Instructional Module: Republic of The Philippines Nueva Vizcaya State University Bayombong, Nueva Vizcaya

Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY

Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.: GE-ENTREP-2S-2020-2021
College: College of Business Education

Campus: Bayombong Campus
DEGREE PROGRAM BSBA COURSE NO. FM12-A

SPECIALIZATION FM/HRM/BE/MM COURSE TITLE Entrepreneurial Mind
YEAR LEVEL 1st Year TIME FRAME 9hou WK NO. 2-4 IM NO. 1
rs
I. UNIT TITLE/CHAPTER TITLE

A Perspective on Entrepreneurship Development
II. LESSON TITLE

Economic Development and Growth
Economic Development and Entrepreneurship
Philippine Environment for Entrepreneurship
Basic Concepts on Entrepreneurship
The Entrepreneurial Process
III. LESSON OVERVIEW
Entrepreneurship is a very important component of a capitalist economy like the Philippines. The
creation and proliferation of young, small and dynamic enterprises have been positively identified as an
important strategy for creating jobs and hastening the economic recovery and growth of the country.
Thus, this chapter presents the theoretical foundation and concepts for entrepreneurship and its
relationship to economic development. It also discusses the entrepreneurial environment in the Philippine
setting highlighting the responsibilities and support of the government to local enterprises.
Furthermore, this course proposes to inculcate entrepreneurship into the consciousness of the students
as a career option to create a positive response on the need for more entrepreneurs on whom economic
development depends.
IV. DESIRED LEARNING OUTCOMES
At the end of the chapter, the students must be able to:

a. explain the concepts of entrepreneurship and its role in economic growth and development and
illustrate the various support and programs of the government in fostering a climate of growth for
entrepreneurial initiatives;
b. discuss the basic concepts on entrepreneurship underscoring its important aspects, benefits,
potential drawbacks, factors that lead to its growth, and its cultural diversity;
c. illustrate and explain the stages of entrepreneurial process
V. LESSON CONTENT
ECONOMIC DEVELOPMENT AND GROWTH
Growth vs. Development
Economic growth and development is a goal of all people and nations in the world. Economic growth is
the sustained increase per capita real output of goods and services. The output of goods and services is
measured in terms of the gross national product (GNP). Economic growth is usually expected to result from
economic development.
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Economic development is a process of bringing about changes in the economical and social structure
of the economy. Economic structural change means the modernization of techniques of production designed to
bring about increase in the output of goods and services.
Three Core Values of Development
1. Sustenance – the ability to meet basic needs;

2. Self-esteem – to be a person;
3. Freedom from servitude – to be able to choose.
Three Objectives of Development
Consistent with the core values of development, the objectives of development are:
1. To increase the availability and widen the distribution of basic life sustaining goods such as food,
shelter, health and protection.
2. To raise levels of living, in addition to higher incomes, provision of more jobs, better education and
greater attention to cultural and humanistic values.
3. To expand the range of economic and social choices available to people and nations by freeing
them from servitude and dependence not only in relation to other people and nation, but also to the
forces of ignorance and misery.
Dimensions of Development
1. Economic Development – It is growth-oriented and development is measured according to how

much progress is made in gross and per capita national product, national and per capita income
and similar economic indicators.
2. Social Development – It considers people and their development and improvement in the quality of
life as a focus of development. Poverty eradication, social justice and equity, and employment
opportunities are the goals pursued by social development.
3. Political Development – The maturity and stability of political institutions and systems.
4. Sustainable Development – It balances the requirement for economic progress and the imperative
conservation and safeguarding of the environment for the future generation. Productivity remains a
valid goal but one that is consistent with the carrying capacities of nature.
5. Human Development – It is the process of enlarging people’s choices. The strategies used to
achieve human development focuses on providing opportunities and access for education, health
services and livelihood.
6. Sustainable Human Development – A development paradigm that emphasizes total well-being of
the people within the context of an ecologically friendly and future-minded development activity. It is
development that distributes the benefits of growth more equitably, substantially satisfies human
needs, and improves the quality of life.
Differentiating the Advanced vs. Third World Countries
Table 1. Characteristics of Advanced Versus Third World Countries

Advanced Countries Third World Countries
 Sustained rise of output per head of population  High birth rate
 Increased population due to increasing agricultural  Subsistence agricultural economy
production
 Sustained patterns of technological progress  High illiteracy
 Sustained increase in net capital stock  Low per capita income
 Sustained rise in real wages  High rates of unemployment
 High rate of change in economic structure and  Negative attitudes, values and institutions;
transformation in social and other non-economic poor health; inefficient public administration
sectors
Theories That Explains How Economies Grow
Generally speaking, individuals who introduced theories of economic development have been limited in
their efforts to study this phenomenon by their particular training, education and experience as well as by the
amount of information, observable data and proof available to them at the time their studies were made.
Despite these limitations, however, their theories are no less valuable in our efforts to understand economic
development. This section provides a general discussion of the various theories or school of thought that try to
explain economic growth. These schools of thought are presented here, regardless of whether or not they have
been confirmed by experience or by other observable data.
Theories of economic growth may be classified into three broad groups. One group consists of theories
viewing economic growth as a natural and inevitable process. The second group of theories explains economic
development as a rational process brought about when men respond to opportunities in the environment so as
to promote their own self-interest or material welfare. The last group of theories views economic development
as a result of seemingly economically irrational yet psychologically and sociologically satisfying activities of
enterprising men. For discussion purposes, these will be labeled as general, economic, and socio-
psychological theories.
1. General explanations of economic development – Some writers explain economic growth as

