Entrepreneurship and the Entrepreneur

1. Entrepreneurship and the
Entrepreneur
Prepared by: Andrijana Bogdanovska
Knowledge Center
Dubai Trainings 27th – 30th of October, 2014

2. Opening Discussion:
Current trends of Entrepreneurship in the World
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3. Entrepreneurship - increasing trends of
presence in the global environment
1. The accelerating pace of change. Micro and SMEs are better equipped to deal with
fast, discontinuous and abrupt change -higher levels of flexibility and speed to respond
to changing market circumstances.
2. The destruction of larger firms, leading to spin offs, smaller operating units, and
outsourcing activities.
3. The overall shift in many (mainly developed, but also developing) economies away
from manufacturing towards the service industry - an ideal ground for the flourishing
of micro and SMEs.
4. Many micro and SMEs are run by individuals who provide specialized goods and
services which are usually neglected by larger firms increasing overall market
efficiency.
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4. 4. The fast pace of technological development which increased micro and SMEs’ ability
to deliver new products, specialized goods and services to the market.
The rapid change and development of technology influenced SME firms in three
specific ways:
• many new technologies were pioneered by SMEs,
• the development of new technologies has facilitated self employment by easing
communication and allowing for habitual flexibility and, possibly most important,
• many new technologies have reduced fixed costs of operating a business thereby
encouraging self-employment.
4
Entrepreneurship - increasing trends of
presence in the global environment
Dubai Training of 10/27/2014 Trainers on Enterprenuership

5. Entrepreneurship and the Entrepreneur
1.What is Entrepreneurship?
2.Who is the Entrepreneur?
3.Why is Entrepreneurship important?
4.Types of Entrepreneurship
5.How does Entrepreneurship develop
at social and individual level?
What?
Who?
How?
Types? Why?
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6. What is Entrepreneurship?
“The search for the source of dynamic
entrepreneurial performance has much in common
with hunting the Heffalump. The Heffalump is a
large and rather important animal (…). He has
been hunted by many individuals using various
ingenious trapping devices, but no one so far has
succeeded in capturing him. All who claim to have
caught sight of him report that he is enormous,
but they disagree on his particularities.”
Kilby (1971:275)
What?
Who?
How?
Types? Why?
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7. What is Entrepreneurship?
Two basic theories on entrepreneurship from the economic theory:
1. Neoclassical Economic Tradition
The neoclassical view advocates that entrepreneurship is an
innovation which will come about when the equilibrium is disrupted
or as a result of the inputs into research and development:
entrepreneurship is a product.
2. Classical Economic Tradition.
The classical economic traditions assumes that entrepreneurship is
part of the nature of the actor, i.e., a character trait.
Neither option is satisfactory. The option that traces entrepreneurship to
some natural character is basically tautological. The option that traces
entrepreneurship to exogenous shocks simply begs the question: what is the
origin of the shock?
New Economy Growth Models – entrepreneurship is a process of
knowledge transfer.
What?
Who?
How?
Types? Why?
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8. What is Entrepreneurship?
From the economic theory there are four theories that
define Entrepreneurship:
1. Joseph Schumpeter and the Creative Destruction
Concept
2. Frank Knight and the Uncertainty Concept
3. Israel Kirzner and the Austrian School - key
concepts of “spontaneous learning”, “alertness”
and “entrepreneurial discovery
4. William Baumol and the Role of Incentives
“the carrying out of new combinations we call
‘enterprise’; the individual whose function is to carry
them out we call ‘entrepreneurs’”
What?
Who?
How?
Types? Why?
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9. What is Entrepreneurship?
And two additional theories :
1. Peter Drucker’s Theory of Entrepreneurship –
Opportunity and Entrepreneurship;
2. Ronald Burt’s Theory of Entrepreneurship –
Network and Entrepreneurship
The theory of entrepreneurship centered on the
concept of opportunity represents more or less the
common point of view of current researchers within
the field.
What?
Who?
How?
Types? Why?
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10. Who is the Entrepreneur?
1. Labor Economics – Entrepreneurship is self-employment
…thus the entrepreneur is the self-employed
2. Microeconomics and Industrial Organization –
Entrepreneur is the small organization …the SMEs
3. Entrepreneurship not only as an occupation (self-employment;
startup rates), but as an entrepreneurial
behavior too, including:
• entrepreneurial employee activity (a term that is closely related
to “intrapreneurship” or “corporate entrepreneurship”, s
• “social enterprenuers”, which is about people starting and
developing new initiatives where the value of the (local, regional)
society is put before the value of the individuals leading these
initiatives - http://www.iande.info/suzana-moreira
What?
Who?
How?
Types? Why?
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11. Who is the Entrepreneur?
One characteristic of entrepreneurs stands out:
Diversity!
Anyone – regardless of age, race, gender, color, national
origin, or any other characteristic – can become an
entrepreneur (although not everyone should).
What?
Who?
How?
Types? Why?
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12. Why is Entrepreneurship important?
What?
Who?
How?
Types? Why?
Macroeconomics: Economic Growth and Development
From the different roles of the entrepreneur distinguished by
the several “Heffalump hunters”, two main roles had been
highlighted as the key ones to link entrepreneurship to
economic growth and development:
1. The entrepreneur as the innovator (identified as the
Schumpeterian entrepreneur) and
2. The entrepreneur as the creator of new firms and new
jobs (a role mainly identified by IO economists).
Entrepreneurship in the endogenous and new growth
economic models.
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13. Why is Entrepreneurship important?
What?
Who?
How?
Types? Why?
Despite theory ….
• Entrepreneurship has many faces and also includes
initiatives that are accompanied by less ambitious business
activities leading to limited or no growth.
• Across the globe, many individuals pursue a business
activity because alternative options for work are limited or
non-existent; by having the option to engage in self-employment
they are able to take care of themselves and
their families.
• Even though the self-employed contribute to the flexibility
and productivity of the overall economy, some could
possibly be more productive by working as an employee.
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14. Types of Entrepreneurship (GEM)
What?
Who?
How?
Types? Why?
By motivation factors:
1. Necessity driven Entrepreneurship
2. Opportunity driven Entrepreneurship
By the stage of development of the entrepreneurial activity:
1. Nascent entrepreneurs involved in setting up a business,
2. Entrepreneurs who own and manage a new business and
3. Entrepreneurs who own and manage an established
business
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15. Types of Entrepreneurship
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16. Types of Entrepreneurship
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17. How does Entrepreneurship develop in
the economy?
What?
Who?
How?
Types? Why?
A synergy of activities covering Entrepreneurial Framework :
1. Entrepreneurial Finance - availability of financial resources
2. Government Policy
3. Government Entrepreneurship Programs
4. Entrepreneurship Education. The extent to which training in
creating and managing SMEs is incorporated in the education and
training system at basic school, secondary and at post-secondary
levels.
5. R&D Transfer. The extent to which national research and
development will lead to new commercial opportunities and is
available to SMEs.
6. Commercial and Legal Infrastructure. The presence of property
rights, commercial, accounting and other legal and assessment
services and institutions that support or promote SMEs.
7. Entry Regulation - Market Dynamics and Openness
8. Physical Infrastructure. Ease of access to physical resources
9. Cultural and Social Norms. 17

