Entrepreneurship

Unit 2
Understanding Entrepreneurship

Ella Kangaude-Nkata
 CONTENT
• Nature of entrepreneurship
• Characteristics of entrepreneurs
• Innovation and creativity
 Nature of Entrepreneurship
• The word ‘entrepreneur’ is an old French
coinage derived from ‘entre’ and ‘prendre’
meaning ‘between’ and ‘to take’
• Together ‘entreprendre’ means ‘to undertake’
• Translated as ‘those who get things done’ in a
different way…’cést lui qui entreprend’
• Entrepreneurship is considered
multidimensional and elusive with no single
definition
Views on Entrepreneurship 1725-1930
• Richard Cantillon:
A self-employed individual
Buying land/property at a certain price and selling at a bargain price
Exercising judgment in the face of risk
• Francois Quesnay:
A large-scale farmer backed up by abundant capital
• Jean-Baptiste Say:
An administrator/a superintendent
Leading to high productivity and greater yields
Not a capital provider
• Carl Manger
Transforms resources into useful goods and services
The owner of the business and coordinates transformation processes
• Alfred Marshall:
One of the factors of production that plans and organizes the other
factors (land, labour and capital)
Views on Entrepreneurship 1931-1999
• Frank Knight:
Is the owner of the business
Uncertainty and risk aspects of entrepreneurship
He/she initiates useful change and adapts to the environment
• Joseph Schumpeter:
Turns an idea into a business venture
He/she is an innovator and earns profits from successful
innovations
Entrepreneurship is a force of “creative destruction” new and
better things/ways of getting things done
• Peter Drucker:
Searches for change, responds to it and exploits that
opportunity whether as a new organization or in an existing
organization
Views on Entrepreneurship 2000-2015
• Earlier views laid the background to thoughts on
entrepreneurship in this era
• However, there are still as many definitions of
entrepreneurship as there are writers on the
subject
• Some definitions hinge on identification and
exploitation of opportunities (Drucker)
• Some other hinge on creation of new businesses
from ideas (Schumpeter)
• Common in recent definitions is the need for
creativity and innovation
 Definition of Entrepreneurship:
Who is an Entrepreneur?
• No universal definition/multidimensional
• An Entrepreneur is a person who is willing and able to convert a new idea or
invention into a successful innovation, simultaneously creating new products and
business models largely responsible for the dynamism of industries and long run
economic growth – Schumpeter (1934)
• An entrepreneur is a person who looks out for change, responds to it and exploits
the opportunity generated by change – Drucker (1985)
• An entrepreneur is a person who undertakes a wealth creating and value adding
process through developing ideas, assembling resources and making things
happen – Kao, Kao, and Kao (2002)
• An entrepreneur is a person who creates new organisations through a dynamic
process that involves such activities as obtaining equipment, establishing
production processes, attracting employees and setting up legal entities – Shane
(2003)
• Common in recent definitions is the need for creativity and innovation -RPT
 Who is an entrepreneur?
An entrepreneur can therefore be described as someone who:
• Starts their own business
• Manages their own business
• Identifies new products or opportunities
• Is creative and innovative
• Organises and controls resources (capital, labour, and
materials) to ensure a profit
• Has the ability and insight to finance, produce and market a
product or service
• Is willing to take calculated risks
 REFLECTION POINT!
• Is there a difference between a
businessman/woman and an entrepreneur?
Class discussion
• Can a businessman be an entrepreneur and
vice versa? Class discussion
• What are the characteristics of an
entrepreneur? ???
 Characteristics of an entrepreneur or
small business owner manager
• Initiative
• Persistence
• Knowledge
• Concern for high quality work
• Systematic planning skills
• Problem solving and decision making skills
• Assertiveness
• Concern for employee welfare
• Monitoring skills
• Self efficacy
• Communication skills
 READING ASSIGNMENT
1. Why is entrepreneurship becoming so
popular these days?
2. What are the benefits of entrepreneurship?
To the individual and to the nation/economy.
INNOVATION
&
CREATIVITY
 Innovation and Creativity
• In Schumpeter's view, an entrepreneur is one
who brings change to the society.
• The entrepreneur is regarded as the consummate
innovator who earns profits from successful
innovations.
• Innovation in this sense refers to something new
and valuable, improved and better
• Therefore, an entrepreneur creates new products
and business models- converts a new idea or
invention into a successful innovation
• Creativity and innovation vital in
entrepreneurship
 Innovation and Creativity

What is the difference between creativity and Innovation?

• Creativity is the ability to develop new ideas and to

discover new ways of looking at problems and
opportunities.
• And innovation is regarded as the ability to apply creative
and unique solutions to the problems and opportunities
with the aim of enhancing or enriching people’s lives.
• Simply, an innovation is creativity put into use.
• Creativity is thinking new things and innovation is doing
new things.
• Innovation can be an incremental, radical or revolutionary
change in a product, process or an organization.
• Consider levels of creativity by Taxonomy of Creative
Design.
Taxonomy of Creative Design
Original
Creation

Transformation

Combination

Variation

Imitation
• Do you have what it takes to be an
entrepreneur?
• What do you think are the characteristics of
an entrepreneur? Reading assignment
End of Unit 2