Entrepreneurial Mindset

In an increasingly intense world order based on knowledge economy and competitive advantage, entrepreneurs need to be more effective and increase their competitive power. This transformation has increased the importance of entrepreneurship and entrepreneurs. Entrepreneurship has an important place in social and economic life and provides excellent benefits to the environment and economic life. Entrepreneurial thinking has been one of the essential concepts in all areas of economic development.

Entrepreneurship is an interdisciplinary concept. Therefore, the meaning and use of entrepreneurship vary. It has been defined in various ways as the process of starting a new enterprise by identifying opportunities and acting accordingly. It is also thought that entrepreneurship is simply the creation of employment. Another approach defines entrepreneurship as the process of using new and unique factors of production to drive economic growth (Hisrich, 2017, p.6).

Knight, Mises and Schumpeter advanced Cantillon’s entrepreneurial concept. Knight made a distinction between risk and uncertainty, concluding that risk, a calculable parameter, is insurable, while uncertainty cannot be calculated. According to Knight, the Chicago tradition pioneer, entrepreneurial activity leads to balance, not imbalance (Parker, 2018, p. 545).

The innovative and dynamic nature of the entrepreneur in economic development was first emphasized and brought forward by Joseph A. Schumpeter (Drucker, 2015, p.13). He defined entrepreneurship as the process of “creative destruction”. According to Schumpeter, the entrepreneur is an actor that creates instability by altering structural change and competition conditions. Schumpeter focuses on the innovative aspect of entrepreneurship. According to Schumpeter, an entrepreneur is an innovative economic actor. According to the Creative Destruction Theory, new firms with an entrepreneurial spirit will replace existing, less innovative firms, leading to economic growth.

Psychological theories of entrepreneurship try to explain the entrepreneurial personality based on personal characteristics. Accordingly, our unique qualities significantly define our psychological and social position. Within the personality theories, psychodynamic and social-psychological approaches portray the entrepreneur as a person with a unique character with her attitude and innovative performance. In addition to these features, among the personal qualities emphasized by psychodynamic and social-psychological approaches, entrepreneurs are proactive, dynamic, focused, positive, initiative, and open to cooperation.

Entrepreneurship is an act, and an entrepreneur is the one who does it. Entrepreneurship is the set of processes that contains actions. The entrepreneur can be involved in all or some of these actions. The attitudes and behaviors of an entrepreneur are essential. These are easily recognized in the definitions of entrepreneurship. Adopting opportunities, taking risks, willingness to innovate, and change are some of the leading entrepreneurial attitudes.

The work history also plays a role in the eventual success of the venture by influencing the decision to start a new entrepreneurial experience of the new venture’s growth. Generally, dissatisfaction with a job can motivate a person to create a new venture. The previous technical and industry expertise of the person plays a vital role in this process. Experience is especially important in product or service development, development of production and distribution channels, and financing (Hisrich, 2017, p.18).

Four essential elements stand out in the explanations made about entrepreneurs’ characteristics (Litunnen, 2000, p. 295). These elements are briefly explained below: • Risk: The entrepreneur has to undertake certain risks in his activities. • Income: Returns are the rewards of being an entrepreneur. The prize here is not profit but creating value. The profit obtained is also an indicator of the level of success. Feelings of independence and personal satisfaction follow value creation and profit. • Effort: A certain amount of time and effort is spent to create a new product/service. • Creation: The product/service subject to design should make sense for both the entrepreneur and the users it is developed for.

Entrepreneurial thinking generally has four main components. These are risk-taking, pioneering, innovation and creativity, and competitive thinking (Hnátek, 2015, p.344).

Entrepreneurial thinking is a mindset that emphasizes learning to understand the opportunity and take advantage of it depending on the situation. Entrepreneurs in most countries, industries, and markets challenge existing circumstances to create value in innovative and creative ways. This challenge can be seen as specializing in new products, giving expertise to social innovations, or institutionalizing entrepreneurial activities within systems and processes. The basis of entrepreneurial thinking is the practice of “effective reasoning” instead of “causal reasoning” (Patel & Mehta, 2016, p.518).

Since companies’ primary purpose is to make profit in the long term, it can be said that the main factor in the establishment of the enterprises is profit. However, it cannot be said that profit is the only factor in establishing a business.

In the entrepreneurship motivation literature, the push and pull factors that lead people to entrepreneurship are frequently mentioned. Push factors include increasing family income, dissatisfaction with job, finding a suitable job, and fulfilling responsibilities. Pull factors include the need for independence, self-realization, and increasing status and reputation in society. 

Internally, a person’s inner impulses such as personal satisfaction and self-realization, a strong need for achievement, and independence determine whether a person will become a successful entrepreneur or not.

External triggers are external incentives that motivate the entrepreneurial spirit. They consist of entrepreneurial culture, supportive government policies, support institutions such as educational institutions and incubators, and access to financial support.

This technique encourages entrepreneurs to look at things differently. Horizontal thinking produces unconventional, creative, and proactive results. For example, it can help think about specific groups of people rather than just thinking about needs and expectations in general. After grouping people among themselves, we can identify some of their possible needs, expectations, and problems.

Entrepreneurs develop new production techniques, introduce new products and services, and establish new businesses. However, some countries’ economic growth processes show that imitation can also be an essential economic development element. Entrepreneurs can also develop business ideas by imitating other successful ideas.

Entrepreneurs are one of the most important driving forces of society. They are praised for their contribution to rising income, launching new products and services, and generating jobs. They play an important role in employment by creating new jobs at low costs. Moreover, they are known to be effective in ensuring a fair distribution of income and to improve forward and backward linkages between various sectors of the economy

Entrepreneurship and innovation, which are at the center of the economy’s creative process, can increase productivity and create new business opportunities. There is a close relationship between the economic and social development levels of countries and their entrepreneurial performance.

Since entrepreneurship is a process of creating an economic activity by combining risk-taking, creativity, and innovation processes within a new or existing business, it has a significant impact on countries’ economic and social development level.

The increasing amount of output in the economy by creating new enterprises leads to the growth of industries and the increase in profits. By using these profits for investments, employment increases, and capital accumulation is achieved. Entrepreneurship is one of the most critical factors in capital accumulation, provided that the necessary incentive and convenience mechanisms are employed.

The competition requires entrepreneurs to produce and invest in a way that meets consumers’ demands and expectations. Therefore, competition ensures the efficient allocation of economic resources. The healthy functioning of competition in the country increases employment and competitive power in foreign markets.