By: [A] [K] [I]

Readings in the
“Concept of Entrepreneurship & the Emergence of the Entrepreneurial Class”

The Concept of Entrepreneurship over the years:

Throughout the theoretical history of entrepreneurship, scholars from multiple disciplines

in the social sciences have grappled with a diverse set of interpretations and definitions to
conceptualize this abstract idea. Over time, "some writers have identified
entrepreneurship with the function of uncertainty-bearing, others with the coordination of
productive resources, others with the introduction of innovation, and still others with the
provision of capital" (Hoselitz, 1952). Even though certain themes continually resurface
throughout the history of entrepreneurship theory, presently there is no single definition
of entrepreneurship that is accepted by all economists or that is applicable in every
economy.

Although there is only limited consensus about the defining characteristics of

entrepreneurship, the concept is almost as old as the formal discipline of economics itself.
The term "entrepreneur" was first introduced by the early 18th century French economist
Richard Cantillon. In his writings, he formally defines the entrepreneur as the "agent
who buys means of production at certain prices in order to combine them" into a new
product (Schumpeter, 1951). Shortly thereafter, the French economist J.B. Say added to
Cantillon's definition by including the idea that entrepreneurs had to be leaders. Say
claims that an entrepreneur is one who brings other people together in order to build a
single productive organism (Schumpeter, 1951).

Over the next century, British economists such as Adam Smith, David Ricardo, and
John Stuart Mill briefly touched on the concept of entrepreneurship, though they
referred to it under the broad English term of "business management." While the writings
of Smith and Ricardo suggest that they likely undervalued the importance of
entrepreneurship, Mill goes out of his way to stress the significance of entrepreneurship
for economic growth. In his writings, Mill claims that entrepreneurship requires "no
ordinary skill," and he laments the fact that there is no good English equivalent word to
encompass the specific meaning of the French term entrepreneur (Schumpeter, 1951).

The necessity of entrepreneurship for production was first formally recognized by Alfred
Marshall in 1890. In his famous treatise Principles of Economics, Marshall asserts that
there are four factors of production: land, labor, capital, and organization. Organization is
the coordinating factor, which brings the other factors together, and Marshall believed
that entrepreneurship is the driving element behind organization. By creatively
organizing, entrepreneurs create new commodities or improve "the plan of producing an
old commodity" (Marshall, 1994). In order to do this, Marshall believed that
entrepreneurs must have a thorough understanding about their industries, and they must
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be natural leaders. Additionally, Marshall's entrepreneurs must have the ability to

foresee changes in supply and demand and be willing to act on such risky forecasts in the
absence of complete information (Marshall, 1994).

Like Mill, Marshall suggests that the skills associated with entrepreneurship are rare and
limited in supply. He claims that the abilities of the entrepreneur are "so great and so
numerous that very few people can exhibit them all in a very high degree" (1994).
Marshall, however, implies that people can be taught to acquire the abilities that are
necessary to be an entrepreneur. Unfortunately, the opportunities for entrepreneurs are
often limited by the economic environment, which surrounds them. Additionally,
although entrepreneurs share some common abilities, all entrepreneurs are different, and
their successes depend on the economic situations in which they attempt their endeavors
(Marshall, 1994).

Since the time of Marshall, the concept of entrepreneurship has continued to undergo
theoretical evolution. For example, Marshall believed entrepreneurship was simply the
driving force behind organization, many economists today, but certainly not all, believe
that entrepreneurship is by itself the fourth factor of production that coordinates the other
three (Arnold, 1996). Unfortunately, although many economists agree that
entrepreneurship is necessary for economic growth, they continue to debate over the
actual role that entrepreneurs play in generating economic growth. One school of thought
on entrepreneurship suggests that the role of the entrepreneur is that of a risk-bearer in
the face of uncertainty and imperfect information. Knight claims that an entrepreneur will
be willing to bear the risk of a new venture if he believes that there is a significant chance
for profit (Swoboda, 1983). Although many current theories on entrepreneurship agree
that there is an inherent component of risk, the risk-bearer theory alone cannot explain
why some individuals become entrepreneurs while others do not. For example, following
from Knight, Mises claims any person who bears the risk of losses or any type of
uncertainty could be called an entrepreneur under this narrow-definition of the
entrepreneur as the risk-bearer (Swoboda, 1983). Thus, in order to build a development
model of entrepreneurship it is necessary to look at some of the other characteristics that
help explain why some people are entrepreneurs; risk may be a factor, but it is not the
only one.

