ENTREPRENEURSHIP

ENTREPRENEURSHIP
BEHAVIOR
WHAT IS ENTREPRENEURSHIP?
Early Definitions of
Entrepreneurship
 Early Definitions of
Entrepreneurship

❖The concept of entrepreneurship has evolved over time, and early

definitions often focused on specific aspects of the entrepreneurial
process.

❖Here are a few early definitions of entrepreneurship:

1. Jean-Baptiste Say (1767-1832)
➢a French economist
➢is often credited with coining the
term "entrepreneur"
➢he described entrepreneurs as
individuals who shift economic
resources out of areas of lower
productivity into areas of higher
productivity and yield. https://www.econlib.or
g/library/Enc/bios/Say.
html
2. Richard Cantillon (1680-1734):
➢Irish-French economist
➢described the entrepreneur as a
risk-taker who buys goods at
certain prices to sell them at
uncertain prices in the future
https://en.wikipedia.
org/wiki/Richard_Can
tillon
3. Frank H. Knight (1885-1972):
➢ American economist
➢defined entrepreneurs as individuals
who bear uncertainty and make
decisions in conditions of risk and
uncertainty.

https://en.wikipedia.
org/wiki/Frank_Knig
ht
4. Joseph Schumpeter (1883-1950):
➢Austrian economist
➢defined entrepreneurs as innovators
who introduce new products,
services, or ways of doing things,
disrupting existing markets and
creating economic change.
https://en.wikipedia
.org/wiki/Joseph_Sc
humpeter
5. John Stuart Mill (1806-1873):
➢He highlighted the
entrepreneurial function of
coordinating and organizing
resources to meet market
demands.
https://www.britannica.co
m/biography/John-Stuart-
Mill
6. Cantillon-Schumpeter Synthesis
➢Some scholars have synthesized the ideas of
Cantillon and Schumpeter
➢emphasizing the combination of risk-taking and
innovation.
➢In this view, entrepreneurs are individuals who
engage in risk-taking activities and introduce
innovations to the market.
ENTREPRENEURSHIP

• refers to the activities associated with being an entrepreneur,

including the creation and development of economic ventures.
(Merriam-Webster)

• the activity of setting up a business or businesses, taking on financial

risks in the hope of profit. (Oxford Languages)
 Key Characteristics
of Entrepreneurship:
• Innovation
• Risk-taking
• Problem-solving
• Vision and Leadership
• Adaptability
ASSIGNMENT:
The Origins of Entrepreneurship
• Research the following and share them in class.

1. How ancient societies exchange goods

2. evolution of trade
3. invention of money
4. First entrepreneurs in history
 TRADE
• Barter system: an old method of exchange
• commodity currencies: bronze or copper ingots or even
cowry shells
• Early trade: luxury goods like precious metals, spices, and
fine textiles
• Ship transportation: easier and cheaper
• Trade spread: language, religion, and art
• Gold and silver: first money used in trade
INVENTION OF MONEY
ENTREPRENEURIAL SCHOOL OF
THOUGHTS
SCHOOL OF THOUGHTS IN
ENTREPRENEURSHIP
Entrepreneurship can be
examined from both macro and
micro perspectives, each
providing a different lens through
which to understand its impact
and dynamics.
The Macro view
➢includes perspectives of the external
environment that cannot be controlled by the
entrepreneur

➢consists of three different schools.

The three schools under the
Macro view are the :

1. Environmental School

2. Financial/Capital School

3. Displacement School
The Environmental School
Key Idea:

• External factors (economic, social, political,

technological, etc.) create opportunities for
entrepreneurship
• Entrepreneurs respond to these changes or trends in
the environment
The Financial/Capital School
• Key Idea:
• Access to funding and resources is the most
critical factor for entrepreneurship
• Without money or capital, starting and growing
a business is nearly impossible
• No money = no business
The Displacement School

Key Idea:

➢ argues that people will only pursue an entrepreneurial venture if

they have no other alternatives

➢ happens because people are pushed out of their current roles or

situations due to economic, political, or cultural changes
The Micro view

•examines factors that are specific to

entrepreneurship and can be controlled
by the entrepreneur

•consists of three different schools.

SCHOOL OF THOUGHT UNDER
THE MICRO VIEW

➢ Entrepreneurial Trait

➢ Venture Opportunity

➢ Strategic Formulation
 Entrepreneurial Trait
• specific traits or personal qualities that set them apart, such
as creativity, determination, and risk-taking
• Some people are naturally good at being entrepreneurs
because of their personality, habits, and mindset.
➢believe that certain attributes are usually exhibited by
entrepreneurs (creativity, determination etc.).
Venture Opportunity

➢recognizing opportunities in the market and taking

advantage of them

➢the interest areas : search for idea, development of concepts

➢Developing the right idea at the right time for the right
market niche
Strategic Formulation

➢emphasizes the planning process in successful venture

development

➢Emphasizes planning, leveraging of unique markets, unique

people, unique products and unique resources

➢Analyzing market, competition and resources

➢Entrepreneurs succeed by planning smartly and strategically.

