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Entrepreneurship:

An international phenomena
Dr. Alan Carsrud
Executive Director & Professor
Global Entrepreneurship Center
FLORIDA INTERNATIONAL UNIVERSITY

Based on the research of Professors Carsrud, Mason, Harrison, Reynolds, Birch, Bygrave. Hay, Brown, Florio,
and others

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


Entrepreneurship: What is It?
• Who or what is entrepreneurial?
– People?
– Businesses?
– Industries?
– Entire societies?
• What makes “it” entrepreneurial?
– Special traits?
– New/innovative ideas, products, & services?
– High growth activities?
– Exploitation of opportunity and/or people?
– Creation of new markets, new economic sectors?

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu
What is Entrepreneurship?
• Not Just Small Companies
• Not Just Start-Ups
• Not the Unscrupulous Promoters
• Not Just For-Profit Firms
• Not Just Non-Government
• Certainly not many “dot.com’s”
• What is it to you as a student?

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


If Entrepreneurship is the Answer,
Then what are other questions?
• What it isn’t?
• Why is it important?
• What role does it play in society?
• What is its role internationally?
• How is being an entrepreneur different
from being a manager?

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


Entrepreneurship:
Traditional Definitions
• Risk Taker
• Founder
• Innovator
• Capitalist
• Scoundrel
• Born not Learned

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


Views of Entrepreneurship

• Francis A. Walker (1876)


...the new captains of industry as the principals
agents of production and industrial process.
• Joseph Schumpter (1934)
...the entrepreneur is the man who gets new
things done.

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Or a modified David Birch model

• Cockroaches
• Mice
• Giselles
• Elephants

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


Another View

• Peter F. Drucker (1964)


...’maximization of opportunities’ is a
meaningful, indeed a precise, definition of the
entrepreneurial job. It implies that effectiveness
rather than efficiency is essential in business.
The pertinent question is not how to do things
right but how to find the right things to do, and
to concentrate resources and efforts on them.

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


More Views of Entrepreneurship
• William Baumol (1968)
He is the individual who exercises what in the
business literature is called ‘leadership’
• Albert Shapero (1975)
...a kind of behavior that includes: 1) initiative
taking, 2) the organizing or reorganizing of social /
economic mechanisms to turn resources and
situations to practical account, 3) the acceptance
of risk of failure. A major resource utilized by the
entrepreneur is himself.

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


Perhaps the Best Working Definition

“The pursuit of
opportunity beyond the
resources you currently
control”

Professor Howard Stevenson


Harvard Business School

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


About Entrepreneurs

• Innovative
• Creative
• Excellence
• Egos

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


The entrepreneur’s personality:
• Cooperative, a team player;
• Strong desire to work hard;
• High in desire to learn new & different
things;
• Able to listen to others;
• Not competitive;
• Not any more risk prone than other
professionals.

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


Factors in entrepreneurial success:
• Achievement Oriented Personality
• Entrepreneurial Attitudes
• Belief in Self and Ability
• Social Context
• Precipitation Event
• Intention to Start a Venture
• Opportunity Recognition
• Controlling Resources
• Timing
Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu
Why Entrepreneurship Now?

• Technological Change
• Economic Change
• Social Change
• Psychological Change

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The Present Explosion
• Response to Ambiguity
• Need for Flexibility
• Creating Economic Value
• Key to Economic Development
• Matches Risks and Rewards
• Creation of Wealth
• Creation of Jobs

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


A final set of questions:
• Are there national differences in
entrepreneurial activity?
• Is entrepreneurial activity related to
national economic growth?
• Why are some countries more
entrepreneurial than others?
• What can be done to enhance
entrepreneurial activity?

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


The Global Entrepreneurship
Monitoring (GEM) Project
Based on the research of
Professor Paul Reynolds and the National GEM Teams

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


General National Major
Framework Established Firms
Conditions (Primary Economy)
•Openness (External Trade)
•Government (Extent,Role)
•Financial Markets (Efficiency)
•Technology, R&D (Level, Intensity)
•Infrastructure (Physical) Micro, Small, and
•Management (Skills)
•Labor Markets (Flexible) Medium Firms
•Institutions (Unbiased, Rule of Law)
(Secondary Economy)
National
Economic
GEM Growth
Social, CONCEPTUAL (GDP,Jobs)
Cultural, Entrepreneurial MODEL
Political Framework
Context Conditions Entrepreneurial
•Financial
•Government Policies
Opportunities
•Government Programs
•Education & Training
•R&D Transfer
•Commercial, Legal Infrastructure Business
•Internal Market Openness Entrepreneurial
•Access to Physical Infrastructure Capacity Churning
•Cultural, Social Norms
- Skills
- Motivation