Another modern school of thought claims that the role of the entrepreneur is that of an
innovator; however, the definition of innovation is still widely debatable. Kirzner
suggests that the process of innovation is actually that of spontaneous "undeliberate
learning" (Kirzner, 1985, 10). Thus, the necessary characteristic of the entrepreneur is
alertness, and no intrinsic skills-other than that of recognizing opportunities-are
necessary. Other economists in the innovation school side more with Mill and Marshall
than with Kirzner; they claim that entrepreneurs have special skills that enable them to
participate in the process of innovation. Along this line, Leibenstein claims that the
dominant, necessary characteristic of entrepreneurs is that they are gap-fillers: they have
the ability to perceive where the market fails and to develop new goods or processes that
the market demands but which are not currently being supplied. Thus, Leibenstein posits
that entrepreneurs have the special ability to connect different markets and make up for
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market failures and deficiencies. Additionally, drawing from the early theories of Say and
Cantillon, Leibenstein suggests that entrepreneurs have the ability to combine various
inputs into new innovations in order to satisfy unfulfilled market demand (Leibenstein,
1995).

Although many economists accept the idea that entrepreneurs are innovators, it can be
difficult to apply this theory of entrepreneurship to less developed countries (LDCs).
Often in LDCs, entrepreneurs are not truly innovators in the traditional sense of the word.
For example, entrepreneurs in LDCs rarely produce brand new products; rather, they
imitate the products and production processes that have been invented elsewhere in the
world (typically in developed countries). This process, which occurs in developed
countries as well, is called "creative imitation" (Drucker, 1985) The term appears initially
paradoxical; however, it is quite descriptive of the process of innovation that actually
occurs in LDCs. Creative imitation takes place when the imitators better understand how
an innovation can be applied, used, or sold in their particular market niche (namely their
own countries) than do the people who actually created or discovered the original
innovation. Thus, the innovation process in LDCs is often that of imitating and adapting,
instead of the traditional notion of new product or process discovery and development.

As the above discussion demonstrates, throughout the evolution of entrepreneurship

theory, different scholars have posited different characteristics that they believe are
common among most entrepreneurs. By combining the above disparate theories, a
generalized set of entrepreneurship qualities can be developed. In general,
entrepreneurs are risk-bearers, coordinators and organizers, gap-fillers, leaders,
and innovators or creative imitators. Although this list of characteristics is by no
means fully comprehensive, it can help explain why some people become entrepreneurs
while others do not. Thus, by encouraging these qualities and abilities, governments can
theoretically alter their country's supply of domestic entrepreneurship.

Although economists have posed many theoretical interpretations of entrepreneurship,

there has been very little empirical research conducted on this phenomenon, especially
compared to the amount of research conducted on the other three factors of production. In
particular, growth and development economics has "suffered rather seriously from the
neglect of the entrepreneurial role" (Kirzner, 1985, 69). This neglect has occurred for two
main reasons. First, entrepreneurship is difficult to measure empirically. Since few
economists can even agree about how to define entrepreneurship, developing the tools to
measure it has been especially problematic. Second, as explained in the theories above,
entrepreneurship is characterized by uncertainty and typically occurs in the presence of
imperfect information, unknown production functions, and market failure. As Leibenstein
claims, entrepreneurship arises "to make up for a market deficiency" (1995). However,
the majority of mainstream economic models assume perfect information and clearly
defined production functions. Thus, entrepreneurs typically fall outside of these models
(Leibenstein, 1995).

