3. Do the profile of these people fit your
perception of the career of an entrepreneur?
What does it takes to start and operate a
successful business
To understand this better, learn about
4. ENTREPRENEUR
Entrepreneur is derived from the French
words entre, meaning, between, and
prendre, meaning “to take”.
Originally to describe people who “take
on the risk” between buyers and sellers or
who undertake a task such as starting a
new venture.
An entrepreneur assembles and then
integrates all the resources needed – to
transform the invention into a viable
business
5. WHO IS THE ENTREPRENEUR?
High
Creativity Inventor Entrepreneur
and
Innovation
Promoter Manager,
Administrator
Low High
General management skills, business know-how, and networks
Timmons
6. ENTREPRENEURSHIP
• Is the process by which individuals pursue
opportunities without regard to resources they
currently control.
• The essence of entrepreneurial behavior is
identifying and putting useful ideas into
practice.
• The task typically requires creativity, drive and
willingness to take risks that can be
accomplished by either an individual or a group
7. Historical Evolution Of Entrepreneurship
Earliest Period
Middle Ages
17th Century
18th Century
19th & 20th Century
8. EARLIEST PERIOD
the earliest definition of entrepreneur may be related to
the person (merchant – adventurer) who attempted to
establish trade routes to the far east
they would sign a contract with money person to sell his
goods.
the capitalist was a passive risk bearer.
merchant adventurer took the active role in trading
bearing all the physical and emotional risks while the
capitalist was a passive risk bearer.
when he completes the trip, the profits divided (capitalist
– 75% , adventurer – remaining 25%)
9. MIDDLE AGES
• the term was used to describe both an actor
and a person who managed large production
projects
• did not take any risks but merely managed
using the resources provided usually by the
government of the country
• a typical entrepreneur in the middle ages was
cleric – the person in charge of great
architectural works, such as castles and
fortifications, public buildings, abbeys and
cathedrals
10. 17TH CENTURY
– Re emergent connection of risk with entrepreneurship
– entrepreneur being a person who entered into contractual
agreement with government to perform a service or
supply stipulated products. since the contract price was
fixed, any resulting profit or losses were entrepreneur’s
– during this period, one entrepreneur John Law,–
established a royal bank then evolved as a trading
company unfortunately led to downfall when he
attempted to push the company’s stock price higher than
the value of assets, leading to collapse.
– this led to the first definition given by Richard Cantillon,
an economist and author
11. 18TH CENTURY
• Finally , the person with capital was differentiated
from one who needed capital (in other words the
entrepreneur was distinguished from the capital
provider )
• Many inventions developed during this time and
changed the world
• Inventors like Eli Whitney and Thomas Edison
developed new technologies, both raise capital
from private sources to develop and experiment
(capital users not providers)
• a venture capitalist who makes risk investments
from a pool of equity capital to obtain a high rate
of return on investments
12. 19TH CENTURY
Entrepreneurs not distinguished from managers
and were viewed from an economical
perspective.
an entrepreneur organizes and operates for
personal gain.
For eg., Andrew Carniege, descended from
poor Scottish family made the American steel
industry one of the wonders– invented nothing
but adapted new tech in the creation of products
to achieve economic vitality
13. 20TH CENTURY
• the notion of an entrepreneur as an innovator was
established
• The concept of innovation and newness is an
integral part of entrepreneurship.
