CHAPTER ONE

THE NATURE OF ENTREPRENEURSHIP

1.1. Introduction……

Why students of Medicine should learn

Entrepreneurship?
 The healthcare industry is booming.
 As technology has improved and become more widely
available, many companies are moving into healthcare or
healthcare-adjacent fields, driven by entrepreneurs who see
the value of this emerging market.
 This means healthcare companies are experiencing an
unprecedented level of competition.
 Many are starting to recognize the role of the entrepreneur in
healthcare and embrace their entrepreneurial education,
habits and knowledge for survival.
 Going into the future, it appears that entrepreneurship and
healthcare are linked and will continue to be connected for
some time.
How Entrepreneurship & Healthcare are linked?
1. Business Practices Drive the Industry
 One of the biggest ways entrepreneurship and healthcare are
related is that business practices are driving the industry.
 Healthcare professionals are using business concepts to get
ahead, which is disrupting traditional healthcare.
 Market incentives are pushing experienced entrepreneurs and
investors into the healthcare industry, and they are finding a
welcome market, open to new ideas and technologies.
 At the same time, healthcare is becoming less directed and
more open as the industry embraces a patients-as-consumers
mindset.
 Healthcare providers have to respond by marketing services —
something that was virtually unheard of in the past.
2. New Payment Models Reward Value
 Traditional clinical models, like the fee-for-service model employed
over recent decades that generate revenue based on how many
patients are seen, are rapidly disappearing.
 New population management models reward healthcare providers
for keeping patients healthy, as opposed to allowing them to
make money only from sick people.
 Changing this focus changes the scope of treatment.
 Now, preventing illness is key, and avoiding unnecessary treatment
is the rule.
 Entrepreneurs in healthcare are using this shift to introduce health-
preserving measures, techniques, systems and novelties, like
wearable technologies and fitness apps.
 This creates a universe of highly profitable products and services
adjacent to healthcare that are not under the sole direction of
medical professionals, health insurance companies or treatment
centers.
3. Technology Moves Modern Healthcare
 Technology is changing modern healthcare.
 Entrepreneurial-minded healthcare professionals are applying
predictive data and analytical tools to anticipate healthcare
needs in a community, ensure care is adequate and necessary,
and make statistical predictions about the care that will be
required next.
 They are also exposing and correcting inefficiencies in
traditional healthcare and making new models based on what
works.
 Technologies used as decision-making tools are also gaining
bigger roles in the healthcare industry, be it wearable
technology that documents patient experiences or websites
that allow patients to access their own lab work.
 There is also the need for integrated data solutions.
 Now that so much data is available about patient
histories, lab work, hereditary issues, and treatment
successes, a systematic solution to support decision-
making is practically required.
 Entrepreneurship and healthcare are linked, and the
bonds between the two are growing deeper as
business practices drive the healthcare industry into
a wellness industry.
 In turn, value-oriented payment models reward that
focus and technology perpetuates the cycle.
 In the end, entrepreneurship is moving healthcare
forward, and the industry has to evolve to keep pace.
1.2. Entrepreneurship: Historical overview
1. The ancient period
 Entrepreneur was used to refer to a person managing
large commercial projects through the resources
provided to him.
2. In the 17th Century
 A person who has signed a contractual agreement
with the government to provide stipulated products
or to perform service was considered as entrepreneur .

3. In the 18th Century

 the first theory of entrepreneur has been developed by Richard
Cantillon who believed that an entrepreneur is a risk taker.
 the differentiation of the entrepreneurial role from
capital providing role was established. The later role
is the base for today’s venture capitalist.
 Entrepreneur was distinguished from capital provider.
4. In the late 19th and early 20th Century
 an entrepreneur was viewed from an economic
perspective. The entrepreneur organizes and
operates an enterprise for personal gain.
5 . In the middle of the 20th Century
 The notion of an entrepreneur as an inventor.
 A person who innovates something new.
 “The function of the entrepreneur is to reform or
revolutionize the pattern of production by exploiting an
invention or more generally untried technological
possibility for producing new commodities or producing an
old one in a new way or opening a new outlet for products
by reorganizing a new industry.”
 The concept of innovation and newness are at the heart
of the above definition
 The word entrepreneur was evolved from managing
commercial project to the application of innovation
(creativity) in the business idea.
1.3. Definitions of Entrepreneurship and Entrepreneur
 The term “entrepreneur” is defined in a variety of ways.
 The word entrepreneur is derived from a French verb entrerprendre.
It means “to undertake”.
Definition of Entrepreneurship
1. Entrepreneurship is the process of identifying opportunities
in the market place, arranging the resources required to
pursue these opportunities and investing the resources to
exploit the opportunities for long term gains. It involves
creating incremental wealth by bringing together resources
in new ways to start and operate an enterprise.
2. Entrepreneurship can also be defined as the process of
creating something different and better with value by
devoting the necessary time and effort by assuming the
accompanying financial, psychic and social risks and
receiving the resulting monetary reward and personal
satisfaction.
3. Entrepreneurship is the art of identifying viable business
opportunities and mobilizing resources to convert those
opportunities into a successful enterprise through creativity,
innovation, risk taking and progressive imagination.
 In general, the process of entrepreneurship includes five
critical elements.
 These are:
1) The ability to perceive an opportunity.
2) The ability to commercialize the perceived opportunity i.e. innovation
3) The ability to pursue it on a sustainable basis.
4) The ability to pursue it through systematic means.
5) The acceptance of risk or failure.
Definition of Entrepreneur
1) An entrepreneur is any person who creates and develops a business idea and takes