In summary:
MACRO MICRO
• Environmental School: • Entrepreneurial Trait: Some
Opportunities come from people have the personality
changes in the world. to succeed as entrepreneurs.
• Displacement School: People • Venture Opportunity:
start businesses because they're Success comes from spotting
pushed out of their current the right business idea.
situations. • Strategic Formulation:
• Financial/Capital School: Success comes from smart
Money is the key to starting a planning and strategy.
business
SCHOOL OF THOUGHTS IN
ENTREPRENEURSHIP

❖Those Schools of Thought are foundations to

entrepreneurial theory.

❖And we need those theories to understand the field

of entrepreneurship in its growth and development.
Global Innovation Index (GII)

➢reveals the ranking of the most innovative economies

in the world amongst 132 economies and localizes the
top 100 science and technology innovation clusters.
 Startup Ecosystem
➢refers to the interconnected network of individuals, organizations,
resources, and environments that support the creation and growth of
startups
➢It is the infrastructure and community that helps entrepreneurs turn
their ideas into successful businesses by providing knowledge,
funding, mentorship, and opportunities for collaboration.
Key Parts of a Startup Ecosystem
1. Startups: New businesses with innovative ideas.
2. Entrepreneurs: The individuals or teams building
and managing startups.
3. Investors: Provide money (funding) to help startups
grow, including:
• Angel investors
• Venture capital firms
• Crowdfunding platforms
VENTURE CAPITAL FIRM
Key Parts of a Startup Ecosystem
4. Incubators and Accelerators:
Incubators: Organizations that support startups in their initial
stages by providing mentorship, office space, training and
networking. No money
Accelerators: Programs that help startups grow rapidly, often
in exchange for equity, with mentorship and funding.
5. Support Organizations:
• Coworking spaces
• Legal and financial advisory firms
• Marketing agencies
 Key Differences
Feature Incubators Accelerators

Stage Early-stage (idea phase) Growth-stage (already has a product)

Focus Developing the idea Rapid business growth

Duration Months to years 3-6 months

Funding? No funding Yes, in exchange for ownership

Helping a small startup expand

Example Helping students create an app
internationally
Accelerators
Accelerators
Key Parts of a Startup Ecosystem
6. Government and Policymakers: Governments often promote
entrepreneurship through:
• Tax incentives
• Startup grants
• Business-friendly regulations
7. Educational Institutions: Universities and colleges that
provide:
• Talent (students and graduates)
• Research and innovation
• Entrepreneurship programs
8. Corporate Partners: Established companies that collaborate
with startups through funding, mentorship, or access to markets.
How Corporate Partners Help Startups:

Funding – Some corporations invest money in startups

Technology & Resources – They offer tools, software, or
office space
Mentorship & Expertise – They provide advice and
business connections
Market Access – They introduce startups to customers or
suppliers
Partnerships – They work together on new products or
services
Examples of Corporate Partners in
Startup Ecosystems:
• Google for Startups – Helps tech startups with free cloud
services, mentorship, and funding.
• Facebook (Meta) Accelerator – Supports startups using AI and
digital tools.
• PLDT & Globe (Philippines) – Invest in local tech startups and
provide digital services.
• Coca-Cola Accelerator – Partners with beverage startups to
create new drinks.
• Microsoft for Startups – Offers free cloud computing and
software tools.
Key Parts of a Startup Ecosystem
9. Mentors and Advisors: Experienced entrepreneurs or
industry experts who guide startups through challenges.
10. Events and Networks:
• Startup competitions
• Pitch nights
• Networking events and conferences
11. Media and Influencers: Outlets and personalities
that highlight startups, attract attention, and build
community awareness.
Why Events & Networks Are Important
for Startups?

Meet Investors – Helps startups find funding.

Gain Knowledge – Learn from successful
entrepreneurs.
Find Co-founders & Team Members – Connect
with people to build the business.
Expand Business – Get partnerships and
customers.
Examples of Prominent Startup
Ecosystems:
• Silicon Valley, USA: Known for its technology startups
and major players like Google, Facebook, and Apple.
• Bangalore, India: A hub for technology and software
startups.
• Shenzhen, China: Famous for hardware and electronics
innovation.
• Tel Aviv, Israel: Renowned for cybersecurity and AI
startups.
How It Works?
 How It Works:
A healthy startup ecosystem

