TECHNOPRENEURSHIP

ENTREPRENEURSHIP

▪ The capacity and willingness to develop, organize and manage a business venture along with any
of its risks in order to make a profit.
▪ The most obvious example of entrepreneurship is the starting of new businesses
▪ An individual who, rather than working as an employee, runs a small business and assumes all
the risk and reward of a given business venture, idea, or good or service offered for sale. The
entrepreneur is commonly seen as a business leader and innovator of new ideas and business
processes.

“All entrepreneurs can be a businessman, but not all businessmen can be an entrepreneur”

INNOVATION

“It is the creation, developemtn and implementation of a new product, process or service”

TECHNOPRENEURSHIP CAN BE DEFINED AS FOLLOWS:

1. Integration of Technology, Innovation and Entrepreneurship.

2. Act of turning “something” into a resource of high value by converting good ideas into business
ventures that relies heavily on the application of human knowledge for practical purposes.
3. Entrepreneurship in the field of technology.
4. Manufacturing if Hi-Tech products or making use of Hi Technology to deliver product to
consumer.
5. Exhaustive use of technology in making profit.

“if your business is not on the internet, then your business will be out of business” – BILL GATES

IMPORTANCE OF TECHNOPRENEURSHIP

▪ Convenience
▪ Market expansion
▪ Reduced cost

MICRO, SMALL, AND MEDIUM ENTERPRISES (MSMEs)

MSMEs defined

Micro, small, and medium enterprises (MSMEs) are defined as any business activity/enterprise engaged
in industry, agri-business/services, whether single proprietorship, cooperative, partnership, or
corporation whose total assets, inclusive of those arising from loans but exclusive of the land on which
the particular business entity’s office, plant and equipment are situated.

Recently, Republic Act No. 9178, otherwise known as the Barangay Micro Business Enterprise (BMBE)
Act of 2002 has redefined the categories. Hence, the present structure, by law, is as follows:
By Asset Size

Micro: Below p3 Million

Small: P3,00,000,001-P15,000,000
Medium: P15,000,001-P100,000,000
Large: Above P100,000,000

Republic Act (RA9501): Magna Carta for small Enterprise of 2008

▪ A law to promote, support, strengthen and encourage the growth and developments of MSMEs
in partnerships with the private sector.
▪ Banks be it private or government are mandated to increase their loan portfolios from 6 to 8
percent for micro and small and maintain the 2 percent allocation for medium-sized companies.
The penalty for non-compliance is not below P500,000.
▪ To avail of this financial assistance, these enterprises must be registered first with appropriate
government agencies (DTI,SEC,CDA, LGUs).

RA NO. 9178: BARANGAY MICRO BUSINESS ENTERPRISE ACT OF 2002

Provided a business capital or assets do not exceed P3 million, a registered enterprise is entitled to the
following:

a) Guaranteed registration approval within 15 working days

b) Reduced local taxes and fees
c) Excemptions from income tax and minimum wage
d) Availability of special financing and credit guarantees windows under DTI’s SME unified Lending
Opportunities for National Growth (SULONG) program
e) Technology transfer; product and management training, and marketing assistance.

ROLE AND IMPORTANCE OF MSMEs

MSMEs play a major role in the country’s economic development through their contribution in the
following:

▪ Rural industrialization
▪ Rural development and decentralization of industries
▪ Creation of employment opportunities and more equitable income distribution
▪ Use of indigeneous resources
▪ Earning of foreign exchange (forex) resources
▪ Creation of backward and forward linkages with existing industries
▪ And entrepreneurial development

▪ They are vital in dispersing new industries to the countryside and stimulating gainful
employment.
 ▪ MSMEs are quick in assimilating new design, trends, developing contemporary products, and
bringing them to the marketplace ahead of the competition.

▪ MSMEs are notably skillful in maximizing the use of scarce capital resources and are able to
partner with large firms by supplying locally available raw materials in unprocessed or semi-
processed forms

▪ MSMEs can act as the seedbed for the development of entrepreneurial skills and innovation.

MSMEs’ Contribution to the Economy

▪ MSMEs are contribute to the creation of wealth, employment, income generation, both in rural
and urban areas, thus, ensuring a more equitable income distribution.
▪ MSMEs provides the economy with a continuous supply of ideas, skills, and innovations
necessary to promote competition and the efficient allocation of scarce resources.
▪ As of 2009, the MSMEs sector accounted for about 99.6% of the registered businesses in the
country by which 63% of the labor force earn a living. Around 35.7% of the total sales and value
added in the manufacturing come from MSMEs as well

STATISTICS

These types of businesses account for 99.6 percent of all registered businesses in the country and
employ 70 percent of the country’s workforce. MSME’s also produce about 30 percent if the philippines’
total output.

