ENTREPRENEURSHIP AND INNOVATION: ENT 212
Introduction:
Concepts and Perspectives of Entrepreneurship
The word entrepreneurship is used to describe the;
Creativity, innovation, risk taking;
Organizational process ad functions of individual who initiate, run and nature a
business venture.
The main aim of entrepreneurship is to receive or make profit, independence,
personal achievement and fame
Entrepreneurship also involves a strong initiative by taking ability to start something
new, venture into new areas to take advantage of opportunities, continuous
innovations, commercial of new technology and a strong managerial process;
E.g. of great entrepreneurs include a. Bill Gate b. Aliko Dangote c. Mark Zogabat
These are individuals who have achieved greatness through entrepreneurship
There are many perspectives to the definitions of entrepreneurship; Economist
view entrepreneurship as taking of risk in expectation of profit by combining
factors of production or resources
the factors include:
Land (Natural Resources)
Labour (Human Resources)
Capital (Finance Resources, equipment and component parts).
To a management scientist, entrepreneurship is a creative, innovative and
strategic process of starting a business.
To an accountant or financier, entrepreneurship is concerned with business or
investment ideas.
Majority of psychologist and sociologist see entrepreneurship as the activities of
individuals with high aspiration to achieve, seek financial and personal independence
and wanting to create a new thing.
To a business person, entrepreneurship has to do with the process of modern
business, industrial leadership, aggressive competition etc. with the sole aim of making
profit by offering better products and services.
ORIGIN AND CONCEPT OF ENTREPRENEUR AND ENTREPRENEURSHIP
Various scholars have written extensively on the origin of entrepreneurship, one
interesting thing about this is that most of these scholars who wrote about
entrepreneurship are either economists or historians.
The concepts of entrepreneurship is derived from the French word “Entrepreneur” the
word literarily mean “to undertake”. From the business point of view, “to undertake”
simply mean to start a business.
From the historical point of view, Schumpeter (1951) stated that the French
economist, Richard Cantillon, was the first to introduce “entrepreneur” in his work in
1755. He viewed the entrepreneur as a risk taker.
However, some scholars agreed that it was an economist, Jean-Baptiste who gave
proper analysis to the concepts in an advanced way in his work in 1821, where he
identified entrepreneur as NEW ECONOMIC phenomenon.
Another economist, Alfred Marshall (1890), viewed entrepreneurship as an important
factor of production. He also viewed entrepreneurship as Organization creation and
believed that entrepreneurship is the driving element behind organization.
Schumpeter (1951) contends with the view that many economics scholars agreed that
the entrepreneurship is necessary for economic growth, but they do not agree on the
actual role played by entrepreneurs in generating economic growth.
Today, entrepreneurship theoretical foundations extend from economics to other
discipline such as history, law, education, medicine, culture and networking.
AN OVERVIEW OF THE DEFINITIONS OF ENTREPRENEURSHIP AND ENTREPRENEUR
There are many definitions of the concept “Entrepreneurship”
According to Putari (2006), scholars have not agree in their definitions of
entrepreneurship. Some scholars viewed entrepreneurship as “Self-employment of
any sort” while others view it as the concept of innovation.
Penrose (1963) views entrepreneurship as the activity that involves identifying
opportunities within the economic system.
Gartner (1988) defines entrepreneurship as the creation of new organizations.
Definitions of Entrepreneurship
There are many definitions of Entrepreneurship, some of them are:
1. Entrepreneurship is a coin of two sides made up of INNOVATION and RISK TAKING
2. Entrepreneurship is the study of a person who coordinates, integrates and manages
an enterprise with a view to making profit.
3. Entrepreneurship is the dynamic process of creating incremental wealth.
4. Entrepreneurship is the ability to create and build a vision from practically nothing
to something.
5. Entrepreneurship is the transformation of an idea into a profit-making exercise.
Who is an Entrepreneur?
1. An entrepreneur is a peculiar person who does peculiar things in a peculiar way at a
particular time, with a view to making profit through risk taking.
2. An entrepreneur is a person who sees and recognize an opportunity where other
see chaos and confusion.
3. An entrepreneur is an inventor, originator who creates an opportunity where there
is none.
4. An entrepreneur is a calculated risk-taker as well as innovator.
5. An entrepreneur is a change agent.
6. An entrepreneur is a catalyst to socio-economic development of a nation.
7. An entrepreneur minimizes financial risk and maximizes return on investment (ROI)
8. An entrepreneur is an opportunity exploiter.
9. An entrepreneur is an opportunity maximizer.
10. An entrepreneur is an opportunity manipulator.
11. Entrepreneurs are value adding agents.
12. Entrepreneurs are job creators as well as wealth creators.
DECISIONS THAT AN ENTREPRENEUR TAKES:
Entrepreneur takes the following decisions;
What to produce? The type of product or service and the quantity to produce.
How to produce? The method of production.
Where to produce? Location of the production.
When to produce? The period\season of production.
CHARACTERISTICS OF ENTREPRENEURS
1. They are committed, determined and persevered people. They are totally
committed and dedicated to success. They are hardworking and preserve people who
never yield to failure.
2. Opportunity orientation
3. Initiative and responsibility: they are independent and self-reliant innovators
4. They are risk takers
5. Integrity and reliability
6. Tolerance for failure
7. Creative and innovativeness
8. Vision: Entrepreneurs know where they want to go and how they can get there
9. Self-confidence and optimism: They belief in their ability to succeed.
TYPES OF ENTREPRENEURS
1. Innovative
This type of entrepreneur introduce something new
They are interested in innovation and invest substantially in research and
development e.g. student becoming better than his master.
2. Fabian
These are entrepreneurs that are very careful in adopting to any change
They are also lazy and shy away from innovations
3. Imitating Entrepreneurs
They are resistant to change
They are considered as “Old School”
They prefer to stick to their traditional or orthodox methods of production
ROLES OF ENTREPRENEUR & FUNCTIONS
1. Figure Head Role
An entrepreneur has to perform ceremonial duties by representing the
organization in Formal and Informal Functions
2. Leader Role
An entrepreneur must play a leadership role, because he is the one who brings
others together in order to create business
He has to lead the people in the organization y hiring, training and motivating
them.
3. Liaison Role
He acts as a link between the business and the parties (customers and
stockholders outside the business)
4. Monitor Role
He also acts as a monitor
He monitors both the internal and external environment of the business
regularly
5. Social Role
This involves transformation of traditional or indigenous industry into modern
enterprise
Stimulation of indigenous entrepreneurship
Job or employment creation in the community
Provision of social welfare service by redistributing wealth and income
6. Economic Role
Baring risk of uncertainty
Mobilizing saving necessary for the enterprise
Providing channel for deposal of economic activities
Utilizing local raw materials and human resource
7. Technology Role
Stimulation of indigenous technology in the production process
Changing traditional technology to modern system
Adapting imported technology to local environment (pandol yam machine)
Development of technological competence in self and the work force through
innovation.
