International Workshop          Skills Development for SMEs and                  Entrepreneurship   Development of opportu...
Contents•   Entity of Business and Business Know-how•   Perspectives on new business development•   Identification of oppo...
Regional development and businessknow-how• Basis for regional development: successful businesses  are essential• Successfu...
Business Know-How                                     •   Business Management Skills: Business                Operative   ...
Risk Management• Tolerance of risks one entrepreneurial characteristic• Risk attitude   –   Risk averse   –   Risk neutral...
Where do you get business know-             how?•   Research  time span?!•   Education  time span?!•   Experience•   Lea...
Where do you get business know-                        how?              Applied Basic       Research                     ...
Where do we need and use business know-                 how?
New business/venture development –entrepreneurial and organisational perspective• Entrepreneurial perspective on new busin...
How to identify opportunity / problem or need of    a customer (Sarasvathy et. al. 2003) ? a) opportunity recognition: ide...
CHARACTERISTICS OF OPPORTUNITY                       (Timmons 1999)• OPPORTUNITY HAS THE QUALITIES OF BEING  –   ATTRACTIV...
QUESTIONS IN DEFINING THE OPPORTUNITY                         (Virtanen 2004)1.   TO WHOM? WHO IS THE CUSTOMER? WHERE IS  ...
Market                 Industry                                Market                 Industry                 Macro      ...
Opportunity development (Ardichvili et. al. 2003)VALUE CREATION CAPABILITY OF OPPORTUNITY   UNDERUTILISED RESOURCES OR UNE...
Basic skill of entrepreneur to create and        develop opportunities                    (Puhakka 2002, 2007)• Collect a ...
Summary• Business know-how is essential for fostering regional  development• Entrepreneurial and organizational perspectiv...
Implications• Regional development – fastest way to acquire business  know-how is to recruit experienced business managers...
THANK YOU!
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Ii d - virtanen development of opportunities-basic skills for entrepreneurs

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The upgrading of workforce skills is key to the competitiveness of SMEs. In today’s business environment there is a premium on innovation that enables firms to develop new products and services, new production processes and new business models. This requires both in-house innovation and the ability to absorb knowledge from other firms and organisations, both of which call for a skilled labour force. Skills are also a critical but understated resource for entrepreneurship seen in the sense of business creation. Similarly to workforce skills, entrepreneurship skills will boost the competitiveness of local businesses thanks to the improved strategic and management competences of the entrepreneur.

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Ii d - virtanen development of opportunities-basic skills for entrepreneurs