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Two Types of Entrepreneurs

• Necessity
• Opportunistic

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


% Necessity

0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
FRANCE

NORWAY

DENMARK

FINLAND

ICELAND

ITALY

BELGIUM

NETHERL

US

SWITZER

CANADA

UK

SINGAPO

IRELAND

N ZEALA

Copyright © Florida International University, Miami, FL 33199


C TAIPE

SWEDEN

AUSTRAL

THAILAN

ISRAEL

MEXICO

SPAIN

GERMANY

www.entrepreneurship.fiu.edu
RUSSIA

CROATIA

INDIA

KOREA

JAPAN

POLAND

SLOVENI
Necessity Entrepreneurship as % of Total : GEM 2002

HUNGARY

H KONG

S AFRIC

CHILE

ARGENTI

BRAZIL

CHINA
Personal Responses and Entrepreneurial Acdtivity: 30 GEM
2002 Countries
TEA_Opportunity TEA_Necessity TEA_Other

25.00

20.00
#/100 Persons 18-64 Yrs Old

15.00

10.00

5.00

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Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


Market Replication vs. Market Expansion

• Market Replication
– Customers know product or service well
– Lots of competition
– Using established technology or procedures
• Market Expansion, Creation
– Customers unfamiliar with product or service
– No competition
– New technology or procedures

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


TEA Entities - Replication versus Market Expansion by Global Type

Asian Advanced Former Centralized EU Europe + 4 Former British Latin American Asian Developing

16

14

12
#/100 Adults 18-64 Years Old

10

0
Market Replication Some market Expansion

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


Developed Asian [Chinese Taipei, Hong
Kong, Japan, Singapore]

• Opportunity Entrepreneurship low


• Necessity entrepreneurship very Low
• Market expansion entrepreneurship low
• Women low in entrepreneurship relative to men
• Small percent adults
– See business opportunities
– Know an entrepreneur
– Think they know how to start a business
• Low income disparity

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


Eastern European
[Croatia, Hungary, Poland, Russia, Slovenia]
• Opportunity entrepreneurship low
• Necessity entrepreneurship very low
• Market Expansion entrepreneurship very low
• Women low entrepreneurship rates relative to
men Small percent adults
– See business opportunities
– Think they know how to start a business
– Some know an entrepreneur
• Substantial farm sector
• Moderate income disparity
• Low VC, informal financing

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


European Union + 4
[Belgium, Denmark, Finland, France, Germany, Iceland, Ireland, Israel, Italy,
Netherlands, Norway, Spain, Sweden, Switzerland, UK]

• Opportunity entrepreneurship moderate


• Necessity entrepreneurship very low
• Market expansion entrepreneurship moderate
• Women low in entrepreneurship relative to men
• Many adults
– See business opportunities
– Think they have start-up skill
– Know an entrepreneur
– Have high fear of failure
• Low income disparity
• High social security costs
• Moderate VC, informal financing

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


Former British Empire (Anglo)
[Australia, Canada, New Zealand, South Africa, United States]

• Opportunity entrepreneurship high


• Necessity entrepreneurship low
• Market Expansion entrepreneurship high
• Women low in entrepreneurship relative to men
• Many adults
– See business opportunities
– Think they have start-up skill
– Know an entrepreneur
– Have low fear of failure
• Moderate income disparity
• Moderate VC, informal financing

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


Latin America
[Argentina, Brazil, Chile, Mexico]
• Opportunity entrepreneurship high
• Necessity entrepreneurship high
• Market Expansion entrepreneurship high
• Women approach men in entrepreneurship rates
• Many adults
– See business opportunities
– Think they have start-up skill
– Know an entrepreneur
• Substantial farm sector
• High % unemployed < 25 yrs old
• Highest income disparity
• Highest firm registration barriers
• Moderate VC, informal financing

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


Developing Asian
[China, India, Korea (South), Thailand]

• Opportunity entrepreneurship high


• Necessity entrepreneurship high
• Market Expansion entrepreneurship high
• Women approach equality in entrepreneurship rates
• Many adults
– See business opportunities
– Think they have start-up skill
– Know an entrepreneur
• Substantial farm sector
• High % unemployed < 25 yrs old
• High income disparity
• Political System
– High levels of corruption
– Weak property rights protection
• Highest firm registration barriers
• Moderate VC, informal financing

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


How Many People Are Involved?
• 37 GEM 2002 countries
– 3,882 million people
– 2,374 million in labor force age range (18-64 years old)
– 62% of world population
– 92% of world GDP
• Estimate 286 million active in start-ups
– 205 million in India and China
– 18 million in the US
– 11.6 million EU + 4
– 4.0 million Eastern European 5
• 140 million business entities (2 per start-up)
• Estimate 460 million active in the world
– Compare to 132 million new human births each year
– More that population of North America (415 million)

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


So Hopefully I have Answered
• Who or what is entrepreneurial?
– People
– Businesses
– Industries
– Entire societies
• What makes “it” entrepreneurial?
– Special traits
– New/innovative ideas, products, & services
– High growth activities
– Exploitation of opportunity and/or people
– Creation of new markets, new economic sectors

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu


QUESTIONS?

Copyright © Florida International University, Miami, FL 33199 www.entrepreneurship.fiu.edu

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