This chapter offers a historical perspective on views of the entrepreneur as both an innovator and risk-taker. The most significant early writer was Richard Cantillon, who took a supply-side perspective, arguing that the entrepreneur was a creative middleman who satisfies market demand through a willingness to embrace the risks associated with uncertainty. Despite the work of Cantillon and others, however, it was a demand-side view that came to dominate. Joseph Schumpeter in particular argued that entrepreneurs were innovators and the primary cause of economic development through a process of creative destruction; risk-taking was not a relevant characteristic. It was left to Frank Knight to develop a synthesis of these opposing views based on his distinction between risk and uncertainty and the argument that entrepreneurs necessarily act in a dynamic rather than a static environment.
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