inevitable process brought about by interacting forces in nature.
a. Law of Nature – economic development proceeds according to a master plan.
In 1932, Spengler explained economic development by likening a culture or society to a

living organism that grows, lives and dies. Thus to him, economic development is a natural
thing that happens to an existing culture: it is a part of life and is something to be expected.
Herbert Spencer thought in much the same way. He viewed society as an organism
constantly in the process of evolution. As it evolved, it increased in complexity since new
institutions developed, and the roles and functions of social institutions became increasingly
specialized. The result is economic development.
b. Invisible Hand
In the 18th century, Adam Smith advanced the principle of an “Invisible Hand” as underlying
economic development. According to him, while individual seek to work for their own
personal goal, they unknowingly promote what is best for all. It is as if these individuals
were led to such actions by an “Invisible Hand” to the interest of the community or society
as a whole.
According to Smith, “Every individual endeavors to employ his capital so that its produce
may be of greatest value. He generally neither intends to promote the public interest, nor
knows how much he is promoting it. He intends only his own security, only his own gain.
And he is in this led by an Invisible hand to promote an end which was no part of his
intention. By pursuing his own interest, he frequently promotes that of society more
effectively than when he really intends to promote it.”
c. Cultural Diffusion
Anthropologists introduced the idea that over the ages and across the years, societies have
been involved indifferent social or cultural experiments in various economic, political,
religious or social aspects of life. Every now and then, societies are fortunate enough to
stumble on a “breakthrough”, that is, a “lucky” combination of interests, leaders, people,
events, methods or processes that leads to economic or some other development in
society. In other words, as one culture that has begun to use a new technique interacts with
another that has not been exposed to the technique, the former is able to influence that
latter to discard old ways and adopt new ones.
d. Racial Heritage
The belief that one race is superior to another on the basis of color, build, and other genetic
heritage has been around for a long time. Some individuals, including Hitler in his lifetime,
contend that racial characteristics make some people more energetic, thus, allowing their
countries to be far more developed than others. The belief in “Aryan superiority” espoused
by the Germans has been used, in fact, as justification for conquest during World War II.
This is also9 the philosophy behind the enslavement of the blacks by the whites; the
subjugation of the Indies by the Spaniards and Portuguese; and the genocide of North
American Indians by the Americans.
e. Climatic conditions determine the energy levels of a people and, in turn, its rate of
development.
In 1915, Ellsworth Huntington, an American geographer, wrote that most of the great
civilization flourished in the tropics or the far north. His observation and studies led him to
conclude that extremes of temperature as well as high fluctuations of climatic conditions
would have detrimental effect on the energy levels of people in the countries experiencing
such climatic extremes. At the same time, Huntington maintained that the most stimulating
climate for man involves an average temperature range between winter and summer of 40 o
to 60o F with moderate rainfalls and frequent mild storms.
f. Challenge of the natural environment is responsible for the rise of civilization.
A modified theory advanced by A.J. Toynbee in his book, A Study of History (1947), traces
economic and cultural changes to a combination of natural (geographic) phenomena and
socio-psychological pressure of stimuli such as new soils to exploit; living in a frontier
position like the British pioneers found themselves to be in America; and prejudice of
society towards a minority group. According to Toynbee, the “challenge of the environment”
is responsible for the rise of civilizations. He stresses however that the challenge must
neither be too weak nor too strong; it must be just right in order to produce results.
2. Economic explanations for development – While there have been attempts to explain economic
growth from people of varying disciplines, it has been, by and large, the principal concern of
economists. Basically, economists explain economic development on the basis of man’s rational
tendency to respond positively to economic opportunities in the environment in order to promote
his self-interest. As a result, he increases productivity and wealth not only for himself but also for
society as a whole.
a. Technology improvements and division of labor lead to development.
Adam Smith, for example, believed that the invention of better machines and equipment
brought about increased productivity which, together with specialization or division of labor,
made economic growth possible. Division of labor, in Smith’s view, leads to: an increase in
dexterity or skills among workers; reduce time necessary to produce commodities; and the
invention of better machines and equipment.
By making production more efficient, such innovations increased profits which were largely
invested in the business. Increased capitalization, in turn, resulted in further technical
improvements which increased productivity and again increased profits. And the cycle
repeated itself over and over again. The happy result of such favorable chain of events is
wealth and still more wealth, in short, economic development.
b. Population changes affect development
According to David Ricardo, the economy will continue to grow for as long as people work
on the land on profitable basis so that profit for the entrepreneurs and wages for labor
would result in accumulated savings which in turn, can be used for capital formation.
John Maynard Keynes (1936) however, disagreed with Ricardo’s conclusion on the effect of
population increase on economic growth. Keynes maintained that capitalists or
entrepreneurs are most likely to invest their resources when there is demand for the
commodity. Therefore, with increasing demand by an increasing population, capitalists
would most likely invest more.
c. Entrepreneurship
Economists recognized that for production to take place, someone had to mobilize all
resources (land, labor and capital) of the enterprise. They called this individual
entrepreneur, and his activity, entrepreneurship.
3. Socio-psychological explanation of development – Sociologist and psychologist differ from