• fosters collaboration and interaction among these

components
• Entrepreneurs get access to mentorship, investors fund
promising ideas
• creates a supportive environment for startups to
innovate, scale, and succeed
A startup ecosystem is like a
garden for new businesses.
• Startups are the plants
• Investors and mentors are like sunlight and water, helping
them grow
• Incubators, events, and services are the tools used to tend
the garden
• The government and universities provide the fertile soil
where everything thrives.
ENTREPRENEURSHIP, INNOVATION, AND
SELF-EMPLOYMENT
1. Entrepreneurship:
• Definition: refers to the process of identifying, creating, and
pursuing opportunities to bring about change, whether
through the introduction of new products, services, or
business models

• Key Elements:
• Risk-Taking: Entrepreneurs often take risks to pursue
opportunities, embracing uncertainty and potential failure.
• Innovation: Entrepreneurship is often associated with innovation,
as entrepreneurs seek novel solutions to problems or unmet
needs.
• Venture Creation: Entrepreneurs establish and manage ventures,
which may range from small startups to large enterprises.
Innovation
➢ the introduction of a new method, device, among others.
➢ Could be any of the following :
1. A new product
2. A new process
3. Substitution of a cheaper raw material
4. Reorganization of functions leading to increased efficiency
5. Improvement in instruments or methods
3. Self-Employment:
• Definition: Self-employment refers to individuals who work
for themselves and operate their own businesses rather than
being employed by others

• Key Elements:
• Independence: have control over their work and business
decisions
• Risk and Rewards
• Diverse Occupations: Self-employment spans various sectors,
including freelancers, consultants, and small business owners
Entrepreneurship, innovation, and self-employment are
interconnected elements:
➢ Entrepreneurs drive innovation
➢ many self-employed individuals embody an entrepreneurial
spirit
➢ The ability to innovate and the pursuit of entrepreneurial
opportunities influenced the decision of individuals to venture
into self-employment.
The mechanisms driving innovation and economic growth :
➢ Knowledge spillovers
➢ Experimentation
➢ Decentralization
➢ Competition
 What is the Difference
Between Innovation and
Entrepreneurship?
What is the Difference Between
Innovation and Entrepreneurship?
Definitions of Innovation and Entrepreneurship:
• Innovation meaning: Innovation is the process of
creating something new.
• Entrepreneurship: Entrepreneurship identifies the
opportunities in great innovations creates
opportunities, adds value, and keeps the value
improving over a period of time.
 Characteristics of Innovation and
Entrepreneurship:
Point of Difference Innovation Entrepreneurship
Definition Creation of something new. Identification of innovative opportunities
and their transformation into profitable
business ventures.

Risk-Taking The generally low risk involved. Involves taking significant risks to convert
ideas into successful businesses.
Durability Often has a short lifespan. Exhibits long-term durability, with
continuous value
creation and improvement.

Interest Innovators may lose interest after the idea Entrepreneurs persist, adapt, and work hard
stage. to make their ventures more successful.

Skills Focuses on inquiry, creativity, and Requires planning, leadership, management,

experimentation. decision-making, risk-taking, and hard work.

Cause The outcome of new thinking and ideas. Process of leveraging innovation to create
viable business opportunities.
SUCCESSFUL INNOVATIONS
SUCCESSFUL INNOVATIONS
What is an entrepreneurial mindset?
 Entrepreneurial Mindset
• A “mindset” refers to the specific behaviors, attitudes,
and thought processes that prompt our decisions

• thought processes can be:

• negative mindset can blind you, clouding your
judgment
• positive mindset opens your mind to the possibilities
of a situation
 The importance of having an
entrepreneurial mindset

• You’ll learn to overcome challenges.

• You’ll think outside the box.
• You can influence and inspire people.
• You’ll have a stronger sense of self.
 Think like an entrepreneur: 5
characteristics of an entrepreneurial
mindset
 Think like an entrepreneur: 5
characteristics of an entrepreneurial
mindset

1. Independence
2. Accountability
3. Goal-oriented
4. Resilience
5. Willingness to experiment
How to develop an Entrepreneurial Mindset
 How to develop an
entrepreneurial mindset

