Entrepreneurial mind

Ms. Ciara Camille S. Batuhan MEntrep (Units)

 SESSION 1:
ENTREPRENEURSHIP AND HIS ROOTS
MODULE 1
What Will You Learn?

At the end of the session, you will learn about the

history of the development of entrepreneurship as a
school of thought. We will learn about great minds who
have contributed to its development. In the same vain,
we will also begin to understand the characteristics of
the entrepreneur.
 What Do You Already Know?

Let’s begin this session by reflecting on

this definition of entrepreneurship:
Let’s Study

The word entrepreneur takes its humble roots from the 13th century
French word “entrepredre” which meant to undertake. The word itself, the
term entrepreneur stems from the French literally, between taker, or go
between with early references having been traced to the eighteenth
century economists Richard Cantillon, Anne- Robert Jacques Turgot, and
Francois Quesnay.

• 16th century that it was first related to business and took to mean as
a person engaged in business.
• The person responsible for the first academic usage of
the word entrepreneur was economist Richard
Cantillon in his Essai sur La Nature du Commerce en
General.

• He stated that the bearing of risk by engaging in

business without an assurance of the profits that will
be derived is the distinguishing feature of an
entrepreneur.

• He further identified the entrepreneur as an adventurer.

• This was later supported by Daniel Defoe by embodying
the entrepreneur through the protagonist of his novel
Robinson Crusoe. Brann, in her book review The
Unexpurgated Robinson Crusoe state “Alone on the
island he is altogether a man of projects, a “projector”
and “adventurer,” as entrepreneurs used to be called.

• He is a busy man, a man of business, labors, and

accounts…He establishes timetables and schedules and runs
his island like a going concern of one.
• By the Seventeenth Century towards the Eighteenth Century, the term entreprendre was
highly related to risk taking, the entrepreneur being the risk taker who entered into a
contractual relationship with the government for the performance of a service or the
supply of goods.

• The 19th century saw three major additions to the growing concept of entrepreneurship. Jean
Baptiste Say portrays that the entrepreneur with his knowledge and judgment as someone who
sought opportunities to earn profits by reallocating resources from areas of low productivity to
areas of high productivity by describing an entrepreneur in terms of behavior.

• John Stuart Mill describes the entrepreneur as someone who was more than the venture
capitalist but also one who managed the venture.

• Alfred Marshall who linked Say’s and Mill’s ideas claiming that the entrepreneur was one who
coordinated the four factors (land, labor, capital and organization) together.
• At the dawn of the twentieth century, these “who” concepts of entrepreneurship were further
developed by the likes of Frank H. Knight and Joseph Schumpeter. Their discussions, however,
were less focused on who the entrepreneur was but what his actions were that makes him an
entrepreneur.

Frank H. Knight carried forward the notion of risk taking by

classifying two kinds of risks. Two different kinds of risk were
distinguished by Frank Knight (1885-1972):

one is capable of being measured (i.e., objective probability that an

event will happen) and shifted from the entrepreneur to another party
by insurance; the other is un-measurable (i.e., no objective measure of
probability of gain or loss), e.g., the inability to predict consumer
demand.
• Joseph Schumpeter’s discussion on innovation
and how it is a vital component of who an
entrepreneur is.

• His two greatest insights were that innovation is the

driving force not only of capitalism but also of
economic progress in general, and that
entrepreneurs are the agents of innovation.