economists in their approach to explaining economic growth. In viewing men as rational beings,
economists theorize that societies engage in entrepreneurial activities because they would gain
from doing so. People would have jobs, communities would have services they need, and so on.
Studies and observations, however, show that in many instances, people engage in enterprise
even if it seems “irrational”, that is, even if it seems that they will not gain materially or that the
venture is without bright prospects.
a. Sociological factors in economic development – Sociologists explain economic growth in

terms of social or cultural values, norms and other structures that differentiate modern from
traditional economies.
b. Psychological factors in economic development – psychologists view economic growth as a
product of individual human behavior, that is, of a person’s decisions, thoughts and actions.
ENTREPRENEURSHIP AND ECONOMIC DEVELOPMENT
With the preceding discussion on various theories of economic growth, students are now in a better
position to analyze for themselves how relevant the various economic and non-economic factors are to the
economic growth process. Again, remember that while these views, observation, claims, assertions, or beliefs
are only theories, they all provide valuable insights necessary to an understanding of the phenomenon of
economic development.
While most of the factors are, indeed, necessary for development to take place, only one factor will be
given emphasis in this subject, and that is Entrepreneurship. It is because the entrepreneur is the one that puts
together all other factors to create productive enterprises that in turn lead to development.
Benefits from Entrepreneurship
The following benefits that result from entrepreneurship explain why development takes place when a
society becomes entrepreneurial:
1. Entrepreneurship creates employment
When entrepreneurs put up a business, they oftentimes need to hire or employ at least one or two
people in order to get things done. Some businesses, in fact, employ hundreds of workers. When
entrepreneurial activities slow down, the country’s unemployment rate goes up. Every society wants all
qualified members of its work force to be gainfully employed. When individuals are employed, they are
able to feed their families, support their children through school, provide them with decent homes,
acquire medical services whenever needed, and contribute to government revenues through payment
of income taxes.
2. Entrepreneurship improves the quality of life
Entrepreneurs continuously innovate and develop new products and services based on what they
perceive as the needs of society. They also look for ways in which these goods and services could be
more efficiently produced. Such innovative efforts lead to better machines and more efficient production
systems.
Entrepreneurial undertakings contribute significantly to the continuous improvement of living

standards. The development of new products and delivery of services make life easier and comfortable
for society in general.
3. Entrepreneurship contributes to more equitable distribution of income and therefore eases social
unrest
Entrepreneurs continuously search, identify and/or develop raw materials needed for the production
of goods and services. They are, therefore, the ones who often see the economic potential of raw
materials and other resources in the rural areas. By putting up an enterprise in the locality,
entrepreneurs are actually dispersing the benefits of development to other parts of the country. When
many segments of society are economically deprived, social tensions may arise.
Income that is evenly distributed means less poor people. The eradication of poverty will help solve
social problems like crime, juvenile delinquency and malnutrition.
4. Entrepreneurship utilizes and mobilizes resources to make the country productive
Our country will develop faster economically if none of its resources were idle or unused.
5. Entrepreneurship brings social benefits through the government
With the revenues the government collects from taxes, duties and licenses paid by the
entrepreneurs, the government allocates the disbursement of these revenues to different services and
projects for communities. These services and projects come in the form of infrastructure facilities such
as roads and bridges; educational and medical facilities and services; and maintenance of peace and
order amongst others.
 We have seen that entrepreneurship directly affects the social and economic development
of people. The more society engages in entrepreneurial undertakings, the more it is likely to
develop economically and socially.
PHILIPPINE ENVIRONMENT FOR ENTREPRENEURSHIP
Entrepreneurship contributes much in the attainment of economic development, hence the need for
government support for entrepreneurs. In as much as the Philippine government would like to provide the best
assistance it could offer to entrepreneurs and “would-be” entrepreneurs, it has to classify enterprises so that it
could provide the specific services entrepreneurs require. In addition, classifying enterprises makes it easy to
prepare reports of a statistical nature. It also makes it easier to conduct researches to know the situation in a
particular size of industry.
Classification of Enterprises
Table 2. Classification of Enterprises by Asset Size and Number of Employees in the Philippines
Catego Asset Size* No. of
ry Employees**
Micro P 150,000.00 & 1–4
below
Cottag Above 150K to 5–9
e 1.5M
Small Above 1.5M to 10 – 99
15M
Mediu Above 15M to 100 – 199
m 60 M
Large Above 60 M 200 and over
*This is the classification used by the Small and Medium Enterprise Development (SMED) Council, a
multi-sectoral government body.
** Classification used by the UP Institute for Small-Scale Industries
Classification by Assets – Enterprises may be classified according to asset size. Assets are properties
owned and used by a business firm so that it can provide or produce products and services. However, it
is not always easy to determine the total assets of a business. A lot of businessmen are secretive as to
how much assets do they have for tax and security reasons.
Classification by employment – If it is not easy to classify enterprises as to assets, we can do so by

employment. Unlike assets, employees are easier to count.
The Philippine Government’s Support for the Development and Growth of Entrepreneurship
1. Government Assistance Program
a. Peace and Order – Countries with news of forthcoming rebellion or revolution cannot attract
investment. Kidnappings and payment for revolutionary taxes discourages investors. The
government tries its best to maintain peace and order in the country.
b. Political Stability – There is political stability when there is no frequent change in the
government, especially through the use of force or violence. That is why every
administration in the government will do all the things that they could do to stabilize the
government.
c. Price stability – Prices are stable if there are no abrupt changes or fluctuations in the prices
of goods and services and in the exchange rates.
d. Taxes – These are needed to fund government projects and programs. However, the
payment of taxes should be based on the ability to pay scheme.
e. Infrastructure – These constitutes the foundation of economic development. Roads, bridges

