Nature and development of
entrepreneurship
Lecture 1_1
Meaning of entrepreneur
• The word Entrepreneur has an interesting definitional history & it
stems from a French word “entreprendre” thereby meaning
“between-taker or go between or “undertaker”.
• Thus, entrepreneur is the person who undertakes the risk of new
enterprise.
Definition of entrepreneur
• Adam smith (1776) describes the Entrepreneur as an individual who forms an
organization for commercial purpose – who is a capitalist.
• David Mc Cleland (1961) defined Entrepreneur as an energetic, moderate
risk-taker.
Nature/Features of Entrepreneurship
Establishment of Related to
New Ventures 01 05 innovation
Dedication and Assumption of
02 06
Hard Work risk
07 Expectation of
Involvement & Reward
03
Achievement
Best use of 04 08
Oppoertunity Create Value
A brief history of Entrepreneurship
• Earliest period
• Middle Ages
• 17th Century
• 18th Century
• 19th Century
• 20th Century
• 21st Century
A Breif History of Entrepreneurship
Earliest Period 01 Middle - Ages 02 17th Century 03
(17,000 BCE - 12,000 BCE) 5 - 15 Century Risk & Rewards
Prehistoric Trade e Emergence of Market Government Contracts
Agricultural Revolution trade routes & Economic Expansion Standardization in accounting
Marco Pollo Invention of accounting Entrepreneur as risk taker
18 th Century 04 19 th Century 05 20th Century 06
Thomas Edision, Tech in Silicon
Distinction betn capital provider Industrial Revolution - oil, mining
Valley
Rise of Industrialization Techonological innovation -
Rise of Internet
Mechanical looms, steam engine,
Innovation and Invention Globalization & Multinational
rail roads
Venture Capital
A brief history of Entrepreneurship: Earliest Period
(17,000 BCE - 12,000 BCE)
• The concept of entrepreneurship can be traced back to around 17,000 BCE in New
Guinea, where the first known trading involved the exchange of obsidian for other
goods.
• The Agricultural Revolution, beginning around 12,000 years ago, allowed humans
to domesticate plants and animals, leading to the establishment of stationary
communities and the specialization of labor, which further spurred entrepreneurial
activities
• Marco Polo (Italian Merchant) --> Middle east for trading
A brief history of Entrepreneurship: Middle Ages (5th
- 16th Century)
• Entrepreneurs of this era were primarily merchants and explorers who raised
capital and took risks to stimulate economic growth.
• Emergence of Market due to population growth
• The establishment of trade routes facilitated the exchange of goods and
ideas across regions.
• Notably, innovations in accounting by figures like Luca Pacioli helped
standardize business practices, laying the groundwork for modern capitalism
A brief history of Entrepreneurship: 17th Century
• The 17th century marked a significant connection between risk and
entrepreneurship
• Entrepreneurs began to form companies that pooled resources for exploration and
trade, leading to wealth accumulation and economic expansion.
• This period also saw the emergence of mercantilism, where nations sought to
increase their wealth through trade regulation and colonial expansion
• France and Mississippi Company had exlusive fransise to trade between france
and new world --> Monopoly --> led to collapse of company
• Richard Cantillon “defined entrepreneur as a risk taker for economic activity”
A brief history of Entrepreneurship: 18th Century
• Finally, the person with capital was differentiated from one who needed capital
• Many inventions developed during this time and changed the world,
• The 18th century was characterized by the rise of the Industrial Revolution, which
transformed production methods.
• Entrepreneurs began to innovate, establishing factories and introducing new
technologies. Entrepreneurs like Richard Arkwright, who invented the water frame
(spinning frame), and James Watt, who improved the steam engine, revolutionized
industries and created new markets.
• This period saw figures like Josiah Wedgwood and Richard Arkwright revolutionizing
manufacturing processes, leading to increased efficiency and productivity.
A brief history of Entrepreneurship: 19th Century
• In the 19th century, entrepreneurship continued to evolve with advancements
in technology and transportation, including railroads and telegraphs.
• This period witnessed the rise of notable entrepreneurs such as Andrew
Carnegie from poor Scottish family in steel made Americal Steel Industry and
John D. Rockefeller in oil, who became symbols of industrial success.
• The concept of entrepreneurship expanded beyond mere trading to include
innovation and management within large corporations
A brief history of Entrepreneurship: 20th Century
• The 20th century brought about unprecedented changes in entrepreneurship due to technological advancements
and globalization.
• The rise of the internet in the late 20th century opened new avenues for startups and small businesses, leading to a
surge in entrepreneurial activity worldwide.
• The century was marked by significant technological advancements that shaped entrepreneurial activities.
Innovators like Thomas Edison and later tech entrepreneurs in Silicon Valley harnessed new technologies to create
groundbreaking products and services
• Influencial entrepreneurs
– Steve Jobs: Co-founder of Apple Inc., Jobs redefined technology and consumer electronics, emphasizing design and user
experience as key components of entrepreneurship.
– Jeff Bezos: Founder of Amazon, Bezos transformed retail through e-commerce, demonstrating the power of technology in
creating global business models.
– Elon Musk: Through ventures like Tesla and SpaceX, Musk exemplifies the modern entrepreneur's role in addressing global
challenges such as renewable energy and space exploration.
A brief history of Entrepreneurship: 21st Century
• The 21st century has been a transformative era for entrepreneurship,
characterized by rapid technological advancements, globalization, and shifts
in consumer behavior.
