ENTREPRENEURSHIP

PREPARED BY:
KELVIN JAY S. SAPLA, LPT, CTT
SIGNIFICANCE OF ENTREPRENEUR IN ECONOMY

BRINGS OVERALL CHANGE

FOCUSES ON RESEARCH AND DEVELOPMENT

BRINGS IN ECONOMIC DEVELOPMENT

IMPROVEMENT IN STANDARD OF LIVING

FOUR KEY ELEMENTS OF ENTREPRENEURSHIP

INNOVATION.

RISK TAKING.

VISION.

DECISION MAKING.
ENTREPRENEURIAL INTENTIONS

TWO BROAD SET OF FACTORS THAT MAY INFLUENCE THE FORMATION

1. INTERNAL FACTORS
- includes qualities of individual
• Demographic – gender, marital status, age, employment status
• Personal traits – self-confidence, determination, enthusiasm
• Psychological characteristics- need for achievement, risk appetite, acceptance of
vagueness, self-efficacy and goal setting.
• Individual skills & Prior knowledge- vocational know-how, supervisory and managerial skills
• Social ties- connections from outside forces, institutions and private companies.

2. EXTERNAL FACTORS
• Environmental support- working hand in hand with the gov’t and other stakeholders
• Environmental influence- regulatory structure, patents, protections, protection of property
rights, competitive environment.
 ENTREPRENEURIAL DECISION MAKING
- Types of thinking that influence decision making

1. Critical Thinking
- refers to the systematic and rational way of providing an answer to a question.
It is systematic since it follows steps in responding to an inquiry. Just like a scientific inquiry, an
answer to a question is preceded by an understanding of the problem, providing possible
answers and reflecting to the validity of these tentative answers. It is rational because it adheres
to the rule of logic in connecting the relationships of variables and in making conclusions.
Example: SWOT Analysis

2. Creative Thinking
- refers to the thought processes that bring about discovery of new ideas. Sometimes,
creative ideas start from a dream, an insight, or from mere observations. The intent of creative
thinking is not to provide an answer but to ask questions that can lead to discovery and change.

3. Strategic Thinking
- involves thought processes that assess current situation that can be useful in the
formulation of plans for the future. It is similar to critical thinking since it uses an orderly and
logical system in its assessment. It also resembles creative thinking in its growth and future
orientation.
FACTORS AFFECTING ENTREPRENEURIAL GROWTH
1. ECONOMIC FACTOR
a) Lack of adequate overhead facilities:
Profitable innovations require basic facilities like transportation, utilities, communication
power supply etc. They reduce cost of production and increase profit.

b) Non availability of capital

Inventions are capital oriented. In less developed countries most capital equipment have
to be imported which involves foreign exchange which acts as a difficult problem.

c) Great risk
Risk is high in case of less developed countries as there is lack of reliable information,
markets for good and services is small etc.

d) Non availability of labor and skills

Though there is abundant labor supply there is generally scarcity of skills at all levels.’

2. SOCIAL FACTORS

3. CULTURAL FACTORS

4. PERSONALITY FACTORS
INDUSTRIAL ENTREPRENEURS
ESSENTIALLY A MANUFACTURER.
IDENTIFIES THE NEED OF CUSTOMER AND TAILORS A PRODUCT.
CONVERTS ECONOMIC RESOURCES AND TECHNOLOGICAL RESOURCES INTO
PROFITABLE VENTURES.
E.g. electronic industry, textile units.

CORPORATE ENTREPRENEURS.
A PERSON WHO DEMONSTRATES HIS INNOVATIVE SKILL IN ORGANISING AND
MANAGING CORPORATE UNDERTAKING.
BUSINESS ORGANISATION REGISTERED UNDER COMPANIES ACT/TRUST ACT.

AGRICULTURE ENTREPRENEUR
ONE WHO UNDERTAKES AGRICULTURAL ACTIVITIES AS RAISING AND MARKETING OF
CROPS, FERTILIZERS etc….
E.g. AGRI TOURISM.

TECHNICAL ENTREPRENEURS
BASICALLY ADRESSED AS CRAFTSMAN
THEY CONCENTRATE ON PRODUCTION AND LESS OR NEGLIGIBLE ON SALES.
IMPORTANT THEORIES OF ENTREPRENEURSHIP
ECONOMIC THEORY

IDENTIFIED BY MARK CASSON.

DEMAND FOR ENTREPRENEURSHIP STEMS FROM NEED TO ADJUST TO CHANGE.
BUT SUPPLY OF ENTREPRENEURSHIP IS LIMITED.
SCARCITY OF REQUISITE QUALITIES.
IF AVAILABLE IDENTIFYING THEM BECOMES DIFFICULT.

THEORY OF PROFIT
KNIGHT IDENTIFIES ENTREPRENEURSHIP AS :
RECIPIENT OF PURE PROFIT.
PURE PROFIT IS BEARING THE COST OF UNCERTAINTY.
FOR WHICH SELF CONFIDENCE IS IMPORTANT.

THEORY OF ADJUSTMENT OF PRICE.

KIRZNER BELIEVES ADJUSTMENT OF PRICE IS MAIN ROLE OF ENTREPRENEUR.
ALERTNESS TO PRICE IS IMPORTANT.
Research work

INTERVIEW
Seek an appointment with an entrepreneur here in our
community and conduct an interview about his/her business.

1. Status of the business as of today

2. What were the reasons for setting up the business?
3. Concerns/Problems encountered upon establishing the
business
4. Their coping strategies
5. Competitive advantage
6. Secret why the are still on operation
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