Entrepreneurship Unit I – Entrepreneurship Theory

Entrepreneurs are made through experience and adapting to the marketplace, not born.
Earning is crucial for survival; individuals earn a livelihood through various activities.
Entrepreneurship: Assuming risk and responsibility in designing/implementing a business strategy or starting a business.
Wage-employment: Earning through salaries/wages from employers (e.g., teachers, factory workers).
Self-employment: Earning by running one's own business (e.g., shopkeeper, factory owner, doctor with clinic).
Entrepreneurs create jobs for themselves and others.

Derived from the French verb "entreprendre" meaning "to undertake."
Entrepreneurship refers to:
- Identifying market opportunities.
- Arranging necessary resources.
- Investing resources for long-term gains.
- Creating wealth by combining resources in new ways.
- Developing ideas and initiating a business.
- Mobilizing resources to convert opportunities into successful enterprises through creativity, innovation, risk-taking, and imagination (ILO Youth Entrepreneurship Manual, 2009).
Entrepreneurship involves identifying business opportunities and creatively transforming them into successful businesses
It is a practice and process leading to creativity, innovation, & enterprise development & growth.
Involves turning ideas into action, socially-useful wealth creation through innovation, labor, time, and ideas.
Shifts people from “job seekers” to “job creators.”
Creativity is the driving force behind innovation.

Knight (1921): $Profits \, from \, bearing \, uncertainty \, and \, risk$
Schumpeter (1934): Carrying out new combinations in firm organization, including new products, services, raw material sources, production methods, markets, and organizational forms.
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): Moderate risk-taking.
Casson (1982): Decisions and judgments about the coordination of scarce resources.
Gartner (1985): Creation of new organizations.
Stevenson, Roberts, & Grousbeck (1989): Pursuit of opportunity without regard to resources currently controlled.
Shane & Venkataraman (2000): Understanding how opportunities create something new.
Kuratko & Hodgetts (2004): A dynamic process of vision, change, and creation.
Allen (2006): A mindset focused on opportunity, innovation, and growth, found in corporations and not-for-profits.

An entrepreneur creates/develops a business idea, takes the risk of setting up an enterprise to create product/service which satisfies customer needs.
Entrepreneur refers to the person; entrepreneurship defines the process.
Both men and women can be successful entrepreneurs.
All entrepreneurs are business persons, but not all business persons are entrepreneurs.
Entrepreneurs always seek ways to improve and grow.
Entrepreneurs discover business opportunities for improved or new goods/services, mobilizing required resources.
Entrepreneurs scan the environment for changes that provide growth-oriented business opportunities.
Entrepreneurs take risk and accountability for new enterprises, ventures or business ideas.
An entrepreneur is a job-creator not a job-seeker.

Ability to identify and pursue opportunity.
Undertakes a business venture.
Raises capital.
Gathers necessary resources.
Sets goals.
Initiates action for success.
Assumes risk.
Has a dream & vision.
Willing to take risks.
Makes something out of nothing.
Identifies successful business opportunities, risks time and money to start and operate the business, bringing resources together with the intention of generating wealth.

Eighteenth Century:
- (Early 1700s): Richard Cantillon coined the term entrepreneur (“go-between” or “between-taker”).
- (Late 1700s): bears risks and plans, supervises, organizes, and owns factors of production.
Nineteenth Century:
- (1803): Jean Baptiste Say proposed profits are separate from profits of capital ownership.
- (Late 1800s): Distinction between those supplied funds and earned interest and those profited from entrepreneurial abilities.
Twentieth Century:
- (1934): Joseph Schumpeter described an innovator who “creatively destructs,