Module No. 1 2.

to organize production by buying and combining inputs like

A Perspective on Entrepreneurship materials and labor
Entrepreneurship and Economic Development 3. to decide on the rate of output, in the light of his expectation
Economic development- is a scheme aimed at about demand; and
improving the living standards of the
nation’s citizenry. To achieve economic 4. to bear the risk inherent to the venture.
goals, proper management of the following
elements is necessary: Entrepreneurship and Innovation
1. human resources (labor supply, education, The freedom of competition afforded by the capitalist
discipline, motivation) economy serves to drive the entrepreneur to innovate and get
2. natural resources (land, minerals, fuel ahead of his competition lest he is driven out of the market.
climate) Buyers of the commodities have a tendency to patronize
3. capital formation (machines, factories, roads) innovative offerings of any kind and if one wants to patronage,
4. technology (science, engineering, management, he must remember this motivation.
entrepreneurship)
Innovation may be defined as the introduction of a new method,
The effective and efficient utilization of the various procedure, custom, device, among others. Innovation could be
Resource elements contribute to the economic any of the following:
Growth.
1. new product
What is Entrepreneurship
Entrepreneurship refers to the economic activity of a 2. new process pf production
person who starts, manages, and assumes the risk of a business
enterprise. The person who undertakes entrepreneurial activities 3. substitution of a cheaper material in an unaltered product
is called an entrepreneur.
4. reorganization of production, internal function, or distribution
The entrepreneur identifies an economic need, considers arrangement leading to increase efficiency, better support for a
offering a business solution, proceeds to assemble the resources given product, or lower costs; or
required, and assumes the risk of either succeeding or failing.
5. Improvement in instruments or methods of doing innovation.
An example of these activities is properly shown on Table 1. Innovation may also be viewed as the last stage in an important
process consisting of the following:
Entrepreneur’s Problem at Hand Entrepreneur’s
Concern Action a. Invention- which refers to the discovery or devising of new
1. Identifying an 1. High income 1. Establish a high products and processes;
economic need families are not school education
satisfied with the with higher b. Development- which refers to the process by which the ideas
services provided standards than the and principles generated from the stage of invention are
by high schools in current high embodied in concrete products and techniques; and
their area. schools are
providing. c. Innovation- which refers to the actual introduction of a new
2. Assembling 2. Resources must 2. Acquire funds, product or process.
resources required be made available. hire people,
construct Examples of successful innovations are the following:
buildings and the
3. Assuming risk 3. Venture must like. 1. cordless microphone
be made. 3.Prepare project
study, advertise, 2. microwave oven
maintain good
relationship with 3. cellular phone
employees and
other customers, 4. kung fu fight scenes developed by Bruce Lee in the movies
among others.
5. Karaoke music appliance

The Entrepreneur’s Task 6. use of Laser in the treatment of eye conditions

If all the requirements in a capitalist economy are in the
place, the entrepreneur can assume his assigned roles in the
development of the economy. A review of the contributions of
entrepreneurs will reveal that no business, big or small, started
without the hand of the entrepreneur. Even if many of these
businesses failed to survive, still a sizable number developed
and proceeded to make the capitalist economy a viable concern.
This is made possible because the surviving enterprise are
responsible for providing the following:
1. products and services for customers and procedures;
2. employment;
3. taxes
4. demand for suppliers products and services
5. training facilities
In the attempt to make profits, the entrepreneur performs the
following specific functions:
7. use of computers by engineers and architects in the design of
buildings
New Ventures and Long-term Enterprises
A new venture cannot remain as such forever. The
entrepreneur must develop it into a small business or make it
grow into a mature and bigger company if he is to recoup the
cost of opening a new venture and take advantage of the
opportunities presented by a mature business.
The transition from a new venture to a successful long-term
enterprise consists of at least four major stages. The stages are
as follows:
1. prestart-up stage;
2. start-up stage

