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