Like Leibenstein, Kilby suggests that entrepreneurship has been largely overlooked in
economics. Kilby claims that entrepreneurship exists "only in the lower realms, where
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imperfect knowledge and market failure are granted an untidy presence;" as a result,
many economists disregard this phenomenon, particularly in economic models dealing
with developed countries (Kilby, 1983). However, many models that focus on the
underdeveloped economies of LDCs relax their assumptions about perfect information.
This more realistic view of economic markets allows entrepreneurship to stand out as one
of the leading sources of market transformation and economic growth and development.

Leibenstein maintains that there are two simultaneous steps in the process of economic
development for LDCs: economic growth and market transformation. In order for a
country to increase its per capita income, it must have a "shift from less productive to
more productive techniques per worker" (Leibenstein, 1995). This shift is the process of
market transformation, and it can be manifested in the creation of new goods, new skills,
and new markets. Entrepreneurship is the driving force behind both growth and
transformation. Without entrepreneurs there would be no new innovation or creative
imitation in the marketplace; hence, the transformation to new production methods and
goods in the country would not take place. As entrepreneurs transform the market, not
only do they provide new goods and services to the domestic market, they also provide a
new source of employment to the economy (Praag, 1995). As a result, entrepreneurship is
a necessary ingredient in the process of economic development; it both serves as the
catalyst for market transformation and provides new opportunities for economic growth,
employment, and increased per capita income.

Although entrepreneurship can directly affect the rate of an economy's transformation

and development, few countries have actively pursued entrepreneurship encouragement
programs. Additionally, many LDCs have focused more on encouraging entrepreneurship
in the form of multi-national corporations (MNCs) rather than domestic and indigenous
entrepreneurship. MNCs can certainly increase a country's income, provide market
innovations, and serve as the catalyst for market transformations; thus, MNCs can be
used as a source of entrepreneurship-led development. However, Saeed suggests that it is
preferred for governments to promote domestic and indigenous entrepreneurship because
domestic entrepreneurs are more aware of the market gaps that need to be filled
domestically (Saeed, 1998). Thus, instead of producing goods that might not be
consumed within the country, domestic market forces encourage domestic entrepreneurs
to create innovations and creative imitations that fulfill a real market deficiency
domestically. Hence, MNCs can be used for entrepreneurship-led development, but
domestic entrepreneurship is thought to be more effective.

Theorists disagree, however, about whether or not informal sector self-employment is

beneficial for entrepreneurship-led development. Saeed suggests that many of the small
family enterprises and shop-houses that make up the informal sector are indeed
entrepreneurial ventures. He asserts that the close-knit structure of the small-family
enterprise is conducive for the incubation of ideas that are tested in the informal sector
and later used to transform market products and processes. Additionally, Saeed claims
that women and young people are traditionally excluded from the formal sector; thus,
their entrepreneurial ideas are locked out of the formal market. However, since small-
family enterprises in the informal sector typically involve women and youth participation,
 By: [A] [K] [I]

the informal sector can often serve as the outlet for their entrepreneurial ideas (Saeed,
1998).

Unlike Saeed, Carree et. al. suggest that self-employment in the informal sector can
actually thwart entrepreneurship-led growth. They assert that an economy will suffer
from lower growth rates both when it has too little and too much domestic business
ownership. Since many enterprises in the informal sector sell goods or services that are
already available in the formal sector market, informal sector enterprises are often
redundant and fail to provide market transformations. According to Carree et. al.,
business ownership in the informal sector rarely transforms the structure of the economy
or produces new market innovations or creative imitations. Thus the presence of business
ownership in the informal sector of a country does not ensure entrepreneurship-led
growth because simple business ownership is not necessarily market transforming.
Hence, business ownership is not synonymous with entrepreneurship (Carree, 2000).