transportation, communication and electricity are vital to business. Without them, trade,
commerce and industry remain primitive and limited.
f. Education and training – It has been said that real development is people development.
Money, machine, land, and material are only productive if people know how to use them
properly. Knowledge and skills are not enough. If productive resources benefit only a few, it
is not wisely utilized. What is more needed is relevant social values, aside from knowledge
and skills. The best way to develop the mind, body and spirit is through education and
training.
g. Public Administration – Entrepreneurs prefer efficient public administration. Simplified

business registration, and efficient and courteous government employees.
h. Production Technology – Aside from skills training, the government should provide simple
production technology which is accessible to the masses at a nominal price or even free.
i. Marketing Assistance – Encouraging the poor to become entrepreneurs without

corresponding marketing assistance is an exercise in futility. It is foolish to encourage
people to produce goods if there are no markets. Marketing assistance come in the form of
promotions, identification of buyers, and ways of reaching the buyers.
j. Financial Assistance – Funds are important to poor entrepreneurs. In fact, many people
would like to go to small or micro business if they have the capital. To encourage the growth
of an entrepreneurial economy, adequate and cheap credit facilities are made available to
the masses.
2. Enactment of Laws and Basic Small and Medium Enterprises (SME) Policies beneficial to
Entrepreneurs
a. RA 6977 – Magna Carta for Small Enterprises – this was passed by the Philippine Congress
in 1991 in order to nurture the “growing Filipino Entrepreneurial spirit” by providing a climate
that minimizes regulations while at the same time assuring stable operating rules.
Specifically, it provided for the creation of a Small and Medium Enterprise Development
Council and a Small Business Guarantee and Finance Corporation.
Highlights of RA 6977:
1.Creation of Small and Medium Enterprises Development Council
2.Creation of the Small Business Guarantee and Finance Corporation
3. Mandatory allocation of credit resources to SME’s
4. Rationalization of existing SME program and agencies
b. RA 6810 – Magna Carta for Countryside and Barangay Business Enterprises – this is also
known as the Kalakalan 20
c. RA 7882 – An Act Providing Assistance to Women – this particular legislation recognizes

the special role of women in development and support women entrepreneurs who are
engaged in manufacturing, processing, service and trading business.
d. RA 3883 – Business Name Registration – this protects an enterprise guaranteeing exclusive

use of its registered name and the goodwill and patronage it represents. Nobody can copy
your business name once it is registered with the Department of Trade and industry.
Business names are protected because DTI is now computerized in processing and storing
data so that no duplication occur and they can provide information faster.
e. Retail Trade Act of 1954, Executive Order 226 – Omnibus Investment Code, Executive
Orders 264 and 288 – Tariff Reform Measures – this are among others the laws that were
enacted to help entrepreneurs in the country.
3. Initiation of various programs such as:
a. Market Encounter Program – which seeks to strengthen the local supply base both for
domestic and export market by offering an assistance package spanning the full business
cycle – from raw materials identification, skills training, product development and adaptation,
enterprise management, training, to financing and marketing assistance. At the end of the
MEP, entrepreneurs participate in trade fairs (provincial, regional, national) depending on
their capability. Given the opportunity to exhibit their products, small and medium
entrepreneurs develop linkages with buyers and suppliers.
b. The National Subcontractors/Contractors Exchange Program – in this program, micro, and

small enterprises with adequate production facilities but with no or limited markets for their
product are linked to bigger firms (called contractors) who need sources of semi-processed
parts and components for their finished products.
c. CITEM Program of Trade Fairs and Missions – The Center for International Trade,
Expositions and Missions manages trade fairs, missions, special events in the Philippines
and overseas.
d. Market Matching and Trade Opportunity Reports – this means facilitating the meeting
between a buyer of products or parts and the supplier or manufacturer of such products or
parts resulting in business transactions between them. A supplementary service that aids
market matching is the publication of trade opportunity list and reports.
4. International Linkages for SME Development
a. World Bank – supports SME development by funding projects using government financing
institutions as conduits. Examples are the Countryside Loan Fund, Retail and Co-financing
Facilities which are channeled through Land Bank of the Philippines to finance private sector
investments in rural areas which upgrade the operational capabilities of rural cooperatives
and financial institutions like thrift and rural banks.
b. Asian Development Bank – ADB is committed to achieving a prosperous, inclusive, resilient,
and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme
poverty. It assists its members and partners by providing loans, technical assistance, grants,
and equity investments to promote social and economic development. ADB focused on
enabling the business environment for SMEs, improving their access to finance, and
increasing their integration to domestic and global value chains.
c. Canadian International Development Agency - the Canada fund for local initiatives aims to
support small projects put forward and implemented by local organizations in developing
countries. CIDA supports foreign aid projects in more than one hundred of the poorest
countries of the world. The aim of Canada's Official Development Assistance (ODA) is
"sustainable development that will reduce poverty and contribute to a more secure,
equitable, and prosperous world”.
d. Philippine – German Export Development Project
e. US Agency for International Development
f. World Trade Organization
g. Asia Pacific Economic Cooperation
h. ASEAN Free Trade Area
i. Brunei – Indonesia – Malaysia – Philippines East ASEAN Growth Area
BASIC CONCEPTS ON ENTREPRENEURSHIP
Around the world, growing numbers of people are realizing their dreams of owning and operating their
own businesses. Entrepreneurship continues to thrive in every corner of the world. According to the research
of Kauffan Foundation, Entrepreneurs in the United States launch 476,000 businesses each month. This
entrepreneurial spirit is the most significant economic development in business history.
Entrepreneurial activity is essential to a strong global economy. Many of the world’s largest companies
continue to engage in massive downsizing campaigns, dramatically cutting the number of employees on their
payrolls. Having been victims of downsizing or having witnessed layoffs, these people see entrepreneurship as
the ideal way to create their own job security and success. Rather than pursue corporate careers after
graduation, many college students are choosing to launch business of their own. They prefer to control their
own destinies by building their own business.
What is Entrepreneurship?
A normal response to this question is that entrepreneurship is about creating or establishing a

