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Lesson 2 - Theories ON Entrepreneurship: Aldrian John V. Soriano Subject Teacher

This document discusses several theories of entrepreneurship: 1) Innovation Theory proposed by Joseph Schumpeter which sees economic development resulting from innovation. 2) Keynesian Theory developed by John Maynard Keynes emphasizing the government's role in entrepreneurship, especially during economic depression. 3) Alfred Marshall Theory asserting there are four factors of production: land, labor, capital, and organization/entrepreneurship. 4) Risk and Uncertainty-bearing Theory by Frank Knight viewing entrepreneurs as risk-takers connecting producers and consumers.

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93 views

Lesson 2 - Theories ON Entrepreneurship: Aldrian John V. Soriano Subject Teacher

This document discusses several theories of entrepreneurship: 1) Innovation Theory proposed by Joseph Schumpeter which sees economic development resulting from innovation. 2) Keynesian Theory developed by John Maynard Keynes emphasizing the government's role in entrepreneurship, especially during economic depression. 3) Alfred Marshall Theory asserting there are four factors of production: land, labor, capital, and organization/entrepreneurship. 4) Risk and Uncertainty-bearing Theory by Frank Knight viewing entrepreneurs as risk-takers connecting producers and consumers.

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secret na malupit
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© © All Rights Reserved
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LESSON 2 – THEORIES

ON ALDRIAN JOHN V. SORIANO


subject teacher

ENTREPRENEURSHIP
OBJECTIVE:
At the end of this lesson, the learners should be able to:
• identify some theories on entrepreneurship; and
• cite the importance of the theories on entrepreneurship.
Is a generalization that explains a set of facts or
phenomena. It is not an absolute truth.

Theory It is not an absolute truth.

It can be supported by another observation or


proven to be otherwise.
REMEMBER!
In the process of evaluating the soundness and logic of
various entrepreneurship theories, remember that the
scholars who developed or contributed them mostly
anchored their concepts on the economic events which
were happening at that time.
THERE ARE SEVERAL
THEORIES IN
ENTREPRENEURSHIP. HERE
ARE SOME
1. Innovation Theory
OF THEM:
2. Keynesian Theory
3. Alfred Marshall Theory
4. Risk and Uncertainty-bearing Theory
5. Other theories on entrepreneurship.
was contributed by Joseph Schumpeter, an
Austrian economist and political scientist.

He wrote about it in his book, The Theory of


Economic Development.

Innovation Economic Development is a product of structural


change or innovation.
Theory
Unless innovation takes place, economic
equilibrium or status quo will remain.

The primary role of entrepreneur is to introduce


innovation.
was developed by John Maynard Keynes, a British
economist.

The key concepts of the theory were included in his


book, The General Theory of Employment, Interest,
and Money, which as published during the Great
Keynesian Depression in 1936

Theory The theory put so much emphasis on the role of the


gov’t in entrepreneurial and economic development,
most especially when the economy was
experiencing depression.

Government played a critical role in overcoming


the crisis The Great Depression in US.
Economic
Economic Depression
Recession
widespread economic decline that
more severe that lasts for years.
lasts for several months.
Proponent was Alfred Marshall, an English
economists.
Alfred
It was introduced on Marshall’s book, Principles of
Marshall Economics.
Theory
He strongly asserted that there are 4 factors in the
production (land, labor, capital, and organization) of
goods and services in the economy.
4 Factors of Production
Organization
Land
refers to all Labor Capital /Entrepreneurship
refers to a man-made
natural is the factor of
human factor of
resources production that
inputs such production
that exist integrates land,
as used to
without labor, and capital
manpower create
mans to create new
Payment
skills for another
intervention products
Payment labor is Payment
product
for land is called for capital
called rent. wages and is called
salaries. investment
Frank Hyneman Knight, an American economist,
conceptualized this theory in his book, Risk,
Uncertainty and Profit.
Risk and
Uncertainty- Knight viewed an entrepreneur as an agent of the
production process where he/she connects the
bearing producers and the consumers.
Theory
Risk-taking is an important dimension that will
differentiate an entrepreneur from a worker.

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