ENTREPRENEURSHIP

Module 1 Part 1
 At the end of these topics, the
learners are able to:

To understand a brief history and the

evolution of entrepreneurship
MODULE 1
OBJECTIVES Identify the importance of
entrepreneurship

Identify and discuss local enterprises

that contributes to the development
 • Entrepreneur – the person who undertakes
entrepreneurship. An entrepreneur is someone
who starts a side hustle that can eventually
create a full-time, sustainable business with
employees.
• Entrepreneurship means staying committed to your
goals beyond your feelings of excitement. Stay the
course and keep your “why” in mind.”
WHO IS AN
ENTREPRENEUR? It’s not about ideas. It’s about making ideas happen –
Scott Belsky
The entrepreneur always searches for change, responds
to it, and exploits it as an opportunity
A person who sees a problem is a human being; a
person who finds a solution is visionary; and the person
who goes out and does something about it is an
entrepreneur ‘ Navin Jain
 BRIEF HISTORY/EVOLUTION OF
ENTREPRENEURSHIP (CONT)

• The earliest usage of the term “entrepreneur” is recorded in 17th

century French military history. It referred to persons who undertook
to lead military expeditions.
• An 18th century Irishman named Richard Cantillon who was living in
France at the time, is credited of being the first to use the term
“entrepreneur” in a business context, as someone who buys goods and
services at certain prices with a view to selling them at uncertain
prices in the future, in other words bearing a not-insured risk.
 BRIEF HISTORY/EVOLUTION OF
ENTREPRENEURSHIP (CONT)

• The word “Entrepreneur” is an English word that has been loaned

from the 18th century French. The French loan word was
“entreprende”, which means in Old French “to undertake” and was
used mainly in French to describe a "manager or promoter of a
theatrical production". The word entrepreneur can be also
translated to mean “between-taker” or “go between”.
• Later, in 1803 Jean Baptiste Say described entrepreneurial function
in broader terms laying emphasis on “the bringing together of the
factors of production with the provision of management and the
bearing of the risks associated with the venture.
 • It was not until the early 20th
century when the Moravian
(Czech), Joseph Schumpeter, cast
BRIEF the entrepreneur as being the
H I S TO RY / E VO L U T I O N O F
ENTREPRENEURSHIP central actor in the change
(CONT)
process that anyone really took
note. He contended that the single
most important function of the
entrepreneur was innovation.
 • The meaning of entrepreneurship
involves an entrepreneur who takes
action to make a change in the world.
BRIEF Whether start-up entrepreneurs
H I S TO RY / E VO L U T I O N
OF
solve a problem that many struggle
ENTREPRENEURSHIP with each day, bring people together
(CONT)
in a way no one has before, or build
something revolutionary that
advances society, they all have one
thing in common: action.
• Founder and CEO of Neuro Flow
shares “Entrepreneurship means being
the one that is willing to take a leap, work
hard enough to sacrifice everything else
around you, all in the name of solving MEANING
problems because no one else is capable OF
or possesses the desire.” Entrepreneurs ENTREPRENEURSHIP

take the idea and execute it.

Entrepreneurship is about
execution of ideas.
 D E V E L O P M E N T O F E N T R E P R E N E U R S H I P T H E O RY A N D T H E
TERM ENTREPRENEUR
( S T E M S F RO M T H E F R E N C H : M E A N S B E T W E E N - TA K E R O R G O
BETWEEN

Middle Ages Actor (war like action) and person in charge of large scale production projects

17th Century Person bearing risks of profit (loss) in a fixed price contract with the government
1725 Richard Cantillon – person bearing risks is different from one supplying capital, a
risk-taker observing the merchants, farmers, craftsmen, and other sole proprietors”
buy at a certain price and sell at an uncertain price, therefore operating at a risk.
1797 Beaudeau – person bearing risks, planning, supervising, organizing and owning
1803 Jean Baptiste Say – entrepreneurship as the shifting of economic resources out of
an area of lower and into higher productivity and greater yield; separated profits of
entrepreneur from profits of capital
 D E V E L O P M E N T O F E N T R E P R E N E U R S H I P T H E O RY A N D T H E
TERM ENTREPRENEUR
( S T E M S F RO M T H E F R E N C H : M E A N S B E T W E E N - TA K E R O R G O
BETWEEN) (CONT)

1876 Francis Walker – distinguished between those who supplied funds and received interest
and those who received profit from managerial capabilities
1934 Joseph Schumpeter – entrepreneur is an innovator and develops untried technology
1961 David McClelland – entrepreneur is an energetic, moderate risk taker
1964 Peter Ducker – entrepreneur maximizes opportunities; one who starts his own, new and
small business
1975 Albert Shapero – entrepreneur takes initiative, organizes some social-economic
mechanisms, and accepts risks of failure
 D E V E L O P M E N T O F E N T R E P R E N E U R S H I P T H E O RY A N D T H E
TERM ENTREPRENEUR
( S T E M S F RO M T H E F R E N C H : M E A N S B E T W E E N - TA K E R O R G O
BETWEEN) (CONT)

1980 Karl Vesper – entrepreneur seen differently by economics, psychologists,

businesspersons, and politicians
1983 Gifford Pinchot – intrapreneur is an entrepreneur within an already established
organization, 1985

