Dr.

Ahmed
EL-Gebaly

Entrepreneurs
hip
Introduction and
Concepts of
Entrepreneurship
LEC 1
Definition and
Concept of
Entrepreneurship

Entrepreneurship is the art of establishing new
organizations or improving existing ones by
responding to new opportunities in the market.
 The creation of a business venture or the
initiation of new services often requires the
entrepreneur to possess a set of unique skills,
which include risk management, innovation,
and leadership
 However, entrepreneurial efforts vary greatly
depending on the scope and nature of the
enterprise, from individual ventures to larger
undertakings that aim to create employment
opportunities and stimulate economic progress.
Definition and
Concept of
Entrepreneurship

A key element of entrepreneurship is
recognizing the importance of organization and
management in avoiding failure.
 Startups, particularly those that are poorly
structured, often fail due to a lack of
preparation or understanding of market
dynamics.
 Successful entrepreneurs understand that
creating a business not only requires an
innovative idea but also involves addressing
potential challenges such as competition,
changing consumer preferences, and financial
uncertainties.
Definition and
Concept of
Entrepreneurship

In many cases, new ventures seek funding from
external sources such as venture capitalists or
co-investors. These investors often look for
substantial returns, typically in the range of 20-
30%, and may even seek involvement in the
business to ensure its success.
 Consequently, entrepreneurs must balance the
need for investment with the willingness to
relinquish a degree of control over their
ventures.
History of
Entrepreneurship

The concept of entrepreneurship gained
prominence through the works of Austrian
economist Joseph Schumpeter in the mid-20th
century.
 Schumpeter's definition of an entrepreneur
emphasized the individual's capacity to turn
innovative ideas into commercially viable
ventures.
 He argued that entrepreneurs serve as catalysts
for economic development, as they introduce
new products and services that stimulate
competition and technological advancement.
Schumpeter's view placed entrepreneurs at the
center of long-term economic growth.
History of
Entrepreneurship

Other economists, such as Frank H. Knight and
Peter Drucker, contributed to the understanding
of entrepreneurship by highlighting the inherent
risks involved in starting new ventures.
 Knight, in particular, categorized risks into three
types: measurable risk, confusion (difficult to
measure statistically), and Knightian
uncertainty, which is completely unpredictable.
 Entrepreneurs operate in environments of
uncertainty, and their ability to navigate these
unknowns is what often sets them apart from
others.
History of
Entrepreneurship

Historical examples of entrepreneurial success
are numerous. For instance, before the internet
revolution, no one could have predicted the
impact of online businesses such as Amazon,
Google, or YouTube.
 These companies started by recognizing an
untapped market and innovating in ways that
no one else had envisioned.
 Their success underscores the idea that
entrepreneurship often thrives on creating
something new for an unknown market.
The Importance of
Entrepreneurship in Economic
Growth
 Entrepreneurship is essential for continued
economic growth.
 In recent decades, governments and private
organizations worldwide have recognized the
importance of fostering entrepreneurial
ventures, particularly small businesses.
 These small enterprises have a remarkable
ability to generate new ideas, introduce
innovative goods, and employ large numbers of
workers, thereby stimulating economic activity.
The Importance of
Entrepreneurship in Economic
Growth
 A shift toward entrepreneurial business
practices has become a necessity rather than a
luxury.
 Entrepreneurs contribute significantly to
economic growth by capitalizing on new
opportunities, introducing cutting-edge
technologies, and enhancing the efficiency of
resource utilization.
 Additionally, entrepreneurship helps alleviate
unemployment by creating jobs and generating
wealth.
The Importance of
Entrepreneurship in Economic
Growth
 Entrepreneurial ventures play a vital role in
economic theory, particularly in development
and growth.
 Schumpeter's theory emphasized that a lack of
entrepreneurial spirit is a major cause of
economic stagnation.
 He proposed that entrepreneurs are the engines
of economic growth, as they continuously
innovate and bring new ideas to the market.
 This constant innovation prevents economies
from falling into cycles of stagnation and
decline.
Traits of Successful
Entrepreneurs
 Research on entrepreneurship has identified
several traits commonly associated with
successful entrepreneurs.
 David McClelland, for example, described
entrepreneurs as individuals driven by a strong
desire to achieve something meaningful and
make a lasting impact.
 Similarly, Collins and Moore's study on 150
entrepreneurs concluded that toughness,
pragmatism, and independence were critical
traits for entrepreneurial success.
Traits of Successful
Entrepreneurs
 Entrepreneurs are often characterized as being
highly optimistic and confident in their decision-
making.
 A study conducted by Cooper, Woo, and
Dunkelberg found that 81% of entrepreneurs
believed their chances of success were greater
than 70%, with many expressing near-total
confidence in their eventual success.
 This optimism, while sometimes excessive,
helps entrepreneurs persevere in the face of
challenges and uncertainties.
Traits of Successful
Entrepreneurs
 Other researchers, such as Bird, have
highlighted entrepreneurs' ability to think
creatively, seize opportunities, and plan
effectively.
 Entrepreneurs are often seen as visionaries who
are capable of turning abstract ideas into
concrete plans and taking the necessary steps
to bring these ideas to life.
 They thrive on innovation and are always
seeking new ways to solve problems or improve
existing products and services.
Traits of Successful
Entrepreneurs
 Self-confidence, resilience, and adaptability are
also crucial traits for entrepreneurs.
 Starting a new business is fraught with
difficulties, and entrepreneurs must be willing
to take risks, make tough decisions, and remain
persistent even when faced with setbacks.
 The ability to manage risk, overcome obstacles,
and remain committed to their goals is what
enables entrepreneurs to succeed where others
may fail.
The Role of Organizations in
Supporting Entrepreneurs
 The growth of entrepreneurship has led to the
establishment of various organizations and
institutions designed to support and nurture
entrepreneurs.
 Government bodies, business incubators, and
non-governmental organizations (NGOs) play a
critical role in providing resources, mentorship,
and funding for new ventures.
 These organizations help entrepreneurs
navigate the complexities of starting a
business, from securing financing to managing
regulatory requirements.
The Role of Organizations in
Supporting Entrepreneurs
 In addition to financial support, many
organizations offer training programs and
workshops to help entrepreneurs develop the
skills needed to succeed.
 For example, entrepreneurship training
programs focus on areas such as business
planning, financial management, marketing,
and leadership development.
 These programs aim to equip entrepreneurs
with the knowledge and tools necessary to
overcome the challenges of starting and
growing a business.
Capabilities and Skills of an
Entrepreneur
 The success of an entrepreneur largely depends
on their skills and abilities.
 Effective entrepreneurs must be capable of
performing a range of tasks, from planning and
implementation to project management and
control.
 These tasks require a combination of hard and
soft skills, including technical knowledge,
leadership abilities, and interpersonal skills.