“MSME’s are the real backbone of our economy. People do not realize that your businesses have greater
direct impact on Filipinos’ lives than do big players,”

Senator Edgardo J. Angara during the launch of the Philippine Home-Based Business and Career Summit
Expo 2011 last August 12 at the SM Megatrade Hall.

But more than this, MSMe’s provide opportunities to those who could not have started business
otherwise. Studies have shown that through MSME’s, advantaged members of society, like the elderly
and disabled, are able to earn income. In fact, about 30 percent of the poor in our country have turned
to entrepreneurship to get by

An Asian Development Bank (ADB) study shows that 50 percent of innovations during the 20th century
were generated by new and small firms

NUMBER OF ESTABLISHMENT

As of 2009 count, there are 780,480 business enterprises operating in the Philippines. Of these, 99.6%
(777,357) are micro, small and medium enterprises (MSME’s) and the remaining 0.4% (3,080) are large
enterprises. Of the total number of MSME’s, 91.4% (710,822) are micro enterprises, 8.2% (63,529) are
small enterprises, and 0.4% (3,006) are medium enterprises
SMALL ENTERPRISE, 63,529

MEDIUM ENTERPRISE, 3,006

LARGE ENTERPRISE, 3,080

MICROENTERPRISE, 710,882

SECTORAL DISTRIBUTION

Majority of the 777,357 MSME’s in operation in 2009 are in the wholesale and retail trade industries
with 385,610 business establishments; followed by manufacturing with 111,987; hotels and restaurants
with 97,298; real state, renting, and business activities with 47,654; and other community, social and
personal services with 44,313. These industries accounted for about 88.4% of the total number of SME
establishments.

GEOGRAPHICAL SPREAD OF MSMEs

Top five (5) Locations os MSME Establishments in the Philippines

1. National Capital Region

2. Region-4A CALABARZON
3. Region 3
4. Region 7
5. Region 6

Majority of the MSMEs in operation in 2009 can be found in the National Capital Region (NCR), with
210,648 business establishments; Region 4-A (CALABARZON) with 114,676; Region 3 (Central Luzon)
with 79.445; Region 7 (Central Visayas) with 45,427; and Region 6 (Western Visayas) with 45,382. These
top five (5) location accounted for about 63.7% of the total number of MSME establishments in the
country.

REGION 7 CENTRAL VISAYAS; 45,427

REGION 3 CENTRAL LUSON; 79,445

REGION 4-A CALABARZON; 114,676

REGION 6 WESTERN VISAYAS; 45,383

NCR; 210,648

EMPLOYMENT

MSMEs generated a total of 3,595,641 jobs in 2009 versus 2,094,298 for the large enterprises. This
indicates that MSMEs contributed almost 63.2% of the total jobs generated by all types of business
establishments that year. Of these, 30.4% or 1,731,082 jobs were generated by micro enterprises; 25.5%
or 1,449,033 by small enterprises; and 7.3% or 415,526 by medium enterprises.
MEDIUM ENTERPRISE; 415,526

SMALL ENTERPRISE; 1,449,033

LARGE ENTERPRISE; 2,094,298

MICROENTERPRISE; 1,731,082

EMPLOYMENT

By industry sector, MSMEs in the wholesale and retail trade generated the most number of jobs (with
1,250,453) in 2009 followed by MSMEs in manufacturing, 637,524; hotels and restaurants, 482,357; real
estate, renting, and business activities, 284,406; and education, 225,016

Majority of the jobs are generated by MSMEs in the National Capital Region (NCR) with 1,360,440 jobs;
followed by MSMEs in Region 4-A (CALABARZON ), 446,648; Region 3 (Central Luzon), 319,340; Region 7
(Central Visayas), 235,091; and Region 6 (Western Visayas) 193,543.

EXPORTS CONTRIBUTIONS OF MSMEs

MSMEs account for 25% of the country’s total exports revenue. It it also estimated that 60% of all
exporters in the country belong to the MSME category. MSMEs are able to contribute in exports through
subcontracting arrangement with large firms, or as suppliers to exporting companies.

LOANS LENT TO SMEs

All lending institutions are required to lend set aside at least 6% of their total loan portfolio to small
enterprises and at least 2% to medium-sized enterprise.

The Republic Act 6977 enacted in 1991 (the Magna Carta for Small Enterprises) required 10% more to be
diverted to SME’s. Then, it was amended in 1997 under the Republic Act 8289 to extend the applicable
period to 2007 and lower the minimum level to 6% and 2%. The Bangko Sentral ng Pilipinas is mandated
by law to monitor this initiative.

