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Entrepreneurship: What does it REALLY mean?
Introduction: In a world where ideas drive economies, it is no wonder that innovation and entrepreneurship are often seen as inseparable bedfellows. The governments around the world are starting to realize that in order to sustain progress and improve a country's economy, the people have to be encouraged and trained to think out-of-the-box and be constantly developing innovative products and services. The once feasible ways of doing business are no longer guarantees for future economic success! In response to this inevitable change, some governments are rethinking the way the young are educated by infusing creative thinking and innovation in their nation's educational curriculum. In the same vein, they are putting much emphasis on the need to train future entrepreneurs through infusing entrepreneurship components within the educational system, especially at the tertiary level. Some countries have taken this initiative to a higher level by introducing entrepreneurship education at elementary schools and encouraging them to be future entrepreneurs when they are of age. In a series of survey funded by Kauffman Center for Entrepreneurial Leadership, it was found that nearly seven out of 10 youths (aged 14-19) were interested in becoming entrepreneurs. Being an entrepreneur is now the choice of the new generation as compared to the preferred career choices of yesteryears such as being a doctor, lawyer or a fighter pilot. In a recent visit to the bustling city of Shanghai in China, an informal survey was carried out among Chinese youths by the author. The results of the survey showed that being an entrepreneur, especially in the field of computer and e-commerce, is perceived as a 'cool' career and is an aspiration for many Chinese youths Prior to the 'opening up' of modern China, being an entrepreneur was perceived as the outcome of one's inability to hold a good government job and those who dared to venture, were often scorned at by their peers. Times have indeed changed. With this change in mindset and the relative knowledge that entrepreneurs bring forth increased job creations, the awareness and academic studies of entrepreneurship have also heightened. In many tertiary institutes, many courses of entrepreneurship and innovation are being developed and offered to cater to the increasing demand. The term "entrepreneurship" has also evolved with numerous variations. The proliferation of jargons such as netpreneur, biotechpreneur, technopreneur and multipreneur are coined to keep up with the ever-changing times and business conditions that surround us. In view of these changes, it is important that the definition of entrepreneurship be refined or redefined to enable its application in this 21st century. To put it succinctly, "Good science has to begin with good definitions (Bygrave & Hofer, 1991, p13)." Without the proper definition, it will be laborious for policymakers to develop successful programs to inculcate entrepreneurial qualities in their people and organizations within their country. The paper will provide a summary of the definitions of entrepreneurship provided by scholars in this subject area. The author will also expand on one of the definitions by Joseph Schumpeter to create a better understanding of the definition of the term "entrepreneurship" as applied in today's business world. Entrepreneurship through the Years: It was discovered that the term 'entrepreneurship' could be found from the French verb 'entreprende' in the twelfth century though the meaning may not be that applicable today. This meaning of the word then was to do something without any link to economic profits, which is the antithesis of what entrepreneurship is all about today. It was only in the early 1700's, when French economist, Richard Cantillon, described an entrepreneur as one who bears risks by buying at certain prices and selling at uncertain prices (Barreto, 1989, Casson 1982) which is probably closer to the term as applied today. In the 1776 thought-provoking book 'The Wealth of Nations', Adam Smith explained clearly that it was not the benevolence of the baker but self-interest that motivated him to provide bread. From Smith's standpoint, entrepreneurs were the economic agents who transformed demand into supply for profits. In 1848, the famous economist John Stuart Mill described entrepreneurship as the founding of a private enterprise. This encompassed the risk takers, the decision makers, and the individuals who desire wealth by managing limited resources to create new business ventures. One of the definitions that the author feels best exemplifies entrepreneurship was coined by Joseph Schumpeter (1934). He stated that the entrepreneur is one who applies "innovation" within the context of the business to satisfy unfulfilled market demand (Liebenstein, 1995). In elaboration, he saw an entrepreneur as an innovator who implements change within markets through the carrying out of new combinations. The carrying out of new combinations can take several forms: The introduction of a new good or standard of quality;
