ENTREPRENEURSHIP

Detailed explanation-1: -According to him, an entrepreneur is an innovator who desires to earn profit through innovation. An entrepreneur is neither technical man nor a capitalist but simply an innovator. He introduces something new in the economy. He is motivated by establishing his psychological power.

Detailed explanation-2: -Schumpeter’s theory assumed that innovation-originated market power could provide more effective results than pure price competition. He described that technological innovation often creates temporary monopolies that produce excessive profits.

Detailed explanation-3: -According to Schumpeter, the process of technological change in a free market consists of three parts: invention (conceiving a new idea or process), innovation (arranging the economic requirements for implementing an invention), and diffusion (whereby people observing the new discovery adopt or imitate it).