The Entrepreneur and His Roots

The Concept of Entrepreneurship

  • Historical Context:

    • Originated from barter systems

    • Evolved into a defined school of thought

  • Central Themes:

    • Various interpretations and definitions of entrepreneurship

    • Innovation as a core component

    • Understanding the entrepreneur's characteristics

Evolution of Entrepreneurship Definitions

  • Early Definitions:

    • French origin "entreprendre" (to undertake)

  • Key Economists:

    • Richard Cantillon: Risk-bearing as the distinguishing feature

    • Daniel Defoe: Entrepreneur as an individualist and project manager

  • Shifts in the Concept:

    • 19th Century: Entrepreneur as manager and risk-taker (Say, Mill, Marshall)

    • 20th Century: Actions of entrepreneurs emphasized (Knight, Schumpeter)

Types of Innovation According to Schumpeter

  1. Product Innovation: New product introduction

    • Example: Combination of horseless carriage and steam engine leading to automotive

  2. Process Innovation: New production methods

    • Example: Henry Ford’s assembly line

  3. Business Model Innovation: Opening new markets

    • Example: Ride-sharing services like Angkas

  4. Source of Supply Innovation: Finding new material sources

    • Example: Vegan leather from cactus

  5. Mergers and Divestments: Organizing industry structures

    • Example: Market monopolization strategies

Entrepreneurial Competencies

  • Definition: Combination of knowledge, abilities, and attitudes for effective entrepreneurship.

  • Clusters of Competencies:

    • Planning Cluster: Goal setting, information seeking, systematic planning

    • Achievement Cluster: Opportunity seeking, persistence, commitment to work

    • Power Cluster: Communication skills, natural leadership, passion

Reflective Questions

  1. Is entrepreneurship a mindset or a process?

  2. Relevance of innovation today?

  3. Interdependency among clusters of Personal Entrepreneurial Competencies (PEC)?

  4. Can one be an entrepreneur with only one cluster of the PEC?

Practical Application

  • Research Task: Identify an innovative enterprise in the Philippines and discuss its innovations in relation to Schumpeter’s types.