Novita Suwardi,Clara Cornelia,Angelia Agatha,Hanson Firyanto


(1) Defination of Entrepreneurship
The word entrepreneur or entrepreneurship is gaining more popularity in the recent
years. The concept of entrepreneurship has been noted as a factor in
microeconomics since the 17th century.
The meaning of entrepreneurship has evolved through the development of business
and economics in the recent years and decades.
With all this hype and fame of entrepreneurialism, most of us still don’t have a
clear definition of what entrepreneurship is. Entrepreneurship have a lot of
meaning. To begin embracing it, let’s take a closer look at the meanings and
definitions of entrepreneurship.

Entrepreneurship is the spirit, behavior, and ability to respond positively to
the opportunity to benefit yourself and or a better service to the customer /
community; by always trying to find and serve the customer better, and create
and provide products that are more useful and implementing a more efficient
way of working, with the courage to take risks, creativity and innovation, and
management capabilities. "

Definitions of entrepreneurship by experts:

Entrepreneurship is a value that is manifested in the behavior of the resource
basis, propulsion, goals, strategy, tips, processes and business results (Ahmad
Sanusi, 1994).
Entrepreneurship is the ability to create something new and different (ability to
create the new and different). (Drucker, 1959).
Entrepreneurship is a process of applying creativity and innovation in solving
problems and finding opportunities to improve life. (Zimmerer, 1996).
Entrepreneurship is a value required to start a business (star-up phase) and
business development (venture growth). (Suharto Prawiro, 1997).
Entrepreneurship is a passion, attitude, behavior, and ability to handle business
or activity directed to find, create, and implement ways of working, new
technology and products to improve efficiency in order to provide better service
and or gain a greater . (Minister of Cooperatives and Small Business
Development 961/KEP/M/XI/1995 number).
Entrepreneurship is the ability (ability) to think creatively and act as the basis of
innovative, resource, propulsion goals, strategy tips and processes in the face of
life's challenges. (Soeparman Spemahamidjaja, 1977).

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(*) ROLE

The entrepreneur who is a business leader looks for ideas and puts them into
effect in fostering economic growth and development. Entrepreneurship is one of
the most important input in the economic development of a country. The
entrepreneur acts as a trigger head to give spark to economic activities by his
entrepreneurial decisions. He plays a pivotal role not only in the development of
industrial sector of a country but also in the development of farm and service
sector. The major roles played by an entrepreneur in the economic development
of an economy is discussed in a systematic and orderly manner as follows.
(1) Promotes Capital Formation: Entrepreneurs promote capital formation by
mobilising the idle savings of public. They employ their own as well as borrowed
resources for setting up their enterprises. Such type of entrepreneurial activities
lead to value addition and creation of wealth, which is very essential for the
industrial and economic development of the country.
(2) Creates Large-Scale Employment Opportunities: Entrepreneurs provide
immediate large-scale employment to the unemployed which is a chronic
problem of underdeveloped nations. With the setting up.of more and more units
by entrepreneurs, both on small and large-scale numerous job opportunities are
created for others. In this way, entrepreneurs play an effective role in reducing
the problem of unemployment in the country which in turn clears the path
towards economic development of the nation.
(3) Promotes Balanced Regional Development: Entrepreneurs help to remove
regional disparities through setting up of industries in less developed and
backward areas. The growth of industries and business in these areas lead to a
large number of public benefits like Health, Education Entertainment and etc.
(4) Reduces Concentration of Economic Power: Economic power is the natural
outcome of industrial and business activity. Industrial development normally
lead to concentration of economic power in the hands of a few individuals
which results in the growth of monopolies.
(5) Wealth Creation and Distribution: It stimulates equitable redistribution of
wealth and income in the interest of the country to more people and geographic
areas, thus giving benefit to larger sections of the society.
(6) Increasing Gross National Product and Per Capita Income: Entrepreneurs
are always on the look out for opportunities. They 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

(7) Improvement in the Standard of Living: Increase in the standard of living of
the people is a characteristic feature of economic development of the country.
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
(8) Promotes Country's Export Trade : Entrepreneurs help in promoting a
country's export-trade, which is an important ingredient of economic
development. They produce goods and services in large scale for the purpose
earning huge amount of foreign exchange from export in order to combat the
import dues requirement.
(9) Induces Backward and Forward Linkages: Entrepreneurs like to work in an
environment of change and try to maximize profits by innovation. When an
enterprise is established in accordance with the changing technology, it induces
backward and forward linkages which stimulate the process of economic
development in the country.
(10) Facilitates Overall Development : Entrepreneurs act as catalytic agent for
change which results in chain reaction. Once an enterprise is established, the
process of industrialization is set in motion. This unit will generate demand for
various types of units required by it and there will be so many other units which
require the output of this unit environment of enthusiasm and conveying an
impetus for overall development of the area

A. Soulless hard at work
B. Smart in creating business opportunities and achieve
C. Honest, efficient and disciplined
D. Being able to think and act wisely
E. Tough and willing to take risks
F. Creative and productive
G. Innovative
H. Behaving adaptable to change and accommodating to the environment
I. Servicing the customer to meet his satisfaction.