SALES AND CENCUS VALUE-ADDED

MSMEs contribute around 35.7% of the total sales and cencus value-added in the manufacturing
industry, according to the National Statistics Office (NSO - 2009).

TRADELINE PHILIPPINES

Tradeline Philippines is an online database service that provides product search listing thousands of
manufactured exported Philippine products complete with product specifications and is a business
search allowing users to contact Philippine exporters, suppliers and local/foreign buyer details and the
products/services they manufacture/provide and export

EXPONENT

The Bureau of Export and Trade Promotion’s (BETP) Export Assistance Network (EXPONENT) helps
exporters and prospective exporters’ access information and resolve specific problems related to
exporting
Exponent provides information on export seminar schedules, export organizing, export procedures and
documentation, import facilities for exporters, buyer linkages, export financing and incentives, product
raw material sourcing and other statistical information. The agency also assists exporters in export-
related problems/trade complaints.

DEFICIENCIES IN THE PRESENT SYSTEM OF SME STATISTICS

1. Timeliness
• Statistics on the cencus of establishments (done every 5 years) and the annual survey of
establishments are usually released 15-24 months after the year. This makes the data more or
less an imprecise tool for analysis and decision-making. In the same manner, BSP collects
information on the loans lent to SMEs (in compliance with the Magne Carta for Small and
Medium Enterprise) every quarter. The data athered is usually released only after 3 months.

2. Cross compatability with other countries cross country comparisons

• the major classification used by most countries to define SMEs is through assets and
employment size. However, the size ranges of their classification differ, since developed
countries have large industries than the less developed ones. Hence, what might be considered
as “small” by developed countries will already fall into the “medium” or “large” category for
developing countries like the Philippines. Thus, cross compatibility with other countries for cross
country comparison, is sometimes inappropriate or could not be used as basis for a policy
recommendation

3. Inadequateness
• The scope and coverge of SME statistics are limited to:
1. the number of establishment,
2. employment contribution, and
3. regional distribution
• more important data which will help policy makers and businesses to react quickly in a
competitive environment are usually not available. These statistics include.

4. Availability
• There are confidentiality clauses in cencus for firm level data. This cannot be accessed at the
National Statistics Office because their agency has to comply with the rules of confidentiality.
• In similar ways, bank also ensure that access to customer information in limited to selected bank
employees and are very conservative in disclosing client information.

5. Coverage
• The Philippines has a large section of small business constituting the so-called underground or
informal economy. This refers to the small scale units in the national economy, which produce
and distribute goods and services without the benefit of official sanction or control.
• They don’t register, don’t keep books and don’t pay taxes. They operate beyond the reach of the
law. They have little or no access to organized markets, credits institutions, educational or
training center or public services. Although efforts are being made by the government to bring
 the underground economy to the surface, the nature of this sector makes it very difficult to
gather and process statistics on them.

WHAT ARE THE CURRENT INITIATIVES TO DEVELOP SME STATISTICS

1. National business Registration (NBR) Project

The NBR project aims to address the growing concern of having consolidated information on all the
registered businesses in the country. Currently, no government agency has a complete record of all
registered businesses since registration is being done by various agencies. It is the objective of the NBR
project to integrate the information contained in the various agencies and have a single consolidated
database containing basic information of all registered business.

The NBR project is considered a “timely” project for the country in this day and age of global
economy. The NBR will not only enable Filipino entrepreneurs to find business ventures with fellow
Filipinos but with foreign investors as well.

2. SME Database Project

The SME Database (healed by the DTI SME-Project Management Office) aims to act as a repository
(databank) of the corporate profiles of SMEs. Its objective is to serve as a tool for monitoring the
assistance given by the different agencies to each SME firm. The database is also designed to identify
individual companies and to track the kinds of government assistance of given to each.

The interim database will enable the much-needed tracking SMEs during the crucial first six (6) months
of 2003, especially for measurement against the National SME Agenda Objectives. The final database
could act as a master database of all SMEs natiowide, possibly supporting other organizations outside
DTI, and would allow for more complex analysis and reporting. A networked database would facilitate
the encoding of data from the provinces at the source of the information. The ultimate benefit of the
SMEs is the possibility of minimizing. If not eliminating the need to register numerous times with various
organizations.
Pre-midterm Topic (Technopreneurship Ecosystem & Intellectual Property Rights)

In our class in Technopreneurship, our instructor discussed regarding the Technopreneurship

Ecosystem, the three vital components for business, Seed Money and its examples, Angel Investors,
some Famous and Successful Technopreneurs and she also discussed to us the lessons regarding
Intellectual Property and its Rights. Let me discuss these topics one by one.