Product - The introduction of a new product
or quality An example of this is the
combination of the horseless carriage and the
steam engine, which led the way to the
invention of automotive such as trains, steam
boats and eventually cars. The combination of
two existing products to create an entirely
new product was an example of an innovation
as described by Schumpeter.
Process – The introduction of a new method of
production
Another type of innovation that Schumpeter has
identified is the introduction of a new process of
production. An example of this is when Henry Ford
introduced the assembly line, which significantly
decreased the amount of time from twelve hours to two
and a half hours it took to create the Ford T1 Model cars
back in 1913. Today his innovation is still used in various
industries around the world.
Business Model – Opening of a new market Have you
ever been stuck in traffic in Manila inside a taxi, bus or
a jeepney, wishing that there was a quicker way for you
to reach your destination? You’re not alone. In fact,
there are millions of commuters who have the same
thoughts running through their minds every day. These
millions accounts for the market for the much disputed
two-wheel taxis like Angkas. Angkas is a a ride-sharing
company, and is an example of Schumpter’s third kind of
innovation: the opening of new markets as it has
recognized that among commuters there exist a
substantial number who were willing, needed and could
afford to avail of the services of a ride sharing company
like theirs.
Source of Supply - the conquest of a new source of
supply of new materials or parts
People these days are on the constant look out for
sustainable and eco-friendly products. One such product
is vegan leather made from cactus. An innovative
solution has been discovered by two entrepreneurs who
have developed a way to create authentic looking
leather from cactus. This is an example of a new source
of supply of new materials or parts.
To define entrepreneurship would be to define both the entrepreneur
and the actions he takes. It is then best to use Commission of European
Communities’ definition which is: Entrepreneurship is the mindset and
process to create and develop economic activity by blending risk-taking,
creativity and/or innovation with sound management, within a new or
an existing organization. As a mindset and a process, it is then
something that can be learned.
PERSONAL ENTREPRENEURIAL
COMPETENCIES
 Let’s Reflect:

The second section of Session 1 provides

an insight of what makes an
entrepreneur. This is done through a
discussion of the Personal
Entrepreneurial Competencies. Let us
begin this section by reflecting upon this
photo.
Now, ask yourself this, what would your
own description be for each part of the
entrepreneur’s anatomy?
PERSONAL ENTREPRENEURIAL COMPETENCIES

• Entrepreneurial Competencies refers to the key characteristics that entrepreneurs

ideally possess in order to perform entrepreneurial functions effectively.

• Competencies are defined as the combination of knowledge, abilities, and

attitudes needed to accomplish a role efficiently.

• In adopting this definition, entrepreneurial competencies to the three components of the

PECs which are the planning cluster (knowledge), achievement cluster (abilities), and power
cluster (attitudes). These clusters are further subdivided in several characteristics.
 THE PLANNING CLUSTER

• The planning cluster of the personal entrepreneurial competencies covers three

characteristics and they are: goal setting, information seeking and systematic planning
and monitoring.

• One of the more popular myths about entrepreneurship is that, they grab opportunities
without considering the risks. Some say that they free-dive into new ventures as easily
as they cross streets. However, the truth to the matter is successful entrepreneurs rarely
go into any business venture without a plan. In fact, it is innate with them to set goals
when meaning to achieve something, seeking relevant information that would ensure
success.
THE ACHIEVEMENT CLUSTER

• Ask any successful entrepreneur why they did and rarely would you hear
that they did it for money. Some have done it for the heck of being the
first, or for even shallower reasons.

• Either way, for successful entrepreneurs, starting an entrepreneurial

venture and willingly accepting all the risks involved, is usually never about
the money. More often than not, it’s just that they have a burgeoning need
to overcome a challenge or difficulty or even the stubbornness to accept
that something that others might have said cannot be done.
THE POWER CLUSTER

• Entrepreneurs have strong communication skills, and it’s this strength

that enables them to effectively sell their product or service to clients and
customers. They’re also natural leaders with the ability to motivate,
inspire and influence those around them.
SESSION 2: ENTREPRENEURSHIP
AND ITS SOCIAL IMPACT
MODULE 1
What Will You Learn?

At the end of the session, you will learn about the various kinds of an
individual entrepreneur is. More importantly, you will also learn about
the significant role that entrepreneurship plays in our society and
economy.
•
What Do You Already Know?

