MODULE 1

THE ENTREPRENEURIAL MIND

UNIT 1
THE EVOLUTION OF ENTREPRENEURSHIP

CONTENT
❖ Earliest Period
❖MiddleAges
❖ 17th Century
❖ 18th Century
❖ 19th Century
❖ 20th Century
❖ 21st Century

Earliest Period
Marco polo , as a go-between was an Italian.
• He wants to trade routes to the far East.
• As a go-between, He had to sign a contract with a money person to sell his
goods. In the contract merchant- adventurer took a loan at 22.5% rate including
insurance.
 the merchant-adventurer successfully sold the goods and completed the
trip, the profits were divided with the capitalist taking mostof them(upto
75%), while the merchant-adventurer settled forthe remaining 25 %.
MiddleAges
• Entrepreneur used to describe both as an actor and a person who managed
large production projects.
• All an entrepreneur should do is to manage it.
•A typical entrepreneur in the middle age was the priest.
•The person in charge of great architectural works used to build castles and
fortifications, public buildings, abbeys, and cathedrals.

17th Century
• The connection of the risk with entrepreneurship developed in the 17th
century.
• An entrepreneur was a person who entered into a contract with the
government to perform a service or to supply stipulated products.
• John law, a frenchman was one of the entrepreneur in that period.
• The founder of the royal bank of France and the Mississippi Company, which
had an exclusive franchise to trade between France and the new world.
• Monopoly on french trade eventually led to collapse of the company.
• Richard Cantillion, a well-known English economist at the beginning of the 17th
century, understood Law’s mistake.
• He viewed the entrepreneur as a risk taker, observing that merchants, farmers,
craftsmen, and others sole proprirtors “buy at a certain price and sell at an
uncertain price, therefore operating at a risk. ”

18th Century
• In the 18th century, the person with capital was differentiated from the one
who needed capital.
• The entrepreneurwas distinguished from the capital provider.
• One reason forthis differentiationwas the industrialization occuring throughout
the world.
• Eli Whitney was an American inventor best known for inventing the cotton gin.
This was one of the key inventions of the industrial Revolution.
• Thomas Edison, the inventor of many inventions. He was developing new
technologies and was unable to finance his inventions himself.
• Edison was a capital user(an entrepreneur), not a provider (a venture capitalist).

19th Century and 20th Century

• In the late 19th and early 20th centuries, entrepreneurs were frequently not
distinguished from managers and were viewed mostly from an economic
perspective.
• The entrepreneur organizes and manages an enterprise for personal gain.
• The materials consumed in the business, for the use of the land, for the services
he employs, and for the capital he requires.
• Andrew Carnegie descended from a poor Scottish family, made the American
Steel Industry one of the wonders of the industrial world.

In the middle of the 20th Century

• The function of the entrepreneurs is to recreate or revolutionize the pattern of
production by introducing an invention.
• Innovation, the act of introducing some new ideas, is one of the most difficult
tasks for the entrepreneur.

21st Century
Entrepreneurs are known as a hero for Free Enterprise market. According to
Kuratko & Hodgetts, most people say entrepreneurs are pioneers in creating new
businesses. His rich, Peter and Shepherd regarded entrepreneur as an
organizer who controls, systematize, purchases raw materials, arranges
infrastructure, throw in his own inventiveness, expertise, plans and administers
the
venture.
 Handout 2
APPROACHES IN STUDYING ENTREPRENEURSHIP

Entrepreneurship:
Economic Phenomenon
Active in Human Societies
Actions driven by Entrepreneurs

 Sociological Approach- Deals with social and cultural factors responsible for the nature and
growth of entrepreneurship development in a society.
Why a social structure and culture facilitates or inhibits entrepreneurial development?
Why one segment of social structure produces larger number of entrepreneurs than the other?
 Psychological Approach- Entrepreneurs is not a common person. Skills: creative, managerial and
imaginative.
How the social structure affects the attitude of the people of a society?
 Political Approach- Deals with the issues involved in relationships between entrepreneurship
development and the state particularly in the context of the role of the latter in the
development of entrepreneurs.
 Composite Approach- Entrepreneurship is a complex phenomenon. “No single reason is entirely
responsible for “No single reason is entirely responsible for “

