1. The Nature and Importance of Entrepreneurship1
Chapter
The Nature and Importance of Entrepreneurship
McGraw-Hill/Irwin
Entrepreneurship, 7/e
Copyright © The McGraw-Hill Companies, Inc. All rights reserved.

2. Definition of Entrepreneurs Today
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 resulting rewards of monetary and personal satisfaction and independence.
Four aspects of being an entrepreneur today:
Involves creation process.
Requires devotion of time and effort.
Involves rewards of being an entrepreneur.
Requires assumption of necessary risks.

3. Entrepreneurs Versus Inventors
Inventor: Creates something for the first time; highly driven and motivated by his or her own work and personal ideas.
Differentiating characteristics of an inventor:
Education.
Level of experience.
Problem-solving skills.
Level of self-confidence.
Willingness to take risks.
Ability to tolerate ambiguity and uncertainty.
View of monetary benefits in measuring success.

4. The Entrepreneurial Process
Four distinct phases:
Identify and evaluate the opportunity.
Window of opportunity.
Develop a business plan.
Determine the resource requirement.
Manage the resulting enterprise.

5. Aspects of the Entrepreneurial Process
<<Insert Table 1.1>>
Table 1.1

6. Types of Start-Ups Lifestyle firm Foundation company
Privately held; usually achieves only modest growth.
Foundation company
Created from research and development.
Lays the foundation for a new business area.
High-potential venture
Receives the greatest investment interest and publicity.
Starts out like a foundation company, but attains rapid growth.
Also called gazelles, is integral to the economic development of an area.

7. Role of Entrepreneurship in Economic Development
Innovation is depicted as a key to economic development.
Product-evolution process: Process through which innovation is developed and commercialized.
Iterative synthesis: Critical point in the product-evolution process.
Three types of innovation:
Ordinary
Technological
Breakthrough

8. Product Evolution Need Recognition Industrial Initiate Innovation
Development
Press to Invent

9. Government as an Innovator
One channel for commercializing the results of the synthesis of social need and technology.
Frequently called technology transfer.
Relatively few innovations reach commercial markets.
Lacks business skills necessary for successful commercialization.
Government bureaucracy and red tape act as inhibitors.

10. Corporate Entrepreneurship
Strengths of an existing business:
Financial resources.
Business skills.
Marketing and distribution systems.
Factors that inhibit successful commercialization:
Bureaucratic structure.
Emphasis on short-term profits.
A highly structured organization.
In the current era of hypercompetition, strategic business units (SBUs) are emerging.

11. Independent Entrepreneurship
Factors that inhibit commercialization:
Managerial skills.
Marketing capabilities.
Financial resources.
Unrealistic inventions.
Lack of awareness on interfacing with necessary entities (banks, suppliers, customers, venture capitalists, distributors, and advertising agencies).

12. Ethics and Social Responsibility
Entrepreneurs usually develop an internal ethical code.
Personal value systems tend to be influenced by:
Peer pressure.
General social norms in the community.
Pressures from their competitors.

13. Future Entrepreneurship has gained mileage through a number of ways:
Entrepreneurial education.
Increase in academic research.
Societal support (media coverage).
Corporate entrepreneurship.

14. Entrepreneurial Universities
Activities
Seminars
Consulting
Research
Case Development
Technology Development & Transfer
Joint Ventures & Strategic Alliances
Structures
Business Assistance Centers
Incubators
Innovation Centers
Industrial Parks
Enterprise Development Centers
Venture Capital Exchanges
Inputs
Guest Lectures
Board of Advisors/Trustees
Internships
Student Projects
Source of Funds