• The newness can consist of anything from a new
product to a new distributions system to a method
for developing a new organizational structures
14. CONTRIBUTORS TO THE
ENTREPRENEURSHIP THEORY
• 18th Century:
– 1725: RICHARD CANTILLION ( person
bearing risks is different from one supplying
capital)
• 19th Century:
– 1803: JEAN BAPTISTE SAY (separated
profits of entrepreneur from profits of capital)
– 1876: FRANCIS WALKER (distinguished
between those who supplied funds and
received interest and those who received
profit from managerial capabilities)
15. CONTRIBUTORS TO THE
ENTREPRENEURSHIP THEORY
• 20th Century:
– 1934: JOSEPH SCHUMPETER (entrepreneur
is an innovator and develops untried
technology)
– 1961: DAVID McCLELLAND (entrepreneur is
an energetic, moderate risk taker)
– 1964: PETER DRUCKER (maximizes
opportunities)
16. CONTRIBUTORS TO THE
ENTREPRENEURSHIP THEORY
– 1975: ALBERT SHAPERO (takes initiative,
organizes some social and economic
mechanisms, and accepts risks of failure)
– 1980: KARL VESPER (entrepreneur seen
differently by economists, psychologists,
business persons and politicians)
– 1983: GIFFORD PINCHOT (intrapreneur is an
entrepreneur within an already established
organization)
18. DEFINITIONS
Richard Cantillon
One of the early theorist, founder of the
term entrepreneurship
He viewed the entrepreneur as a risk taker
by observing merchants, farmers,
craftsmen…
“Buy at a certain price and sell at an
uncertain price , therefore operating at a
risk”
19. DEFINITIONS
Jean Baptiste Say
Entrepreneurs shift economic resources out of areas of
lower and into areas of higher productivity and yield
Joseph Schumpeter
The function is to reform or revolutionize the pattern of
production by exploiting an invitation or more generally
an untried technological method of producing a new
commodity or producing an old one in a new way ,
opening a new source of supply or new outlet for
products, by organizing a anew industry
20. DEFINITIONS
Peter Drucker
The entrepreneur always searches for change,
responds to it, and exploits it as an opportunity
Howard Stevenson
Entrepreneurship is the pursuit of opportunity
without regard to resources currently controlled
21. DEFINITIONS
Robert C. Ronstadt
Entrepreneurship is the dynamic process of
creating incremental wealth. This wealth is
created by individuals who assume the major
risks in terms of equity, time, and/or career
commitment of providing value for some
product or service. The product or service
itself may or may not be new or unique but
value must somehow be infused by the
entrepreneur by securing and allocating the
necessary skills and resources.
22. Robert Hisrich
Entrepreneurship is the process of
creating something new with value by
devoting their necessary time and effort
assuming the accompanying financial,
psychic and social risks and receiving the
resulting rewards of monetary and personal
satisfaction and independence
23. AN INTEGRATED DEFINITION
Entrepreneurship is a dynamic process of
vision, change, and creation. It requires an
application of energy and passion towards the
creation and implementation of new ideas and
creative solutions.
24. All definitions of entrepreneurship
includes
• Newness, organizing, creating, wealth and
risk taking
• Entrepreneurs are found in all professions
25. • Individuals have difficulty bringing their
ideas to the market & creating a new
venture
• Yet entrepreneurial decisions have resulted
in several new businesses through out the
world
• Despite recession- inflation- high interests
rate, lack of infrastructure-economic
uncertainty & high probability of failure
26. Deciding to become an entrepreneur by
leaving present activity
Changing from
present life style
Work Environment
Disruption
27. Types of Start-Ups
• Lifestyle firm-a small venture that supports
the owners and usually does not grow
• Foundation Company-is created from
research and development that usually
does not go public.
• High-potential venture-has high growth
potential and receives the greatest
investment interest and publicity.
• Gazelles-very high growth ventures.
28. ENTREPRENEURSHIP IN
ECONOMIC DEVELOPMENT
• More than per capita and income, it involves
change in business and society. This
change is accompanied by growth and
increased output, which allows more wealth
to be divided among the various participants
• What facilitates needed change and
development?
29. • One theory of economic growth depicts
innovation as the key not only in
developing new products but also
stimulating investment interest in the new
ventures being created. The new capital
created expands the capacity for growth
• It is the process through which innovation
develops and commercializes through
entrepreneurial activity which in turn
stimulates economic growth
30. Economic Impact of
Entrepreneurial Firms
• Innovation
– Is the process of creating something new, which is central to
the entrepreneurial process.
– Small firms are twice as innovative per employee as large
firms.
• Job Creation
– In the past two decades, economic activity has moved in the
direction of smaller entrepreneurial firms, which may be due
to their unique ability to innovate and focus on specialized
tasks.
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31. Entrepreneurial Firms’ Impact on
Society and Larger Firms
• Impact on Society
– The innovations of entrepreneurial firms have a dramatic
impact on society.
– Think of all the new products and services that make our
lives easier, enhance our productivity at work, improve our
health, and entertain us in new ways.
• Impact on Larger Firms
– Many entrepreneurial firms have built their entire business
models around producing products and services that help
larger firms become more efficient and effective.
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32. Role of Entrepreneurship in
Economic Development
• Product evolution process-process for
developing and commercializing an
innovation
• Iterative Synthesis-the intersection of
knowledge and social need that starts the
product development process
33. • Ordinary innovations-new products with
little technological change
• Technological innovations- new products
with significant technological innovation
• Breakthrough innovation- extremely
unique innovations that sets the basis for
further innovation.
34. The future of Entrepreneurship
• In spite of the difference conceptual
perspectives, there are common aspects:
risk taking, creativity, independence &
rewards
• The future– we are living in the age of
entrepreneurship!