7 FACTORS RESPONSIBLE FOR ENTREPRENEURSHIP

Social
Economic
Technological
Political
Ecological
Individual
Legal

HANDOUT 3
ENTREPRENEURIAL CONCEPTS

Entrepreneur derived from a French word, “entreprendre” meaning to undertake.

10 Different Concepts of Entrepreneurship

1. Risk Bearing Concept

This is the premier and most popular concept. “entrepreneurship is a function of taking unlimited
risks.” This has revealed that the entrepreneur has to bear various types of risks for establishing the
new enterprise and operating it. These risks are related to time changes and fluctuations in prices.
Entrepreneurship as the concept capacity bear uncertainties. Further, elaborating it they have made
a slight differentiation between risk and uncertainty. According to this, “Uncertainty bear risk, which
can neither be predicted nor insured.

2. Innovative Concept

According to this concept, entrepreneur is a developed economy is that person whose parents
something new in the economy.” Innovation is a specific tool for entrepreneurship. In this concept,
entrepreneurship has been regarded as the adaptation of various innovations in industries, new
production systems or techniques, new products, new markets, new marketing methods, new
qualities of raw materials, new packaging and new mixture on methods are used. Hence, this is
regarded as a modern entrepreneurship concept.

3. Managerial Skill Concept

The Scholars supporting this concept have turned entrepreneurship as the ability of managerial
skills. Entrepreneurship as the ability for inspections, controls, and direction. Similarly,
entrepreneurship as a Managerial skill, along with the capacity to bear the risks.

4. Creative and Leadership Concept

According to this concept, entrepreneurship as a creative activity and it is the function of

progressive leadership.” Similarly, Entrepreneurship is the quality of developing resources of the
institution, developing human capacity, performing creative activities and coordinating new
thoughts. He is of the opinion that new thoughts emerge due to creativity, which may be put to
economic use, by efficient leadership. Creativity activities also expand due to high-level
entrepreneurship.

5. High Achievement Capacity Concept

Entrepreneurship is a high achievement capacity concept, for which the capacity of making
innovations and taking the decision during risks is essential. Under the assumption, there is
mentioned two characteristics of entrepreneurship:

1. Ability to perform work with the latest method.

2. Ability to take decisions during uncertainties.

Besides, he has also assumed that inspiration for high-level achievements makes a man an
entrepreneur.

6. Professional Concept

Modern management experts accept entrepreneurship as a professional concept. They are of the
view that entrepreneurship may be developed through education and training. Being a managerial
ability may be learned by education and training, similarly entrepreneurship attitude maybe also be
developed by education and training. That is why Governments and private organizations conduct
various training programs for entrepreneurial ability development.

7. Organization and Coordination Concept

Entrepreneurship is that economic component that organizes and coordinates various sources of
production. Entrepreneurship, as an “ability to organize Enterprise.

8. Business Oriented Concept

Under this concept, entrepreneurship is expressed as the business-oriented entrepreneurial attitude

of the individuals, that inspires them to become entrepreneurs, to do the business thinking, to
formulate plans and programs and to establish Enterprises.

9. Result Oriented Concept

According to this concept, entrepreneurship is called result-oriented in the modern age. Now, it is
not very important, what efforts have been made for obtaining the goals or how much hard labor
has been put, more important is what has been the result? In the business world, only who succeed
in achieving the Goals is recognized as an entrepreneur.

10. Personality, Identity or Role Transformation Process Concept

Entrepreneurship is not only to adopt new works and behavior, but it is also the transformation of
personality and to establish a new identity through that.

