Addis Ababa University (AAU)

Ethiopian Institute of Architecture Building

Construction and City Development (EIABC)

Fourth Year BSc. In Urban Planning and Design

Course Title: Entrepreneurship

Individual Assignment 01

Name: Henery Alemayehu

ID No.: UGR/2923/12
Section: A
Submission date: 19/12/2022
 Fourth Year BSc. in Urban Planning and Design
Course Title: Entreprenuership
Individual Assignment: Interprenuership

1. Explain the contributions of entreprenuership in economic and social developments

of the society
Contributions of Entrepreneurship in Socio-Economic Growth of a Country
Socio-Economic-Growth
Entrepreneurs play big role in driving a nation’s economic growth and societal development. They inspire
people to dream big and to push the boundary of advancement. They initiate change in the way we work
and live for the better. And most importantly, they create jobs and fortune for a nation. They pull the
process of economic development through efficient use of resources, manpower, and finance. Their role is
significant in all types of economies undeveloped, developing, and developed.
Let’s take a closer look at how entrepreneurship contributes to a nation’s economic development:
Creation Employment
Entrepreneurs are by nature job creators as opposed to job seekers. When a person becomes an
entrepreneur, there is one less job seeker in the economy. In addition to that, that person provides
employment or multiple other job seekers. The job creation by new and existing businesses is one of the
basic goals of economic development.
Encourages Better Standard of Living
Entrepreneurship is a key in raising the standard of living. Entrepreneurs not only provide means for
living through employment but they also provide people’s needs and wants. They develop as well as
adopt innovations that lead to improvements in the quality of lives. The boom in the high tech electronics,
personal shopping experiences, luxury cars and other products which have made our life easier are all a
result of this rise in our standard of living, thanks to the innovators and entrepreneurs.
Initiate Chain of Support and Wealth Sharing
While establishing the business entity, entrepreneurs invest their own resources and attract capital from
investors, lenders and the public. This mobilizes public wealth and allows people to profit from the
success of entrepreneurs and growing businesses. This kind of pooled capital results in wealth creation
and distribution.
Enable Balanced Regional Development
Entrepreneur generally looks for places that are cheap to set up business which are usually the least
develop region. These new businesses and industrial units help in the development of the regions. This
eventually leads to infrastructure improvements including better roads and rail links, airports, stable
electricity and water supply, schools, hospitals, shopping malls and other public and private services that
would not be available otherwise.
Expanding Exports
As businesses grow, they eventually want to start exporting to expand their businesses to foreign markets.
It is considered an important key factor of economic development since it provides access to bigger
markets which ultimately leads to currency inflows and access to cutting-edge technologies and processes
being used in more developed foreign markets.

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 Fourth Year BSc. in Urban Planning and Design
Course Title: Entreprenuership
Individual Assignment: Interprenuership

Entrepreneurs not only invest their own capital but it also attracts capital from the market. They make
productive use of these savings and mobilize them by turning it into a productive resource. The pooled
financial resource or capital is the basis of wealth creation in the economy, thus contributing majorly to
the socio-economic development of a country.
Conclusively, entrepreneurs play a very important role in a nation’s development by starting new
businesses, creating jobs, and contributing to development in various key areas such as GDP, exports,
standard of living, skills development and community development

2. What makes entreprenuers different from:

A. Managers
The main difference between Entrepreneur and Manager is their role in the organization. An
entrepreneur is the owner of the company whereas a Manager is the employee of the company.

Difference between Entrepreneur and Manager

• The key difference between an entrepreneur and a manager is their standing in

the company. An entrepreneur is a visionary that converts an idea into a business. He
is the owner of the business, so he bears all the financial and other risks. A manager,
on the other hand, is an employee, he works for a salary. So, he does not have to bear
any risks.

• The focus of an entrepreneur lies in starting the business and later expanding the
business. A manager will focus on the daily smooth functioning of the business.

• For an entrepreneur the key motivation is achievements. But for the managers, the
motivation comes from the power that comes with their position.

• The reward for all the efforts of an entrepreneur is the profit he earns from the
enterprise. The manager is an employee, so his remuneration is the salary he draws
from the company.

• The entrepreneur can be informal and casual in his role. However, a manager’s
approach to every problem is very formal.

• The entrepreneur by nature is a risk taker. His has to take calculated risks to drive the
company further. A manager, on the other hand, is risk-averse. His job is to maintain
the status quo of the company. So, he cannot afford risks.

