Entrepreneurship and economic development: From classical political economy to economic sociology

Purpose – The purpose of this paper is to reconstruct economic reasoning on entrepreneurship from the perspective of its institutional content, thus underlining the aspects of power relations and leadership, which are related with the organisational and technological dimensions of innovation and coordination as entrepreneurial functions. Design/methodology/approach – In reconstructing the theory of entrepreneurship in a range from classical political economy to current efforts in economic sociology, the paper focuses on an appreciation of Schumpeterian entrepreneurship as a concept that is influenced both by Austrian marginalism and the German historical school. Findings – The paper finds that the research perspective of economic sociology as a means for exploring the institutional foundations of entrepreneurship is of utmost relevance for further efforts in theorising the role of entrepreneurship in economic development. Practical implications – The paper promotes policy implications, which underline that policies for the support of entrepreneurship need to account for the differentiation of entrepreneurial functions and their actual carriers, reconsidering the economic manifestations of their institutional embeddedness. Originality/value – The paper establishes innovation and coordination as ideal types of entrepreneurial functions, perceiving them as fundamental concepts in economic reasoning on entrepreneurship in the process of economic development.