2007 Volume 28 Pages 115-128
What role does entrepreneurship bear in the economic society? In this paper, considering the argument of the entreprneurial competition in Schumpeter and Kirzner, we inquire the feature of the entrepreneurial competition and the role of entrepreneurship in this process. Because the neoclassical theory of market competition excludes the dynamics of entrepreneurship, we cannot argue these subjects. We need the alternative framework that explains the dynamics of economic society and the roles borne by entrepreneurship in this dynamics. According to Schumpeter, the dynamics of captitalism means the complex phenomenon of economic and social changes. And the engine of dynamics is the entrepreneurial activity. Entrepreneurial activities cause the economic development that involves qualitative change of economic life. Without entrepreneurial activities, we cannot enjoy the fruits of capitalism. For example, the new products like air-plains, refrigerators, TV, and the new way of life that bring these new products and services. In the capitalism, only the entrepreneur can bear the role of innovator under the social resistance to innovation. But once firms realize that they are subject to the latent threat of entrepreneurship, these entreprneurial activities make many firms to aquire the ability to change their routines in order to execute innovation by themselves. We define this process as the process of the institutionalization of entrepreneurship. According to Kirzner, the dynamics of captitalism means the market process driven by entrepreneurship. Similarily to Schumpeter, the engine of dynamics is the entrepreneurial activity. But the field Kirzner focuses on is the market knowledge problem. This problem means how market participants make use of their required knowledge and information. We cannot get this kind of knowledge and information by bearing transaction cost. He points out only the entrepreneur can solve this problem. Entrepreneurial activity consists of three parts. Discovering the opportunity of mutual profit in a market, accessing the economic resources and accessing the consumer's demand. In the process of entrepreneurial activities, market participants learn to know what knowledge and information they are required. Without entrepreneurial alertness, market doesn't work. Kirzner's theory of entrepreneurship shows the process of the culutivation of market function. We define his theory of entrepreneurship as the institutionalized entrepreneurship in the market economy. The dynamics of capitalism is not the continuity but the discontinutity process. Both theory of the entrepreneurship shows that the firms and markets need the leap by entrepreneurship and this is the role that entrepeneurship can bear.
