Importance of Entrepreneurship and Business for the Society

Abstract – Entrepreneurs are equivalent to innovation. This innovative spirit can be argued to be the main drive behind modern capitalism. This article looks at the type of progress and development brought about by entrepreneurship. It also looks at the varying degrees of innovation embraced by different economies based on their potential. The different arguments on the impact of entrepreneurship on society are discussed as per two main sociological perspectives – functionalism and conflict perspective. The article concludes by reflecting that the innovative and risk-taking spirit has always existed in all societies throughout history and has been the driving force behind all historical change.

Importance of entrepreneurship and business for the society

In dictionaries, an entrepreneur is more or less defined as a person who sets up a business, taking financial risks with the expectation of profit. The concept of an entrepreneur is different from that of the merchant and the manager. While a merchant is interested in merely selling commodities for profit, a manager may produce and sell commodities through a rationalised and calculated venture. However, it is the entrepreneur who innovates and seeks new ways of profit without certainty. This mix of daring with management makes for an entrepreneur. Karl Marx sketched out the developing phases of society from simple to complex based on the economic potential of a certain stage. The contemporary stage is the capitalist society driven by entrepreneurial ambition. The radical aspect of capitalism which distinguishes it from all other ages is its continuous creation of new ways of production thus never allowing for a status quo to settle in. Max Weber in his seminal work ‘Protestant Ethic and the Spirit of Capitalism argues that the origin of capitalism can be sourced from the religious spirit of the protestant faith. Protestantism, a counter-faith to the catholic order of Christianity, introduced the notion of vocation or “calling” as a means of worshipping God. Believers were urged to take up work with devotion and detachment. Money earned was not to be used for material enjoyment but it was to be reinvested into the corresponding businesses. This gave rise to the spirit of capitalism, namely, the investment of profits to increase further profits. Gradually, entrepreneurs dominated the manufacturers and formed corporations. These corporations indicated the unprecedented scale of economic expansion leading to contemporary globalisation where all objects are being commodified and all societies are being increasingly homogenised.

What is Progress?

We have now reached a standpoint where capitalism is an inevitable feature of all modern societies. Progress then, from such a perspective would refer to the degree of the commodification of nature and culture, alienation of labour from the capital and the degree to which social institutions have been successfully recruited to the capitalist objective. The constant need to innovate both new products as well as new ways of production means that all resources of nature, as far as they are subject to the forces of humans, are being constantly labelled and objectified to be channelled into the endless stream of production. A basic example is the concept of real estate which marks a certain value for a piece of land depending on its surroundings. Not only are new needs being created for the sake of increasing the range of consumption but the specific cultural peculiarities of each society are also being exploited. For example – the construction of themed village complexes which supposedly transport tourists to an ancient era of peaceful life amongst the greenery of nature. The larger the city, the more recreation parks, resorts, malls and shopping complexes it will have. The city of New York, USA, which has stood as a symbol of the urban dream life throughout history, is filled with all such attractions besides monumental commercial headquarters. It represents the pinnacle of human hypnotism of the self. Consumption is no longer associated with need, rather, it has become a way of life in itself. The constant upgradation of manufacturing procedures means that production is always greater than supply. For a certain section of the population, basic necessities are taken for granted due to the abundant accumulation of capital. New needs then need to be created for them. Their way of life is projected as the ideal through elaborate propaganda and such superfluous needs are then owned up by the rest of the population.

Secondly, the essence of capitalism is the alienation of labour from capital or the detachment of a worker from his/her product. The division of professional labour has become so complex in modern society that labourers are hardly involved in the making of the whole product. Specialisation has become the norm. The relationship between work and need has been disrupted. Work is now an entire phenomenon in itself. What the protestant faith preached as the desire to work without reaping rewards for the sake of salvation has now been imposed on the workers by the capitalist system involuntarily. The religious faith has been overshadowed by a nihilistic approach to existence and consequent hedonism as a way of life. Now, happiness is more or less the commonly accepted objective of life. To work has become a norm. Working has developed into a social need. In a sense, the number of citizens productively employed also indicates the progress made by that society.

Activities can be distinguished as those belonging to states of either productivity or leisure. It is in this sense that the social institutions of family and school have been recruited to the capitalist cause. According to Michel Foucault, discipline is the new method of dominance used by modern society to maintain social order. The disciplinary method involves the use of social institutions to inculcate values of conformism, and productivity and to develop an attitude of mass consumption of manufactured products as a way of ensuring that even leisure serves a role in the capitalist framework. Discipline and propaganda are backed up by the apparatus of ever-increasing state surveillance. Therefore, the degree of progress made by society depends now on how well they have fulfilled these parameters which determine the quality of life besides the statistical and quantitative figures of progress.

Role of Innovation in Different Societies

One important factor of entrepreneurship is the constant production of knowledge not only of new opportunities to be exploited but also of new ways of exploitation and production. In developed economies, competition is intense and corporations are more or less at par with each other when it comes to production and profit. This drives companies to continuously innovate new products and methods of production to overtake the other companies in a particular sector. Thus, research and development are a priority and groundbreaking innovations have shaped the market throughout history. For example – Ford assembly line production of cars, Apple Macintosh, etc. However, in developing economies, new industries are still cropping up and imitation of innovations in developed economies is usually the prerogative. Such imitations are usually new to the respective society/country so they imply similar radical changes in the society similar to original innovations in developed economies.

Entrepreneurship and the Balance of Society

How does entrepreneurship affect the prevailing social order? There are two main sociological perspectives under which all arguments on the above question can be classed: functionalist and conflict perspective. Under the former perspective, the main argument is that social equilibrium is achieved at a certain period when all profitable opportunities have been exploited. This points towards a stable but stale society where change stops occurring after a time. It is an idealist viewpoint. On the other hand, the argument under the conflict perspective states that equilibrium is attained for a certain time period after which it is again disrupted to create a new equilibrium through innovation.

The entrepreneurship spirit of capitalism has radically transformed the quality of life in almost all societies. Its ever-increasing demand for larger markets has led to radical developments in technology as well, connecting the whole world in networks previously unimaginable. However, if one is to look for progress, one must look for it within a certain context. The emergence of capitalism has not only changed the economy but also the values and morality of our societies. Therefore, progress in the contemporary sense may not have been considered progress in another era. Regardless, the innovative spirit of humans and a thirst for the uncertain have always surfaced in all periods in the form of explorers, adventurers and contemporary entrepreneurs. This drive for risk-taking is what has driven change in human society throughout history.


Holcombe, Randall G. “Progress and entrepreneurship.” Quarterly Journal of Austrian Economics 6, no. 3 (2003): 3-26. Accessed on 9 August 2022.

Naude, W., Szirmai, A., & Goedhuys, M. (2011). Innovation and entrepreneurship in developing countries. UNU.

Innovation and Entrepreneurship in Developing Countries ( Accessed on 20 August 2022.

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I graduated in Sociology from Hindu College, Delhi. I love reading almost anything and watching movies, especially art and indie films. You can find me on Instagram at @sounak_01