Someone has to take the first risk. Entrepreneurship is the act of starting and running a business, spotting an opportunity, assembling resources, and accepting the possibility of failure. It is one of the four factors of production, alongside land, labor, and capital. Without it, the other three sit idle.

Entrepreneurs come in many forms. A street food vendor in Bangkok. A software founder in Bangalore. A farmer who switches to organic vegetables and finds a new market. Not all are innovators in the Silicon Valley sense. Many simply organize production in a new way or serve a market that larger firms ignore.

Failure is common. Most new businesses do not survive five years. That sounds grim, but failure is also informative. Failed founders often try again with better ideas and sharper skills. Economies with a culture of experimentation, and a tolerance for bankruptcy, tend to produce more successful startups over time. Japan and parts of Europe have struggled with this, while the United States and Israel have thrived.

What entrepreneurs do

• Identify unmet needs
• Gather capital and labor
• Take on financial risk
• Innovate products and processes
• Create jobs and competition