Introduction to entrepreneur and entrepreneurship Chapter 1 Introduction to entrepreneur and entrepreneurship

Who is an entrepreneur? Entrepreneur stems from the French word entreprendre which refers to individuals who undertake the risk of new ventures. Richard Cantillon, a French economist asserted that an entrepreneur invests, transforms and makes profit / loss. Adam Smith widened the scope to include the task of forming an organisation for commercial purposes and the extra qualities of the entrepreneur (ability to foresee potential through changes in the economy and to act on the demand).

Who is an entrepreneur? French economist, Jean Baptiste Say: the entrepreneur was said to influence society by forming enterprises and in turn influenced by society to recognise needs and to fulfill them through skill management resources. British economist, John Stuart Mill: entrepreneurs as one of the factors of production (land, labour, capital and entrepreneur).

The evolution concept of entrepreneurship Joseph Schumpeter introduced the concept of creative destruction. Creative destruction sees the destruction of usual ways of doing things by the introduction of new improved ways.

The Economic Questions What should be produced? When will it be produced? How will it be produced? Who will produce it? Who gets to have what is produced? An economy is a country’s financial structure. It is the system that produces and distributes wealth.

Entrepreneurship development in Malaysia Entrepreneurship has existed in Malaysia since the interaction of Malacca with foreign traders. When the British colonized in Malay Peninsular, they practiced the ‘divide and rule’ system : Malays – engaged in administration and agriculture Chinese – engaged in mining and business Indians – engaged in rubber plantations

Entrepreneurship development in Malaysia After independence, the Malaysian government has been focusing on the field of entrepreneurship until today A specific body to manage and promote the growth of entrepreneurship is the Ministry of Entrepreneurship Development and Co-operation. Others: The New Economic Policy(1971-1990) The National Development Policy (1990 – 2000) Vision 2020

Why Be an Entrepreneur? Control over time Fulfillment Creation/Ownership Control over Compensation -salary -wage -dividend -commission Control over Working Conditions

The importance of entrepreneurship Micro aspects: Sources of new ideas and change: New and value added ideas & products Transforming ideas and opportunities into profitable businesses Macro aspects: Creating wealth & promoting wealth distribution Catalyst for economic change and growth Creating job opportunities Developing supporting industries Providing wider choices of technologically up to date products Utilising resources more efficiently Expanding family business that can be inherited and expanded Role model for society

Characteristics of Successful Entrepreneurs

Locus of Control-they control their destinies Internal Locus of Control-they control their destinies Flexibility Initiative & Responsibility Seeking Feedback High Energy High Commitment Team Building Opportunity Orientation Ability to set Vision Moderate Risk Taker Tolerance to Failure Drive to Achieve Confidence & Optimistic Creative and Innovative Skilled at Organising Independent

Businessmen vs Entrepreneurs Small Businessman Entrepreneur Engages in business to support living & family Starts the ventures, assume leadership & expand it to fulfill personal goals n self-accomplishment Low risk taker Moderate risk taker Follows others and invests only in tested and proven mkts Takes calculated risk

Managers Vs Entrepreneurs Primary Motives promotion & other traditional rewards Independence, opportunity to create & money Time Orientation Short-term: meetings, quota, budgets Survival and achieving; 5 to 10 yrs growth of business Activity Delegates and supervises more than direct involvement Direct involvement Risk Careful Moderate risk taker Status Concerned about status symbols Not concerned about status symbols Failure & Mistake Tries to avoid mistakes & surprises Deals with mistakes and failures Decisions Usually agrees with those in upper management Follows dream with decisions Who serves Others Self and customers Family history Family members worked for large organisations Entrepreneurial small business, professional Relationship with others Hierarchy as basis relationship Transactions and deal making as basic relationship