ENTREPRENEURSHIP

BY ROBERT D. HISRICH, MICHAEL P. PETERS & SHEPHERD

Nadir Khan

Development of Entrepreneurship Theory & the Term Entrepreneur

Stems from French: means between-taker or go-between
Middle Ages 17th Century 1725 1803 1876 Actor and person in charge of large-scale production projects. Person bearing risks of profit (loss) in a fixed-price contract with government. Richard Cantillon person bearing risks is different from on supplying capital. Jean Baptiste Say separated profits of entrepreneur from profits of capital. Francis Walker distinguished between those who supplied funds and received interest and those who received profit from managerial capabilities. Joseph Schumpeter entrepreneur is an innovator and develops untried technology. David McClelland entrepreneur is an energetic, moderate risk taker. Peter Drucker entrepreneur maximizes opportunities.
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1934 1961 1964

Development of Entrepreneurship Theory & the Term Entrepreneur

1975 Albert Shapero entrepreneur takes initiative, organizes some social and economic mechanisms and accepts risks of failure. Karl Vesper entrepreneur seen differently by economists, psychologists, businesspersons and politicians. 1980

1983

Gifford Pinchot intrapreneur is an entrepreneur within already established organization.

Robert Hisrich entrepreneurship is the process of creating something different with value by devoting the necessary time and effort; assuming the accompanying financial, psychological and social risks; and receiving the resulting rewards of monetary and personal satisfaction.
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1985

Definition
Entrepreneurship is the process of creating

something new with value by devoting the necessary time and effort, assuming the

accompanying financial, psychic, and social risks, and receiving the rewards of monetary and personal satisfaction and independence.
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The Entrepreneurial Decision Process

Deciding to become an entrepreneur by leaving present
activity. Decisions for a Potential Entrepreneur
Change from present lifestyle Work environment Disruption Form new enterprise
Desirable 1. Cultural 2. Subcultural 3. Family 4. Teachers 5. Peers Possible 1. Government 2. Background 3. Marketing 4. Financing 5. Role Models
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Types of Start-Ups
Lifestyle Firm
A small venture that supports the owners and usually does not grow

Foundation Company
A type of company formed from research and development that usually does not go public

High-Potential Venture
A venture that has high growth potential and therefore receives great investor interest. Also known as Gazelles.

Nadir Khan

Role of Entrepreneurship in Economic Development

Product-Evolution Process Process for developing and commercializing an innovation. Innovations Ordinary Innovations New Products with little technological change Technological Innovations New products with significant technological advancement Breakthrough Innovations New products with some technological change Iterative Synthesis The intersection of knowledge and social need that starts the product development process
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Government as an Innovator
A government active in commercializing technology Technology Transfer Commercializing the technology in the

laboratories into new products

Nadir Khan