18. Entrepreneurial Framework
Current Global Indicators
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19. Barriers to Entrepreneurship
Prepared by: Andrijana Bogdanovska

20. Barriers to Entrepreneurship
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21. Discussion
On Barriers to Entrepreneurship – Fox News
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22. National Policies and
Entrepreneurship Programs
Prepared by: Andrijana Bogdanovska

23. Government policies and measures
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24. Formulating National
Entrepreneurship Strategy
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25. Optimizing the Regulatory Environment
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26. Entrepreneurship Education and Skills
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27. Facilitating Technology
Exchange & Innovation
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28. Improving Access to Finance
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29. Promoting Awareness and Networking
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30. Access to Finance
Prepared by: Andrijana Bogdanovska

31. Access to Finance
Two basic forms of access
to finance for
entrepreneurs:
1. Own resources
2. Debt/ Credit
3. Equity
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32. Access to Finance
Phase of
Development
Sources of Funding Alternative sources of
funding
Government framework
Pre seed and
seed phase
Own funds, family friends Peer-to-peer lending
Crowdsourcing
KIVA
www.kiva.org
www.crowdcube.com
Appropriate regulatory framework
Tax advantaged for investors
Tax breaks for start-ups
Start-up phase Business Angles Lending Platforms –
Market Invoice
Facilitate the formation BA networks
Tax relieves for companies
Tax advantages
Emerging growth Bank Finance
Venture Capital
Explore credit guarantees
Introduce monitoring and mediation entities
Make it easier for VC firms to make cross-border
investments
Co-invest with the private sector
Expansion Private Equity
Going Public
Avoid too much regulation on the PE activity
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33. Improving Access to Finance
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