We have learned that the parts of the Technopreneurship Ecosystem in order to be successful are
Human Resources, Environment, Laws and Policices, and Financial Resources (or HELF). The components
of Human Resources are Research, Developer, Scanner and marketing people and financers. The
researchers are the thinkers, idea generators and the innovators, developers are the implementers and
technical people. Also, scanner, marketing people and financers are components of human resources.
Moving further, the components of Environment are Science parks, Incubation centers, Academic
Institutions, R & D Centers , Internet access, Communication, Other Support Services, Geographic
accessibility, and Venture Mentoring Services/Support. Incubation centers have incubation programmes
provide incubation services to assist technology start-ups in their vulnerable beginning stages, enabling
them to grow and flourish. Their supports are Office Space and Facilities, Technical and Management
Assistance, Promotion and Development Assistance, Business Support and Financial Aid Package. Going
further, the components of Laws and Policies are Intellectual Property Rights Office, Technology
Licensing Office (facilitates commercialization of inventions) and Legal Services. Lastly, the components
of Financial Resources are investors, business sector, funding agencies and financial services (i.e.
Accounting).

We have also learned about the three vital components for business and these are Excellent Market
Opportunity, Superb entrepreneur (and management team) and Resources needed to start the
company and make it grow. Talking about Excellent Market Opportunity, it needs to know the Customer
need and must have Timing. If in case, would-be entrepreneurs who are unable to name customers are
not ready to start a business. They have only found an idea and have not yet identified a market need. In
this case, one must plan to start a business with the knowledge of the market need and must identify
customers. Also, if the window of opportunity is brief, the entrepreneur will rush to open the business,
usually with inadequate planning. This means that usually if entrepreneurs who rush to open a business
without proper planning will lead to costly mistakes. Thus, planning to open for a business needs proper
timing. Going further, the Technopreneur and the management team should have experience in the
same industry or a similar one and cannot go on OJT at the same time. In addition to this, ideal
entrepreneur/technopreneur is one who has been a successful entrepreneur in the same industry, have
management experience, preferably with responsibility for budgets, profit and loss, sales. The business
will be successful if led by a person with strong entrepreneurial and management skills. And the last vital
component for business is the Resources that has a principle of Entrepreneural frugality (pagtitipid)
which means Low overhead (operating cost), High Productivity and Minimal ownership of capital assets.
We also learned about Seed Money or Seed Funding which is a form of securities offering in which an
investor purchases part of a business. According to our class discussion, the term seed suggests that this
is an early investment, meant to support the business until it can generate cash of its own, or until it is
ready for further investments. The options of this include friends and family funding, angel funding
and—recently -- crowd funding. In our lessons also, tapping family and friends to raise cash for a
company that's either too new or too small to get financing elsewhere is an age-old formula that still
makes sense. But here's one risk too big to ignore in today's highly competitive capital marketplace: if
you don't follow professional standards in structuring and documenting "F&F" loans or equity
arrangements, your sloppiness will likely come back to haunt you. This is true because if and when your
company grows to the point at which it can credibly approach banks or professional investors for funds,
their lawyers will examine your corporate capitalization structure with a fine-tooth comb. In my own
opinion, an entrepreneur must have a good credit record everywhere so that whenever he needs to
borrow money, especially in banks in which really investigate your credit backgrounds very keenly, they
would grant him loans. The examples of Seed Money that has been discussed during our class are Blood
Money, Borrowing: Avoiding Problems with Family and Friends, Borrowing Money for Your Business,
Steps to Borrowing from Family or Friends, and Try Bank Borrowing. Blood Money or borrowing money
from family and friends is the most common way to finance a start-up and it's also the riskiest. In
avoiding problems with family and friends in borrowing, it's best to prepare for the worst -- before it
happens. Moreover, the steps in borrowing money from family and friends includes one should keep the
relationship professional is the key to successful borrowing from close acquaintances. Also, in borrowing
money for your business, especially in the banks or someone you know, it is best to sign a promissory
note - - a legally binding contract in which you promise to repay the money. Tips to remember, one
should try Bank borrowing for bank financing isn't impossible and one should find an Angel Investor
because they will not only share their money; they're also great sources of knowledge for fledgling
businesses. Lastly, our instructor taught us the 9Fs to consider in starting a business and these are
Founders (first class entrepreneur), Focused (focus on niche markets, specialize), Fast (decision making,
implementation), Flexible (open mind, respond to change), Forever Innovating, Flat (organizations),
Frugal (low overhead, productivity high), Friendly (to their customers, suppliers, workers) and Fun (to be
associated with an entrepreneur company).