  1. 1. International Workshop Skills Development for SMEs and Entrepreneurship Development of opportunities - Basic skill for entrepreneursResearch Director Markku VirtanenAalto University School of BusinessSmall Business Center
  2. 2. Contents• Entity of Business and Business Know-how• Perspectives on new business development• Identification of opportunities• Development of opportunities• Summary and implications 2012 © Markku Virtanen
  3. 3. Regional development and businessknow-how• Basis for regional development: successful businesses are essential• Successful businesses posses high level of business know-how• Fostering regional development requires acquisition and/or development of business know-how• What do we mean by business know-how and where from do we get it? 2012 © Markku Virtanen
  4. 4. Business Know-How • Business Management Skills: Business Operative Business – ManagementManagement Skills – Leadership Skills • Operative Business Skills Business Know-How = Business Know-How  Mastery of Business Entity = Governance of business know-how in relation to risks involved in the business Success
  5. 5. Risk Management• Tolerance of risks one entrepreneurial characteristic• Risk attitude – Risk averse – Risk neutral – Risk lover – Entrepreneur / Business Manager Successful entrepreneurs keep the risks under their control Calculated risk taking
  6. 6. Where do you get business know- how?• Research  time span?!• Education  time span?!• Experience• Learning by doing
  7. 7. Where do you get business know- how? Applied Basic Research ContinuingResearch Education: Education Experience Degree Courses Programs
  8. 8. Where do we need and use business know- how?
  9. 9. New business/venture development –entrepreneurial and organisational perspective• Entrepreneurial perspective on new business development – Schumpeter (1936; 1943): innovations, creative destruction• Organisational perspective on new business development and entrepreneurial behaviour – Opportunity identification and development (Ardichvili et. al., 2003; Baron 2006; Shane and Venkataraman 2000; Sarashvathy 2003) 2012 © Markku Virtanen
  10. 10. How to identify opportunity / problem or need of a customer (Sarasvathy et. al. 2003) ? a) opportunity recognition: identification of an opportunity is matching of market demand and supply b) opportunity discovery: search for information about characteristics of market especially potential customers and competitors is essential c) opportunity creation: both demand and supply are unknown (test your idea) 2012 © Markku Virtanen
  11. 11. CHARACTERISTICS OF OPPORTUNITY (Timmons 1999)• OPPORTUNITY HAS THE QUALITIES OF BEING – ATTRACTIVE: MARKET AND GROWTH LARGE ENOUGH – DURABLE: LONG TERM BUSINESS – TIMELY: OPPORTUNITY WINDOW OPEN FOR LONG TIME ENOUGH• IS ANCHORED IN A PRODUCT OR SERVICE WHICH CREATES OR ADDS VALUE FOR ITS BUYER AND/OR END USER• MARKET AND CUSTOMER FOCUS – SOLVES CUSTOMER’S PROBLEM AND OFFERS THE SOLUTION TO THE CUSTOMER• THE MANAGEMENT TEAM CAPABLE FOR SEIZING IT 2012 © Markku Virtanen
  12. 12. QUESTIONS IN DEFINING THE OPPORTUNITY (Virtanen 2004)1. TO WHOM? WHO IS THE CUSTOMER? WHERE IS THE MARKET? (Listen to the customers!)2. WHAT AND WHY? WHAT IS THE PROBLEM OF THE CUSTOMER? HOW DO WE SOLVE IT? (PRODUCTS /SERVICES)3. WHEN? WHAT IS THE TIMING OF DIFFERENT ACTIONS? (OPPORTUNITY WINDOW!)4. WITH WHICH MEANS? HOW DO WE DO THAT?5. WHO? IS THE CAPABILITY OF THE TEAM APPROPRIATE?6. WHAT IS THE VALUE? HOW DOES THIS OPPORTUNITY ADD VALUE TO THE VENTURE / TO THE INVESTORS/TO THE CUSTOMERS? 2012 © Markku Virtanen
  13. 13. Market Industry Market Industry Macro attractiveness attractiveness levelDomains of Ability to Missionopportunity Objectives execute Risk atti- CSF(Mullins 2006) tudes Team Connectedness Up and down in Micro The value chain level Benefits and Sustainable Attractiveness competitive Of the target advantage segment 2012 © Markku Virtanen
  14. 14. Opportunity development (Ardichvili et. al. 2003)VALUE CREATION CAPABILITY OF OPPORTUNITY UNDERUTILISED RESOURCES OR UNEMPLOYED SERVICES BUSINESS CONCEPT MARKET NEEDS DEFINED IN TERMS OF BENEFITS, VALUE SOUGHT AND RESOURCES MORE PRECISELY BUSINESS MODELMATURE BUSINESS CONCEPT WHERE INFORMATION OF COMPETI- TORS, PRICING AND PROFIT-GENERATION MODEL IS INCLUDED BUSINESS PLAN THE MOST ELABORATED FORM OF OPPORTUNITY INCLUDES BUSINESS CONCEPT AND BUSINESS AND FINANCIAL MODEL 2012 © Markku Virtanen
  15. 15. Basic skill of entrepreneur to create and develop opportunities (Puhakka 2002, 2007)• Collect a team – people are the most important, ability to execute CSFs• Define together mission and values• Recognize, identify or create opportunity• Analyse your value creation capability and define business concept and business model• Mobilize the other necessary resources to pursuit the opportunity 2012 © Markku Virtanen
  16. 16. Summary• Business know-how is essential for fostering regional development• Entrepreneurial and organizational perspective overlapping• Opportunity identification = identifying of customer’s needs and solving customer’s problems or creation of opportunities  listen to your customers• Development of opportunities from value creation capability via business concept and business model to business plan• Mobilize resources for successful commercialisation 2012 © Markku Virtanen
  17. 17. Implications• Regional development – fastest way to acquire business know-how is to recruit experienced business managers• Policy makers should pay attention to the development of opportunities in addition to / instead of promotion of innovation inputs – Resources should be allocated more to encourage contacting and meeting the customers and sales efforts – Emphasize creativity and encourage to be different www.mindspace.fi – Encourage modernising and diversification in existing firms – Pay attention to succession processes and their novice entrepreneurs• Allocation of resources in business degree education = you have to be patient 2012 © Markku Virtanen
  18. 18. THANK YOU!

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