the risk of setting up an enterprise to produce a product or service which satisfies

customer needs.
2) An entrepreneur can also be defined as a professional who discovers a business

opportunity to produce improved or new goods and services and identifies a way
in which resources required can be mobilized.
3) An entrepreneur is an individual who has the ability to identify and pursue a

business opportunity; undertakes a business venture; raises the capital to

finance it; gathers the necessary physical, financial and human resources
needed to operate the business venture; sets goals for him/herself and others;
initiates appropriate action to ensure success; and assumes all or a major portion
of the risk!
4) An entrepreneur is a person who: create the job not a job-seeker; has a dream, has

a vision; willing to take the risk and makes something out of nothing
 Entrepreneur (Oxford Dictionary)
 Person who undertakes an enterprise with chances
of profit or loss.
 Entrepreneur: An individual who bears the risk of
operating business in the face of uncertainty about
the future conditions (New Encyclopedia Britannica).
1.5. Types of Entrepreneurs
 Entrepreneurship can take three different forms. They are:
1. The individual entrepreneur: An individual entrepreneur is

someone who started; acquired or franchised his/her own

independent organization. The major portion of this module is also
devoted to describe the basic features and activities of the individual
entrepreneur.
2. Intrapreneur: An Intrapreneur is a person who does
entrepreneurial work within large organization. The process by
which an intrapreneur affects change is called Intrapreneurship.
3. The Entrepreneurial Organization: The entrepreneurial function
need not be embodied in a physical person. Every social environment
has its own way of filling the entrepreneurial function.

 Individuals working in organizations have the potential for

being, as do those working independently to start their own
business.
 An organization can create an environment in which all of its
members can contribute in some function to the entrepreneurial
function.
1.6. Role of Entrepreneurs in Economic Development
 The entrepreneurs serve as a key to the creation of new
enterprises, thereby rejuvenating economy and sustaining the
process of economic development in the following ways:
1) Improvement in per capita Income/Wealth Generation: economic dev’t
2) Generation of Employment Opportunities: new enterprises are created
3) Inspire others Towards Entrepreneurship: backward & forward linkages
4) Balanced Regional Development: remove regional disparities in economic dev’t
5) Enhance the Number of Enterprise: new emerged firms
6) Provide Diversity in Firms: creation of a variety of firms
7) Economic Independence: import substitution & export promotion
8) Combine Economic factors
9) Provide Market efficiency
10) Accepting Risk
11) Maximize Investor’s Return
1.7. Entrepreneurial Competence and Environment
1.7.1. Entrepreneurial Mindset
Who Becomes an Entrepreneur?
 Anyone with the following characteristics can be an entrepreneur.
1) The Young Professional:
2) The Inventor
3) The Excluded
Qualities of an Entrepreneur
 In order to be successful, an entrepreneur should have the
following qualities
1. Opportunity-seeking
2. Persevering:
 An entrepreneur always makes concerted efforts towards the successful
completion of a goal.
 An entrepreneur perseveres and is undeterred by uncertainties, risks,
obstacles, or difficulties which could challenge the achievement of the
ultimate goal.
3. Risk Taking:
 The best entrepreneurs tend to:-
 Set their own objectives where there is moderate risk of failure and take
calculated risks
 Gain satisfaction from completing a job well
 Not be afraid of public opinion, skepticism
 Take responsibility for their own actions
 Importance of Risk-taking
 Build self confidence
 Create a feeling of leadership
 Create strong motivation to complete a job well

4. Demanding for Efficiency and Quality

 Efficiency: Being efficient means producing results with little wasted effort.
 Quality refers to:
1. The ongoing process of constant improvement of goods/services to meet the
customer’s need in a way that exceeds the customer’s expectations;
2. A characteristic of the product or service that makes it fit to use. It makes a
product, process, or service desirable.
3. The ability of a product or service to meet a customer’s expectations for that
product or service.
  Quality plays an important role in assuring the following
benefits
 Reduction of waste
 Cost-effectiveness
 An increase in market share
 Better profitability
 Social responsibility
 Reputation

