ENTREPRENEURSHIP

2nd Semester
Brief History

Philippine Economic Development

• There were inhabitants in the Philippines about 250,000 to 300,000 years
ago. They arrived from other countries through the land bridges. They had
primitive economic existence. More civilized migrants came in later years.
The Colonial Rule
• The Philippines was a slave of three colonial masters:
a. United States
b. Japan
c. Spain.

• Chinese dominated the retail trade even before the Spanish time.

• Spanish rule introduced the tobacco monopoly and galleon trade for the
benefits of top ranking Spanish citizens.

• Americans exploited agricultural economy.

The Republic: 1946-1972
• The Philippine government got its political independence on July 4, 1946 but
not economic independence from the United States.

• Bell Trade Act of 1946

-imposed by Americans.
-Accepted by Philippine government in exchange for war damage payment.

• Filipino First Policy

-Introduced by President Carlos Garcia in 1985. It granted the Filipino
preferential treatment in the Philippine economy.
-lasted only for seven years
The national government, in its effort to alleviate poverty, has been promoting
the growth of entrepreneurship. It has several financial and technical
assistance programs for the poor who are interested in putting up their micro
businesses. Even some NGOs are actively involved in entrepreneurial projects
for the Poor.
Entrepreneurship

According to Professor Nathaniel Left,

is the capacity of innovation,
investment and expansion in new
markets, products and techniques.
Economic Development and Growth

Development i

Development is a process while growth is a product

Development is INPUT
Growth is the OUTPUT
Economic Development
progressive process of improving human conditions by eliminating or reducing poverty,
unemployment, disease, illiteracy, injustice and exploitation
Development and Growth Theories
1. LAISSEZ FAIRE THEORY

These are French words introduced by the Physiocrats to

mean economic freedom. This theory explains that the
government should not interfere in economic activities. It is
absolute free-enterprise economy. The role of the
government is only confined in education, justice and public
works. It is argued that with economic freedoms, business
can be more efficient through free competition. And this
benefits the economy.
Development and Growth Theories
2. KEYNESIAN THEORY.

The government should play the key role in economic

development, particularly in less developed countries, or
those with depressed economic conditions. This theory
contends that during economic depression the government
should put up massive public works, like construction of
roads and bridges, and other labor-intensive projects.

These generate large-scale employment resuling to more

incomes for more people. Such situation increases the
demand for goods and services. This means more
production, and this enhances economic development.
Development and Growth Theories
3. RICARDIAN THEORY.

This is the theory of David Ricardo, an English classical

economist.

He believes that the key factor in economic growth is LAND.

This means that agriculture plays a major role in economic
development, Such theory was earlier supported by the
Physiocrats. They claim that all wealth comes from the land.

People cannot live without food and natural resources. Hence

the importance of land or agriculture.
Development and Growth Theories
4. HARROD-DOMAR THEORY

This was conceptualized by Sir Harrod of England and

Professor Domar of the United States.

The key factor in economic growth is PHYSICAL CAPITAL like

machines.

The theory claims that more products can be produced

through the use of machines.

In other words, production is far more efficient with the use of

machines.
Development and Growth Theories
5. KALDOR THEORY

Nicholas Kaldor maintains that the key factor is technology.

this theory explains that the application of modern

technology in the production of goods and services has been
responsible for the economic success of the highly developed
countries like the United States, Japan, Great Britain, France,
Italy and Germany.

In the case of Japan, it can raise vegetables without the use

of soil. only fertilized water is used. such technology has been
exported to the middle east where agricultural lands are
scarce.
Development and Growth Theories

6. INNOVATION THEORY

This was developed by Joseph Schumpeter.

He stresses the role of innovators or entrepreneurs in

economic development.

Schumpeter says that it is the innovator who has the

courage and imagination to handle old systems, and be able
transform theory into reality. It is the innovator who
introduces change for the better.
Contributions of Entrepreneurship
• Development of new markets
• Discovery of new sources of materials
• Mobilization of capital resources
• Introduction of new technologies
• Creation of employment
Origin and Nature
• originated in Europe sometime in the Middle Ages.

• Entrepreneur dervied from a French word "Entreprendre" which means "to

undertake"
THANK YOU