Since entrepreneurship can serve as a positive source of economic growth and

development, governments should attempt to increase their supplies of market-
transforming entrepreneurship. Although it is debatable as to whether the informal sector
is truly a source of entrepreneurs, governments can insulate themselves from this debate
by focusing on the encouragement of market-transforming entrepreneurship, and not
simply business ownership in both the formal and informal sectors.1

Socio-psychological factors influencing Entrepreneurship development

Before policy makers can increase the supply of entrepreneurship, it is necessary for them
to understand what factors affect the supply of entrepreneurs. At its most basic level, the
supply of entrepreneurship is determined by two factors: opportunity and willingness to
become an entrepreneur. According to Praag (1995), opportunity is "the possibility to
become self- employed if one wants to." The primary factors affecting opportunity
include one's intrinsic entrepreneurial ability, starting capital, ease of entry into the
market, and the general macroeconomic environment. Alternatively, willingness is the
relative valuation of work in self-employment compared to one's other options for
employment. In terms of opportunity cost, an individual's willingness is positive
whenever self-employment is perceived as the best available career option. Thus,
willingness is inherently affected by the anticipated market incentives that are available
for would-be entrepreneurs, namely profit and economic benefits (Praag, 1995).

The supply of entrepreneurship is thus dependent on both individual level factors and
general economic factors. Policymakers can improve the economic factors that face
potential entrepreneurs by initiating market reforms that both increase the market
incentives and the availability of capital that is available to entrepreneurs (Wilken,
1979).2 In terms of the non-economic factors that affect entrepreneurship, policymakers
are more limited in what they can achieve. Many economists such as Marshall and Mill
suggest that not just anyone can be an entrepreneur. Nonetheless Marshall implies that
the skills of an entrepreneur can be taught (1994).3 Thus, policymakers can affect the
 By: [A] [K] [I]

level of entrepreneurship in their countries by crafting policies that reform the market in
order to encourage entrepreneurship both economically and educationally.

Not surprisingly, regional variations have been found in the levels of entrepreneurship
between countries. In their cross-national study of entrepreneurship, Davidsson and
Wiklund (1995) suggest that regional variations in the levels of entrepreneurship are
influenced by the cultural values of the people. They claim that "cultural and economic-
structural determinants of the new firm formation rate were positively correlated," thus
suggesting that cultural differences in both values and beliefs help explain regional
variances in the supply of entrepreneurship. Despite this relationship, other studies on
migrant and ethnic entrepreneurs have found that cultural beliefs and values rarely
suppress aspiring entrepreneurs. Although cultural hostility towards entrepreneurship
may stifle it in a particular region, migrant entrepreneurs frequently move to new areas in
order to start their enterprises. Thus, cultural hostility may prevent entrepreneurship in a
particular region, but some other region will, in part, benefit from the migration of the
ethnic entrepreneurs (nDoen, 1998).

Basic economics teaches that supply is only a one-sided story of market phenomena.
Thus, for countries to benefit from increasing their supplies of entrepreneurship,
traditional economics suggests that those countries' would also need to promote the
demand for entrepreneurship. However, little has been written about the demand side of
entrepreneurship because it a calculation of demand is intrinsically built into
entrepreneurship. As Leibenstein suggests, entrepreneurs are gap-fillers who perceive and
correct for market deficiencies. Thus, so long as there are market deficiencies, there will
naturally be demand for entrepreneurs to correct them. As a result, when governments
promote the supply of entrepreneurship, they are essentially encouraging entrepreneurs to
seek out what parts of the market demand them.4

Role Governments can play:

The supply of entrepreneurship is affected by many factors, not all of which can easily be
controlled or changed. Nonetheless, policymakers can implement certain policies in order
to encourage entrepreneurship. Based on the above characteristics of entrepreneurs and
the factors that affect the supply entrepreneurship, the following policy prescriptions may
serve as a general guide for implementing policies that foster economic development
through increased levels of entrepreneurship (the recommendations are in no particular
order):

1. Increase the market incentives for entrepreneurs: As stated earlier, one of the
primary determinants of the supply of entrepreneurship is the willingness of an individual
to become an entrepreneur. Willingness is largely determined by the anticipated
economic benefits that will accrue to an entrepreneur if his enterprise is profitable. In
many countries market regulations limit the incentives that could encourage would-be
entrepreneurs to start their own enterprises. For example, price ceilings that are set
below market equilibrium lower the amount of revenue that an entrepreneur could earn in
a certain industry. If the anticipated economics benefits are lower than the opportunity
cost, than the would-be entrepreneur will not start his own enterprise. Thus, in many
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countries policies should be implemented to increase and improve the incentives for
entrepreneurs. Additional policy possibilities include tax incentives for entrepreneurs.