5. Information-seeking
6. Goal Setting
is a general direction, or long-term aim that you want to
 A Goal -
accomplish.
 Objectives - are specific and measurable. They are concise and specific.
 An entrepreneur must have a goal and an objective which is specific, measurable,
attainable, relevant, and time bound (SMART).
 Attainable: Dream big and aim for the stars but keep one foot firmly based in reality.
7. Planning:
 Planning is making a decision about the future in terms of what to do, when to do, where to
do, how to do, by whom to do and using what resources.
8. Persuasion and Networking
 Persuasion is a way of convincing someone to get something or make a
decision in your favor.
 Networking is an extended group of people with similar interests or concerns
who interact and remain in informal contact for mutual assistance or support.
 Factors that Affect Persuasion and Networking
 Socio-cultural background and perceptions
 Communication skills (both verbal and non-verbal).
 Negotiation skills
9. Building Self-confidence
 Self-confidence is having confidence in oneself when considering a capability.
 Characteristics of a Self-confident Person

 A person with self-confidence may exhibit some of the

following characteristics:
 Risk-taking
 Independent:
 Perseverance: Ability to endure and survive setbacks and continue
 Able to learn to live with failure
 Ability to find happiness and contentment in work.
 Doing what you believe to be right, even if others mock or
criticize you for it.
 Admitting mistakes and learning from them
10. Listening to Others
11. Demonstrating Leadership
Entrepreneurial Skills
1. General Management Skills
 These are skills required to organize the physical and financial
resources needed to run the venture.
 Strategy Skills – An ability to consider the business as a whole,
 Planning Skills
 Marketing Skills
 Financial Skills
 Project Management Skills
 Time Management Skills

2. People Management Skills:

 Communication Skills
 Leadership Skills
 Motivation Skills
 Delegation Skills
 Negotiation Skills
The Entrepreneurial Tasks
 Owning Organizations
 Founding New Organizations
 Bringing Innovations to Market
 Identification of Market Opportunity
 Application of Expertise
 Provision of leadership
 The entrepreneur as manager
 Who Benefits from the entrepreneur’s Wealth?
 Employees
 Investors
 Supplier
 Customers
 The local community
 Government
 The entrepreneurial performance results from a
combination of industry knowledge, general
management skills; people skills and personal
motivation
Entrepreneurship and Environment
 Business environment refers to the factors
external/internal to a business enterprise which
influence its operations and determine its
effectiveness.
 External Environment
 Internal Environment
Environmental Factors Affecting Entrepreneurship
 Some of the environmental factors which hinder entrepreneurial growth are given
below:
 Sudden changes in Government policy.

 Sudden political upsurge.

 Outbreak of war or regional conflicts.
 Political instability or hostile Government attitude towards industry.
 Excessive red-tapism and corruption among Government agencies.
 Ideological and social conflicts.
 Unreliable supply of power, materials, finance, labor and other inputs.
 Rise in the cost of inputs.
 Unfavorable market fluctuations.
Non-cooperative attitude of banks and financial institutions.
 Entrepreneurship is environmentally determined.
 The most important essential for entrepreneurial growth is the presence of a favorable
business environment
1.8. Creativity, Innovation and Entrepreneurship
1 Creativity
 Is the tendency to generate or recognize ideas, alternatives, or possibilities
that may be useful in solving problems, communicating with others, and
entertaining ourselves and others.
 Creativity is the ability to come up with new idea and to identify new and
different ways of looking at a problem and opportunities.
 It is a process of assembling ideas by recombining elements
already known but wrongly assumed to be unrelated to each
other
Steps in the Creative Process
 Step1: Opportunity or problem Recognition:
 Step2: Immersion
 the individual concentrates on the problem and becomes
immersed in it.
 Step 3: Incubation
 the person keeps the assembled information in mind for a
while
 Step 4: Insight
 the problem-conquering solution flashes into the person’s
mind at an unexpected time, such as on the verge of sleep,
during a shower, or while running.
 Step 5: Verification and Application
 the individual sets out to prove that the creative solution
has merit.
 Barriers to Creativity
 Be aware that there are numerous barriers to creativity, including:
1. searching for the one ‘right’ answer

2. focusing on being logical

3. blindly following the rules

4. constantly being practical

5. viewing play as frivolous

6. becoming overly specialized

7. avoiding ambiguity

8. fearing looking foolish

9. fearing mistakes and failure

10. believing that ‘I’m not creative

2. Innovation
 It is the implementation of new idea at the individual, group or
organizational level.
 The Innovation Process
1. Analytical planning
 carefully identifying the product or service features, design as well as the
resources that will be needed.
2. Resources organization
 obtaining the required resources, materials, technology,
human or capital resources
3. Implementation
 applying the resources in order to accomplish the plans
4. Commercial application
 the provision of values to customers, reward employees and
satisfy the stakeholders.
Areas of Innovation
 New product:
 New Services
 New Production Techniques
 New Way of Delivering the Product or Service to the Customer
 New Operating Practices
 New Means of Informing the Customer about the Product
 New Means of Managing Relationship within the Organization
 New Ways of Managing Relationships between Organizations

 Creativity is the ability to develop new ideas and to discover new ways

of looking at problems and opportunities.

 Innovation is the ability to apply creative solution to those problems

and opportunities in order to enhance people’s lives or to enrich society.

 Entrepreneurship = creativity + innovation.
THANK YOU!