HISTORY OF ENTREPRENEURSHIP

2. Marco Polo – made practice of selling his goods to a

moneyed person with both of them signing a contract.
- he was the forerunner of a venture capitalist

6. Richard Cantillon - father of theory of entrepreneurship.

- viewed entrepreneurs as risk takers
- define entrepreneur as “the agent who buys
means of production at certain prices in order
to combine them”

9. Jean Baptiste Say – claimed that an entrepreneur is one

who brings other people together in order to build a single
productive organism

Adam Smith – maintained that economic development was

due to a phenomenon known 4. “Invisible Hand Theory”.
8. John Stuart Mill – claimed that entrepreneurship requires
“no ordinary skill”

Francis Walker – distinguished between individuals who

supplied funds and received interests for these funds, and
those who received profit from managerial capabilities.

Alfred Marshall – asserted that there are four factors of

production: land, labor, capital, and . organization.

7. Harvey Leibenstein – claims that the dominant and

necessary characteristic of entrepreneurs is being gap-
fillers.
 THE ROLE OF
ENTREPRENEURSHIP
IN ECONOMIC
DEVELOPMENT
1. INNOVATION – refers to new or different
ways of doing things

*Development is a process and growth is a

product.

*development does not only include

economic factors, but other factors which
are noneconomic.
 DEVELOPMENT AND
GROWTH THEORIES
11. Laissez Faire Theory – French words introduced
by Physiocrats to mean economic freedom. It is
absolute free-enterprise economy.
15. Keynesian Theory – the government should play
the key role in economic development. This theory
contends that during economic depression the
government should put up massive public works and
other labor intensive projects.
12. Ricardian Theory – developed by David Ricardo,
an English classical economist who believes that the
key factor in economic growth is land.
13. Harrod-Domar Theory – conceptualized by Sir
Harrod of England and Professor Domar of the United
States. The key factor in economic growth is physical
capital like machines.

Kaldor Theory – conceptualized by Nicholas Kaldor,

believes that the key factor is technology. Explains that
the application of modern technology in production of
goods and services has been responsible for the success
of highly developed countries.

Innovation Theory – was developed by Joseph

Schumpeter. He stresses the role of innovators or
entrepreneurs in economic development. It stress that it
is the innovator who has the courage and imagination to
handle old systems, and be able to transform theory to
reality.
Non-Economic Theories – key factors are political
stability, efficient public administration, open society,
and positive cultural values.

The Importance of Entrepreneurship

 Statistics in both rich and poor countries show that

small enterprises are leading in the generation of jobs
and wealth.

 Subjects in Entrepreneurship have been included in

the curriculum of High Schools, Colleges and
Universities in many countries.
 Contributions of Entrepreneurs
1. Develop New Markets
markets are people who are willing and able to satisfy
their needs. Entrepreneurs are resourceful and
creative.

2. Discover New Sources of Materials

3. Mobilize Capital Resources

4. Introduce New Technology

5. Create Employment