ENTREPRENEURSHIP

QUARTER 1– WEEK 1
MODULE 1: OVERVIEW & RELEVANCE of
ENTREPRENEURSHIP
MELC: Discuss the relevance of the course

Prepared by: EMERENCIANA H. SALAPARE

SHS Teacher II
Meaning of Entrepreneurship and Entrepreneur

Entrepreneurship is…

● The act of creating a business or businesses while building and scaling it to generate a
profit.
● An important driver of economic growth and innovation.
● Putting up a business and assuming all risks.
● In the simplest sense, refers to the ability of an individual to determine and come up with
the proper combination of the resources available in his environment and transform this
into an output of either goods or services, and obtain a fair profit at the price the
entrepreneur sets. (Azarcon 2008)

An entrepreneur is…

● A person who sets up a business with the aim to make a profit and creates a new
business, bearing most of the risks and enjoying most of the rewards.
● An innovator, a source of new ideas, goods, services, and business/or procedures.
● Playing a key role in any economy, using the skills and initiative necessary to anticipate
needs and bring good new ideas to market.

From the definitions given above, there are several factors used by an entrepreneur to turn his
idea into a profitable product. An idea is the first and foremost investment of an entrepreneur
because this is where it started a clear plan of action. In other words, this is the clear blueprint of
an entrepreneur’s mind. Therefore, the uncertainty of the success of a new idea makes
entrepreneurs more significant risk takers compared to typical business owners. So,
entrepreneurs are more likely innovators because they come up with new product or service.
That is why they are also considered as visionaries. Raw materials are the basic inputs that the
entrepreneur uses to come up with his products. Capital, refers to the buildings, machinery,
equipment and tools used the process of production. These things is generally called a
production plant. In order to meet the production process an entrepreneur should hires
laborers. Therefore, having all these things allows entrepreneurs to have what is called business
enterprise. When these inputs are turned into an outputs or what we call finished products, then
an entrepreneur brings these finished products to his market. A market is the buyers and users of
the product. These people who buy the product are called customers; while people who are
product users are called consumers or end user.

ORIGINS OF ENTREPRENEURSHIP
It is not really clear where entrepreneurship began. Though the term originated from the
French. In the earliest historical accounts of entrepreneurs and entrepreneurial activities are
traced to the great adventurer Marco Polo (1271-1295), who made the practice of selling his
goods to a moneyed person with both of them signing a contract.
Richard Cantillon (1680-1734), a well-known economist and author in the 17th century.
He is the one who introduced the term entrepreneur to the world, that’s why some considered
him as a father of the Theory of Entrepreneurship. He also viewed entrepreneurs as
risk-takers, and defined the entrepreneur as the “agent who buys means of production at
certain prices in order to combine them into a new product.”

Shortly thereafter, the French economist Jean Baptiste Say (1767-1832), added to
Cantillon’s definition by including the idea that entrepreneurs had to be leaders. He claimed
that an entrepreneur is one who brings other people together in order to build a single
productive organism.

In the next century, a British economists like Adam Smith (1723-1790), David Ricardo
(1772-1823), and John Stuart Mill (1806-1873), briefly touched on the concept of
entrepreneurship, broadly referring to the English term as “business management.” But the
writings of Smith and Ricardo likely undervalued the significance of entrepreneurship, Mill’s
writings stresses the significance of entrepreneurship for economic growth, and claimed that
entrepreneurship requires “no ordinary skill,” ad there is no good equivalent English word to
encompass the specific meaning of the French term entrepreneur. Adam Smith maintained
that economic development was due to a phenomenon known as the Invisible Hand Theory.
This theory states that business ventures and nations will develop to a particular direction
without necessitating the effort nor the desire of the capitalist, thereby espousing the thought
 that economic development is but a natural thing that comes about. This master plan of
economic development was otherwise known as the Law of Nature.

Another economist, Alfred Marshall (1842-1924), first formally recognized the

necessity of entrepreneurship for production in 1890 which is “Principles of Economics.”
Marshall asserted the four factors of production: land, labor, capital, and organization and
replaced by the term entrepreneurship.

Other economists in the innovation school of thought claim that entrepreneurs have
special skills that enable them to participate in the process of innovation. Along this line,
Harvey Leibenstein (1922-1994), claims that the dominant and necessary characteristics of
entrepreneurs is being gap-fillers.

In the 19th century, Joseph Schumpeter (1883-1950), espoused the idea that

entrepreneurs are innovators and developers of untried technology. David McClelland
(1917-1998), maintained that productivity is dependent upon the energy levels of people, and
that entrepreneurs are energetic and productive. He also espoused the idea that entrepreneurs
are moderate risk-takers.