Though the term 'innovation' has different meanings to different people, several writers tended to see "innovation" in the form of entrepreneurship as one not of incremental change but quantum change in the new business start-ups and the goods/services that they provide (egs, Bygrave, 1995; Bygrave & Hofer, 1991). In the view of Drucker (1985), he perceived entrepreneurship as the creation of a new organization, regardless of its ability to sustain itself, let alone make a profit. The notion of an individual who starts a new business venture would be sufficient for him/her to be labeled as an entrepreneur. It is this characteristic that distinguishes entrepreneurship from the routine management tasks of allocating resources in an already established business organization. Though the definition tends to be somewhat simplistic in nature, it firmly attaches the nature of entrepreneurial action with risk-taking and the bearing of uncertainty by the individual (Swoboda, 1983) In a Delphi study, Gartner (1990) found eight themes expressed by the participants that constitute the nature of entrepreneurship. They were the entrepreneur, innovation, organization creation, creating value, profit or non-profit, growth, uniqueness, and the owner-manager. The themes could be seen as a derivative and expansion of Schumpter's earlier concept. Expanding on Schumpeter's Definition: After digesting the numerous definitions of entrepreneurship, one would tend to see a strong link between these two terms: entrepreneurship and innovation. In retrospect, most of the definitions tended to be, to some extent, a re-work and expansion of Schumpeter's definition of entrepreneurship (which is that of innovation being applied in a business context). As defining the term of 'innovation' is highly debatable and would merit a paper on its own, the author has thus, for convenience, summarised the definition of innovation. Innovation can be perceived simply as the transformation of creative ideas into useful applications by combining resources in new or unusual ways to provide value to society for or improved products, technology, or services. In the author's opinion, the difficulties of defining "innovation" could be the reason for the quandary one finds in attempting to arrive at a clear-cut definition of the term " Entrepreneurship". Take for example, if someone starts another run-of-the-mill hot dog stand in the streets of New York, will he termed as an entrepreneur? According to Drucker's definition, he will be seen as one. However, if the above definition by Schumpeter was used as a guideline, the answer is probably 'NO'. Why? The core of the matter lies in what is so innovative about setting up another hot-dog stand which are in abundance in New York. On the contrary, if he is the first one to start a stand selling hot-dogs with Oriental Sweet and Sour sauce topping; he could be termed as an entrepreneur (even based on Schumpeter's requirement) as he has done what others have not done before. In the context of entrepreneurship, creativity and innovation are key points in the whole scheme of things. In this manner, by adding "innovative" features to a product or services and setting up a business based on these additional features to compete in the existing market, new entrants may be able to gain this competitive advantage over existing market players. In the case of the hot-dog seller, it may be argued that his addition of Oriental Sweet and Sour sauce toppings may be seen as nondescript. This runs in contrary to some scholars' definition of entrepreneurship as requiring quantum changes in the products/ services to be justified as being entrepreneurial (Bygrave, 1985; Bygrave & Hofer, 1991). Consistent with creating new products for sale, someone who starts a business by providing a totally new way of serving his customers/ clients is considered to be entrepreneurial too. Though, it is often argued that there are no real new products or services in a case where one does not look to the past products and services for ideas for improvements. Thus, the notion of incremental improvements should be accepted as being innovative too. Innovation in the business sense may not necessarily involve, in the physical sense, the introduction of a new product or service. It can be in the form of what is commonly known as creative imitations. For example, if an individual starts selling a product that is already common in his area or country, he will not be seen as being entrepreneurial. However, if he is the first to sell the same product in a virgin locale or to an untouched market segment, he will be seen as an entrepreneur in his own rights. Take Muhammad Yunus, for example. Yunus became an entrepreneur when he started a micro-loan program for the poor villagers in a rural part of Bangladesh named Grameen, with only US$26. The loan was divided among 42 villagers to assist them to buy small items such as combs, scissors, needles and other necessities to start their own home businesses. In the past 22 years, Grameen