SESSION 1entrepreneurship
SESSION 1entrepreneurship
SESSION 1entrepreneurship
Why Entrepreneurship
Entrepreneurship is important for socio economic development- capital formation, job creation,
innovation. Governments are championing for entrepreneurship to propel economic growth, as
a model for social-economic development and to create jobs and fuel innovations.
We need entrepreneurship to help solve social problems-provision of goods and services.
We need entrepreneurial organizations that are innovative to compete effectively in the current
market place
Entrepreneurship as a career alternative to employment – it offers an individual independency
and creativity; for flexibility; to innovate to solve identified problems and to receive financial
rewards far more than employment can offer is on the rise.
Entrepreneurship is invaluable given that unemployment and retrenchment are real, people stuck
in careers that they don’t like and are not working to their full potential, and many professionals
not living their passion, dreams and expectations,
Definitions of Entrepreneurship:
Entrepreneurship involves undertaking a business activity by an individual who undertakes to
organise, manage and assume the risks of an enterprise.
Overtime, the term entrepreneurship has evolved. Different scholars have come up with different
definitions, examples include
Several definitions
Entrepreneurship as the ability to create and build something from practically nothing. This
involves the willingness to assume risks in undertaking a new economic activity through the
mobilization of human, financial and material resources.
Entrepreneurship as the dynamic process of incremental wealth creation by individuals who
assume the major risks in term of equity, time and commitment to provide value.
Entrepreneurship involves the identification of an opportunity, and organizing an enterprise for
the production and supply of goods and services
Entrepreneurship is the act of creating or growing a business through innovative and risk-
assuming management.
Entrepreneurship as the process of creating something new of value by devoting the necessary
time and effort, acknowledging and assuming the accompanying risks and receiving the resulting
rewards of monetary and personal satisfaction and independence.
It involves doing things that are not generally done in the ordinary course of business routine
and entails the process of opportunity recognition and implementation and innovation
Recent definition of Entrepreneurship defines Entrepreneurship is the attempt to create value
through the recognition of a business opportunity, the management of risk taking appropriate to the
opportunity and through the management skills to mobilise human, financial and material resources
necessary to bring the project to fruition.
From the above definitions, we can summarise the key tenets of Entrepreneurship as the following;
Starting a business enterprise, initiative taking/creation
Being creative and innovative in developing new products and services. This involves doing
or creating something new or significantly different
Mobilization and management of resources
Accepting risk and uncertainty in the development of the venture. Starting new ventures and
applying creativity involves a lot of risks.
An Entrepreneur
The term ‘entrepreneur’ is coined from the French word ‘Entreprendre’ which means to undertake
or one who goes between hence an entrepreneur is one who is able to identify opportunities and
actualize them, by undertaking to organize, manage, and assume the risk of a business
Kirzner considers an entrepreneur as one who is alert for profitable opportunities for exchange.
The entrepreneur benefits by acting as a middleman who facilitates the exchange. The role of
information in the market-place is important and an entrepreneur is in possession of additional
knowledge that provides opportunities for creative discoveries
Schumpeter defines an entrepreneur as an innovative person who brings about change through
innovation by the introduction of new products, processes, markets, organizational methods and
new sources of raw materials.
Knight considers an entrepreneur as an individual who takes calculated risk which is uncertain
and whose reward (profit) is the return of bearing uncertainty
An entrepreneur is one who searches for change, responds to it and exploits it as an opportunity
Functions of an entrepreneur
1. Opportunity identifier
2. Entrepreneur initiates the business activity
3. Resource mobilizer
4. Entrepreneur is the manager – planning, organizing, directing -organises things and people
5. Entrepreneur is a decision maker
6. Entrepreneur coordinator and organizer
7. Entrepreneur as an innovator - According to Schumpeter, the true function of an entrepreneur
is introducing innovations.
8. Entrepreneur as the financial manager
9. Entrepreneur as a risk bearer
Intrapreneurship/Corporate Entrepreneurship
Changes in the internal and external environment propelled by rapid evolution of knowledge and
technology, and stiff competition is forcing corporates to restructure and change their way of doing
business. They are realizing that they need to be more innovative and flexible than in the past and
are hence engaged in corporate entrepreneurship or intrapreneurship.