B. Workers/professionals
The main difference between a worker and entrepreneur is that the worker/employee should follow the
rules and instructions given by an organization, while the entrepreneur is the one who makes the rules and
issues instructions for employees.
Differences Between Employee and Entrepreneur

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 Fourth Year BSc. in Urban Planning and Design
Course Title: Entreprenuership
Individual Assignment: Interprenuership

Definition
A worker/employee is a person who works for a company while performing his or her duties, whereas an
entrepreneur is a person who creates a new business while bearing risks and enjoying most of the profits
and rewards.
Compensation
Although a worker/employee gets a fixed compensation for a month, an entrepreneur does not get fixed
compensation.
Role
Workers/Employees have to follow instructions, whereas the entrepreneur issues the instructions and
demands.
Responsibility
Although an Worker/employee is not responsible for each decision of the company, an entrepreneur is
responsible for every decision of his company.
Leaves
Workers/Employees are entitled to different types of leaves in accordance with necessity, whereas
entrepreneurs are not entitled to specific types of leaves.
Retirement
Workers/Employees have a specific retirement age limit, whereas entrepreneurs do not have an exact age
limit to exit their carrier. They can work as long as they desire.

Conclusion
The key difference between employee and entrepreneur is that the employee should follow the rules and
instructions given by an organization, while the entrepreneur is the one who makes the rules and issues
instructions for employees. In other words, entrepreneurs work for themselves while employees work for
employers or entrepreneurs.

C. Investors
Different Business Ideas
Although investors and entrepreneurs both focus on businesses and making profits, they have different
views on business ideas. For example, an investor will invest their money in a company that is already up
and running to make a profit, whereas an entrepreneur will come up with new business ideas that they can
use to set up a business to make a profit.
Invest in Different Ways

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 Fourth Year BSc. in Urban Planning and Design
Course Title: Entreprenuership
Individual Assignment: Interprenuership

The next difference between investors and entrepreneurs is that they invest in things in different ways.
For example, an investor will invest their money in a business to make a profit and an entrepreneur will
invest time and new ideas to get a business up and running in order to make a profit. Either way, they are
both as important as each other because if a business didn’t have money. then, no profits would be made
and, if a new idea wasn’t thought of then, there would also be no profit made as the business ideas would
not exist.

Focus on different part of a business

Another one of the differences between investors and entrepreneurs is that they both focus on
different parts of a business. This is because an investor will focus on the financing part of the
business whereas the entrepreneurs will focus on different parts of the business. This includes
everything from coming up with ideas, speaking to customers, doing marketing, and more.

3. Discuss what conditions enhance the appearance and development of entreprenuers.

Concerning entrepreneurial framework conditions, the analysis of the main components was performed to
derive 12 latent variables:
(1) access to entrepreneurial finance;
(2) government policy: support and relevance;
(3) government policy: taxes and bureaucracy;
(4) government entrepreneurship programs;
(5) entrepreneurial education at school;
(6) entrepreneurial education post-school;
(7) research and development transfer;
(8) commercial and professional infrastructure;
(9) ease of entry: market dynamics;
(10) ease of entry: market burdens and regulations;
(11) physical infrastructure;
(12) social and cultural norms
Various studies on entrepreneurship have pointed out that commercial and professional infrastructures are
crucial for the success of the entrepreneurial activity, and thus, for countries’ economic growth.
Government funding and support for entrepreneurial activity stimulates the development of
entrepreneurial activity and the growth of an economy.

4. Discuss about:

A. Business opportunities
business opportunity, in the simplest terms, is a packaged business investment that allows the buyer to
begin a business. Unlike a franchise, however, the business opportunity seller typically exercises no
control over the buyer's business operations. In fact, in most business opportunity programs, there's no
continuing relationship between the seller and the buyer after the sale is made.

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 Fourth Year BSc. in Urban Planning and Design
Course Title: Entreprenuership
Individual Assignment: Interprenuership

B. Underutilized resources
Underutilization is a situation where resources are inefficiently used or not used to the fullest capacity.
Underutilized resources can impact your company's profits; hence it should be among the major
management concerns. It can be in terms of labor, machines, raw materials among others not utilized to
the fullest capacity.
C. Calculated risks
Calculated risk in business is defined as, “a carefully considered decision that exposes a person to a
degree of personal and financial risk that is counterbalanced by a reasonable possibility of benefit.”1
All business owners have assumed some form of risk on the path to building their business. And risk
doesn’t stop when the business gets off the ground. Business owners constantly need to assess risk as it
relates to their offering, but also in context of growth and success.
D. Demanding efficiency and quality
an entrepreneur makes certain legal and professional demands from himself/herself and from the people
hired by the company. he/she understand that she/he owns it to the company to promote and maintain the
quality of the products and services produced and offered by the company.
Efficiency in economics is used to refer to a number of concepts related to maximizing utility and
utilization of all resources in the process of producing goods and services.
Quality is the level of good or bad or the level or degree of something. This term is widely used in
business, engineering, and manufacturing in relation to techniques and concepts to improve the quality of
products or services produced. Quality is the suitability of product use (fitness for use) to meet customer
needs and satisfaction.

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