Bank has grown with over $2 billion loans granted. It has now become a model for several micro-loan facilities. >From the following example, Yunus created banking and lending facilities in Grameen specifically for the poor villagers. Banking and lending money activities are not new but Yunus was the first to provide such facilities in a rural part of Bangladesh and that is definitely innovation and risk-bearing on his part as a social entrepreneur. In short, innovation need not arise mainly from a new product or service but it could be an old product or service finding a new market for penetration. An individual could be termed as an entrepreneur if he or she sells a product or service using new systems and/ or mediums of marketing, distribution or production methods as a basis for a new business venture. A good example will be Jeff Bezos, the founder of Amazon, the successful Web-based bookstore. He was one of the first to sell books on a large scale using an online store and also patented the one-click system for online buying. Though selling books is not an innovation in itself, Jeff Bezos was innovative in the use of the Internet then as a viable marketing and sales channel for selling books. Another example from the field of e-commerce is Stuart Skorman, the founder of Reel.com. Reel.com is essentially one of the first cyber movie store with a very large inventory of over a 100 000 videos. Though setting a movie store was revolutionary then, Reel.com main distinction was being known as the first online store to expand by opening an offline store. The founder felt that by doing so, the online store could be an advertisement for the offline store and vice versa, thus strengthening this click and mortar business venture- an example of creativity and innovation applied in a profitable business context. Conclusion: This paper has started as an attempt to redefine the term of entrepreneurship but ended up 'updating' the wheel, based on the definition as proposed by Schumpeter. The paper expanded on this influential work by giving examples to illustrate what innovation in entrepreneurship was and hope that along the way, new insights were unearthed in the study of defining entrepreneurship. In summary, the author hopes that this paper would further encourage the infusion of creative thinking and innovation within the educational system to nurture future entrepreneurs with a competitive edge. In the author's view, the characteristics and capabilities to set up a new business venture based on doing things that have not done before should be encouraged. Innovation needs to be the cornerstone of entrepreneurship as opposed to the mere setting up of another new enterprise without implementing changes or adding features of improvements to the products and services provided and/ or its business processes. About The Author Dr. Alvin Chan is a Senior Research Consultant at First Quatermain Centre of Collaborative Innovation (www.firstquatermain.com). For reprints permission, please contact bizguru88@hotmail.com
Latest News:Site: Yahoo! News Search Results for news Myanmar's Suu Kyi to get family letters, news mags (Reuters via Yahoo! News) Detained Myanmar opposition leader Aung San Suu Kyi has managed to wring small concessions from the ruling generals in the form of letters from her family and some international news magazines, her lawyer said on Friday. JCDecaux in talks for News Outdoor Group in Russia (AP via Yahoo! News) French outdoor advertising firm JCDecaux SA said Thursday it is negotiating to buy Russian rival News Outdoor Group from global media company News Corp. News Corp tightens grip on Premiere with new CEO (Reuters via Yahoo! News) Rupert Murdoch tightened his grip on German pay-TV broadcaster Premiere by appointing News Corp executive Mark Williams as CEO in a move to get the company back on track. SEC Looks Into UAL Stock Scare; Implications For Online News? (CBS News) A ton of digits have been devoted to this in other spots but the SEC's decision to investigate takes it to another level. The backstory: a six-year-old news story about UAL declaring bankruptcy made it into the Tribune-owned Sun-Sentinel 's current news flow, was picked up by a Google (NSDQ: GOOG) News bot and, via a reporter for a newsletter, made it onto Bloomberg News. After a lot of buck ... JCDecaux and News Corp. in talks to combine outdoor ad groups (International Herald Tribune) The News Corp. chief executive, Rupert Murdoch, has recently expressed nervousness about investments in Russia, where News Outdoor generated the bulk of its revenue last year. SEC Looks Into UAL Stock Scare; Implications For Online News? (paidContent.org via Yahoo! Finance) A ton of digits have been devoted to this in other spots but the SEC's decision to investigate takes it to another level. The backstory: a six-year-old news story about UAL declaring bankruptcy made it into the Tribune-owned Sun-Sentinel's current news flow, was picked up by a Google News bot and, via a reporter for a newsletter, made it onto Bloomberg News. JCDecaux in talks to buy News Corp. billboard unit (AP via Yahoo! Finance) In a deal that would create the world's largest outdoor advertising company, French conglomerate JCDecaux SA said Thursday that it is in talks to buy Russian rival News Outdoor Group from global media company News Corp. Phila. mayor to announce grim budget news (The Philadelphia Inquirer) The Nutter administration is expected to announce grim budget news today, which is all but certain to lead to significant spending cuts - perhaps as high as 10 percent - in some city departments, according to three sources familiar with the budget. News Corp says Mark Williams interim Premiere CEO (Reuters via Yahoo! News) News Corp. executive Mark Williams has taken over as chief executive of German pay-TV broadcaster Premiere in an interim capacity, News Corp. said after the move led to renewed takeover speculation. News Corp. says Mark Williams interim Premiere CEO (Reuters via Yahoo! News) Mark Williams, a News Corp. executive named late on Wednesday as chief executive of German pay-TV broadcaster Premiere, has taken over in an interim capacity, a News Corp. spokeswoman said on Thursday. Site: news - Google News Phil Schiller bringing the news at Macworld - San Francisco Chronicle
MORE RESOURCES: Site: Yahoo! News Search Results for entrepreneurialism Lone Star Library: Green Mountain founder shares entrepreneurial insights (Fort Worth Business Press) Rural Southerner Sam Wyly came by his self-made captain-of-industry status the hard way, developing a passion for business strategy by playing schoolboy football and observing his parents? natural gift for small-business operations and hard-bargain bartering. S.C.'s brightest complete Business Week (Columbia Star) Approximately 200 high school students from across S.C. have successfully graduated from South Carolina Business Week, presented by the South Carolina Cable Television Association, July 13- 18, at Presbyterian College in Clinton. Wellington West opens Montreal branch (CNW Group via Yahoo! Finance) Wellington West Holdings Inc., a privately held, employee-owned financial services firm, today announced the expansion of its national network with the opening of a Wellington West Capital Inc. full-service retail investment branch in Montreal, Quebec. Ctek Selects Kyocera 300 Module for Z4100 Wireless Router (Centre Daily Times) Kyocera Wireless Corp. (KWC), a leading global manufacturer of wireless handsets, devices and embedded machine-to-machine (M2M) modules, and Ctek, a leading manufacturer of specialized communications solutions for industrial and commercial applications, today announced the selection of the Kyocera 300 Module for Ctek's cost-effective Z4100 Router. The Kyocera 300 Module enables reliable, ... Memphis confident of growth campaign (Memphis Commercial Appeal) One year after the launch of a $64 million economic development campaign, city officials are increasingly optimistic about the impact of MemphisED on the Bluff City. Summer break project: JTCC student lives, learns nonprofit leadership with Pheonix Project (The Petersburg Progress-Index) CHESTER ? Jamie Poniatowski, a Class of 2008 human services major, spent her summer break in Petersburg, participating in the Phoenix Project?s 2008 Nonprofit Leadership and Social Entrepreneurship Program, which transforms committed undergraduate and graduate students into effective social entrepreneurs with the knowledge, skills and connections to succeed in Virginia?s nonprofit sector. Ctek Selects Kyocera 300 Module for Z4100 Wireless Router (Business Wire via Yahoo! Finance) SAN DIEGO & RANCHO PALOS VERDES, Calif.----Kyocera Wireless Corp. , a leading global manufacturer of wireless handsets, devices and embedded machine-to-machine modules, and Ctek, a leading manufacturer of specialized communications solutions for industrial and commercial applications, today announced the selection of the Kyocera 300 Module for Ctek?s cost-effective Z4100 Router. $1 Million Opus Prize Finalists Announced (PR Newswire via Yahoo! Finance) Seattle University and the Opus Prize Foundation today announced three finalists for the $1 million 2008 Opus Prize, one of the world's largest humanitarian service awards. Guided by faith and an entrepreneurial spirit, Marguerite "Maggy" Barankitse, Krishnammal Jagannathan and Michael Woodard are working throughout the world to give people the tools to transform their lives. Scotiabank Online Small Business Contest Last Call (CNW Group via Yahoo! Finance) The chance for Canadian small business owners to win $50,000 in cash prizes is coming to a close. As part of Scotiabank's 'Get Growing to a Million' Campaign, the online challenge has offered small business owners across Canada a chance to win one grand prize of $20,000 and six regional prizes of $5,000. In cinemas this weekend (Guardian Unlimited) RocknRolla | The Duchess | Bangkok Dangerous | Disaster Movie | Sweete Land | El Cantante | Never Apologise | Mera Pind My Home Site: entrepreneurialism - Google News Ohio House Speaker Budish touts regionalism in his first address - WKYC-TV
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