Corporate Entrepreneurship can facilitate firm’s efforts to innovate constantly and to cope effectively
with competing realities in the market. Entrepreneurship is necessary for organizational survival in
the competitive environment. Corporates need to change the way they do business by re-inventing
themselves through the integration of the strengths of the entrepreneurial firms (creativity, flexibility,
innovativeness and closeness to the market) with the market power and financial resources of the
large organizations. Existing organizations have resources, business skills, marketing distribution
channels to commercialise innovations but their bureaucratic structures, highly structuredness inhibit
creativity and prevent the development of new products and services.
Social Entrepreneurship
Social entrepreneurship is a form of entrepreneurship that has a social purpose; applies
entrepreneurship to solve a social problem. Involves tackling social challenges in an innovative and
financially sustainable way. Unlike the traditional entrepreneurship, it is not focused on profit
making but on solving a social need. It begins with a perceived social opportunity that is translated
into an enterprise leading to the creation of new organizations; new products or services, new
industries, new business models that contribute to the social welfare of the society.
Social entrepreneurs are entrepreneurs with a social mission to create social value that fulfils social
needs as opposed to the usual profit-seeking motivation. Like other entrepreneurs, they are creative
thinkers who continuously strive for innovation that result in new technologies, supply of resources,
production methods. Social enterprises are market driven (based on opportunities), Social impact
centred and pursue revenue and sustainability.
Social entrepreneurs aim to achieve sustainable solutions to the problems they address and seek to
empower others in most cases. They however need to develop practical and innovative solutions,
given their limited finances and the scale of the problems they aim to solve. They need sustainability
strategies. Social entrepreneurship and social innovation aim to provide innovative solutions to
unsolved social problems, putting social value creation at the heart of their mission in order to
improve individuals’ and communities’ lives and increase their well-being.
Examples;
Lorna Rutto:
EcoPost - a company that manufactures durable fencing posts using plastic waste, an environmentally
friendly alternative to timber. “I resigned in 2010 because I wanted to do something that would see
me help the community,” she says. So far, EcoPost has directly employed 40 people and 500 others
who work indirectly. They process posts for fencing, sign posts, building and construction materials
and lumber which can make tables and ceilings. “We want to prevent the cutting of trees. That is
why we are making lumber which is a long lasting product that does not rot,” she says. EcoPost
generates over Sh10.8 million in revenue in a year and has saved over 250 acres of forests and
withdrawn over 1,000,000 kilograms of plastic waste from the environment.
Muhammad Yunus:
Muhammad Yunus is the founder of the Grameen Bank, an institution that provides microcredit loans
to those in need to help them develop financial self-sufficiency. Founded in 1983, the bank has
brought in a net income of more than $10 million, and his work with the organization landed Yunus
a Nobel Prize in 2006.
Blake Mycoskie:
Mycoskie founded TOMS in 2006 after a visit to Argentina where he learned that many children get
sick or injured because they do not have shoes to wear. To combat this, he created TOMS, a business
that donates one pair of shoes to needy people for every pair that's bought. So far, the company has
donated more than a million pairs of shoes. In 2011, the company launched another initiative which
aims to give away a pair of glasses or sight-saving surgery for every pair of sunglasses or glasses
sold.
Thato Kgatlhanye
Founder of Rethaka Trading and the creator of Repurpose School Bags is a for-profit social
enterprise that specialises in green innovative solutions for social development. Her Repurpose
Schoolbag is a practical and sustainable solution to a major problem for many kids living in rural
and non-electrified parts of South Africa. Repurpose designs school bags from up-cyled plastic bags,
integrating solar technology that charges during the day and transforms into light for school kids to
study after dark. These 100% recycled plastic schoolbags are changing the lives of young learners -
they are not only environmentally friendly, but they provide much needed renewable energy light
sources for these young students who need to study after dark at home where electric light simply
doesn’t exist. The integration of reflective light material in the bags also provides much needed
visibility for these young students on the often dangerous roads as they walk many kilometers each
day just to attend school.
Techno-preneurship
Entrepreneurship in a technology - intensive context.
Process of merging technology process and entrepreneurial talent and skills.