2. ENTREPRENEURSHIP AND ECONOMIC
DEVELOPMENT
To achieve economic development goals, proper
management of the following elements is necessary.
• Human resources (labor supply, education,
discipline, motivation);
• Natural resources (land, minerals, fuel,
climate);
• Capital formation (machines, factories, roads);
and
• Technology (science, engineering,
management, entrepreneurship).
3. WHAT IS ENTREPRENEURSHIP?
• refers to the economic activity of a person
who starts, manages, and assumes the risk
of a business enterprise. The person who
undertakes entrepreneurial activities is
called entrepreneur. The entrepreneur
identifies an economic need, considers
offering a business solution, proceeds to
assemble the resources required, and
assumes the risk of either succeeding or
falling.
4. THE ENTREPRENEUR’S CONTRIBUTION
1. Products and services for customers
and procedures
2. Employment
3. Taxes
4. Demand for suppliers’ products and
services; and
5. Training facilities for future
entrepreneurs
5. THE ENTREPRENEUR PERFORMS THE
FOLLOWING SPECIFIC FUNCTIONS:
1. To supply the necessary capital
2. To organize production by buying and
combining inputs like materials and
labor;
3. To decide on the rate of output, in the
light of his expectation about demand;
and
4. To bear the risk inherent to the venture
6. INNOVATION may be defined as the introduction
of a new method, procedure, custom, device, among
others.-
Innovation could be any of the following:
1. A new product
2. A new process of production
3. The substitution of cheaper material in an
unaltered product
4. The reorganization of production internal
function, or distribution arrangement leading
to increased efficiency, better support for a
given product or lower costs ; o
7. Innovation could be any of the following:
5. An improvement instruments or methods of doing
innovation. Innovation may also be viewed as the last
stage in an important process consisting of the
following :
a) Invention – which refers to the discovery or
devising of new products and processes ;
b) Development – which refers to the process by
which the ideas and principles generated from the
stage of invention are embodied in concrete
products and techniques ; and
c) Innovation – which refers to the actual
introduction of a new product or process
8. Innovation could be any of the following:
1. A new product
2. A new process of production
3. The substitution of cheaper material in an unaltered product
4. The reorganization of production internal function, or
distribution arrangement leading to increased efficiency,
better support for a given product or lower costs ; or
5. An improvement instruments or methods of doing innovation.
Innovation may also be viewed as the last stage in an
important process consisting of the following :
6. Invention – which refers to the discovery of devising of new
products and processes ;
7. Development – which refers to the process by which the ideas
and principles generated from the stage of invention are
embodied in concrete products and techniques ; and
8. Innovation – which refers to the actual introduction of a new
product or process
10. The transition from a new venture to a successful long-
term enterprise
1. The prestart-up stage - happens when the
entrepreneur starts to question the feasibility of an
idea, product, or service.
2. The start-up stage –
The following activities are undertaken:
– Formation of the business
– Generation of necessary capital
– Purchase of facilities and equipment
– Constructing prototype products; and
– Testing the market
11. New ventures and long-term enterprises
3. The early growth stage - follows after
establishing feasibility. Activities will be on a
small scale, i.e. selling to limited markets
with limited resources.
4. The late growth stage - the final stage before
the new venture mature into a stable
enterprise. This is when management is
structured, long-term financing is
established, and the facilities planning are
undertaken.
12. The factors of production and their
rewards
Factors of Economic Limiting factor for
production reward rewards received
Land Rent supply and demand
Capital Interest industry rates /
government mandated
rates
Labor Wages/salary supply and demand
legislation
Entrepreneur Profits skill of entrepreneur