A. Having a strong capital ability to work with a spirit of independence
B. Able to solve problems in a decision
C. Having the courage to take risks
D. Having a strong desire to learn, and act creatively innovative
E. Work hard, be diligent and meticulous and never be satisfied
F. Able to produce new work based on sound business ethics.

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Entrepreneurs can be in a variety of sectors
In carrying out its activities the entrepreneur can manage a wide range of
businesses that can in principle be divided into two sectors, namely the formal
and informal sectors.

1. Formal sector
The formal sector is a sector that operates the official (formal) early requires
certain conditions such as the deed of incorporation, business license, articles of
association and others.
The formal sector has certain characteristics, traits formal sector include:
a. Have permission.
b. Requires a relatively large capital.
c. Using a systematic and regular bookkeeping and financial reporting to
determine the financial situation and income / loss is obtained.
d. Gains derived by a relatively large.
e. Make payments to the state tax, the tax liability (if the business entity form PT),
and the income tax (for the owner).
f. Generally located in urban or industrial areas. Form of business entity from the
formal sector, including firms, cooperatives and other businesses that require a
license or certificate of incorporation. Due to large capital, general formal sector
entities that have one or more companies to run their business

2. Informal Sector
The informal sector is the sector that operate informally (informal), since its
establishment in general, do not use terms such as deed of incorporation,
articles of association, business license and many more. In the formal sector,

the informal sector also has the characteristics, such as:

a. Generally do not have permission.
b. Require relatively small capital.
c. Using a simple bookkeeping and some do not even use the books at all.
d. Profits derived generally relatively small.
e. Generally do not pay taxes to the government (except when earnings large
enough for owners of taxable income)
f. Housed in all directions, can be in urban rural areas.
g. Price of goods or services being sold are generally relatively inexpensive.
Forms of informal sector enterprises generally is an entity on the individual
establishment does not need to use the certificate. However, for certain
businesses such as rice mills and the inn, although owned by an individual still
must obtain permission from the local government.

In general, the more resources are needed by an industry, it is increasingly
difficult to start a business and the more likely that the industry is dominated by
small firms. Consider some of the following sectors :

Services : Since at least require resources, business services small business
segment is the fastest growing. In addition, there is no other industry groups that
offer a higher return on the time invested in addition to the service industry.
Business services may be a small shoe business, car rentals, wedding organizer,
software makers, to management consultants, and many more.

Retail : Retail business sells products made by other companies directly to
consumers. There are hundreds of different types of retailers ranging from the
shop, bookstore, cafe, restaurant, to department stores. Usually, however,
entrepreneurs who start small businesses prefer stores that sell specific items,
such as a coffee shop or gift shop.

Construction : Because a lot of construction work is a relatively small local
projects, small businesses often fits engaged in the construction. Many of these
companies were started with skilled personnel who work with others, before
deciding to open his own business. A common example of a small construction
companies among others, to build a house, installing wood, roofing, painting and
installing plumbing, electricians, and others.
Finance and Insurance: Entrepreneurial can also be engaged in finance and
insurance. In many cases, this business is an affiliate of the national companies
that are more substantial. Although changes in regulation of the banking industry
has reduced the number of small local banks, this business can be run well.

Wholesale : Small business owners can also do the wholesale business.
Businesses buying wholesale products from manufacturers and sell to retailers.
Wholesale companies usually buy goods in large quantities and store them in a
specific location. Therefore, they require fewer employees than the company's
manufacturing, retail or service provider. They also serve customers who order
fewer goods with large volume.

Transportation : Transportation is one of the businesses that are developed by
entrepreneurs. Entrepreneurs can open a transport business in the city,
interprovincial transportation, rental of trucks and buses, rental boats, to
airplanes. Small businesses often we see around tourist places that rent
equipment to transport tourists. Starting from horse rentals, boat rentals, to
Banana Boat and jet skis can be a viable alternative in the transportation business.

Manufacturing : Unlike other industries, manufacturing is usually only owned by
big business. This makes sense because manufacturing investments typically
require substantial capital. Build a car factory, for example, requires billions of
dollars of investment and thousands of workers before the first car goes on the
assembly line. Along with advances in technology, opportunities for small
businesses to enter in this field increasingly possible. In China, business is a
motorcycle manufacturing industries. Toys, dry food, even the software is also
made by small businesses.

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