• Digital Revolution: The early years of the 21st century were marked by the
rise of the internet, fundamentally altering how businesses operate and
interact with customers. E-commerce, social media, and digital marketing
have reshaped traditional business models, leading to the emergence of new
industries.
• E-commerce platforms like Amazon and Alibaba revolutionized retail, allowing
entrepreneurs to reach global markets with minimal overhead.
Entrepreneurs versus Inventors
• An inventor is an individual who created something new for the first time, & is
highly motivated by his/her own work & personal ideas.
An inventor:
• Tends to be well educated
• Has family, educational & occupational experiences that contribute to free thinking
• Is a problem solver
• Has a high level of confidence
• Is willing to take risk
• Has the ability to tolerate uncertainty
• Focus on achievement as success rather than money.
Entrepreneurs versus Inventors
Entrepreneur:
• Entrepreneur looks forward for venture while inventor love inventions.
• Development of new venture based on an inventors work often requires the
expertise of an entrepreneur to commercialize it.
Characteristics OF entrepreneurs
01 Creativity & Vision
02 Confidence on ability & Innovation
03
Risk Taking Passion
04
Curiosity & Decisiveness
05
Adaptability and Persistence
Functions of Entrepreneurs
Entrepreneurial Managerial Promotional Commercial
• Risk • Planning • Identification & • Manufacturing
bearing selection of
function
• Organizing business idea
• Marketing
• Organizing • Staffing • Preparation of • Accounting
functions • Directing business plan
• Innovation • Arrangement of
• Controlling
function capital
Importance of Entrepreneurship
Economic Impact Impact on
• Innovation Society
• Job Creation
• Capital Formation
• Resource Mobilization
• Raise living standard
• Add national income
The entrepreneurial process
• Entrepreneurial journey is about innovating and taking risks to produce
something of value to the society which in turn brings revenue to the
enterprise and uplifts the living standard of the people involved.
The Entrepreneurial process
• The entrepreneurial process comprises: developing opportunities ,
gathering resources, and managing and building operations, all with the
goal of creating value.
Developing
Opportunities Economical, Legal, and Social
Environment
Creating Value
Managing and
building Gathering
Operations Resources
1. Idea Generation
• Involves brainstorming innovative ideas that address identified
gaps or problems in the market.
• The entrepreneur will conduct the feasibility study and take
input from other stakeholders.
• Here, the entrepreneur identified an idea worth pursuing.
2. Opportunity Analysis
• After identifying the opportunity, the entrepreneur will evaluate
it.
• They will see if the opportunity provides any value to the
business or the consumer,
• whether it will be sustainable in the long term if the profit is
healthy, the market competition, the risks associated with the
opportunity, and the entrepreneur’s product or service will be
different or better than the competition.
2. Opportunity Analysis
The entrepreneur should look to answer for following questions:
• Is the opportunity worth investing capital, resources, and
energy?
• Can we offer better solutions than existing ones?
• Can we beat the competition?
• Is the business sustainable in the long run?
• What are the risks?
3. Development of the Business Plan
• The plan will have a business strategy and operating structures, including steps for the
formation of the company.
• It will provide details on business objectives, goals, mission statement, and details of
products or services.
• Executive Summary: A brief overview of the business concept, mission, and vision.
• Market Analysis: Detailed insights into the industry, target market, and competitive landscape.
• Marketing Strategy: Plans for promoting and selling products or services to attract customers.
• Operational Plan: Outline of day-to-day operations, including production processes and
logistics.
• Financial Projections: Estimates of revenue, expenses, and profitability over a specified
4. Collecting Resources
• Financial Resources: Determining funding needs and
exploring options such as personal savings, loans, investors, or
crowdfunding.
• Human Resources: Identifying key team members required for
various roles within the organization, from management to
sales.
• Physical Resources: Assessing the need for equipment,
technology, inventory, or office space necessary for operations.
• Networking: Building relationships with suppliers, partners, and
mentors who can provide support and resources.
5. Forming Organization
• Once the entrepreneur secures the funds and resources, they
will launch the company and form a legal entity.
• The structure of the organization will depend on its
requirements.
• The entrepreneur will name the company and file the papers
with the government to form Sole, Partnership, company, or
non-profit
6. Growing Business
• After launching the company, it will start producing products or
offering services.
• The entrepreneur will ensure that the business is running
smoothly and growing.
• The entrepreneur will have regular status updates and
compare the actual progress with the planned progress.
• If things are not going as planned, they will take corrective
actions to bring the progress on track.
Aspects of the entrepreneurial process
Identify and Develop Business Plan Resources Manage the enterprise
Evaluate the required
Opportunity
• Opportunity • Title page • Determine • Develop management
assessment • Table of contents resources style
• Creation and • Executive summary needed • Understand key
length of • Major section • Determine variables for success
opportunity i. Description of business existing • Identify problems and
• Real and ii. Description of industry resources potential problems
perceived value of iii. Technology plan • Identify resource • Implement control
opportunity iv. Marketing plan gaps and systems
• Risk and returns of v. Financial plan available • Develop growth
opportunity vi. Production plan suppliers strategy
• Opportunity vs vii. Organization plan • Develop access
personal skills and viii. Operation plan to needed
goals ix. Summary resources
• Competitive • Appendix
environment
Project: Discussion
Assignment 2
What is the current scenario of
entrepreneurship in Nepal? What should
be done to promote entrepreneurship
sector of Nepal and encourage new
enrepreneurs?