“Entrepreneurship is meant the function of seeking investment and production seeking investment
and production seeking investment and production seeking investment and production opportunity,
organizing an enterprise to undertake a new production process, raising capital hiring labor,
arranging the supply of raw materials, finding site, introducing a new raw materials, finding site,
introducing a new technique and commodities, discovering new sources of raw materials and
selecting top sources of raw materials and selecting top managers of day to -day operations of the
enterprise” -Benjamin Higgins

Entrepreneurship was defined as an attempt to create value through recognition of business

opportunity, the management of risk-taking appropriate to the opportunity, and through
communicative and management skills mobilize human, financial, and material resources necessary
to bring a project realization. realization. -Conference on Entrepreneurs, USA

“Entrepreneurship is the purposeful activity of an individual or a group activity of an individual or a

group activity of an individual or group associated individuals, undertaken to initiate, maintain or
aggrandize profit by production or distribution of profit by production or distribution of profit by
production or distribution of economic goods and services”. -Arthur Harrison Cole

Entrepreneurship as “the ability to create and build something from nothing”. Jaffrey A. Timmons

“Entrepreneurship is neither a is neither a science nor an art”. -Petr F. Drucker

ENTREPRENEURSHIP

 The act of being an entrepreneur

 A process involving actions to be undertaken
 Relationship between Entrepreneur and Entrepreneurship

Entrepreneurship involves the following:

–Confidence in an idea and a willingness to accept the hard

–Seeing the opportunity

–Taking controllable risks

–Costs other than money

–Reality testing

–Knowing and understanding customers

–Understanding of business

–Keeping and interpreting records

–Careful planning

–Knowing competitors

–Having right location

–Building a team

–Sensing opportunities

–Finding and controlling resource

–Having a vision Having a vision

–Vision to others

–Willingness to take responsibility

Entrepreneurship is a multi -dimensional concept.

 HANDOUT 4
ENTREPRENEURSHIP VS INTRAPRENEURSHIP
Entrepreneurship and intrapreneurship are not much different.
Common qualities:
Creative thinking
Problem solving
Resourceful
Deal with uncertainty
Optimism
Visionary
Persistence

Intrapreneurship functions within the business operation. business operation.

Entrepreneurship create new business from scratch.

What is Intrapreneurship?
“The process by which other new ventures are born within the confines of an existing corporation”.
 Intrapreneurs entrepreneurially -talented individuals within the business.
 Intrapreneur is an employee within a business.

Usually they are:

 business developer
 innovation officer
 product developer
 innovation executive
 project/product development officer

ENTREPRENEUR VS INTRAPRENEUR
Start their own Organization Start within an existing business

Procure their own Resources Provided by the company

Independent Dependency Dependent

Assumed by themselves Risk Taken by the company

Reap all the benefits Reward Company receives the reward

Complete control Autonomy Work with a system

Full Ownership None

The Approaches of Entrepreneurship

HANDOUT 2 QUIZ 1

Natural disaster → Ecological Factor,

Regulations set by the trade and industry commission. → Legal Factor,

Cultural practices → Social Factor,

Years of experience → Individual Factor,

Discrimination law → Legal Factor,

Health and safety law → Legal Factor,

Labor force → Economic Factor,

Automation of business processes → Technological Factor,

Tax policy → Political Factor,

New production process → Technological Factor,

Research and Development activity → Technological Factor,

Technical background → Individual Factor,

Accessibility of customers → Economic Factor,

Religion → Social Factor,

Consumer law → Legal Factor,

Deregulation and Privatization → Political Factor,

Educational background → Individual Factor,

Attitude of the society → Social Factor,

Trade restrictions → Political Factor, Social structure → Social Factor,

Sources of capital → Economic Factor,

Government Incentives ad Subsidies → Political Factor,

Supply of raw material → Economic Factor,

Climate change → Ecological Factor,

Parental background → Individual Factor

Entrepreneurial Classifications, Roles and Responsibilities
HANDOUT 5 ASSIGNMENT 1
Kimberly established an enterprise with the desire and the ability to expand her business as fast as large
as possible. She is a/an_____________________________. → Growth Entrepreneur,

