TECHNOLOGY ENTREPRENEURSHIP (ENT600)

UNIT 1: INTRODUCTION TO TECHNOLOGY ENTREPRENEURSHIP

Entrepreneurship Dept, FBM (2009)

ENT600/UNIT 1 : INTRO

Definition of Entrepreneurship Entrepreneurship is a dynamic process that involves change and creation Entrepreneurship can be defined as the identification, evaluation and exploitation of previously unexploited opportunities. The focus is on creation of a new enterprise or business as well as the wealth associated with it. Essential dimensions or ingredients include willingness to take calculated risk, the skill to apply creative solutions and new ideas and finally, being proactive to act on opportunities while others are still confused or unaware of the potential at hand.

Entrepreneurship Dept, FBM (2009)

ENT600/UNIT 1 : INTRO

Understanding Entrepreneurship
Entrepreneurship encompasses several dimensions or ingredients that help explain what makes it a unique concept The key dimensions of entrepreneurship include: Risk Creativity & innovation Opportunity exploitation Pro-activeness
Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 3

Dimensions of Entrepreneurship: Risk Risk indicates elements of uncertain outcomes or events that is inherent in the process of exploiting an opportunity and starting a business Entrepreneurs take risks in order to obtain the higher rewards that come from higher risk but are careful to evaluate the risk first. Success comes from taking a calculated, carefullythought out approach to risk where everything possible is done to identify and minimize potential problems

Entrepreneurship Dept, FBM (2009)

ENT600/UNIT 1 : INTRO

Dimensions of Entrepreneurship: Creativity & Innovation

Entrepreneurship is characterized by newness or the specific effort of bringing something new and something different to the market. Being creative and innovative dimensions of newness are essential

Creativity focuses on thinking of new things while innovation focuses on doing new things

Entrepreneurship Dept, FBM (2009)

ENT600/UNIT 1 : INTRO

Dimensions of Entrepreneurship: Opportunity Exploitation

Entrepreneurship is focused on taking advantage or exploiting of previously unexploited opportunities The exploitation of opportunities often result in the creation of a new enterprise or business as well as the wealth associated with it

The new enterprise should be beneficial to the society and make a positive change
Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 6

Dimensions of Entrepreneurship: Pro-activeness

Pro-activeness refers to the propensity to act on information, ideas and opportunities in a timely and speedy manner Acting at the right time and in the right manner on the superiority of an idea or opportunity can differentiate between better success or less success or even between success and failure

Entrepreneurship Dept, FBM (2009)

ENT600/UNIT 1 : INTRO

Definition of Technology Entrepreneurship

Technology entrepreneurship can be defined as a form of entrepreneurship and business leadership focused on identifying high-potential, technology-intensive business opportunity for possible exploitation into new products, processes or services Technology entrepreneurship can be based on revolutionary breakthrough in technology (inventions or radical innovations) or a technological advancement (incremental innovations) Can target existing market or create an entirely new one

The process is relevant for both independent startups or within established corporations
(Adapted from Dorf & Byers, 2005) Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 8

The Entrepreneurial Process The entrepreneurial process in general encompasses all the cognitive (thinking) and behavioral (action) steps from the initial emergence of a rough business idea until the creation of a new business venture or the process is terminated.
(Adapted from Davidsson (2005)

Entrepreneurship Dept, FBM (2009)

ENT600/UNIT 1 : INTRO

The Entrepreneurial Process The entrepreneurial process is generally composed of three key phases The idea generation or idea discovery phase The idea evaluation and development phase The idea exploitation phase Figure 1 shows the entrepreneurial process with examples of activities at each stage

Entrepreneurship Dept, FBM (2009)

ENT600/UNIT 1 : INTRO

10

Fig 1: The Entrepreneurial Process

Idea Evaluation & Development Phase Idea Exploitation Phase

Idea Search & Generation Phase

Idea Discovery Idea Screening

Research & Development (Invention/Innovation) Concept Testing Prototyping

Business Start-up Technology Commercialization Monitoring & Evaluation

Test Marketing
Technology Blueprint

Entrepreneurship Dept, FBM (2009)

ENT600/UNIT 1 : INTRO

11

Entrepreneurial Process: Idea Search and Generation Phase This phase is also known as the opportunity formation or opportunity discovery phase Both the terms idea and opportunity indicate the possibility of bringing something new to the market

Individuals or groups of individuals enter this phase by either: Actively searching for business possibilities that they can offer in a better, more creative or efficient form or Discovering a solution for their own problem experienced at work, play or in the marketplace that has the potential of being shared with others who are willing to pay for the solution
Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 12

Entrepreneurial Process: Idea Search and Generation Phase In technology entrepreneurship, this idea formation or discovery phase may be recognizable by the fact that the business idea or problem solution involves creating a new technology or adapting an existing technology
Technology refers to devices, processes, tools, methods and materials applied to industrial and commercial purposes.