Management guru Peter Drucker  (1909—2005)emphasized the idea that entrepreneurs

are people who look for and maximize opportunities. Albert Shapiro argued that
entrepreneurs take initiatives, organize some social and economic mechanism and accept
risks of failure.

Throughout the evolution of entrepreneurship theory, different scholars have offered

varied theories on entrepreneurship, and the entrepreneurs different and common
characteristics. By combining the schools of thought cited above, one can establish a clearer
understanding of entrepreneurship and economic development.

EVOLUTION OF THE TERM ENTREPRENEURSHIP

Let us now take a look at how this course of study evolved over the years. Below is a
summary of various economists’ view of entrepreneurship, including the year they
conceptualized this view.
CONTRIBUTOR AND YEAR OF CONTRIBUTION TO
CONTRIBUTION ENTREPRENEURSHIP THOUGHT
Jean Baptiste Say (1800) Entrepreneurship refers to the shifting of
economic resources out of an area of lower
and into higher productivity and greater yield.
Carl Menger (1871) Entrepreneurship involves obtaining
information, calculation, an act of will and
supervision.
Joseph Schumpeter (1910) Entrepreneurship is, in its essence, the finding
and promoting new combinations of
productive factors.
Harvey Liebenstein (1970) Entrepreneurship is the reduction of
organizational inefficiency.
Israel Kirzner (1975) Entrepreneurship is the identification of
market arbitrage opportunities.
 Albert Shapiro (1975)
Karl Vesper m(1980)
W. Ed Mc Mullan and Wayne A. Long Entrepreneurship is the building of new
(1990)
Howard Stevenson (1992)
Jeffrey Timmons (1994)
Peter Drucker (1998)
Robert Hisrisch (2001)
Entrepreneurship involves a king of behaviour
that includes initiative taking, organizing and
recognizing, social mechanism to turn
resources and situations to practical account,
and the acceptance of risks and failures.
Entrepreneurship is the dynamic process of
creating incremental wealth.
growth organization.
Entrepreneurship is the pursuit of opportunity
beyond the resources currently under one’s
control.
Entrepreneurship is the ability to create and
build a vision from practically nothing.
Entrepreneurship is the process of starting
one’s own, new and small business. It is also
the process of innovation and new venture
creation through four major dimensions –
individual, organizational, environmental,
process-aided by collaborative networks in
government, education and institutions.
Entrepreneurship involves the creation
process, requires the devotion of the
necessary time and effort, assumes the
accompanying financial, psychic and social
risks, and receives the resulting rewards of
monetary and personal satisfaction and
independence.

Relevance of Entrepreneurship to Students (https://www.marlborough.org)

1. Entrepreneurship education teaches students crucial life skills that will help them
navigate uncertain future.
2. Entrepreneurship education encourages creativity, innovation and collaboration.
3. Entrepreneurship education teaches students to identify problems they have never
encountered before.
4. Entrepreneurship helps students to develop “grit.”
5. Entrepreneurship helps students to become ready to create their own future and to
change the world.

Relevance of Entrepreneurship to the Economy (https://www.investopedia.com)

1. Entrepreneurship make productive use of various resources present in the economy.
2. Entrepreneurs provide employment opportunities to various individuals.
3. Entrepreneurship is the backbone of the economy that add to national income.
4. Entrepreneurs innovate goods and services and to create social change.
5. Entrepreneurs give prestige to the country.
6. Entrepreneurs are risks takers, risks that society will otherwise be hesitant to take.

● Socio-economic Benefits from Entrepreneurship (https://apacentrepreneur.com)

 1. Promote self-help and employment
2. Provide taxes to economy
3. Empowers individual
4. Enhances national identity and pride
5. Enhances competitive consciousness
6. Improves quality of life
7. Enhances equitable distribution of income and wealth
8. Mobilizes capital

DEVELOPMENTAL ACTIVITIY

Directions: Read each statement below to help you determine the correct answer, then complete
the blanks with the correct words or names.
1. A French economist who first introduced the term entrepreneur as the agent who buys
means of production at certain prices in order to combine them into a new product, is
_________________________.
2. Considered as the Father of Economics, and the person who espoused the Invisible Hand
Theory is __________________________.
3. The person that claimed that entrepreneurship required no ordinary skill is
___________________________.
4. Another modern school of thought claims that the role of the entrepreneur is called an
___________________________.
5. Economic development proceeds according to a master plan or the law of
___________________________.
6. Adam Smith said that economic development was due to _________________________.
7. Entrepreneurship is the ability to create and build a ______________ from practically
nothing.
8. Entrepreneurship is the identification of market arbitrage
__________________________.
9. The person that emphasized the idea that entrepreneurs are people who look for and
maximize opportunities is _______________________________.
10. __________________________ argued that entrepreneurs take initiatives, organize some
social and economic mechanism and accept risks of failure.

