REVIEWER for MASTERY TEST 1

Entrepreneurship

 Entrepreneurship, according to Professor Nathaniel Left, is the capacity for innovation, investment and expansion
in new markets, products and techniques.
 Development is a process while growth is a product. So, growth is the result of development. In simple terms,
development is INPUT while growth is the OUTPUT.
 An entrepreneur is a person who uses resources like land, money, and skills to produce a product or service that
will meet the needs of people.
 He or she also employs people to help produce products and provide services.
 The industry of an entrepreneur is called an enterprise while a businessman is a firm.
 Consumers are people who purchase products for the purpose of consumption or personal use.
 Customers are people who buy and sell products and considered as possible consumers.
 A microenterprise has 1-9 workers and requires less than P 3 million as capital.

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.

2. Keynesian Theory
The government should play the key role in economic development, particularly in less developed countries, or those
with depressed economic conditions.

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.

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.

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.

6. Innovation Theory
This was developed by Joseph Schumpeter.
He stresses the role of innovators or entrepreneurs in economic development.

7. Non-Economic Theories
Their key factors are political stability, efficient public administration, open society, and positive cultural values.

Personal Entrepreneurial Competencies

Achievement Cluster
 Opportunity Seeking. They see things in their environment as opportunities accompanied by profit which they may
use to start a new business venture.
 Persistence. They possess the “never say die” attitude which means not giving up easily.
 Commitment to Work Contract. They are able to complete the job in standard of quality, accept full responsibility
for problems encountered, and seek to satisfy customers.
 Demand for Quality and Efficiency. Entrepreneurs always strive to raise standards, aim for excellence, and do
things better, faster, and cheaper.

Planning Cluster
 Goal Setting. They set objectives that are specific, measurable, attainable, realistic, and time bound.
 Risk Taking. They choose to manage the risks instead of just watching the opportunities to pass by.
 Information Seeking. They consult experts, read relevant materials and show overall openness to ideas and
information.

Power Cluster
 Self-confidence. They trust their own abilities, have a general sense of control in their lives, and believe that,
within reason, they will be able to do what they wish, plan, and expect.
 Persuasion and Networking. Their ability to persuade or convince people to buy the products contributes to the
success of the business.

Contributions of Entrepreneurs

1. Develop new markets

Under the modern concept of marketing, markets are people who are willing and able to satisfy their needs.
2. Discover new sources of materials
Entrepreneurs are never satisfied with traditional or existing sources of materials.

3. Mobilize capital resources

Entrepreneurs are the organizers and coordinators of the major factors of production, such as land, labor and capital.

4. Introduce new technologies, new industries and new products

Aside from being innovators and reasonable risk-takers, entrepreneurs take advantage of business opportunities, and
transform these into profits.

5. Create employment
The biggest employer is the private business sector. Millions of jobs are provided by factories, service industries,
agricultural enterprises, and the numerous small-scale business.