- Social entrepreneurs invest money in the company’s goals, not in its development.
- Google is the best example of a successful corporate entrepreneurship venture with its “20% time” policy.
- Technology entrepreneurs apply science and technology to launch businesses and commercialize their products.
- Green entrepreneurship is concerned with finding solutions to environmental problems.
- Cultural entrepreneurship can create new job opportunities using cultural services and products.
Entrepreneurship can be described as the process of starting and running a new business with the goal of generating a certain profit by using innovative ideas. Besides being a business venture, entrepreneurship plays a key role in economic development by boosting employment and national income.
In addition, you can see its influence on education and law in the form of entrepreneurial education and entrepreneurial law, while in the science sector, a collaboration between scientists and entrepreneurs often leads to new scientific achievements.
All entrepreneurs need funds to start a business. This is where the government plays a major role by providing loans, grants, or other financial stimulants.
That said, while you’ll find different types of entrepreneurship, social, corporate, technological, green, and cultural entrepreneurship are some of the leading branches you should know about. Each of these entrepreneurship types comes with certain benefits and challenges. Below, we’ll explore their individual potentials and provide examples for each.
5 Types of Entrepreneurship With Examples
Since entrepreneurs can operate in different areas of business, you’ll encounter various types of entrepreneurship. Understanding these types will help you become familiar with their main goals and benefits, which will ultimately help you choose the type that best suits your needs.
There are 4 types of entrepreneurs – coasting, conservative, aggressive, and innovator/revolutionary. Innovators are the most common type of entrepreneurs you will meet, and you can find them in the top 5 entrepreneurship types: social, corporate, technological, green, and cultural.
We’ll now explore each type below, as well as provide a case study for each:
1. Social Entrepreneurship
Social entrepreneurship deals with recognizing social and environmental problems and solving them using entrepreneurial concepts. Unlike traditional entrepreneurs, whose goal is to invest in businesses to help them grow, the main goal of social entrepreneurs is to invest their profits in community-oriented problems to bring about a positive change in the world.
Its main characteristics include:
- Investing money in the company’s goals, not in its development.
- Fundraising through alternative methods such as donations, sponsorships, and grants.
Examples of Successful Social Entrepreneurship Ventures
There are about 11 million social enterprises in the world, and some of the most notable ones are:
- TOMS Shoes is a for-profit company often associated with the Buy-One-Give-One model. Since 2006, for every shoe model purchased, the company has donated a pair of shoes to a person in need up until 2021. Today, TOMS Shoes gives one-third of its profits to grassroots good.
- Love Your Melon is an apparel brand that donates 50% of its profits to non-profit organizations that fight against pediatric cancer.
Benefits and Challenges
The main benefit of this type of entrepreneurship lies in its potential to leave a positive mark on society by improving people’s quality of life. Other advantages include:
- Creating job opportunities for unemployed or underemployed individuals
- Supporting underrepresented groups by advocating for diversity
- Breaking gender stereotypes, like GoldieBlox, whose mission is to introduce girls to STEM – science, technology, engineering, and math.
On the other hand, the main challenges social entrepreneurs may encounter include:
- Lack of recognition
- Lack of funding support
- Lack of a proper business strategy.
It’s been proven that social entrepreneurship has a major impact on economic growth. For example, in the UK this sector contributes around £60 billion to the economy yearly, which is 3% of GDP and 5% of total employment.
2. Corporate Entrepreneurship
Corporate entrepreneurship is one of the most common entrepreneurship types you’ll come across. You’ll also find it under the term intrapreneurship. This type of business deals with the provision of services within organizations. In other words, corporate entrepreneurs aim to create value and drive revenue growth within the company using an entrepreneurial approach.
Its main characteristics include:
- Planning innovations that may turn into products that will be satisfactory for existing and new customers.
- Keeping the product quality at a high level and supporting continuous growth.
Examples of Successful Corporate Entrepreneurship Ventures
You’ll find numerous renowned companies that incorporate corporate entrepreneurship, such as:
- Google – Google incorporates a “20% time” policy, which allows workers to spend 20% of their business hours on the implementation of projects that could benefit Google. Unsurprisingly, this policy led to the creation of Gmail and Google Maps.
- 3M – 3M incorporates a similar policy called the “innovation rule.” This rule allows 3M workers to spend 15% of their working hours on individual projects. Post-It is the best example of the success of this policy.
Benefits and Challenges
These types of entrepreneurship come with many advantages, the main being availability of resources. Namely, corporate entrepreneurs have access to a variety of resources, from finance to sales force. Other benefits include:
- Minimal set-ups – A large number of corporate entrepreneurs are familiar with the technical side of the business, which is why they will not have problems with the setup process.
- Professional connections – Corporate entrepreneurs can use the help of other professionals when developing business ideas .
- Mistakes are not expensive – If a certain mistake is made, the company will be more than capable of absorbing a possible failure.
The main challenges of corporate entrepreneurship include
- Long approval cycles
- Limited financial rewards
- Procedures and rules that can hinder maneuvering through the company.
According to this Zahra & Holmes study, corporate entrepreneurship positively impacts business operations in countries that don’t offer strong intellectual property protection and employee protection.
3. Technological Entrepreneurship
What are the types of entrepreneurship that are linked to technology? That would be technological entrepreneurship. These types of businesses are based on finding and implementing technology-intensive business opportunities that carry great potential.