Individual who is devoted to one venture at a time but ultimately starts many. → Serial Entrepreneur,

An entrepreneur with a dramatic growth of ventures through high turnover of sales. → Super-Growth
Entrepreneur,

An individual who retains an original business and builds a portfolio of additional businesses through
inheriting, establishing, or purchasing them. A portfolio entrepreneur starts and runs a number of
businesses. → Portfolio Entrepreneur,

Someone who has business ownership with or without experience in business industry and starts
his/her first entrepreneurial ventures. → Novice Entrepreneur

A nascent entrepreneur is an individual who is in the process of starting a new business. → TRUE,

Social entrepreneur is one who recognizes the part of society which is stuck and provides new ways to
get it unstuck. → TRUE,

A first-generation entrepreneur is one who starts an enterprise by means of an innovative skill. → TRUE,

Modern entrepreneur is an individual who has prior business ownership experience. → FALSE,

Nascent entrepreneur is one who undertakes those businesses which go well along with the changing
scenario in the market and suits the current marketing needs. → FALSE

ASSIGNMENT 2
Tom Anderson with MySpace, he do not bother about changing their business policies in spite of having
knowledge about there market fall. → Drone Entrepreneurs,

Walton BD. has introduced its motorbikes, refrigerators, televisions and other electronic appliances in
Bangladesh not being the original inventor of those products. → Imitative Entreprenuer,

Richard Branson has founded so many businesses in vastly different areas. His mastery of marketing and
how he has been able to get his messages and value propositions out to the public is also wildly
impressive. Branson also speaks his mind and thinks that a business leader should also be a leader in
society and use their talents for philanthropic reasons. → Innovative Entrepreneur,

Walt Disney started-out as merely a farm boy looking to become a cartoonist and animator, he ended up
becoming the founder of one of the largest mass media empires in the world, The Walt Disney
Company. Disney has always been about using creativity to inspire onto others even more creativity, and
this has helped grow the entire entertainment industry as a whole. → Innovative Entrepreneur,
George Eastman founded the Kodak, a company that happened to be the market leaders in producing
analog cameras but they did not realize the change and the introduction of the Digicam. → Fabian
Entrepreneur

James Dyson is a British inventor, industrial designer, farmer and billionaire entrepreneur who founded
Dyson Ltd. He established new business and invested from the different companies but retains his
original business. → Portfolio Entrepreneur,

Derek Halpern is a successful blogger, teacher and entrepreneur who founded the blog Social Triggers.
Focusing on social cues and expectations, he teaches on more than just business. His engaging talks
about social interactions pave the way for any up-and-coming business person who wants to learn the
ropes. → Lifestyle entrepreneur,

Saxbys CEO Nick Bayer founded the company in 2005, but he says he never really considered it to be a
coffee company — instead, he wants Saxbys to be "a hospitality company fueled by great coffee."
Looking at his background, his family had not been into business before. → First-Generation
Entrepreneur,

Donald Trump loves to brag about his riches, and he claims he got rich because of his business genius. In
truth, Trump owes everything to one man: his father.
Frederick Christ Trump methodically built a real estate empire in New York. When he died, his son
Donald inherited a $40 million stake in that empire. He’s taken his money for a roller coaster ride over
the years and built a
tremendous personal brand, but he’d have nothing if not for his father’s hard work. → Entrepreneur by
Inheritance,

Bryan Benitez McClelland the founder of Bambike Revolution Cycles, learning to create bicycles made
out of bamboo would not only change his life, but the livelihood of many others along the way. Bryan
realized this innovation could be developed in the Philippines, where bamboo is naturally abundant. →
Social Entrepreneur