2. Improve the availability of credit and capital: The second major determinant of the
supply of entrepreneurship is opportunity. In order for an individual to start his own
enterprise, it is necessary for him to have the credit or capital to finance the initial start-up
costs. One of the primary problems facing would-be entrepreneurs in LDCs is a lack of
such capital. Without initial capital, many entrepreneurs do not have the funds to start
enterprises of their own. Governments could attempt to correct for this problem by
encouraging the development of venture capital companies and by implementing micro-
credit programs. The specific type of capital programs that are implemented would need
to be crafted specifically for each country, depending on where the country is along its
course of development. In the poorest of LDCs, the focus would most likely be on micro-
credit programs, like the Grameen Bank in Bangladesh. However, in countries with higher
levels of human capital, entrepreneurial firms would derive greater use from venture
capital.

3. Develop entrepreneurship encouragement programs: By passing legislation that is

friendly towards entrepreneurs, countries can make it more culturally acceptable and less
risky to be an entrepreneur. Additionally, entrepreneurship encouragement programs, like
the Technopreneurship 21 Initiative in Singapore5, can assist entrepreneurs in finding
capital, setting up a business plan, and complying with the various business and tax
regulations.

4. Initiate entrepreneurship educational programs: New education initiatives should be

created to teach entrepreneurship. By equipping more people with the skills to become
entrepreneurs, a country can effectively increase its supply of competent entrepreneurs.
Economists disagree as to whether entrepreneurial skills can be taught or whether they
are intrinsic. Nonetheless, there have been successful results from such educational
programs. One example of such a policy is the Malaysian Entrepreneurship Development
Centers in the rural, indigenous areas of Malaysia. These centers teach the indigenous
people entrepreneurial skills and assist aspiring entrepreneurs with the development of
their business plans.

5. Reform market regulations to facilitate entry into the market: Countries can increase
their supply of entrepreneurship by improving the ease of entry into the formal sector.
Many LDCs use licenses and permits to regulate who can participate in the formal sector.
Although these policies may earn government revenue or protect state-owned
enterprises, they effectively make the markets inefficient (by limiting competition) and
prevent would-be entrepreneurs from starting their enterprises. By reforming their market-
entry laws, some countries will be able to increase their supplies of entrepreneurs. As an
example, Nigeria's abolition of its marketing boards provided new opening for a large
number of small entrepreneurs to enter the market with creative imitations.6

6. Increase entrepreneurial opportunities available to women and young persons: As

Saeed suggests, many women and young persons are excluded from the formal sector in
LDCs because of cultural values or legal restrictions. By preventing these groups from
participating in the formal market, these countries are essentially limiting the size of their
pool of would-be entrepreneurs. By eliminating discriminatory employment and licensing
policies, countries could create an influx of possible entrepreneurs. Unfortunately, such
polices may not be culturally popular in some countries (Saeed, 1998).

All of the above recommendations are general policy suggestions that governments can
pursue. The specific policies that a country implements, however, must be made
 By: [A] [K] [I]

appropriate for the specific circumstances that the country faces. For example, in a
country where the majority of entrepreneurship takes the form of small family-owned
enterprises, there is initially little need for venture capitalists; instead it would be more
appropriate for this country to implement micro-credit programs to assist potential
entrepreneurs. Thus, the policies that an LDC implements to increase its supply of
entrepreneurship must be crafted individually for the country's specific case and stage of
development. Additionally, like most development policies, many of the above
recommendations require government expenditure. However, since entrepreneurship is
necessary for economic development, expenditure on encouragement policies is as
justified as much as expenditure on any other development policy.

The above article is not fully original its picked up from

www.technopreneurial.com/articles/supply.asp

It is important that I mention that the article is one of the best I found on the above topic.
Please do not duplicate and/ or circulate it. Use it as reference to get your answers ready.