WORKSHEETS
Directions 1: Read each phrase or statement below and complete the phrase to make it a
complete statement by filling in the blanks with the correct answer. Look for the answers in the
box of letters provided below. You can move up, down, left, right and diagonally to spell out the
words and write these answers on the appropriate spaces corresponding to its description.
1. The act of creating a business or businesses while building and scaling it to generate a
profit is called ________________________________.
2. An innovator, a source of new ideas, goods, services and business or procedure is an
_________________________________.
3. Raw materials and capital is generally called ___________________________.
4. A master plan that says that economic development is a natural thing that comes about is
known as the ______________________________.
5. ___________________________ argued that entrepreneurs take initiative, and accept
risks of failure.

E Q W E R T Y U I O P A S D F G
 H N J K L Z X C V B N M N B V C
E N T R E P R E N E U R S A Z X
D F G R H J K L P O I U Y T R E
A D A M E S M I T H M A R C O D
J E A N R P B A P T I S T E G Y
S Y A L B E R T S H A P I R O U
M A N A G E M E N T S T U A R T
I I M L A W O F N A T U R E O E
T D R A D I C R A E T E B N M C
H E K B A L P R O D U C T U A H
J A E O P L V E N T U R E H R N
O Y T R T I E N D U S E S K E O
H T Y I N N O V A T O R S H R L
N Q B U S I N E S S O P L Y I O
P R O D U C T I O N P L A N T P

Directions 2: In your own words, give what is being asked in the items below.

ITEMS ANSWER
1. Give three a.
importance of
entrepreneurship b.
to students.
c.

2. Give three a.
relevance of
entrepreneurship b.
to the economy.
c.

3. Give three a.
socio-economic
benefits from b.
entrepreneurship.
c.
KEY ANSWER

DEVELOPMENTAL ACTIVITY

1. Richard Cantillon 6. Invisible Hand Thoery

2. Adam Smith 7. Vision
3. John Stuart Mill 8. Opportunities
4. Innovators 9. Peter Drucker
5. Nature 10. Albert Shapiro

WORKSHEETS
Part I:
E Q W E R T Y U I O P A S D F G
H N J K L Z X C V B N M N B V C
E N T R E P R E N E U R S A Z X
D F G R H J K L P O I U Y T R E
A D A M E S M I T H M A R C O D
J E A N R P B A P T I S T E G Y
S Y A L B E R T S H A P I R O U
M A N A G E M E N T S T U A R T
I I M L A W O F N A T U R E O E
T D R A D I C R A E T E B N M C
H E K B A L P R O D U C T U A H
J A E O P L V E N T U R E H R N
O Y T R T I E N D U S E S K E O
H T Y I N N O V A T O R S H R L
N Q B U S I N E S S O P L Y I O
P R O D U C T I O N P L A N T P
Part II: (Note: answers vary)

ITEMS ANSWER
1. Give three a. Entrepreneurship is important to students because it teaches
importance of us crucial life skills such as on how to collaborate and
entrepreneurship communicate.
to students. b. Entrepreneurship is important to students because it helps us
to become more creative.
c. Entrepreneurship is important to students because it helps us
to become courageous..

2. Give three a. Entrepreneurship is important to the economy because it

relevance of gives prestige to the country.
entrepreneurship b. Entrepreneurship is important to the economy because they
to the economy. provide employment opportunities to individuals.
c. Entrepreneurship is important to the economy because they
innovate goods and services to make our lives better and
more convenient.

3. Give three a. Benefits that we could get from entrepreneurship is they

socio-economic provide taxes to economy.
benefits from b. They provide self-help and employment to people.
entrepreneurship. c. They improve quality of life.

References:
A. Books
Boado, S.A.(2017). Applied Economics. Makati City, Philippines: Diwa Learning
Systems Inc. page 109
Azarccon, E.R.S.(2008).Entrepreneurship Principles and Practices. Baguio City:
Valencia Educational Supply. Page 7-16
B. Online and Other Sources
http://www.googlecom./search

http://www.reference.com meaning of entrepreneurship

https://www.investopedia.com meaning of entrepreneurship

https://www.researchgate.net/publication/287208107_Evolution_of_Entrepreneurship_theories
_through_different_schools_of_thought/citation/download

https://www.marlborough.org/news/~board/stem/post/five-benefits-of-entrepreneurship-educ
ation-to-students

https://apacentrepreneur.com/role-of-entrepreneurship-in-socio-economic-growth-of-a-country
/