I think a lot of people will be saying that it's all on entertainment value here, but I think it's more complex than that.
I know I'll be a lone voice here, but I do think that the vast majority of the candidates that they have on the show are pretty capable. The edit manipulates a lot of them to appear worse than they are, and the tasks are set up so that they are impossible to undertake amazingly, even by the world's best businessperson - no one could design an amazing product or event, for example, in two days, as these things take months to sort out in real life, and even then they often don't revolutionise the world. So whilst entertainment value is obviously a key factor, I think that finding capable people who have skills is very important as well. After all, most of the candidates have been pretty successful in their day jobs, and they always come across a lot better in interviews afterwards. Lord Sugar has said that people who think it's just about finding the biggest egos should come to the auditions and look at the people who are turned away - there are people with crazy hair, tattoos all over the place and things who know nothing at all about business. The edit may not suggest it that much, but I do think that CVs, experience and common sense still play a big role in the selection process.
As for entertainment, that is also a very big thing, but what is 'entertaining' is such a broad spectrum. You need to get the right balance of people who are going to play off each other well. If you took the 16 most memorable candidates from all the series and put them together it wouldn't work at all, because none of them would stand out from each other. You need to have a few people who are a bit aggressive and intimidating, a few who are quite bubbly and fun, a few who are quietly confident and a few people who just have something about them that makes them stand out at audition. That's how you find a decent selection.