1. Both Knight and Schumpeter placed great emphasis on the importance of the entrepreneur. What similarities and differences do you find, if any, in these authors' conceptions of the nature and role of the entrepreneur? For Schumpeter, the main function of an entrepreneur is that of an innovator who induces forward changes in the market through the improvements he introduces. Schumpeter classifies innovation into five different types, namely: (1) the creation of a new good or the improvement of the quality of an existing good; (2) the creation of a new production method; (3) the opening of a new market; (4) the capture of a new source of supply; or (5) the creation of a new organization or industry. Schumpeter's entrepreneur exists in tandem with the banker or capitalist. It is the capitalist who finances the business venture and assumes the uncertainty caused by the entrepreneur. Knight, on the other hand, argues that the main role of the entrepreneur is to take on uncertainty himself and to function as a kind of “insurance agent”. "to interested parties. For Knight, an entrepreneur is an individual who performs the following tasks: (1) initiate useful changes or innovations; (2) adapt to changes in the economic environment; and (3) assume the consequences of business-related uncertainty the company. Schumpeter and Knight had some similar points in their conceptualization of an entrepreneur. Both believed that innovation and initiating change are vital tasks of an entrepreneur. Since entrepreneurs generate capitalist development, Schumpeter and Knight also considered them the driving force of economic growth. The main difference between the two authors is their approach to uncertainty. Schumpeter firmly believed in...... middle of paper ......921). Boston, MA: Hart, Schaffner, and Marx.Knight, F.H. (1942).The Journal of Economic History, 2, 126-132.Landreth, H., & Colander, D. (1994). economic thought. Boston: Houghton Mifflin Company.Marshall, A. (1890). Principles of Economics (8th ed.). London: Macmillan and Co., Limited. Roncaglia, A. (2006). The wealth of ideas: a history of economic thought. Cambridge, UK: Cambridge University Press.Samuelson, Pennsylvania (1947). Fundamentals of economic analysis. Cambridge, MA: Harvard University Press.Schumpeter, J. (1981). History of economic analysis. London: George Allen & Unwin. Schumpeter, J. A. (1934). The theory of economic development. (R. Opie, trans.) Cambridge, Massachusetts: Harvard University Press.Schumpeter, J. A. (1949). Economic theory and entrepreneurial history.