Other suggested alternate readings

http://www.econlib.org/library/Enc/Entrepreneurship.html

http://growthconf.ec.unipi.it/sessions/acceptedAbstractsPDF/RimaAbs.pdf

http://www.me.psu.edu/lamancusa/Entrepn/Module1/Lecture/Entre.doc

Q. What does the term ‘Entrepreneur’ mean?

(än´´tr pr nûr´) (KEY) [Fr.,=one who undertakes], person who assumes the organization,
management, and risks of a business enterprise. It was first used as a technical economic
term by the 18th-century economist Richard Cantillon. To the classical economist of the
late 18th century the term meant an employer in the character of one who assumes the
risk and management of business; an undertaker of economic enterprises, in contrast to
the ordinary capitalist, who, strictly speaking, merely owns an enterprise and may choose
to take no part in its day-to-day operation. In practice, entrepreneurs were not
differentiated from regular capitalists until the 19th cent., when their function developed
into that of coordinators of processes necessary to large-scale industry and trade. Joseph
Schumpeter and other 20th-century economists considered the entrepreneur’s
competitive drive for innovation and improvement to have been the motive force behind
capitalist development.

The emergence of the entrepreneurial class

 By: [A] [K] [I]

Richard Arkwright in England and William Cockerill on the Continent (of Europe)
were prominent examples of the rising class of entrepreneurial manufacturers during the
Industrial Revolution. Henry Ford was a 20th-century American example. The
entrepreneur’s functions and importance have declined with the growth of the
corporation.

Richard Arkwright the youngest of thirteen children was born in Preston in

1732. Richard's parents were very poor and could not afford to send him to
school and instead arranged for him to be taught to read and write by his cousin
Ellen.

Richard became a barber's apprentice. However, he was an ambitious young

man and had a strong desire to run his own company. In 1762 Arkwright started
a wig-making business. This involved him traveling the country collecting
people's discarded hair.

While on his travels, Arkwright heard about the attempts being made to produce
new machines for the textile industry. Arkwright also met John Kay, a clockmaker
from Warrington, who had been busy for some time trying to produce a new
spinning-machine with another man, Thomas Highs of Leigh. Kay and Highs had
run out of money and had been forced to abandon the project.

Arkwright was impressed by Kay and offered to employ him to make this new
machine. Arkwright also recruited other local craftsman to help, and it was not
long before the team produced the Spinning-Frame. Arkwright's machine
involved three sets of paired rollers that turned at different speeds. While these
rollers produced yarn of the correct thickness, a set of spindles twisted the fibres
firmly together. The machine was able to produce a thread that was far stronger
than that made by the Spinning-Jenny produced by James Hargreaves.

In 1769 Arkwright went to Ichabod Wright, a banker from Nottingham, in search

of funds to expand his business. Wright introduced Arkwright to Jedediah Strutt
and Samuel Need. Strutt and Need were impressed with Arkwright's water-frame
and agreed to form a partnership.

Arkwright's Spinning-Frame was too large to be operated by hand and so the

men had to find another method of working the machine. After experimenting
with horses, it was decided to employ the power of the water-wheel. In 1771 the
three men set up a large factory next to the River Derwent in Cromford,
Derbyshire. Arkwright's machine now became known as the Water-Frame.

The invention of the Spinning Jenny and the Spinning Frame caused an increase
in demand for cardings and rovings. Lewis Paul had invented a machine for
carding in 1748. Richard Arkwright made improvements in this machine and in
1775 took out a patent for a new Carding Engine.
 By: [A] [K] [I]

In Cromford there were not enough local people to supply Arkwright with the
workers he needed. After building a large number of cottages close to the
factory, he imported workers from all over Derbyshire. Arkwright preferred
weavers with large families. While the women and children worked in his
spinning-factory, the weavers worked at home turning the yarn into cloth.

When Samuel Need died on 14th April, 1781. Arkwright and Jedediah Strutt
decided to dissolve their partnership. Strutt was disturbed by Arkwright's plans to
build mills in Manchester, Winkworth, Matlock Bath and Bakewell. Strutt believed
that Arkwright was expanding too fast and without the support of Need, his long-
time partner, he was unwilling to take the risk of further investments.