Robert Hisrich – entrepreneurship is the process of creating something different

with value by devoting the necessary time and effort, assuming the accompanying
financial, psychological, and social risks, and receiving the resulting rewards of
monetary and personal satisfaction
20th Century The notion of innovation and newness attributed to entrepreneurs is now the
heart and essence of entrepreneurship. The innovation and newness can come in
the form of anything from new product to a new distribution system for simplifying
a new organizational structure
 EVOLUTION OF
ENTREPRENEURRSHIP

By the middle of the 20th century, the notion of an entrepreneur as “innovator” was established.
Hisrich and Peters described the function of an entrepreneur as follows:
• “to reform or revolutionalize the pattern of production by exploiting an invention or, more generally, an untried
technological possibility for producing a new commodity or producing an old one in a new way, opening a new
source of supply of materials or a new outlets of products, by reorganizing a new industry,”

The latter part of the 20th century, the notion of “innovation” and “newness” attributed to
entrepreneurs is now the “heart and essence” of entrepreneurship. The innovation or newness can
come in the form of anything from a new product to a new distribution system for simplifying a new
organizational structure.
 WHO IS AN ENTREPRENEUR?
(CONT)

Prof. Robert Nelson defines entrepreneur as a person who is able to look at the environment,
identify opportunities to improve the environment, marshall resources, and implement action to
maximize those opportunities. In non-work situation, entrepreneurs maybe considered those
persons who improve social and economic conditions primarily in the local communities

Joseph Schumpeter defines entrepreneurship as doing things that are not generally done in the
ordinary course of business routine. It is essentially a phenomenon that comes under wider
aspect of leadership.
 CONTEMPORARY VIEWS ON
ENTREPRENEURSHIP

Loyd Shefsky in his book “Entrepreneurs are

Made Not Born” dissect the word
entrepreneur into three parts:
entre means to enter
pre means before, and
neur means nerve center
This leads to a definition of the word as
someone who enters a business – any
business. Individuals develop or change the
nerve center of the business
 CONTEMPORARY VIEWS ON
ENTREPRENEURSHIP (CONT)

According to Karl Vesper: entrepreneurship is the dynamic

process of creating incremental wealth
• To an economist: an entrepreneur is one who brings resources, labor,
materials and other assets into combination that made their value greater
than before and also one who introduces changes, innovation, and a new
order
• To a psychologist – could refer to a personas typically driven by certain
forces – need to obtain or attain something, to experiment, to accomplish .
• To a businessman – an entrepreneur appears as a threat, an aggressive
competitor, whereas to another businessman, the entrepreneur maybe an
ally, a source of supply, a customer, or someone good to invest in
 There was no specific indication as to the
particular line of business operations the
entrepreneur is engaged in

Does not indicate that an entrepreneur is a

capitalist
C AVEATS ON THE
DEFINITION OF
ENTREPRENEURSHIP There is any no bias indicating that
entrepreneur is small-time or low capitalisation
business endeavour

Entrepreneurs can now be found in all

professions
 DEFINITIONS OF ENTREPRENUERSHIP

Entrepreneurship is
the process of creating something different with value by devoting the necessary time and
effort, assuming the accompanying financial, psychic and social risks, and receiving the
resulting rewards of monetary and personal satisfaction. - Hisrich and Peter

a dynamic process and that it is a matter of creating incremental wealth. A value must be
infused by the entrepreneur by securing and allocating the necessary skills and resources to a
product or service. – Robert Rondstat

the process of identifying opportunities in the marketplace, marshalling (organizing) the

resources to pursue those opportunities, and committing actions and resources necessary to
exploit the opportunities for long-term personal gain. – Sexton and Bowman-Upton
 DEFINITIONS OF ENTREPRENUERSHIP
(CONT)

William Bygrave entrepreneurship evolves

around the notion that:
• First, an entrepreneur is someone who perceives an
opportunity and creates an organization to pursue it
• Second, the entrepreneurial process involves all the
functions, activities, and actions associated with perceiving
opportunities and creating organizations to pursue them
 ENTREPRENEURSHIP
I S A P RO C E S S A N D
A P P ROAC H

Bygrave subscribes to
Carol Moore’s model on
the entrepreneurial
process as shown in the
figure shown. Moore’s
model follows a pattern
commencing with an
innovation, a triggering
event, implementation,
and growth
 ENTREPRENEURSHIP IS A PROCESS

Albert Shapero pointed out that entrepreneurship is a

dynamic process of innovation and new venture creation
through four major dimensions: individuals, organization,
environment, process – and aided by collaborative networks
in government, education and institutions. The entrepreneurial
event focuses on the process of entrepreneurial activity and
includes the following factors:
 ENTREPRENEURSHIP IS A PROCESS (CONT)

Initiative: an individual or group takes the initiative

Organization: Resources are brought together in organization to accomplish some

objectives (or the resources in existing organization are reorganized

Administration: Those who took the initiative take over the management of the
organization

Relative autonomy: The initiators assume relative freedom to dispose of and

distribute resources

Risk taking: The organization’s success or failure is shared by the initiator’s superiors and
subordinates
 ENTREPRENEURSHIP IS AN APPROACH
Two Approaches to Problem Solving
ADAPTER
Employs a discipline, precise methodical approach
Is concerned with solving, rather that finding
problems
Attempts to refine current practices
Tends to be means-oriented
Is capable of extended detail work
Is sensitive to group cohesion and cooperation
INNOVATOR
Approaches tasks from unusual angles
Discovers problems and avenue of solutions
Questions basic assumptions related to current
practices
Has little regard for means, is more interested in
ends
Has little tolerance for routine work
Has little or more need for consensus, often is
sensitive to others