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Ppt01Allen Presentation Transcript

  • 1. C HAPTER O NE U NDERSTANDING E NTREPRENEURSHIP
  • 2. Learning Objectives
    • Explain the role of entrepreneurship in economic growth.
    • Discuss the characteristics and behaviors of entrepreneurs.
    • Distinguish entrepreneurial ventures from small businesses in terms of their purpose and goals.
  • 3. Learning Objectives (continued)
    • Describe the evolution of entrepreneurship as a field of study since the 1960s.
    • Identify the three broad categories of research in entrepreneurship.
  • 4. Definition of Entrepreneurship
    • Entrepreneurship is a mindset or way of thinking that is:
      • opportunity-focused
      • innovative
      • growth-oriented
  • 5. The Promise of Entrepreneurship
    • Technological innovation is the biggest engine of growth for the U.S. economy.
    • Technological change has facilitated the globalization of economic growth.
    • It is responsible for the biggest productivity gain achieved in the US in 19 years posted in Q1 of 2002.
  • 6. Figure 1.1: Entrepreneurship and Technological Change
  • 7. Outcomes of Entrepreneurship
    • Globalization
    • New industry formation
    • Job Creation
    • New business formation
  • 8. New Industry Formation
    • New industries are born when technological change produces a new opportunity that an enterprising entrepreneur seizes.
    • Disruptive or metamorphic technologies that destroy previous technologies and create new industries display a different pattern of behavior.
    • The pattern of growth, shakeout, stabilization, and decline of industry can be interrupted at any time by the entry of another disruptive technology.
  • 9. Figure 1.2: Industry Life Cycles
    • Adapted from M. R. Darby and L. G. Zucker, “Growing by Leaps and Inches: Creative Destruction, Real Cost Reduction, and Inching Up,” Economic Inquiry, January 2003, pp. 1-19 (January 2003).
  • 10. Job Creation
    • Entrepreneurial ventures are responsible for significant job creation.
    • SBA estimates that three-quarter of all net new jobs in 2000 were created by small business.*
    • * U.S. Bureau of the Census; Administrative Office of the U.S. Courts; Endogenous Growth and Entrepreneurial Activities.
  • 11. New Business Formation
    • Entrepreneurs use identifiable milestones to measure their progress:
      • Deciding to start a business
      • Researching the concept
      • Preparing for launch
      • Securing the first customer
      • Obtaining the business license
      • Other activities which signal the business is in operation.
  • 12. Figure 1.3: Social, Political, and Economic Context of the Entrepreneurial Process
    • Source: Paul D. Reynolds. (2000) National Panel of U.S. Business Start-ups: Background and Methodology. Databases for the Study of Entrepreneurship, Amsterdam: JAI/Elsevier Inc. Vol. 4, pp. 153-227.
  • 13. New Business Failure
    • Not all entrepreneurs succeed in growing their start-up into an established business.
    • Survival rates of new businesses vary by industry and demographics.
    • The vital lesson for an entrepreneur is to minimize the cost of a possible failure: start with robust business mode and test it in the marketplace prior to starting the business.
  • 14. Table 1.1: Starts and Closures of Employer Firms, 1990-2002
  • 15. Figure 1.4: Entrepreneurship in the United States by Gender, Age, and Education
    • Source: H. Neck, A.L. Zacharakis, W. Bygrave, and P. Reynolds (Eds.). Global Entrepreneurship Monitor 2002 Executive Report, p. 14.
  • 16. The Nature of Entrepreneurs
    • Entrepreneurial Characteristics:
      • Risk-taking
      • Need for achievement
      • A sense of independence
      • Internal locus of control
      • Tolerance for ambiguity
  • 17. Entrepreneurial Behavior
    • The entrepreneurial act is the act of creating a business by:
      • perceiving an opportunity
      • assessing the opportunity
      • risking resources to exploit the opportunity
      • managing the process of building a venture from and idea
      • managing creative value
  • 18.  
  • 19. Entrepreneurial Behavior (continued)
    • Entrepreneurs:
      • have a passion to build innovative businesses from the idea stage.
      • continue to act entrepreneurially, making strategic decisions that engage the business in risk-oriented activity, growth, and consequent high performance.
  • 20. Theresa Bergeron Thermohair, Inc
    • Founder and President of Thermohair, Inc.
    • Company produces goods made from mohair (fleece from angora goats)
    • Discusses marketing, business planning and entrepreneurship
  • 21. Types of Entrepreneurs
    • The Home-Based Entrepreneur
    • The Cyber Entrepreneur
    • The Serial Entrepreneur
    • The Traditional Entrepreneur
    • The Nonprofit Entrepreneur
    • The Corporate Venturer
  • 22. Nature of Entrepreneurial Start-Ups
    • Primary characteristics:
      • Innovative
      • Value-creating
      • Growth-oriented
  • 23. Daniel Stein JDS Capital and eMusic
    • President of JDS Capital, based in New York City
    • CEO of Dimensional Associates – operating company which manages JDS Capital’s digital media assets including eMusic
    • Discusses entrepreneurship, risk, managing people, leadership, business planning and work-life balance
    • Bachelor’s degree from Cornell University
  • 24. Figure 1.5: The Entrepreneurial Revolution
  • 25. The Entrepreneurial Phenomenon
    • What constitutes the study of Entrepreneurship?
      • Sources of opportunities
      • Processes of discovery, evaluation, and exploitation of opportunities
      • Individuals and teams who recognize the opportunities, evaluate them, and exploit them.
  • 26. The Entrepreneurial Phenomenon (continued)
    • “ Entrepreneurship: The intersection of lucrative opportunities and enterprising individuals.” *
    • * Finkle, T.A., and D. Deeds (2001). “Trends in the Market for Entrepreneurship Faculty During the Period 1989-1998.” Journal of Business Venturing, 16(6):613.
  • 27. Essentials for Entrepreneurship
    • Opportunity Recognition
    • Opportunity Exploitation
    • Networking