Entrepreneurs must hide the overall operations of the business from the investors to avoid imitating the
same line of business. → FALSE,

The business must deal with suppliers in favor of the condition suggested by the owner to cut cost and
earn more profit. → FALSE,

To have more sales and revenue, the business must hide about the negative things about their products
and service. → FALSE,

Entrepreneurs encourage employees to do what ever they want to do. → FALSE,

Entrepreneurs must provide safety to the investment of the other people. → TRUE,
The entrepreneurs should manage their business with such competence and skill that it inspires
confidence and pride in the mind of the people. → TRUE,

As an employer and business owner, you are responsible to provide better working environment to your
employees. → TRUE,

An entrepreneur must patronize other business with the same offerings to ensure development of
healthy business practices → TRUE,

The management of the business is accountable for providing proper wages to their employees. →
TRUE,

Entrepreneurs must abide by the laws of the country in their true spirit. The must conduct their affairs
as may cause the minimum possible social damage such as air or water pollution. → TRUE

Entrepreneurs mobilize the idle savings of public. → Promotes Capital Formation,

Entrepreneurs help to remove local disparities through setting up of industries in less developed and
backward areas. → Promotes Balanced Regional Development,

Entrepreneurs play a key role in increasing the standard of living of the people by adopting latest
innovations in the production of wide variety of goods and services in large scale that too at a lower
cost. → Improvement in the Standard of Living,

Entrepreneurs explore and exploit opportunities, encourage effective resource mobilization of capital
and skill, bring in new products and services and develops markets for growth of the economy. →
Increasing Gross National Product and Per Capita Income,

Encouraging large number of entrepreneurs to avoid market monopoly. → Reduces Concentration of

Economic Power
 HAND OUT 5
ENTREPRENEURIAL CLASSIFICATIONS, ROLES AND RESPONSIBILITIES

DESIRED LEARNING OUTCOME/S

By the end of the topic, the student must have:

1. identified the types of socio-cultural entrepreneurs,

2. recognized the ethics and social responsibilities of entrepreneurs, and

3. explained the role of entrepreneurship in socio-economic development.

OBJECTIVES

a. To classify entrepreneurs from different types of entrepreneurs on various bases.

b. To describe the various functions of each types of entrepreneurs.

c. To discuss the social obligation of entrepreneurs towards society.

d. To focus on the ethical and social responsibility related issues of an entrepreneurs.

e. To recognize on how entrepreneurship plays important roles in economic development.

Social and cultural factors are the most known and responsible for the nature and growth of
entrepreneurship in a society.

The socio-cultural factors are seen as a set of common values . It includes the beliefs, values, attitudes,

habits, family background, education, and social structure.

Types of Entrepreneur

Basis of Classifications:

➢ Economic Development

➢ Type of Business

➢ Use of Technology

➢ Motivation

➢ Growth

➢ Entrepreneurial Activity
On the Basis of Economic Development

✓ Innovating Entrepreneurs

✓ Adoptive/Imitative Entrepreneurs

✓ Fabian Entrepreneurs

✓ Drone Entrepreneurs

On the Basis of Type of Business

✓ Business Entrepreneurs

✓ Trading Entrepreneurs

✓ Industrial Entrepreneurs

✓ Corporate Entrepreneurs

✓ Agricultural Entrepreneurs

According to the Use of Technology

✓ Technical Entrepreneurs

✓ Non-technical Entrepreneurs

✓ Professional Entrepreneurs

According to Motivation

✓ Pure Entrepreneurs

✓ Induced Entrepreneurs

✓ Motivated Entrepreneurs

According to Growth

✓ Growth Entrepreneurs

✓ Super-Growth Entrepreneurs
According to Entrepreneurial Activity

✓ Novice Entrepreneurs

✓ Serial Entrepreneurs

✓ Portfolio Entrepreneurs

Other Type of Entrepreneurs

✓ First-Generation Entrepreneurs ✓ Modern Entrepreneurs

✓ Women Entrepreneurs ✓ Nascent Entrepreneurs

✓ Habitual Entrepreneurs ✓ Lifestyle Entrepreneurs

✓ Copreneurs ✓ IT Entrepreneurs

✓ Social Entrepreneurs ✓ Forced Entrepreneurs

✓ Individual and Institutional Entrepreneurs ✓ Entrepreneurs by Inheritance

✓ Migrant Entrepreneurs

Ethics and Social Responsibilities of Entrepreneurs

What are Ethics?

Why practice business ethics?

A. Customer are more confident when buying goods and services.

B. An ethical workplace motivates employees.

C. Ethical behavior also prevents legal problems.

What is the most common goal of an entrepreneur for the survival and growth of his/her business?

Profit cannot be the sole objective of the entrepreneur. The ultimate objective of every enterprise has
to be the good of the people.

A business is necessary to perform and satisfy obligations which it owes to the society and the
performance of which is essential for its own survival and the well-being of the society.
To pursue those policies, to make those decisions or to follow those lines of action which are desirable,
in terms of the objectives and values of the society.

-H.R. Brown

Social responsibility is the personal obligation of everyone as he acts for his own interests, to assume
that the rights and legitimate interests of all others are not questioned.

-Koontz O’ Donnell

Roles of Entrepreneurship towards Economic Development

Entrepreneurship is one of the most important input in the economic development of a country.

It creates and builds something from practically nothing. It takes calculated risks. It is the ability for
sensing an opportunity where others see chaos contradiction and confusion. It is the know-how to find,
and control resources and to make sure that the venture does not run out of money when it is needed
most

-J.A. Timmons

Entrepreneurship is the dynamic process of creating incremental wealth.

-Robert Ronstadt

The importance of entrepreneurship stands beyond challenge in every economic system except under
socialism where it appears in a different form, yet, entrepreneurship prevails in all economic systems in
one form or the other.

Ways on how Entrepreneurship contributes Economic Development

1. Increasing Income and Per Capita Income

2. Wealth Creation and Distribution

3. Production Evolution Process

Role Of Entrepreneurship In Economic Development

1. Promotes Capital Formation

2. Creates Large-Scale Employment Opportunities

3. Promotes Balanced Regional Development

4. Reduces Concentration of Economic Power

5. Wealth Creation and Distribution

6. Increasing Gross National Product and Per Capita Income

7. Improvement in the Standard of Living

8. Promotes Country's Export Trade

9. Induces Backward and Forward Linkages

10. Facilitates Overall Development

 THEORIES OF ENTREPRENEURSHIP

DESIRED LEARNING OUTCOME/S

By the end of the topic, the student must have:

1. explained the theories of entrepreneurship;

OBJECTIVES

a. To discuss theories of entrepreneurship propounded by various

well-known authors.

b. To explain these theories.

c. To evaluate the issues and limitations of each theories.

What are the main concentrations of the Theoretical Approaches to Entrepreneurship?

Focus of Theoretical Approaches

1. Nature of Opportunities

2. Nature of Entrepreneurs

3. Nature of Decision Making

Innovation Theory by Joseph Schumpeter 1949

The theory introduced a concept of innovation as key factor in entrepreneurship and defines
entrepreneurship as “a creative activity”.

Innovation occurs when the entrepreneur:

i. Introduces a new product

ii. Introduces a new method of production

iii. Opens new market

iv. Conquests of new source of supply of raw material

v. Carrying out new organization.

Entrepreneurship is the activity of innovating and exploiting profitable business opportunities to sustain
economic development.

An entrepreneur is an innovator not an inventor.

Need for Achievement Theory by David McClelland 1961

The theory emphasizes achievement orientation as most important factor for entrepreneurs.