business.
Entrepreneurship however is more than simply starting or operating a small business. This is evident in
the responses from the people in the cartoon below.
It is true that entrepreneurship is both a science and an art. The science lies in the proven process of
planning and managing business. The art lies in the innovative thought, implementation and growth of a
business.
Entrepreneurship refers to the process of creating a new enterprise and bearing any of its risk, with the
view of making the profit. It is an act of seeking investment and production opportunity, developing and
managing a business venture, so as to undertake production function, arranging inputs like labor, material and
capital, introducing new techniques and products, identifying new sources for the enterprise.
Entrepreneurship is a dynamic, social process where individuals, alone or in collaboration identify

opportunities for innovation and act upon them by transforming ideas into practical targeted activities whether
in a social, cultural or financial context.
De La Salle University defined entrepreneurship as the creation of a new good or service, the
assumption of any risk that comes with creating that good or service and the receipt of rewards or profits.
(source: https://www.borgenmagazine.com/entrepreneurship-in-the-philippines/Sept.15,2020)
Important Aspects of Entrepreneurship
Building upon the definition, Nieman et al, (2004:9) identified the following concepts as integral to the
understanding of entrepreneurship. Entrepreneurship means that an individual must be able to:
 Identify an opportunity ‐ This means that there must be a real business opportunity.
 Be innovation and creativity ‐ Something new and different is required that is needed by a target audience.
 Gather resources ‐ Capital, labor and operating equipment must be found.
 Create and grow a business ‐ This means the start of a new business venture or the conversion of an
existing business.
 Take risk ‐ There will be both personal and financial risks.
 Create rewards ‐ Reward can be in the form of profit or increased value of the business.
 Manage a business ‐ This means that there must be planning, organization, leadership and control of all
the functions.
Factors that Led to the Growth of Entrepreneurship
1. Entrepreneurs as heroes. An intangible but compelling factor is the attitude that Americans have toward
entrepreneur. As a nation, we have raised them to hero status and have held out their accomplishments as
a model to follow. Business founders such as Bill Gates, Steve Jobs and Mark Zuckerberg.
2. Entrepreneurial education. College and universities have discovered that entrepreneurship is an extremely
popular course of study. Today, more than two-thirds of the colleges and universities in the United States
offer more than 5,000 courses in entrepreneurship. Philippine strongly supports entrepreneurship through
education. It ranked first in post school education and second in school education (basic education)
entrepreneurship training among the ASEAN economies. Entrepreneurial education in higher education is
mandated by law and offered as a bachelors’ degree and master’s degree.
3. Demographic and economic factors. More than 75 percent of entrepreneurs start their businesses between
the ages of 20 and 44, and the number of Americas in that age range currently is nearly 103 million.
4. Shift to a service economy. The service sector accounts for 82.5 percent of the jobs and 79.7 percent of
the private sector gross domestic product (GDP) in the United States, both of which represent a sharp rise
form just a decade age. The booming service sector continues to provide many business opportunities,
from educational services and computer maintenance to pet waste removal and iPod repair.
5. Technology Advancement. With the help of modern business machine such as personal computers, laptop,
smart phones, fax machines, copier, color printers, answering machine and voice mail, even one person
working at home can look like a big business.
6. Independent Lifestyle. Entrepreneurship fits the way American want to live-independent and self-
sustaining. People want the freedom to choose where they live, what hours they work, and what they do.
Although financial security remains as an important goal for most entrepreneurs, many places top priority
on lifestyle issues, such as more time with family and friends, more leisure time, and more control over
work-related stress.
7. The Internet, cloud computing and mobile marketing. The proliferation of the Internet, the vast network that
links computers around the globe and opens up ocean of information to its users, has spawned thousands
of entrepreneurial ventures since its beginning in 1993.
Cloud computing. Internet-based subscription or pay per use software services that allow business owners
to use a variety of business application from database management and inventory control to customer
relationship management and accounting, has reduced business start-up and operating cost.
Ex: Student Information and Accounting System (SIAS) which the NVSU purchased to store data of
students’ information (grade, statement of account); Quick books – accounting software; Amanzon,
Lazada and Shopee
8. International opportunities. The global economy has opened the door to tremendous business opportunities
for entrepreneurs willing to reach across the globe.
The Cultural Diversity of Entrepreneurship
1. Young entrepreneurs. Young people are embracing entrepreneurship enthusiastically as a career choice. A
recent survey by the Kauffan Foundation reports that 40 percent of young people between the ages of 8
and 24 have already started a business or would like to do so in the future. The top five reasons these
young people want to start their own business include the opportunity to use their skills and abilities,
building something for their future, be their own bosses, earn lots of money, and see their ideas realized.