1. to supply the necessary capital 3. early growth stag; and

4. late growth stage

The prestart-up stage happens when the entrepreneurs starts to
question the feasibility of an idea, product, or service. He seeks
answers to questions regarding potential markets, production
and financing, This is a very important stage that the
entrepreneur must consider.
In the start-up stage, the following activities are undertaken:
1. formation of the business
2. generation of necessary capital
3. purchase of facilities and equipment
4. constructing prototype products; and
5. testing the market
The early growth stage follows after establishing feasibility.
Activities will be on a small scale, i.e., selling to limited
markets with limited resources. If losses occur, it will naturally
be limited also. If the enterprise is successful at this stage, the
option to move to the next stage can be exercised.
The late growth stage is the final stage before the new venture
matures into a stable enterprise. This is when management is
structured, long term financing is established, and facilities
planning are undertaken. This is also the stage where the skills
of the entrepreneur are less needed.
Rewards for Successful Entrepreneurship
The use of any of the factors of production deserves to
receive some form of compensation. The factors referred to as
“things required for making a commodity” consist of land,
labor, and capital. To make them work, however, a fourth
factor becomes necessary and this is the entrepreneur.
When the land is used in production activities, the
owners of land are paid a compensation called rent. The term
“rent” refers specifically to the price paid per unit of time for the
services of a durable good, which, most often, refers to land or
buildings.
For the effort of laborers, they are paid wages or salaries. Wages
may be determined on a piece-rate basis, while salary is based
on time-rate.
Interest is the compensation paid to owners of invested capital.
The Entrepreneur’s Predicament
In the race for winning the all-important consumer’s
pesos, the business will have to offer products or services that
have certain advantages over the competition’s wares.
In the creation of a new venture, the entrepreneur may be
successful in offering innovative products or services. At this
stage, he will reap the profits for being ahead of the competitors.
This situation may be temporary because the competitor may
attempt to improve his position by making moves to out space
the entrepreneur in the race. The competitor may either imitate
or offer better innovations. If the competitor is successful, the
profits of the entrepreneur will decline. (Table 3)
To be ahead again, the entrepreneur will consider offering
newer and better innovations. The cycle continues until one or
both find a reason to stop.
Table 3. Innovation and its Possible Effects on Competing Firms
Entrepreneur Entrepreneur Entrepreneur
1 2 3
Year 1 introduce inactive inactive
innovative
product
Year 2 reap introduce inactive
moderate innovative
profits products
Years 3 maximize reap reap
moderate moderate
profits profits
profits
Year 4 profits maximize profits reap moderate
decline profits
Year 5 introduce
innovative profits decline maximize profits
Entrepreneurship and Business Size
To many people, entrepreneurship means running a small
business. New business ventures, however, can also be
undertaken on a large scale. Both small and large businesses are
confronted by problems that are entrepreneurial in nature.
To effectively compete, business of whatever size must
adapt innovative approaches to its activities. Examples of
innovations are the following:
1. offering business services during Sundays and holidays
2. manufacture and sale of new products
3. selling on a deferred payment scheme
RESEARCH ACTIVITY
Deadline: September 28,2020
Direction: Answer the following activity in MS WORD and
convert it to PDF Form. And send it via messenger or gmail
(kimb.calceta@gamil.com)
1. Identify a business in your area which became successful due
to innovation. Write about the role played by innovation in its
success.
2. Prepare a list of five innovative products or services currently
introduced in the market.
EXERCISE NO. 1
I. Fill in the blanks.
1. __________ perform the function of harnessing the potentials
of any or all of the various elements and the like.
2.__________ refers to the economic activity of a person who
starts, manages, and assumes the risk of a business enterprise.
3. The entrepreneur will determine and _________ on the rate
of output the firm must produce.
4. The entrepreneur will enjoy the ____________ as a reward if
he succeeds.
5. The introduction of a new method is referred to as
_________.
6. Innovation must reduce __________ or improve the quality
of products offered for sale.
7. The transition from a new venture to a long-term enterprise
consists of the prestart-up stage, the early growth stage, and the
_________.
8. Rent is the compensation of the _____________.
9. The profits accruing to the entrepreneurship are limited by
his_______.
10. ______________ is that activity done by an employee of a
corporation who is tasked to launch new products.
II. Fill in the blanks before each item in column A with the
corresponding letters in column B.

A B

1. rent A. hire people, acquire funds and the like

2. economic growth B. new process of production

3. assembling required resources C. follows after establishing feasibility

4 innovation D. labor

5. invention E. entrepreneur questions the feasibility of a product

6. profits F. has the advantages of switching to another business

7. prestart-up stage G. discovery of new products and processes

8. small business H. landowner

9. early growth stage I. effective and efficient utilization of the various resource
elements
10. wages
J. entrepreneur