Our instructor also shared some examples of Famous Technopreneurs and their inventions and
contributions, local and international. The examples she gave us are..
Bill Gates (Microsoft software),

Steve Jobs (founded the Apple together with Steve Wozniac),

Michael Dell (Created a new model for PC sales Cutting out the retail middleman and custom-building
computers),
Larry Page and Sergey Brin (founded Google),

Dado Banatao (Filipino ICT Hero),

and Winston Damarillo (Developed Gluecode Software as an open source application system
provider).

Going further, talking about Intellectual Property which refers to creations of the mind: inventions,
literary and artistic works, and symbols, names, images, and designs used in commerce.
Our instructor also shared to us regarding Intellectual Property Rights these are the rights given to
persons over the creations of their minds. It usually grants the creator an exclusive right over the use
of his/her creation for a certain period of time. Intellectual Property Code of the Philippines is the
Republic Act No. 8293 of June 6, 1997 is an act prescribing the intellectual property code and
establishing the intellectual property office, providing for its powers and functions, and for other
purposes.

It is divided into three categories:

Industrial property (PATENT), Trademark and Copyright. Industrial property includes inventions
(patents), Trademarks include industrial designs, and geographic indications of source and Copyright
includes literary and artistic works such as novels, poems and plays, films, musical works, artistic works
such as drawings, paintings, photographs and sculptures, and architectural designs.
Going further, according to our lessons, a Patent grants an inventor exclusive rights to make, use, sell,
and import an invention for a limited period of time, in exchange for the public disclosure of the
invention. It has a term of protection of twenty (20) years providing an inventor significant commercial
gain. In return, the patent owner must share the full description of the invention. This information is
made available to the public in the form of the Intellectual Property Official Gazette (is the public journal
and main publication of the government of the Republic of the Philippines) and can be utilized as basis
for future research and will in turn promote innovation and development.

Requirements for Filing a Patent

1. Request for the Grant of Patent

2. Description of the Invention (Specification and Claim/s)
3. Drawings necessary for the Invention (if any)
4. Filling Fee

Going further, talking about Trademarks according to our lessons, is a tool used that differentiates goods
and services from each other. It can be one word, a group of words, sign, symbol, logo, or a combination
of any of these. Generally, a trademark refers to both trademark and service mark, although a service
mark is used to identify those marks used for services only. Trademark is a very effective tool that makes
the public remember the quality of goods and services. Once a trademark becomes known, the public
will keep on patronizing the products and services. Utilized properly, a trademark can become the most
valuable business asset of an enterprise. In addition to making goods and services distinctive, the owner
of a mark may earn revenues from the use of the mark by licensing its use by another or though
franchising agreements.

These are examples of Trademarks:

• ® Registered trademark

• ™ Intent to use application filed for product

• SM Intent to use application filed for services

Rights are reserved exclusively for owners for 17 years; it can be renewed and lasts indefinitely.

TM = unregistered trade mark, SM = unregistered service mark, ® = registered trade mark

Trademark can be protected through registration. Registration gives the trademark owner the exclusive
right to use the mark and to prevent others from using the same or similar marks on identical or related
goods and services. Your mark should be able to distinguish your goods or services from those of others.
Your mark should also meet the requirements for registrability of marks under Sec. 123.1 of the
Intellectual Property Code.

What are the requirements to apply for registration?

1. A duly filled out trademark application form [you can access link from site]

2. Drawing of the mark

3. Payment of fees

Part of our lesson is the Trademark Infringement, Counterfeiting, and Dilution. Infringement is a mark
that is likely to cause confusion with a trademark already existing in the marketplace, Counterfeiting is
the deliberate copying of a mark, and Dilution is defined as the value of the mark is substantially
reduced through competition or through the likelihood of confusion from another mark.
And the last category for Intellectual Property is Copyright. It is a protection for authors of original
works, whether published or unpublished. It covers original works of authors, composers, screenwriters,
and computer programmers. In Section 172 of the IP Code are the copyright protection listed.

THE TWO TYPES OF RIGHTS UNDER COPYRIGHT

(1) economic rights, so-called because they enable the creator to obtain remuneration from the
exploitation of his works by third parties, and

(2) moral rights, which makes it possible for the creator to undertake measures to maintain and protect
the personal connection between himself and the work.

The term of protection of Copyright for original and derivative works is the life of the author plus fifty
(50) years after his death.