Barry Asmus and Wayne Gruden in their book, Poverty of Nations , provide additional insight into the role of the entrepreneur. The following excerpt is from their book.
We now turn to the final component of the free market, but this one is not a process but a person: the entrepreneur. The importance of the entrepreneur to make the free-market system work has become more and more evident as innovation has become so necessary. When a nation first begins to develop, it can pick the low-lying fruits to produce growth. Urbanization, low labor costs for manufacturing, and producing goods for export all have initially served developing countries well. But individuals and businesses must innovate to get to the next stage, and entrepreneurs are the key to innovation.
Competition naturally produces a process of entrepreneurial discovery, pulling and prodding markets in new directions. Alert to the changes always occurring, entrepreneurs must then earn profits by innovating and turning problems into opportunities. They must create new products or services, calculate the best ways to utilize resources and deliver them, and constantly look for new and better productive techniques. It is entrepreneurs who seldom fear failure but see new ways to do things by breaking the mold: builders, creators, dreamers, doers, opportunists, and future builders. Entrepreneurs attempt to read the market signals, anticipate previously undeveloped consumer demands, and then take risks, usually with their own money.
Sometimes entrepreneurs get rich, sometimes their ideas fail, and often they have to start all over again. Successful entrepreneurs have to be proactive.