2. Women entrepreneurs. The number of women-owned businesses is growing 1.5 times faster than the
national average.
3. Immigrant entrepreneurs. The United States, which has long been a melting pot of diverse culture, is the
leading destination in the world for immigrants drawn to this nation by its promise of economic freedom and
prosperity. In fact, immigrants are significantly (1.9 times) more likely to start businesses than are native-
born U.S. citizens. Immigrant entrepreneurs start their business with more capital than do native-born
entrepreneurs and are more likely to export goods and services than their native-born counterparts.
4. Part-time entrepreneurs. Part time business is a popular gateway to entrepreneurship. Part time
entrepreneurs can ease into business for themselves without sacrificing the security of a steady paycheck
and benefits. The internet and mobile communication devices make establishing and running part time
business.
5. Home-based businesses
6. Family businesses. A family-owned business is one that includes two or more members of the family with
financial control of the company. Family businesses are an integral part of our economy. Of the nearly 28
million businesses in the United States, 90 percent are family owned and managed. In the Philippines,
about 80 percent of businesses exist as a family business.
Example of family owned business in the Philippines are Cebu Landmaster Inc, Pages Holdings Inc.,
Unilab, Jollibee Foods Corporation, GT Cosmetics Manufacturing Inc.
7. Copreneurs. Copreneurs are entrepreneurial couples who work together as co-owners of their businesses.
Successful copreneurs learn to build the foundation for a successful working relationship before they ever
launch their companies.
8. Corporate dropouts. The dramatic downsizing of corporate America has created another effect among the
employees left after restructuring: a trust gap. The result of this trust gap is a growing number of dropouts
from the corporate structure who then become entrepreneur. Although their workdays may grow longer and
their incomes may shrink, those who strike out on their own often find their work more rewarding and more
satisfying because they are doing what they enjoy. Other entrepreneurs are inspired to launch their
companies after being treated unfairly by large, impersonal corporate entities.
9. Retiring baby boomers. According to the studies of Kauffman Foundation, the level of entrepreneurial
activity among people ages 55to 64 actually exceeds that of people ages 22 to 34.
THE ENTREPRENEURIAL PROCESS
The entrepreneurial process stages that needs to happen to start a business is not easy for anyone.
People have reasons to be an entrepreneur, many say the things that should be done. The entrepreneurial
process stages can be developed one step at a time, but some entrepreneurs are the ones who continue on
this lifestyle.
The entrepreneurial culture and spirit is on those who decide to take one step ahead to achieve
success. It is a long-term process, that visionaries will have to keep on working to transform their environment.
Entrepreneurial Process Stages
Based on the model of University of Pretoria, the main points that an entrepreneur should consider are
the following:
1. Idea generation
The entrepreneur begins to wonder why there is no available product or service, why not
improve certain things, how to generate income to cover their expenses, etc. Thousands of questions
might rise that will help to identify opportunities to meet the market needs. In previous years, there were
not enough amount of goods and services. It was a little bit easier to position a business, however now
it requires a search for information and market analysis to see the possibility of success.
2. Decision making and business planning
A critical point in the entrepreneurial process is deciding to start the project. Be active and stay
motivated are the main factors for the entrepreneur to start landing his idea. Asking what resources are
needed and where he will get them, is vital to generate at least one way forward for the entrepreneur.
The development of the business plan will mark only a guide that can be used as reference.
3. Project creation
The project is conducted when the entrepreneur decides to seek and obtain resources. Getting
finance is difficult, and perhaps one of the main obstacles to start a business. When the entrepreneur
begins to invest the resources and begin operating, it is a point release of stress, as the entrepreneur
will see the first steps of his company.
4. Management and control
After having passed through the first months of operation, the company will see if it decreases,
maintains or increases in sales. The entrepreneur should strive to maintain revenue growth before
worrying about having a nice office. Managing a business is not easy, but the experience that
entrepreneurs acquire over time will surely ease the handling of all resources. Perhaps one could say
that the entrepreneurial process ends here, but I think it is no longer an entrepreneur, and he becomes
a full businessman or businesswoman.
The Entrepreneurial Process Model by Hisrich And Peters
One of the models on the entrepreneurial process is of Robert Hisrich, a professor at the Thunderbird
School of Global Management and Michael P. Peters author of several books on entrepreneurship. This model
establishes the various factors and events surrounding the entrepreneurial process.
The personal, sociological, and environmental factors that give birth to a new enterprise. A person gets
an idea for a new business either through a deliberate search or a chance encounter. Whether or not he
decides to pursue that idea depends on factors such as his alternative career prospects, family, friends, role
models, the state of the economy, and the availability of resources.
Entrepreneurial Process Events Stages

