Origin and Forms of

Entrepreneurship
FRM 131 GH Lecture 1
 Learning Objectives

At the end of the session, learners must be able to:

1. Explain how the concept of entrepreneurship has evolved through time

2. Name the most influential people in the field of entrepreneurship and their
scholarly contributions in the development of entrepreneurship as a
research field

3. Enumerate the characteristics of a Filipino entrepreneur

What is
entrepreneurship?
 “Entrepreneurship” came from the French word
Entrepreneurship entreprende which means “to do something” or
“to undertake”
Defined
Origins of
Entrepreneurship
The Earliest Entrepreneurship Barter and Exchange System

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This Photo by Unknown Author is licensed under CC BY-SA-NC
Middle Ages

• In this period, entrepreneur

is a term for a person who
manages large production
projects

• That individual takes no risk

as capital was provided by
the government
17th Century

• Link between risk and

entrepreneurship further
established
• An entrepreneur was a
person who entered a
contract with the
government to perform a
service or to supply
stipulated products.
 John Law
• French entrepreneur
• Founder of the Royal
Bank of France and the
Mississippi Company,
which had an exclusive
franchise to trade
between France and the
new world.

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Richard Cantillon

• English economist
• He described an entrepreneur as “a risk taker, observing that merchants, farmers,
craftsmen, and other sole proprietors buy at a certain price and sell at an uncertain
price, therefore operating at a risk”

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 18th Century

• Entrepreneurship as a
form of management

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 Entrepreneur vs.
Manager
• A manager becomes an entrepreneur
“when the exercise of his/her judgment is
liable to error and s/he assumes the
responsibility for its correctness”

• Entrepreneurs calculate risks and make

informed judgments and decisions. Those
who choose to avoid taking risks favors
security of being employees
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catering" by www.audio-luci-store.it is licensed under CC BY 2.0
 Capitalist vs.
Entrepreneur
• In the 18th century, the person with capital
(capitalist) was differentiated from the one who
needed capital (entrepreneur)

• According to Alfred Marshall (1842-1924), an

entrepreneur took control of money provided by
capitalists in an effort to leverage it to create more
money; but would lose less if something went
wrong than would the capitalists.

"C. M. Bair, Capitalist, Billings, Montana. (1911)" by Butte-Silver Bow Public Library is licensed under CC BY-NC-ND 2.0
 Jean Baptiste-Say
This Photo by Unknown Author is licensed under CC BY-SA

• He defined entrepreneurship as “the shifting

of economic resources out of an area of lower
productivity into higher productivity and
greater yield.”
2oth Century

• Entrepreneurs were viewed

to have the role of
recreating or
revolutionizing the pattern
of production by
introducing an invention
There’s a way to
do it better – find
it.

–Thomas
Edison
Entrepreneurship
and Innovation

• Jeremy Bentham viewed

entrepreneurs as
innovators.
• According to him,
entrepreneurs “depart
from routine, discover
new markets, find new
sources of supply,
improve existing
products and lower the
costs of production”
 Entrepreneurship and Innovation
• Five cases of new combinations on innovation by Joseph
Schumpeter:

Introduction of a New method of Opening of a new

new good production market

Conquest of a new Carrying out of

source of supply new organization
of raw materials of any industry
 Peter Drucker (1964)
• The founder of modern management

“An entrepreneur is one who searches for change,

responds to it, and exploits it as an opportunity”
Modern Definition
Entrepreneurship is a process of creating
something different with value by
devoting the necessary time and effort,
assuming the accompanying risks and
receiving rewards of monetary and
personal satisfaction

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What makes someone
an entrepreneur?
• Entrepreneurs’ profile vary

• But they share certain

characteristics
Entrepreneurs
are …

Opportunity
seekers
Entrepreneurs
are…

Calculated risk-
takers
Entrepreneurs
are…

Persistent
Entrepreneurs
are…

Committed
 Entrepreneurs
are…

Demanding
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Entrepreneurs
are…

Goal setters
Entrepreneurs
are…

Information
seekers
 Entrepreneurs
are…

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Systematic
 Entrepreneurs
are…

Persuasive and
have good
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network
 Entrepreneurs
are…

Confident

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 Innovative

Imitating
Types of
Entrepreneur
Fabian

Drone
 Innovative
Entrepreneur
• Key figure in the process of development

• Highly motivated and talented and able to

foresee potentially profitable opportunities

• Not an inventor but commercializes inventions to

produce better goods
 Adoptive or Imitating
Entrepreneur
• Characterize by readiness to adopt successful
innovations initiated by innovating entrepreneurs

• They imitate techniques and technology initiated

by others

• In developing countries, adoptive entrepreneurs

fill the void from having very few innovative
entrepreneurs
 Fabian Entrepreneurs

• Characterized by great caution and skepticism in

practicing any change

• They are not much interested in taking risks and

they try to follow the footsteps of their
predecessors.
Drone Entrepreneurs
• One who follows traditional methods of
production

• Under no circumstances will a drone

entrepreneur change the method of
production he has introduced.

• Very often their products lose their

marketability and their operation
becomes uneconomical leading to them
being pushed out of the market.
Risks and Rewards of being an Entrepreneur

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Rewards of being an
entrepreneur

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 Make money

Mariano Que Henry Sy Socorro Ramos

 Be your own
boss

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 Express
creativity

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Feel
fulfilled
Risks of being an
entrepreneur

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Risk of failure
Long hours of hard work
 This Photo by Unknown Author is licensed under CC BY

Unwanted responsibility
 Learning Objectives

At the end of the session, learners must be able to:

1. Explain how the concept of entrepreneurship has evolved through time

2. Name the most influential people in the field of entrepreneurship and their
scholarly contributions in the development of entrepreneurship as a
research field

3. Enumerate the characteristics of a Filipino entrepreneur

 References:
• BSMED. (2015). Your Guide to Starting a Small Enterprise. Department of
Trade and Industry, Makati City, Philippines.
• Garg, M.C. no date. Entrepreneur and Entrepreneurship. Lesson 1 Code
CP-401. Entrepreneurial Development Course.
• Isteaq. (2013). A brief history of entrepreneurship. Slideshare. Retrieved
last 30 June 2022 from https://www.slideshare.net/Isteaq/a-brief-history-
of-entrepreneurship
• Swanson, L. (2017). Entrepreneurship and Innovation Toolkit. 3rd Edition.