The first book to present innovation and entrepreneurship as purposeful and systematic discipline which explains and analyzes the challenges and opportunities of America's new entrepreneurial economy. A superbly practical book that explains what established businesses, public survey institutions, and new yentures have to know, have to learn, and have to do in today's economy and marketplace.

"The entrepreneur," said the French economist J. B. Say around 1800, "shifts economic resources out of an area of lower and into an area of higher productivity and greater yield." But Say's definition does not tell us who this "entrepreneur" is. And since Say coined the term almost two hundred years ago, there has been total confusion over the definitions of "entrepreneur" and "entrepreneurship."

In the United States, for instance, the entrepreneur is often defined as one who starts his own, new and small business. Indeed, the courses in "Entrepreneurship" that have become popular of late in American business schools are the linear descendants of the course in starting one's own small business that was offered thirty years ago, and in many cases, not very different.

But not every new small business is entrepreneurial or represents entrepreneurship.

The husband and wife who open another delicatessen store or another Mexican restaurant in the American suburb surely take a risk. But are they entrepreneurs? All they do is what has been done many times before. They gamble on the increasing popularity of eating out in their area, but create neither a new satisfaction nor new consumer demand. Seen under this perspective they are surely not entrepreneurs even though theirs is a new venture.

McDonald's, however, was entrepreneurship. It did not invent anything, to be sure. Its final product was what any decent American restaurant had produced years ago. But by applying management concepts and management techniques (asking, What is "value" to the customer?), standardizing the "product," designing process and tools, and by basing training on the analysis of the work to be done and then setting the standards it required, McDonald's both drastically upgraded the yield from resources, and created a new market and a new customer. This is entrepreneurship.

Equally entrepreneurial is the growing foundry started by a husband and wife team a few years ago in America's Midwest, to heat-treat ferrous castings to high-performance specifications-for example, the axles for the huge bulldozers used to clear the land and dig the ditches for a natural gas pipeline across Alaska. The science needed is well known; indeed, the company does little that has not been done before. But in the first place the founders systematized the technical information: they can now punch the performance specifications into their computer and get an immediate printout of the treatment required. Secondly, the founders systematized the process. Few orders run to more than half a dozen pieces of the same dimension, the same metallic composition, the same weight, and the same performance specifications. Yet the castings are being produced in what is, in effect, a flow process rather than in batches, with computer-controlled machines and ovens adjusting themselves.

Precision castings of this kind used to have a rejection rate of 30 to 40 percent; in this new foundry, 90 percent or more are flawless when they come off the line. And the costs are less than two-thirds of those of the cheapest competitor (a Korean shipyard), even though the Midwestern foundry pays full American union wages and benefits. What is "entrepreneurial" in this business is not that it is new and still small (though growing rapidly). It is the realization that castings of this kind are distinct and separate; that demand for them has grown so big as to create a "market niche"; and that technology, especially computer technology, now makes possible the conversion of an art into a scientific process.

Peter F. Drucker was born in Vienna, Austria, in 1909. Educated in Austria and in England, Mr. Drucker holds a doctorate in Public and International Law from Frankfurt University in Germany. He also has received honorary doctorates from American, Belgian, Czech, English, Japanese, Spanish and Swiss universities. Since 1971, Mr. Drucker has been Marie Rankin Clarke Professor of Social Science and Management at Claremont Graduate University in Claremont, California, which named its Graduate Management Center after him in 1987.

In addition to teaching, Mr. Drucker currently acts as a consultant, specializing in strategy and policy for both businesses and nonprofits, and in the work and organization of top management. He has worked with many of the world's largest corporations and with small and entrepreneurial companies; with nonprofits such as universities, hospitals and community services; and with agencies of the U.S. Government as well as with Free-World governments such as those of Canada and Japan. In the past, Mr. Drucker has variously been economist for an international bank in London; American economist for a group of British and European banks and investment trusts; and American correspondent for a group of British newspapers.

From 1950 to 1971, Mr. Drucker was Professor of Management at the Graduate Business School of New York University which awarded him the university s highest honor, the Presidential Citation in 1969. From 1979 to 1985, he also served as Professorial Lecturer in Oriental Art at Pomona College, one of the Claremont Colleges. He also acted as Professor of Politics and Philosophy at Bennington College in Bennington, Vermont.

A prolific writer on subjects relating to society, economics, politics and management, Mr. Drucker has published 30 books which have been translated into more than twenty languages. In addition to his writings on management and economics, he has written an autobiographical book entitled, Adventures of a Bystander, and co-authored Adventures of the Brush; Japanese Paintings. Mr. Drucker has made several series of educational movies based on his management books, and he was an editorial columnist for the Wall Street Journal from 1975 to 1995, and serves as a frequent contributor to magazines.

Mr. Drucker is married and has four children and six grandchildren.

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