ENTREPRENEURSHIP

Nature and Relevance of Entrepreneurship

Entrepreneurship is the mindset that allows you
to see opportunity everywhere. It could be a
business idea, but it could also be seeing the
possibilities in the people that can help you grow
that business" (Preeti Sriratana n.d.).
Lesson 1: Concept of Entrepreneurship
 Entrepreneurship is a catchword in this era of globalized
economy. It is a foundation and catalyst for economic
growth and innovation across nations. Entrepreneurial
activities thrive in societies with supportive government
policies and which give much importance to
innovativeness and risk-taking to turn new ideas into
breakthrough solutions.
 These are some of the definitions that have been given to entrepreneurship
from early on to the present time:
 Knight(1921)- Having profits from bearing uncertainty and risk.
 Schumpeter (1934)- Carrying out of new combinations of firm
organization-new products, new services, new sources of raw material,
new methods of production, new markets, new forms of organization.
 Hoselitz (1952)- Uncertainty bearing...coordination of productive
resources... introduction of innovations and provision of capital.
 Cole(1959)- Purposeful activity to initiate and develop a profit-oriented
business.
 McClelland (1961)-Taking moderate risk.
 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, and (3) the acceptance of
risk failure.
 Casson (1982)- Decisions and judgments about the coordination of scarce
resources.
 Ronstadt (1984)- Dynamic process of creating incremental wealth. This
wealth is created by individuals who assume the major risks in terms of
equity, time, and/ or career commitment of providing value for some
product or service. The product or service itself may or may not be new or
unique, but value must somehow be infused by the entrepreneur by
securing and allocating the necessary skills and resources.
 Drucker (1985)- Behavior rather than personality trait. Its foundation lies
in concept and theory rather than in intuition.
 Gartner (1985)- Creation of new organizations.
 Hisrich and Brush (1985)- Process of creating something new with
value by devoting the necessary time and effort; assuming the
accompanying financial, psychic, and social risks and
uncertainties; and receiving the resulting rewards of monetary and
personal satisfaction.
 Stevenson & Grousebeck (1989)- Pursuit of opportunity without
regard to resources currently controlled.
 Hart, Stevenson and Dial (1995)- Pursuit of opportunity without
regard to resources currently controlled, but constrained by the
founders' previous choices and industry-related experiences.
 Shane (2003)- An activity that involves the discovery, evaluation and
exploitation of opportunities to introduce new goods and services, ways of
organizing, markets, processes, and raw materials through organizing efforts
that previously had not existed.
 KURATKO (2017)- Dynamic process of vision, change, and creation that
requires an application of energy and passion toward the creation and
implementation of new ideas and creative solutions.
 Dyck and Neubert (2012)- Conceiving an opportunity to offer new or
improved goods or services, showing the initiative to pursue that opportunity,
making plans mobilizing the resources necessary to convert the opportunity
into reality.
Common Elements:
 Innovation
 Opportunity seeking and exploitation
 Resource mobilizing
 Encountering risks and uncertainties
 Economic and personal rewards
A Brief History of Entrepreneurship in the
Philippines
 The Philippines is an entrepreneurial country. According to
Philippine Statistics Authority, a total of 915,726 business
enterprises are operating in the country in 2016-1.64 percent
more than the 900,914 business establishments reported in the
previous year. Micro, small and medium enterprises (MSMEs)
account for 99.57 percent (911,768) of the total establishments.
SMEs and large enterprises are predominantly found in and
around Metro Manila, while micro enterprises are relatively less
geographically concentrated.
 Lesson 2: Development of Entrepreneurship

Evolution of the Field Entrepreneurship

 The Earliest Period
Based on the idea that an entrepreneur is a person who sells goods on behalf of the
goods' owner, entrepreneurship was exhibited by Marco Polo (1254-1324), the
merchant from Venice who travelled to many places in Asia to trade. He would
enter into a formal agreement with a capitalist to sell his goods. He bore all the
risks of possible damage or loss of the goods. After everything was sold, profits
were divided between the capitalist and the trader as agreed (OUM n.d.).
 The Middle Ages
The term entrepreneur was used to describe both an actor
and a person who was in charge of and managed large
production projects. This person merely managed the
projects using the resources provided by the government. In
this case, he did not assume any risks. The entrepreneur in
this age was the person who was in charge of great
architectural works such as public buildings and cathedrals
(OUM n.d.).
 The 17th Century
Entrepreneurship has become associated with risk. The
entrepreneur was someone who would enter into a formal
agreement with the government to provide products or
services. It was common practice to agree on the price as
part of the terms in the agreement. In effect, the
entrepreneur either reaps profits or bear losses (OUM n.d.).
A prominent theorist during this period was Richard
Cantillon (1680-1734), an economist who viewed the
entrepreneur as a risk taker and a bearer of uncertainty (Van
Praag 1999).
 The 18th Century
The entrepreneur was distinguished from the capitalist who
simply provides money for the creation of products to be
sold. Jean-Baptiste Say (1767-1832), a French economist
and businessman, described the entrepreneur as a person
who plays a central coordinating role both in producing
and selling goods. He was someone who coordinates,
leads, and manages all the activities of the firm (Van Praag
1999).
 19th and 20th Centuries
There was very little distinction between an entrepreneur and a manager.
However, towards the middle of the 20th century, Joseph Schumpeter (1883-
1950), an Austrian-Hungarian-American economist and political scientist,
refuted the idea of entrepreneurship as manager of the firm, and espoused the
concept of the entrepreneur as innovator who seeks opportunities and leads
"existing means of production into new channels." "The entrepreneur is neither
a risk-bearer nor a manager or capitalist" (Van Praag 1999, 319-321). Risk and
financing is relegated to the banker or to some other party whose sole aim is to
provide needed capital. On the other hand, it was also during this period that
business expert Peter Drucker (1909-2005), came up with a behavioral concept
of the entrepreneur-one who actually searches for change, responds to it, and
exploits change as an opportunity (Holden 2011).
 21st Century
Hailed as the DotCom era, entrepreneurs in the 21st century are
considered the heroes of free enterprise (OUM n.d.). Creativity
and innovation have made many of these entrepreneurs able to
exploit high growth potentials. Today, many people regard
entrepreneurship as 'pioneership' on the frontiers of business"
(Kuratko & Hodgetts 2004). Much of the significant changes
revolutionizing the world of business was due to the Internet
which provided countless opportunities for entrepreneurs.
Lesson 3: Relevance of Entrepreneurship and
entrepreneurs in Economic Development and Society
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