Features of Entrepreneur: Needs of Entrepreneur:

1. Doing things in a new and better way. A. Need for achievement

2. Decision making under uncertainty. B. Need for Power

C. Need for Affiliation

Entrepreneurship ultimately depends on motivation.

COMPONENTS:

(a) responsibility for problem solving,

(b) setting goals,

(c) reaching goals through one’s own effort,

(d) the need for and use of feedback, and

(e) a preference for moderate levels of risk-taking

X-Efficiency Theory by Harvey Leibenstein 1966

Imperfect competition/not well established market.

Gap filler role of entrepreneur.

Fill the gap in imperfect market to pun the enterprise in motion.

Input completer role of entrepreneur.

Transforming available inputs that improve the efficiency of the existing production method.

An entrepreneur has to act as gap filler and an input completer if there are imperfections in markets.
Risk Bearing Theory by Frank H. Knight 1957

FEATURES

1. Risk creates Profits

2. More Risk, More Gain

3. Profit as Reward and Cost

4. Entrepreneur‟s Income is Uncertain

Religious Theory of Entrepreneurship by Max Weber 1904

Religion has a large impact on entrepreneurial development and that religions have basic beliefs to earn
and acquire money and some have less of it.

The theory suggests the belief systems of Hinduism, Buddhism and Islam do not encourage
entrepreneurship.

Theory of Status Withdrawal by Everett E. Hagen 1962

The theory referred to as the withdrawal of status respect.

Events which can produce status withdrawal:

• Displacement of a traditional elite group from its previous status by another

traditional supply physical force.

• Denigration of valued symbols through some change in the attitude of the

superior group.

• Inconsistency of status symbols with a changing‟ distribution of economic

power.

• Non-acceptance of expected status on migration to a new society.

Personality Types of Entrepreneur

a. Retreatist

b. Ritualist

c. Reformist
d. Innovator

The main source of entrepreneurship is from the creativity of

disadvantaged minority group.

–Hagen, 1962

Theory of Cultural Values by Thomas Cochran 1965

The cultural values, role expectations and social sanctions are the key quantities of the theory.

• The entrepreneur represent society‟s model personality.

• Entrepreneurs have emerged from socio-economic class.

• With the social values that change over time create opportunities for

entrepreneurial development.

Theory of Change in Group Level Pattern by Thomas Cochran 1940

The entrepreneur characteristics are found in small groups wherein individuals develop as
entrepreneurs.

Conditions of Reactive Groups

i. When denied of access to important social networks;

ii. When a group experiences low „status recognition; and

iii. When the group has better institutional resources than other groups in the

society at the same level.

Economic Theory of Entrepreneurship by Gustav Fritz Papanek (1962) and J.R. Harris (1970)

Economic incentives are the main forces for entrepreneurial activities in any country.

Factors that promote or demote entrepreneurship

(a) The availability of bank credit

(b) High capital formation with a good flow of savings and investments

(c) Supply for loanable funds with a lower rate of interest.

(d) Increased demand for consumer goods ad services

(e) Availability of productive resources.

(f) Efficient economic policies like fiscal ad monetary policies

(g) Communication and transportation facilities

Exposure Theory of Entrepreneurship

Exposure to new ideas and opportunities towards creativity and innovation leads to create a new
venture.

Political System Theory of Entrepreneurial Growth

Commitment of political System. Creation of favourable business climate. Enhancemen of creative and
entrepreneurial ability. Entrepreneuial growth in the country.

Conclusion

Entrepreneurship is the product of a complex and varying combinations of socio-economic,

psychological and other factors. A realistic viewpoint should take them together. Each of the
entrepreneurship theories discussed are inter-disciplinary and are influenced by a lot of factors. It is the
combination of external environment, vision, determination, desire, accomplishment, motivation,
commitment, integrity, enthusiasm, honesty, authenticity, ability and hard work which largely
determine whether an individual become an entrepreneur or not.