Entrepreneurship Dept, FBM (2009)

ENT600/UNIT 1 : INTRO

13

Entrepreneurial Process: Idea Evaluation & Development Phase This phase is characterized by efforts to better understand what it will take to bring the idea or opportunity into a full-fledge economic activity or business In technology entrepreneurship, some key activities at this stage include doing the research and development work to invent or innovate a new technology-based product, process or service preparing the initial technology blueprint concept testing prototyping, market testing
Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 14

Entrepreneurial Process: Idea Exploitation Phase This phase is generally characterized by the decision to pursue the business opportunity or not The decision at this phase can take three basic forms (Fig 2): proceed to exploit the opportunity abandon the current idea and go back to search for other ideas terminate the process totally and not pursue any other business ideas

Entrepreneurship Dept, FBM (2009)

ENT600/UNIT 1 : INTRO

15

Fig 2: Idea Exploitation Decision Options

Proceed & Exploit Opportunity

YES Idea Exploitation Decision

NO

Abandon Current Idea

or

Terminate Process

Entrepreneurship Dept, FBM (2009)

ENT600/UNIT 1 : INTRO

16

Entrepreneurial Process: Idea Exploitation Phase

If the decision is to exploit the opportunity, among the key activities include the registering of the business entity (in the case of an own new business), hiring workers and starting business operations In a technology based business, a unique activity at this phase is the commercialization of the technology-based product, process or service that may or may not require the creation of a new business venture.
Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 17

Entrepreneurship & the Economy: The Role of Entrepreneurship Economic growth and vitality can be generated by encouraging entrepreneurial activity in the society. Entrepreneurial activity is centered around entrepreneurs who act as agents of progress

In order to contribute to economic growth, entrepreneurs must Mobilize natural, financial and intellectual capital as capital inputs in the economy and utilize the capital inputs to create products, processes and services as economic outputs

Entrepreneurship Dept, FBM (2009)

ENT600/UNIT 1 : INTRO

18

Fig 3: A Model of Role of Entrepreneurship in the Economy

Natural capital

Economy
Financial capital Intellectual capital Entrepreneurs as agents of progress

Beneficial outputs

Undesired waste outputs

Adapted from Dorf & Byers (2005)

Entrepreneurship Dept, FBM (2009)

ENT600/UNIT 1 : INTRO

19

Entrepreneurship & the Economy: The Economic Inputs

Natural capital Consist basically of natural resources such as minerals, fuels and energy

Can also include natures biological capacity to produce (e.g. oxygen) or absorb (e.g. pollution) As such this natural capital can be irreversibly depleted through neglect or irresponsible usage
Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 20

Entrepreneurship & the Economy: The Economic Inputs Financial capital Refers to financial assets such as money and shares Can include exclusive use of technological designs and products that have financial value Intellectual capital Refers to knowledge that is accessible within an business because it has been recorded (e.g. in documents and reports), explained (e.g. through knowledge sharing processes ) and disseminated (e.g. through inter-team or inter-department project or research work)

Entrepreneurship Dept, FBM (2009)

ENT600/UNIT 1 : INTRO

21

Entrepreneurship & the Economy: The Economic Inputs There are three key sources of intellectual capital Human capital This is the combined knowledge, skill and abilities of the entrepreneurial team and the business employees Organizational capital This is the management structure and peripherals (including hardware, software, databases patents and systems) that support the human capital

Social capital The relationships and the quality of the relationships that the business maintains with its suppliers, partners and customers
Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 22

Entrepreneurship & the Economy: The Economic Outputs Economic progress and growth (outputs) is essentially in two forms of: The beneficial outputs (e.g. increase in new business ventures that create new jobs) The undesired inefficiencies and waste outputs (e.g. pollution from growing numbers of industries) The benefits should be maximized while waste and inefficiencies need to be minimized for entrepreneurship to have the desired impact on the economy

Entrepreneurship Dept, FBM (2009)

ENT600/UNIT 1 : INTRO

23

References Dorf, Richard C., & Byers, Thomas H. (2005). Technology Ventures: From Ideas to Enterprise. New York,USA: McGraw Hill

Davidsson, Per. (2005). Proceedings, Academy of Management Conference, Hawaii (http://eprints.qut.au/active/00002064 retrieved 25 June 2008)

Entrepreneurship Dept, FBM (2009)

ENT600/UNIT 1 : INTRO

24