What is Entrepreneurship?¶
Entrepreneurship is more than just starting a business. It's a mindset and a process that involves identifying opportunities, taking risks, and creating value. It's about innovation, problem-solving, and building something new. Entrepreneurship is a dynamic and multifaceted process that plays a vital role in economic development, innovation, and social progress.
Entrepreneurship is the foundation of invention, job creation and wealth generation. Entrepreneurs are change-makers, problem-solvers, out-of-the-box thinkers and uncompromising leaders with a vision in mind and mission to make a dent in the universe.
Origin of Entrepreneurship¶
- It is the fundamental aspect of human commerce, existing even before formal communication. The term has gained popularity in recent years, particularly with the rise of start ups and venture capital.
- We are homo economicus ( we do business ) much before we started to converse with eachother. Our ability to do business, understand commerce, offer things to each other in exchange of what is valuable to one has been there for centuries.
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Silent Trade: Early traders exchanged goods without verbal communication, highlighting the innate human tendency to engage in commerce.
How does silent trade work?
For example, traders mostly from Europe go to Africa , put a bunch of products in a particular location, then there would be locals who would come to look at the products, and put gold/ valuable for it and take it, or just go back implying no deal.
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We have seen and see very rapid changes coz of entrepreneurship. Things exists now ( which didn’t exist years ago) is becoz somebody thought of it.
- Technological Advancements: Rapid technological advancements over the last century, illustrating how innovations like flight and the internet have transformed society. The comparison between historical and modern conveniences underscores the impact of entrepreneurial ventures on everyday life.
- Risk and Capital: Entrepreneurship involves risk-taking. The distinction between those who provide capital and those who operate businesses is highlighted by Jean-Baptiste Say, marking a shift in understanding entrepreneurship.
Few concepts on Entrepreneurship¶
- The term entrepreneurship was coined in 1700s by an Irish - French economists Richard Cantillon ( entrepreneurs vs employee distinction ) where he distinguished between entrepreneurs with nonfixed incomes and employees with fixed income. He considered entrepreneurs are those who undertake to bear and overcome uncertainty by investing, paying expenses, and hoping for a return.
- By 1800s they realised that those who are taking risk in terms of capital could be different from those who are actually undertaking venture.
- Jean Baptiste Say ( french economist and businessman) said , those who do business and make capital are 2 different classes of men. (Entrepreneur vs investor distinction)
Creative Destruction¶
The concept of "creative destruction," introduced by an Australian political economist Joseph Schumpeter, and explains how new ventures can disrupt established companies.
Creative destruction happens incessantly all the time, continuously. Incessant movement of economy is an outcome of peeps who are entrepreneurial, who want to change things and disrupt
Examples include the decline of Kodak and Nokia, showcasing how innovation can lead to the obsolescence of once-dominant firms.
Key Aspects of Entrepreneurship:¶
- Opportunity Recognition: Identifying unmet needs, market gaps, or innovative solutions that can be turned into a successful business venture. This could involve recognizing a new trend, a technological advancement, or a problem that needs solving.
- Risk-Taking: Entrepreneurs are willing to take calculated risks. They understand that there's no guarantee of success, but they are willing to invest time, money, and effort into pursuing their vision. This involves assessing potential downsides and developing mitigation strategies.
- Innovation: Entrepreneurship thrives on innovation. This can be developing a new product or service, improving an existing one, or finding a new way to deliver value to customers. Innovation can be incremental or disruptive.
- Resource Management: Entrepreneurs are skilled at managing limited resources. This includes financial resources, human capital, and time. They are resourceful and creative in finding ways to achieve their goals with the available resources.
- Value Creation: The core of entrepreneurship is creating value. This can be economic value (profits, jobs), social value (improving lives, solving social problems), or both. Entrepreneurs strive to deliver something that customers are willing to pay for or that benefits society.
- Building and Scaling: Entrepreneurship involves not just starting a business but also building and scaling it. This includes developing a business model, building a team, and expanding operations. Scalability is a key factor in long-term success.
Why is Entrepreneurship Important?¶
- Economic Growth: Entrepreneurs create new businesses, which generate jobs and contribute to economic growth.
- Innovation and Progress: They drive innovation and introduce new products and services that improve our lives.
- Job Creation: They are a major source of job creation, especially in small and medium-sized enterprises (SMEs).
- Social Impact: They can address social problems and create positive change in communities.
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