1. Set clear goals

2. Practice being decisive
3. Redefine failure
4. Face your fears
5. Remain curious
ASSIGNMENT:
• Search
• Thomas Edison
• Steve Jobs
• Nelson Mandela
• J.K Rowling
Examples of an entrepreneurial mindset and
thinking in the real world
• 1. Thomas Edison
• He modeled creativity and adaptability when he invented the lightbulb
• He saw a need for a small enough lighting solution for the home that used
very little electricity.
• It took him over a year to make his product work, despite his plan to have it
done in three to four months.
• A lot of people would give up after month six. But, to quote the man
himself, “I have not failed. I’ve just found 10,000 ways that won’t work.”
• Talk about positivity.
Examples of an entrepreneurial mindset and
thinking in the real world
2. Steve Jobs
• fired from Apple and became the co-founder of Pixar Animation
Studios, changing the face of animated film-making.
• upon his return to Apple, he spearheaded the creation of the iPod
and the iPhone
• Jobs’ favorite quotes of his: “It’s impossible to fail if you learn from
your mistakes. Don’t give up.”
• PERSEVERANCE
Examples of an entrepreneurial mindset and
thinking in the real world
• 3. Nelson Mandela
• It takes an entrepreneurial spirit to enter politics — even more so if it
means opposing a system bent on curtailing human rights.
• Mandela saw the potential for a better future and set about building
it
• “One of the most difficult things to do is not to change the society but
to change yourself.”
• ADAPTABILITY
Examples of an entrepreneurial mindset and
thinking in the real world
4. J. K. Rowling
• If entrepreneurship requires creativity, creative fiction is very much an
entrepreneurial endeavor. J.K. Rowling embodied this sentiment
when she created the popular Harry Potter book series, inspiring a
generation of kids with her writing.
• Her first book in the series was rejected by 12 different publishing
houses before someone accepted it
• Speaking vicariously through Ginny, a character in her book, Rowling
reminds us, “Anything's possible if you've got enough nerve.“
• RISK TAKER
Anyone can embrace the
entrepreneurial mindset
 Entrepreneur’s Task

• Products and services for customers and

producers
• Employment
• Taxes
• Demand for suppliers’ products and services
• Training facilities for future entrepreneurs
 Entrepreneur’s Task
Land Labor Capital
(Natural resources) (Human Resources) (Financial Resources)

Entrepreneur

Production Process

Finished Goods and Services

In the attempt to make profits, the
entrepreneur performs the following specific
functions:

1. To supply the necessary capital

2. To organize production by buying and combining inputs like
materials and labor
3. To decide on the rate of output, in the light of his expectation about
demand
4. To bear the risk inherent to the venture
MECHANISMS DRIVING INNOVATION
AND ECONOMIC GROWTH
 MECHANISMS DRIVING INNOVATION
AND ECONOMIC GROWTH
A. Technological Advancements:
1. Research and Development (R&D): Investments in R&D lead to technological
breakthroughs, which can drive innovation across various industries.
2. Disruptive Technologies: The introduction of disruptive technologies can
revolutionize existing industries, creating new opportunities for growth and
efficiency.
B. Entrepreneurship and Startups:
1. New Venture Creation: Entrepreneurs often bring new ideas, products, and services
to the market, fostering innovation.
2. Risk-Taking: The willingness of entrepreneurs to take risks and pursue novel
ventures can lead to the development of innovative solutions.
 MECHANISMS DRIVING INNOVATION
AND ECONOMIC GROWTH
C. Education and Human Capital:
1. Skilled Workforce: A well-educated and skilled workforce is crucial for
fostering innovation.
2. Knowledge Transfer: Educational institutions play a role in knowledge
creation and transfer, contributing to the development of innovative ideas.
D. Market Competition:
1. Incentive for Innovation: Competitive markets encourage firms to innovate
to gain a competitive advantage.
2. Efficiency Improvements: Innovations driven by competition can lead to
increased efficiency, lower prices, and improved products.
 MECHANISMS DRIVING INNOVATION
AND ECONOMIC GROWTH
E. Government Policies and Support:
1. Research Funding: Government investments in research and development provide a
foundation for innovation.
2. Intellectual Property Protection: Legal frameworks protecting intellectual property
incentivize innovation by ensuring that innovators can reap the rewards of their
efforts.
F. Globalization and Collaboration:
1. Knowledge Exchange: Globalization facilitates the exchange of ideas and
technologies across borders, contributing to a more interconnected innovation
ecosystem.
2. International Collaboration: Collaborative efforts between organizations and
researchers worldwide can accelerate the pace of innovation.
.
 MECHANISMS DRIVING INNOVATION
AND ECONOMIC GROWTH
G. Infrastructure Development:
1. Information and Communication Technology (ICT): Advanced ICT
infrastructure supports the development and dissemination of innovative
solutions.
2. Logistics and Transportation: Efficient transportation and logistics systems
enable the rapid movement of goods and ideas, fostering innovation.
H. Financial Support:
1. Venture Capital and Investment: Access to financial resources, such as
venture capital, helps fund innovative ventures and projects.
2. Public and Private Funding: Government grants, subsidies, and private
investment contribute to the financial backing of innovation.
 MECHANISMS DRIVING INNOVATION
AND ECONOMIC GROWTH
I. Cultural and Social Factors:
1. Entrepreneurial Culture: Societal attitudes towards risk-taking,
entrepreneurship, and creativity influence the willingness of individuals to
pursue innovative endeavors.
2. Diversity and Inclusivity: Diverse perspectives and inclusive environments
can lead to a broader range of innovative ideas.
J. Adoption of Innovation:
1. Diffusion of Innovations: The widespread adoption of innovative products
and processes by businesses and consumers contributes to economic growth