachweis ), which restricted training of apprentices to craftspeople who held a Meister certificate. This institution was introduced in 1908 after a period of so-called freedom of trade ( Gewerbefreiheit , introduced in 1871) in

10640-431: The potential for cost recovery until disposition or abandonment of the asset to which the capitalized costs relate. This is often the case for costs related to the formation or reorganization of a corporation, or certain expenses in corporate acquisitions. However, some systems provide for amortization of certain such costs, at the election of the taxpayer. Some systems distinguish between an active trade or business and

10752-403: The processual approach, or the contextual turn/approach to entrepreneurship. Entrepreneurship includes the creation or extraction of economic value . It is the act of being an entrepreneur, or the owner or manager of a business enterprise who, by risk and initiative, attempts to make profits. Entrepreneurs act as managers and oversee the launch and growth of an enterprise. Entrepreneurship

10864-561: The range of responsibilities is available from government operated Business Link centres. The UK government has stated that "self-employment is not the right choice for everyone". The Office for National Statistics has observed that information on levels of income from self-employment is limited and largely comes from surveys. The House of Commons Work and Pensions Committee reported in May 2017 that some self-employment could be described as "bogus", noting that "a minority of companies" promote

10976-454: The repeated assembly or creation of temporary organizations. These are organizations that have limited lifespans which are devoted to producing a singular objective or goal and get disbanded rapidly when the project ends. Industries where project-based enterprises are widespread include: sound recording , film production, software development , television production, new media and construction. What makes project-entrepreneurs distinctive from

11088-477: The same class of assets. In the U.S., a loss on non-business assets is considered a capital loss, and deduction of the loss is limited to capital gains. Also, in the U.S. a loss on the sale of the taxpayer's principal residence or other personal assets is not allowed as a deduction except to the extent due to casualty or theft. Many jurisdictions allow certain classes of taxpayers to reduce taxable income for certain inherently personal items. A common such deduction

11200-535: The self-employment tax on Schedule SE of IRS Form 1040. Estimated taxes must be paid quarterly using form 1040-ES if estimated tax liability exceeds $ 1,000. Self-employed workers cannot contribute to a company-run 401(k) plan of the type with which most people are familiar. However, there are various vehicles available to self-employed individuals to save for retirement. Many set up a Simplified Employee Pension Plan (SEP) IRA , which allows them to contribute up to 25% of their income, up to $ 54,000 (2017) per year. There

11312-488: The short-term. These driving characteristics allude to the presence of serial entrepreneurship in the region. It has been argued, that creative destruction is largely responsible for the dynamism of industries and long-run economic growth. The supposition that entrepreneurship leads to economic growth is an interpretation of the residual in endogenous growth theory and as such is debated in academic economics. An alternative description posited by Israel Kirzner suggests that

11424-550: The single act of opportunity exploitation and more on the series of actions in new venture emergence, Indeed, nascent entrepreneurs undertake numerous entrepreneurial activities, including actions that make their businesses more concrete to themselves and others. For instance, nascent entrepreneurs often look for and purchase facilities and equipment; seek and obtain financial backing, form legal entities , organize teams; and dedicate all their time and energy to their business Project entrepreneurs are individuals who are engaged in

11536-406: The study found that increased levels of self-employment were associated with strong increases in per capita income and job creation and significant reductions in family poverty levels. In 1969, the average income of non-farm proprietors was $ 6,758 compared to $ 6,507 earned by salaried employees; by 2006 the difference in earnings widened to $ 12,041 in favor of salaried employees. The study notes that

11648-544: The term "adventurer" was often used to denote the same meaning. The study of entrepreneurship reaches back to the work in the late 17th and early 18th centuries of Irish-French economist Richard Cantillon , which was foundational to classical economics . Cantillon defined the term first in his Essai sur la Nature du Commerce en Général , or Essay on the Nature of Trade in General , a book William Stanley Jevons considered

11760-662: The top five pioneers in management ideas were: Frederick Winslow Taylor ; Chester Barnard ; Frank Bunker Gilbreth Sr. ; Elton Mayo ; and Lillian Moller Gilbreth . According to Christopher Rea and Nicolai Volland, cultural entrepreneurship is "practices of individual and collective agency characterized by mobility between cultural professions and modes of cultural production", which refers to creative industry activities and sectors. In their book The Business of Culture (2015), Rea and Volland identify three types of cultural entrepreneur: "cultural personalities", defined as "individuals who buil[d] their own personal brand of creativity as

11872-721: The traits of an entrepreneur using various data sets and techniques. Looking at data from the Global Entrepreneurship Monitor (GEM), entrepreneurial traits specific to the Association of Southeast Asian Nations (ASEAN) are: experience in managing or owning a business, pursuit of an opportunity while being employed, and self-employment. In the decision to establish a new business, the ASEAN entrepreneur depends especially on their own long-term mental model of their enterprise, while scanning for new opportunities in

11984-531: The type of organization and creativity involved. Entrepreneurship ranges in scale from solo, part-time projects to large-scale undertakings that involve a team and which may create many jobs. Many "high value" entrepreneurial ventures seek venture capital or angel funding ( seed money ) to raise capital for building and expanding the business. Many organizations exist to support would-be entrepreneurs, including specialized government agencies, business incubators (which may be for-profit, non-profit, or operated by

12096-540: The willingness of the entrepreneur to assume the risk and to deal with uncertainty, thus he drew attention to the function of the entrepreneur and distinguished between the function of the entrepreneur and the owner who provided the money. Jean-Baptiste Say also identified entrepreneurs as a driver for economic development, emphasizing their role as one of the collecting factors of production allocating resources from less to fields that are more productive. Both Say and Cantillon belonged to French school of thought and known as

12208-407: The work of Richard Cantillon and Adam Smith in the late 17th and early 18th centuries. However, entrepreneurship was largely ignored theoretically until the late 19th and early 20th centuries and empirically until a profound resurgence in business and economics since the late 1970s. In the 20th century, the understanding of entrepreneurship owes much to the work of economist Joseph Schumpeter in

12320-410: The world has ever seen". Another historian Tristram Hunt called Wedgwood a "difficult, brilliant, creative entrepreneur whose personal drive and extraordinary gifts changed the way we work and live." Victorian-era Welsh entrepreneur Pryce Pryce-Jones , who would capitalise on the railway network created during the Industrial Revolution and the modern postal system that also developed in the UK, formed

12432-683: Was extended from its origins in for-profit businesses to include social entrepreneurship , in which business goals are sought alongside social, environmental or humanitarian goals and even the concept of the political entrepreneur . Entrepreneurship within an existing firm or large organization has been referred to as intrapreneurship and may include corporate ventures where large entities "spin-off" subsidiary organizations. Entrepreneurs are leaders willing to take risk and exercise initiative, taking advantage of market opportunities by planning, organizing and deploying resources, often by innovating to create new or improving existing products or services. In

12544-604: Was launched. The term "entrepreneur" is often conflated with the term " small business " or used interchangeably with this term. While most entrepreneurial ventures start out as a small business, not all small businesses are entrepreneurial in the strict sense of the term. Many small businesses are sole proprietor operations consisting solely of the owner—or they have a small number of employees—and many of these small businesses offer an existing product, process or service and they do not aim at growth. In contrast, entrepreneurial ventures offer an innovative product, process or service and

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