(1) Innovation : Entrepreneur need to be innovative. The essence of entrepreneurship is innovation. Innovation may take place in the following forms viz., the introduction of a new product in the market, the installation of new production technology, entry of specific product, the discovery of a new source of raw material, etc. In view of changing taste, preferences, etc., of the consumers, from time to time, entrepreneur undertakes research and development to manufacture products to satisfy the consumers’ needs.
(2) Economic activity: In order to satisfy human wants and as well as in exchange earn a better livelihood, an entrepreneur manufactures new products or modify the existing products as per the needs, preferences and demands of the consumers. For this purpose, he undertakes a systematic plan activity by using his skills, knowledge and experience. For this reason, entrepreneurship is considered as an economic activity.
(3) Creative activity : Innovation is a process of creating something new and creativity is most important for innovation. Therefore, innovation should be strongly supported by creativity, Innovation and creativity are supplement to each other. Introducing creativity in the production process is a challenging task before the entrepreneur. Hence, creativity is an essential element of entrepreneurship.
(4) Risk-bearing : An entrepreneur has to undertake many risks including fall in prices, changes in fashions, earthquake, etc. All these risks cannot be insured with insurance companies. A risk which cannot be insured against and measured is called uncertainty. Entrepreneur buys factors of production at certain prices to combine their contributions into the products and then sells those products at uncertain prices in future. Thus, entrepreneur is a risk-bearing agent of production.