Let us start the session with this photo of a

watermelon and what an entrepreneur would do
with it. Now ask yourself this:
If you were an entrepreneur, what other
product would you come up with to sell other
than a watermelon shake? (Thought of something
else? Then you might just be on your way to
becoming an entrepreneur!)
THE ENTREPRENEUR AS THE INDIVIDUAL THAT
STEERS

Entrepreneurs identify opportunities in the market.

Entrepreneurial ventures are created because opportunities are identified,

pursued and exploited. Economies would not run without entrepreneurial
ventures. Without individuals identifying and exploiting opportunities
economic activities would be limited and would not thrive.

Entrepreneurs actively seek our opportunities to pursue and exploit. It

is one of the more important skills that entrepreneurs must have.
Entrepreneurs process market information.

Entrepreneurs identify opportunities by processing market information. At times, it

could be a very technical process using scientifically backed data, but more often that
not, most successful entrepreneurs identify opportunities by merely observing and
having and enthusiastic willingness to learn and understand. Often, they ask themselves
questions like: “How can something be made better?” or “How can the customers’
experience happier?”.

Entrepreneurs bring innovation.

More important that identifying opportunities is what entrepreneurs actually do about them.
This is when innovation comes in, and this is generally what sets them apart from businessmen and
managers. Entrepreneurs don’t stop at simply creating a product but instead innovate and create
more value for customers.
Entrepreneurs take and accept risks.
There will always be risks involved in starting anything new. As it often is with novel
things, acceptance is hard to come by. People, generally reject new ideas and do not
instantly accept what is being introduced. That is why not a lot of people go on and
start a new business. The risks, aside from the risk of the product not being accepted is
numerous! However, entrepreneurs, willingly take and accept those risks. It is believed
that they’d rather fail trying than have someone else try it before them.

Entrepreneurs establish new venture and improve existing ones.

With innovations, entrepreneurs establish new ventures. They usually don’t stop at one.
The most successful entrepreneurs are often known to be serial entrepreneurs, pursuing and
exploiting opportunities and starting new entrepreneurial ventures, one after the other.
 Entrepreneurs are managers as well as leaders.
Entrepreneurs are known to know even the tiniest details of their ventures. A

prime example of this is Sir Richard Branson. An article by Business Insider reports that
Sir Richard Branson wakes up at 5 a.m. every day. "Getting up and at it early gives me
time to get on top of things, and chart my day effectively," as written in a 2014 blog
post, by the Billionaire founder of Virgin Group.
 THE IMPACT OF
ENTREPRENEURSHIP
Entrepreneurship Spurs Economic Growth

• Entrepreneurs create new products and services and this in turn spurs on
the creation of other economic activities that would support the new
business venture.

• These economic activities could be job creation, the production of

supplementary products and services and other activities that would
stimulate economic development.
 Entrepreneurship Creates Jobs

• As new businesses are made, jobs are also created. Starting an entrepreneurial
venture, no matter how small it is, requires an entrepreneur to hire people.

• As the business expands, more jobs are created and would require hiring
even more. Inadvertently jobs are also created by entrepreneurs who
previously had jobs before opening their business.
Leaving their day jobs creates a vacancy. Sometimes, these vacancies
require more than one person to fill in the gap left by the entrepreneurs.
Entrepreneurships Bring Innovations

• Necessity is the mother of invention, as the saying goes, and so perhaps

its older sibling is innovation. We have come to learn that entrepreneurs
succeed because of the innovation they bring in.

• It could be innovation that come in the form of the products and

service they offer, or the way they get the products and services to
the market or even how the products and services are made.
Entrepreneurship Creates Wealth

• Entrepreneurial ventures help generate new wealth not only for the entrepreneur but
for the nation as well. Existing businesses may remain focused to serve their current
market and may hit the glass ceiling in terms of income. By introducing new and
improved products and services entrepreneurs are able to serve new markets and
thereby creating new wealth.

As previously stated, entrepreneurship creates jobs which in turn provides earnings or

higher earnings. This in turn contributes to better national income in the form of higher
tax revenue and higher government spending. The government can then use the revenue
in struggling sectors and more importantly on human capital.