Within the entrepreneurial process, there are different events that are generated along the process.
1. Innovation
It is the time when the entrepreneur generates the innovative idea, identifies the market opportunity,
and look for information. Also, it begins to see the feasibility of ideas, the ability to get value from it and how to
generate the development of the product or service.
2. Triggering event
This event is the gestation time of the project. The entrepreneur begins to motivate himself to start a
business and to decide to proceed with. The business plan is created, as well as the identification of the
resources required, the project risk, the source of the funds and how they would use them.
There is almost always a triggering event that gives birth to a new organization.
3. Implementation
This event includes the incorporation of resources and arms the project to launch their new business to
the market. The strategy and business plan begin to develop day by day, and the use of resources are
invested in favor of building a successful company.
4. Growth
The ideal event for any entrepreneur is to see how their company is constantly growing. The activities
of the previous event, ideally lead the business to a stage of maturity to maximize profitability for better
benefits. Growth is the stage of the entrepreneurial process in which it is reflected on time and effort spent by
the entrepreneur. At this time, to keep up the pace of the business growth, the entrepreneur must keep up his
personal development to continue also his internal growth. This growth is eventually collaborative it there is an
entrepreneurial ecosystem improvement that also aids the mutual work.
VI. LEARNING ACTIVITIES

For supplemental references, access the links below:
 Economic Growth vs. Development Explained | IB Microeconomics
https://www.youtube.com/watch?v=4D_36i4zVFs
 Why Entrepreneurship is Important to The Economy? A Must Watch Video

https://www.youtube.com/watch?v=WwyLeYcUYL0
 What is Entrepreneurship? definition, characteristics and entrepreneurial process

https://www.youtube.com/watch?v=MdNNGfoxrqA
 ABM12: Introduction to Entrepreneurship

https://www.youtube.com/watch?v=LOPHNIwbGAg
 The Entrepreneurial Process

https://www.youtube.com/watch?v=iS-rHcNynAQ
VII. ASSIGNMENT
Excellent Very Satisfactory Needs
Satisfactory Improvement
Understanding of the lesson
Task/Activity performance
The topic that I like best is ___________________________________________________ because
_______________________________________________________________________________.
The topic that I am having difficulty understanding with is ____________________________ because

_________________________________________________________________________.
Mode of delivery: FB Group
VIII. EVALUATION
Name: _____________________________ Course/Section: _______ Contact No.: __________________
GENERAL DIRECTIONS. After reading and understanding the lessons/topics on this chapter. ALL
STUDENTS are required to answer the evaluation tasks on GOOGLE FORMS. LINK IS PROVIDED BELOW.
It is recommended to answer the tasks/quiz here and transfer your answers on the google form later for
convenience. The google form is NOT time restricted, but, only ONE response is allotted for each student.
ANSWERS TO BE ENTERED IN GOOGLE FORM IS “CASE SENSITIVE”, USE CAPITAL LETTERS ONLY.
https://docs.google.com/forms/d/e/1FAIpQLSdXdsXBcjij8eNwwW29G_EFZ5daCo-b2KwJzYdmTz0Bcb2WJg/
viewform?usp=sf_link
Multiple Choice: Read and analyze the questions carefully, afterwards, choose the letter of your choice and
write it on the space provided (2 points each).
1. Which of the following best describes sustenance as a core value of development?
a. The ability of the people to have access on foods, water, shelter, health and protection.
b. The ability to sustain life where basic needs are available and met.
c. The ability to access essential goods.
d. All of the choices
2. All of the following are core values of development except
a. Sustenance
b. Honesty
c. Freedom from servitude
d. Self-worth and self-respect
3. All of the following are objectives of development, except
a. To make basic needs available to people
b. To expand range of choices for societies, whether economic, social or political
c. To encourage servitude and dependence to other people and nation

d. To raise level of living of people
4. Increase in gross and per capita national product, national and per capita income and similar
economic indicators are the focus of _________.
a. Economic development
b. Sustainable development
c. Political development
d. Human development
5. Which of the following does not promote social development?
i. Racism
ii. Discrimination in the workplace
iii. Safe space in workplace
iv. Due process in the justice system
v. Employment opportunities based on age, experience, gender and economic status
a. i,ii,iii,v
b. i,ii,v
c. iii,iv,v
d. i,ii
6. Which of the following theories/concepts explain growth as a natural and inevitable process?
a. Invisible hand theory
b. The concept of entrepreneurship
c. Economic growth as a product of human behavior
7. Which is not a benefit of venturing into entrepreneurship?
a. It improves the quality of life
b. It brings social benefits through the government
c. It is costly and risky
d. It creates employment
8. Which of the following best describe entrepreneurship?
a. It is a dynamic, social process where individuals, alone or in collaboration identify
opportunities for innovation and act upon them by transforming ideas into practical targeted
activities whether in a social, cultural or financial context.
b. It is the creation of a new good or service, the assumption of any risk that comes with
creating that good or service and the receipt of rewards or profits.
c. It is an act of seeking investment and production opportunity, developing and managing a
business venture, so as to undertake production function, arranging inputs like labor, material
and capital, introducing new techniques and products, identifying new sources for the
enterprise.
9. Which of the following is the initial step of the entrepreneurial process?
a. Idea generation
b. Business planning
c. Project implementation
d. Management and control
10. What is Angeline Tham's (founder and CEO of "Angkas" ride), Socorro Ramos' (founder of
National Bookstore), and Kylie Jenner's (founder of Kylie Cosmetics and Kylie Skin) common
denomination?
a. They are woman entrepreneurs.
b. They are immigrant entrepreneurs
c. They are young entrepreneurs
d. They are copreneurs
True or False: Write T if the statement is correct and F, otherwise. Write your answers on the space provided
(2 points each).
1. The existence of bad political dynasties and rivalries is the goal of political development.
2. The proper allocation of resources to sustain present and future lives is the goal of sustainable
development.
3. Exponential growth in population and mathematical growth in production is a characteristic of an

