Entrepreneurship is considered to be one of factors of production (the other factors of production are capital, labor and land).

According to Heckscher–Ohlin model, a country that has an abundant supply of a factor of production will have a comparative advantage in goods whose production is intensive in that factor.

I tried to imagine examples of countries with different comparative advantage for each factor:

1.Country A has lots of capital, including human capital. It exports state-of-art semiconductors. It also has lots of programmers, system adminstrators, "white hats" and other IT specialists who export their services by working remotely.

2.Country B has lots of land. It uses said land for farming, consequently exporting products of its farming.

3.Country C has lots of labor, although its workers are poorly educated. People work in sweatshops. It exports clothing.

4.Country D has lots of entrepreneurship. Or in other words, it has lots of talanted and skilled business people. Now I have a problem with this one, I don't know what kind of goods country D could have exported. Can you help?

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    $\begingroup$ I am posting this as a comment instead of as the answer because it is too short to be proper answer, but countries with abundance of entrepreneurial talent could export consulting services/entrepreneurial literature etc. This being said entrepreneurial capacity is not easy to empirically measure so ultimately we can just make conjectures about which goods are entrepreneurial intensive and which not but I think the above two examples are reasonable. $\endgroup$
    – 1muflon1
    Commented Jul 11, 2020 at 13:45
  • $\begingroup$ @1muflon1 Can start-ups,that are made to be bought by foreign firms, be considered such goods too? $\endgroup$ Commented Jul 11, 2020 at 13:55
  • $\begingroup$ No. That would be equivalent of cross-border factor flows (this would be more narrowly a capital flow - but you could consider it entrepreneurial flow) and HO model explicitly forbids the factor flows. You have a versions of the models where goods are not allowed to be traded and only factors allowed to flow but based on your question that’s not the variety of the model you are using. On the other hand if some other company would order a service from an entrepreneur to make a strategy/or even from distance operate the firm for them it could be considered trade in services. $\endgroup$
    – 1muflon1
    Commented Jul 11, 2020 at 14:00

1 Answer 1


The term "entrepreneur" is usually taken to mean something more specific than talented and skilled business people. Wikipedia for example gives several definitions, including characteristics such as (with my emphases):

  • creation of value;
  • launching and running a new business;
  • organize the capital, talent and other resources that turn an invention into a commercially viable innovation;
  • willingness to take risks in the name of an idea, spending time and capital on an uncertain venture.

Many who are talented and skilled business people lack some or all of these characteristics.

Entrepreneurship can be applied to many different types of goods. Taking your countries A, B and C, for example, consider:

What type of good your country D would export will depend to a large extent on what other factors it possesses in addition to entrepreneurship. As 1muflon1 says there may be opportunities for it to export consulting services, but even that would depend on good transport and/or communications in order to make contact with clients abroad. But as the above examples illustrate, entrepreneurship is typically applied in order to start and grow businesses using other available factors to develop new products, technologies or markets.

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    $\begingroup$ I think that this answer has overall lot of value but there is one part that I think is incorrect. You write “there is no particular good to which entrepreneurship is exclusive”. I think that applies (for most part) to labor and capital too (even programmer needs at least a PC, writer pen and paper etc - although I can imagine exceptions from rule). But if good is being intensive in some factor that does not mean it is exclusively produced by that factor. Programming is still labor intensive. If production of good x uses more labor than capital it’s labor intensive see also the source below $\endgroup$
    – 1muflon1
    Commented Jul 12, 2020 at 19:58
  • $\begingroup$ saylordotorg.github.io/… $\endgroup$
    – 1muflon1
    Commented Jul 12, 2020 at 19:59
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    $\begingroup$ @1muflon1 You are right: I've edited my answer to replace those words. $\endgroup$ Commented Jul 12, 2020 at 21:13
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    $\begingroup$ A related question may be: what happens to country E which has lots of labour, capital, and land, but almost zero entrepreneurship? $\endgroup$ Commented Jul 14, 2020 at 12:55

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