Analysis Of The Status And Role Of Entrepreneur In The Economic Transformation

It is assumed in micro economics that there are three participants in market economy. They are businesses, consumers and the government. Businesses are the suppliers of goods, consumers buy them and the government plays the role of maintaining order in the market. The author of this essay attaches great importance to the role played by entrepreneur. Occurrences in economy offer ample evidence for the fact that the success of an business depends in a great degree on the skills and character of the entrepreneur.But it is to be regretted that the importance of the entrepreneur has not received due attention from the economists. Entrepreneur as a resource in economic activities is rather scarce. The accumulation of knowledge and constant innovations rather than the application of new technologies and improved management contribute more and more to economic development in modern society. It is entrepreneurs that play the core role in innovation activities.This essay bases its views on the innovation theory of Schumpeter. In this essay, the author tries to prove and analyze the importance of entrepreneurs in china’s economic transformation according to the practices in economic activities since Reform and Opening up. A short introduction of the theory of entrepreneur will be given and then the essay tries to summarize changes that the meaning of entrepreneur and the spirit of entrepreneur have undergone in the history of economics.In different periods of history, the social status the entrepreneurs occupy varies according to the level of economic development. Take China for instance. The past35years during which the status of entrepreneurs change in china’s economic transformation coincide with the period when entrepreneur play a more and more important role in china’s economic development and become the major participants in market economy.With the assistance of a model of innovation by entrepreneurs, the way that entrepreneurs exert influences over china’s economy during structural transformation is analyzed and expounded upon. I want to point out that the role that entrepreneur plays in innovations is irreplaceable by any organization or group. The author also believes that the innovations by entrepreneurs are capable of scale advantages and that entrepreneurs are not only the demanders of new systems, but also become the indirect suppliers of systems by the feedback of information to the government in their innovation activities. During the process of supplying systems, entrepreneurs play the role of advancing system changes. The entrepreneurs are the demanders of financial structural reforms and embody the force of establishing modern share-holding corporations. An in-depth discussion is carried on the importance of entrepreneurs in china’s change of the mode of economic development in the present economic transformation.In this essay, structural obstacles which confront entrepreneurs during their innovational activities are also discussed according to actual cases since china’s Reform and Opening up. The incentives and encouragement from the governmental policies are necessary for entrepreneurs. The attitude of the government toward the innovational activities is of decisive importance for the smooth carrying out of their activities. By setting up a game model between the government and entrepreneurs, the author tries to explain the functions of government and the factors leading to the ill success of entrepreneurs during innovational activities. Some proposals are advanced concerning the measures encouraging innovations and the improvement of systems.