advanced country.
4. Advancements and improvements in technology promotes economic development.
5. Entrepreneurship is a means of contributing to a more equitable distribution of income and
therefore eases social unrest.
6. Company A has a total asset size of P16-M with over 120 employees. Company A is an example
of a large enterprise
7. Entrepreneurship promotes economic development.
8. Government supports are necessary in nurturing an environment for entrepreneurship.
9. Entrepreneurship is only suitable for men.
10. Entrepreneurship is about taking risks and gaining returns.
11. An existing problem in a community can be an opportunity for an entrepreneur to develop an
enterprise or product that provides solution to that problem.
12. Growth is the stage of the entrepreneurial process in which it is reflected on time and effort spent
by the entrepreneur.
13. Copreneurs are couples who work together as employees of a businesses
14. Baby boomers venturing into entrepreneurship refers to people who started creating their
enterprise at a young age.
15. In entrepreneurship, innovation is an important aspect of development.
IX. REFERENCES
Asian Development Bank. (28, August 2018). Support for small and medium- sized enterprises, 2005–2017:
business environment, access to finance, value chains, and women in business. Retrieved from
https://www.adb.org/documents/support-small-and-medium-sized-enterprises-2005-2017.
Cartwright, B. (n.d.). Economic growth vs. development explained | IB Microeconomics. Retrieved from
https://www.youtube.com/watch?v=4D_36i4zVFs
Cengage. (2021). Canadian International Development Agency. Retrieved from https://www.encyclopedia.com

/education/encyclopedias-almanacs-transcripts-and-maps/canadian-international-development-agency.
EntrepreneurialEthic (2011, July 22). The entrepreneurial process. Retrieved from https://www.youtube.com
/watch?v=iS-rHcNynAQ
Entrepreneurs Unity Group. (2020, June 25). Why entrepreneurship is important to the economy? A must
watch video. Retrieved from https://www.youtube.com/watch?v=WwyLeYcUYL0

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Republic of the Philippines

NUEVA VIZCAYA STATE UNIVERSITY

College: College of Business Education

DEGREE PROGRAM BSBA COURSE NO. FM12-A

I. UNIT TITLE/CHAPTER TITLE

II. LESSON TITLE

III. LESSON OVERVIEW

IV. DESIRED LEARNING OUTCOMES

At the end of the chapter, the students must be able to:

ECONOMIC DEVELOPMENT AND GROWTH

Growth vs. Development

Three Core Values of Development

1. Sustenance – the ability to meet basic needs;

Three Objectives of Development

1. Economic Development – It is growth-oriented and development is measured according to how

Differentiating the Advanced vs. Third World Countries

Table 1. Characteristics of Advanced Versus Third World Countries

Theories That Explains How Economies Grow

1. General explanations of economic development – Some writers explain economic growth as

a. Law of Nature – economic development proceeds according to a master plan.

In 1932, Spengler explained economic development by likening a culture or society to a

f. Challenge of the natural environment is responsible for the rise of civilization.

a. Technology improvements and division of labor lead to development.

b. Population changes affect development

3. Socio-psychological explanation of development – Sociologist and psychologist differ from

a. Sociological factors in economic development – Sociologists explain economic growth in

ENTREPRENEURSHIP AND ECONOMIC DEVELOPMENT

Benefits from Entrepreneurship

1. Entrepreneurship creates employment

2. Entrepreneurship improves the quality of life

Entrepreneurial undertakings contribute significantly to the continuous improvement of living

4. Entrepreneurship utilizes and mobilizes resources to make the country productive

5. Entrepreneurship brings social benefits through the government

PHILIPPINE ENVIRONMENT FOR ENTREPRENEURSHIP

Classification by employment – If it is not easy to classify enterprises as to assets, we can do so by

1. Government Assistance Program

e. Infrastructure – These constitutes the foundation of economic development. Roads, bridges

g. Public Administration – Entrepreneurs prefer efficient public administration. Simplified

i. Marketing Assistance – Encouraging the poor to become entrepreneurs without

c. RA 7882 – An Act Providing Assistance to Women – this particular legislation recognizes

d. RA 3883 – Business Name Registration – this protects an enterprise guaranteeing exclusive

3. Initiation of various programs such as:

b. The National Subcontractors/Contractors Exchange Program – in this program, micro, and

4. International Linkages for SME Development

BASIC CONCEPTS ON ENTREPRENEURSHIP

A normal response to this question is that entrepreneurship is about creating or establishing a

Entrepreneurship is a dynamic, social process where individuals, alone or in collaboration identify

Important Aspects of Entrepreneurship

Factors that Led to the Growth of Entrepreneurship

The Cultural Diversity of Entrepreneurship

THE ENTREPRENEURIAL PROCESS

2. Decision making and business planning

4. Management and control

The Entrepreneurial Process Model by Hisrich And Peters

Entrepreneurial Process Events Stages

VI. LEARNING ACTIVITIES

 Why Entrepreneurship is Important to The Economy? A Must Watch Video

 What is Entrepreneurship? definition, characteristics and entrepreneurial process

 ABM12: Introduction to Entrepreneurship

 The Entrepreneurial Process

The topic that I am having difficulty understanding with is ____________________________ because

Mode of delivery: FB Group

Name: _____________________________ Course/Section: _______ Contact No.: __________________

Name: _________________________ Course/Section: _ Contact No.: ________________