L1: ENTRPRENEURSHIP THE IMPORTANCE OF ENTREPRENEURSHIP: PHILIPPINE CONTEXT

Entrepreneur - originates from the French word entreprendre MSME’s = Micro, Small & Medium sized Enterprises (using
which means “to undertake” (commit oneself to and begin (an asset size)
enterprise or responsibility); take on).
Micro : Up to PhP 3M
Entrepreneurship comes from the word entrepreneur. It is the Small : Up to PhP 15M
art of observing correct practices in managing and operating Medium : Up to PhP 100M
self-owned wealth creating business venture. This venture is
also called enterprise. IMPORTANCE OF ENTREPRENEURSHIP –

1. NO. OF ESTABLISHMENTS: SMALL BUSINESSES DRIVE THE

“a concise universally accepted definition of entrepreneur or
entrepreneurship does not exist... there is agreement that
entrepreneurs have common personality traits.”
“There is only one definition: An entrepreneur is someone
who gets something new done.”
“Traditional” Characteristics:
 Commitment and Determination
 Leadership
 Opportunity Obsession
 Tolerance of Risk, Ambiguity, and Uncertainty
 Creativity, Self-Reliance, and Ability to Adapt
 Motivation to Excel
Myth:
ECONOMY!
Based on 2015 statistical data provided by the Philippine Statistics
Authority (PSA), there are 900,914 establishments in the
Philippines. Of these, 99.5% (896,839) are micro, small, and
medium enterprises (MSMEs) and the remaining 0.5% (4,075) are
large enterprises.
2. IMPORTANCE OF ENTREPRENEURSHIP – EMPLOYMENT: SMES
CREATE JOBS
MSMEs generated a total of 4,784,870 jobs in 2015 versus
2,981,819 for the large enterprises. This indicates that MSMEs
contributed almost 61.6% of the total jobs generated by all types of
business establishments that year. Of these, 29.4% or 2,285,634
jobs were generated by micro enterprises; 25.3% or 1,968,452 by
small enterprises; and 6.8% or 530,784 by medium enterprises.

1. Successful entrepreneurs are always rugged individualists

who crave risk, work mostly alone, and are always breaking
all the rules
2. Entrepreneurship can’t be taught – people are either born
entrepreneurs... or they’re not

Reality:

1. Successful entrepreneurs come in all shapes and sizes,

spend most of their time working in teams, and some may
be risk adverse
2. Potential entrepreneurs can be taught the skills and
knowledge to be successful in business because...
Entrepreneurship is a Process not a Person!

ENTREPRENEURSHIP AS A PROCESS: THREE MAJOR STEPS

L2: ENTREPRENEURSHIP & INNOVATION Why Is Innovation Important?

“Business has only two basic functions – marketing and and

innovation.”
Entrepreneurship Is A Process That Can Be Taught:

1. Finding and evaluating innovative technologies

2. Planning a new business venture
3. Managing for profitability and growth

Entrepreneurship is a leading part of the economy and critical to economic success

Ideas are not enough, IDEAS must be turned into products to be successful in the marketplace
An ENTREPRENEUR play a critical part in this process

RISKS - Business Failure, Unpredictable Business Conditions, Long Hours, Product/Service compete on Price only, & Imitation strategy

REWARDS - Financial, Emotional – building a business, Pride, Recognition, Flexibility, Creativity

ART - CREATIVITY; ENERGY; FEEL; INSIGHT

SCIENCE - ANALYSIS; DISCIPLINE; SYSTEMATIC APPROACH

ABOUT ENTREPRENEURSHIP

1. Identify a need or opportunity

2. Create a solution - Innovation
3. Implement solution to create value
4. Harvest or other long-term strategy
2 KINDS OF ENTREPRENEURSHIP

Opportunity – based & Necessity – based

TWO IMPORTANT CONSIDERATIONS FOR ENTREPRENEURS:

 Opportunity Identification
 Innovation/Creativity

THREE CHARACTERISTICS OF OPPORTUNITY

 Newness
 Potential Economic Value
 Perceived Desirability

Opportunity implies something that has not existed or been available before, that can yield potential economic gains, and whose
development is consistent with legal and/or moral standards of the society in which it occurs.

WHAT IS INNOVATION?
 “Innovation is the specific tool of the entrepreneur”
 “An Innovation is an idea, practice, or object that is perceived as new by
an individual or other unit of adoption...if an idea is new to an individual,
it is an innovation.” - Rogers, Diffusion of Innovations, 4th Edition, 1995
 “Creativity is thinking up new things. Innovation is doing new things.” -
Theodore Levitt
 “Innovation: the process of bringing new goods and services to market,
or the result of that process.” - Public Investments in University Research:
Reaping the Benefits, Advisory Council on Science and Technology