Abstract: this article presents the concept of entrepreneurship described by Joseph Schumpeter in his Theory of Economic Development (1926), in which the economist was able to prove that in addition to the three existing factors of production (labour, land, capital), there is another one that plays an important role in the development of the economy of any country. Schumpeter considered entrepreneurial abilities as the fourth factor of production, not noted by the classics, and the entrepreneur himself — as an innovator who undertakes the search and introduction of new factors of production. The study presents “combinations” that are key to understanding Schumpeter’s entrepreneur, identifying his features and highlighting the main characteristics. The relevance of the economist’s theory at the present stage is also proved by the example of the study of Nobel laureate Milton Friedman. The article analyses the current state of small and medium-sized businesses in Russia, as well as provides recommendations on levelling the most acute problems and improving the efficiency of entrepreneurship development in Russia on the basis of Schumpeter’s theory of economic development.
Keywords: entrepreneurship, Schumpeter, entrepreneur, innovation, small enterprise, medium-sized enterprise