Its main characteristics include:
- Innovation and action-oriented businesses with a profound understanding of technology.
- Technology entrepreneurs apply science and technology to launch businesses and commercialize their products.
Examples of Successful Technological Entrepreneurship Ventures
While the pioneers of technological entrepreneurship were Nikola Tesla and Alan Turing, today you’ll find many technology-based companies that are engaged in creating technology-oriented products, such as:
- Tesla – Elon Musk’s Tesla is the best example of technological entrepreneurship. This company focuses on creating electric cars and renewable energy solutions with the goal to reduce the individual carbon footprint.
- Uber – Uber uses technology to transfer goods and transport people from one location to another.
Benefits and Challenges
The main benefit of these types of entrepreneurship is using technology in innovative ways. Technology entrepreneurs can also benefit by using different technology-related scenarios to match the needs of their customers.
Other pros include:
- Implementing technology as a core business strategy
- Developing security strategies
- Easier and faster communication.
The main challenges technological entrepreneurs may face are:
- Rapid changes in technology
- Cyber risks
- Inability to hire top talent.
According to surveys, technological transformations have had a significant impact on the operations of many businesses in the last few years. For example, technology helped businesses with generating new revenues, expanding incomes from previous streams, lowering expenses, and improving the employee experience.
4. Green Entrepreneurship
Green entrepreneurship is concerned with finding solutions to environmental problems. The main goal of these entrepreneurship types is to promote social change and protect the environment.
Its main characteristics include:
- Delivery of environmentally friendly products and services.
- Permanent dedication to ecological principles in business and inclusion of sustainability principles in business decisions.
Examples of Successful Green Entrepreneurship Ventures
Many prominent companies invest their money in sustainable development. The best examples of successful green business ventures include
- Patagonia – This retailer of outdoor clothing is one of the most famous eco-friendly companies that use recycled and organic materials in its products. They’re focused not only on their environmental but also societal effects, ensuring humane working conditions and safety for all employees.
- Lush – Lush is another eco-friendly company that uses recycled materials in addition to saving energy and water during the creation of its products.
Benefits and Challenges
The main benefits of this type of entrepreneurship are:
- Tax relief – Many governments encourage eco-friendly businesses by giving them funds and granting them tax relief. Moreover, they can acquire loans with better terms.
- Easy administration of environmental laws
- Healthier work environment.
Conversely, green entrepreneurship comes with the following challenges:
- Using raw materials is more expensive
- Complex business model
- Implementing an eco-friendly business model may take a lot of time.
Based on studies, green entrepreneurship leaves a positive impression on both the economy and society as it helps improve the quality of the environment. Higher shares of green entrepreneurial activity are also associated with positive economic and social development.
5. Cultural Entrepreneurship
Cultural entrepreneurship is a business model that deals with cultural products such as literature, theater, or art and cultural activities such as music and film events and their impact on the growth of the economy.
Its main characteristics include:
- Cultural entrepreneurs use business skills to turn assets into innovative cultural products and services that produce financial income.
- Cultural business model is a type of entrepreneurship that seeks to promote the preservation of cultures while encouraging innovation.
Examples of Successful Cultural Entrepreneurship Ventures
These are some of the most famous companies that have successfully implemented cultural entrepreneurship models:
- Netflix – Netflix has made a real impact in the entertainment industry with its streaming platform, showing just how much potential there is for cultural entrepreneurship. Thanks to this widespread streaming platform, people around the globe can watch their favorite shows in HD at a reasonable fee.
- PepsiCo – PepsiCo is a well-known beverage company that created a special organization to encourage rapid development towards racial equality among beverage and food-related businesses.
Benefits and Challenges
The main benefits of these types of entrepreneurship are:
- Economic growth and job creation – Cultural entrepreneurship can create new job opportunities using cultural services and products.
- Promoting cultural exchange – Through cultural events, cultural entrepreneurs can bring together people of different origins, which could contribute to social equality.
- The possibility of generating income for investment in cultural content.
At the same time, cultural entrepreneurship comes with the following challenges:
- Limited market
- Funding limitations
- Limited support.
Cultural entrepreneurship has had a great impact on the global economy. Namely, according to UNESCO, as of 2022, creative and cultural sectors make up 3.1% of GDP. Furthermore, this sector creates about 30 million jobs, in other words, makes up for 6.2% of all employment.
Regarding revenue and employment, visual arts, including television, contribute the most income to the creative economy industry, while music and visual arts contribute the most jobs.
Conclusion
As you can see, all 5 types of entrepreneurship come with undeniable advantages and some challenges.
For example, since social entrepreneurs invest their profits in community-focused issues, they may face a lack of financial support. Furthermore, while most corporate entrepreneurs will succeed in driving revenue growth, they will face long approval cycles.
As for technology entrepreneurs, since the implementation of technology is their main business strategy, they could have problems hiring top talents due to rapid changes in technology. And finally, green and cultural entrepreneurs could have problems with funding limitations due to the high cost of raw materials and limited market.
That said, the importance of entrepreneurship in driving innovation and economic growth is indisputable. Namely, with their contribution, entrepreneurs play an important role in the formation of the economy. They also encourage innovation, which leads to the creation of new and improved services and products that greatly contribute to economic growth.
So if you want to become an entrepreneur, choose the type of entrepreneurship that suits you best and take into account all its advantages and disadvantages. Also, believe in your ideas, know your audience, and come up with a viable business plan.