Arkwright'stextile factories were very profitable. He now built factories in

Lancashire, Staffordshire and Scotland. In these factories he used the new
steam-engine that had recently been developed by James Watt and Matthew
Boulton. When businessmen heard about Arkwright's success, they sent spies to
find out what was going on in his factories. In exchange for money, some of
Arkwright's employees were willing to explain how the factory was organised.
Businessmen then used this information to build their own water-powered textile
factories.

Richard Arkwright's employees worked from six in the morning to seven at night.
Although some of the factory owners employed children as young as five,
Arkwright's policy was to wait until they reached the age of six. Two-thirds of
Arkwright's 1,900 workers were children. Like most factory owners, Arkwright
was unwilling to employ people over the age of forty.

Richard Arkwright died in 1792. The Gentleman's Magazine claimed that on his
death, Arkwright was worth over £500,000.

Cockerill, William (1759-1832) English engineer who is generally regarded as

the founder of the European textile-machinery industry. He was mainly active in
Russia and Belgium. Cockerill was born in Lancashire. His working career began
with the building of spinning jennies and flying shuttles. In 1794 he went to St
Petersburg, Russia, and enjoyed the patronage of Catherine II. Her successor,
however, imprisoned Cockerill for failing to complete a contract within the given
time. Eventually he escaped via Sweden to Belgium 1799, where he established
himself as a manufacturer of textile machinery, first in Verviers and from 1807 in
nearby Liège. There, together with his three sons William, Charles, and John, he
made rotary carding machines, spinning frames, and looms for the French
woollen industry.

As most of his work is done in Belgium, it is difficult to find stuff on him in English.
However a reading of the following sites will help:

http://www.sjsu.edu/faculty/watkins/belgium.htm
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http://stabi.hs-bremerhaven.de/whkmla/region/lowcountries/belgnap.html

http://www.ekh.lu.se/ekhmdr/papers/eapbelg.rtf

The PageWise, Inc. Encyclopedia further adds

COCKERILL, WILLIAM (1759—1832), Anglo-French inventor and machinist, was

born in England in 1759. He went to Belgium as a simple mechanic, and in 1799
constructed at Verviers the first wool-carding and wool-spinning machines on the
continent. In 1807 he established a large machine workshop at Liege. Orders soon poured
in on him from all over Europe, and he amassed a large fortune. In 1810 he was granted
the rights of naturalization by Napoleon I., and in 1812 handed over the management of
his business to his youngest son, JoHN COCKERILL (1790—1840).

Thanks to his o~n energy and ability, aided by the influence of King William I. of the
Netherlands, John Cockerill largely extended his father’s business. King William secured
him a site at Seraing, where he built large works, including an iron-foundry and blast
furnace. The construction of the Belgian railways in 1834 gave a great impetus to these
works, branches of which had already been opened in France, Germany and Poland. In
1838 Cockerill met with a carriage accident which nearly proved fatal, and the prospect
of his loss resulted in the credit of the firm being so badly shaken that in 1839 it was
compelled to go into liquidation, the liabilities being estimated at 26 millions of francs,
the assets at 18 millions. This reverse, however, was only temporary. John Cockerill had
practically concluded negotiations to construct the Russian government railways, when
his constitution, undermined by overwork, broke down. He died at Warsaw on the I9th of
June 1840. The iron works, among the largest in Europe, are still carried on under the
name of La Société Cockerill at Seraing (q.v.).

Henry Ford, the son of farmer, was born in Greenfield, Michigan on 30th July,
1863. He left school at 15 to work on his father's farm but in 1879 he moved to
Detroit where he became an apprentice in a machine shop. To help him survive
on his low wages he spent his evenings repairing clocks and watches.

Ford returned to Greenfield after his father gave him 40 acres to start his own
farm. He disliked farming and spent much of the time trying to build a steam road
carriage and a farm locomotive. Unable to settle at Greenfield, Ford returned to
Detroit to work as an engineer for the Edison Illuminating Company.

During this period Ford read an article in the World of Science about how the
German engineer, Nicholas Otto, had built a internal combustion engine. Ford
now spent his spare time trying to build a petrol-driven motor car. His first car,
finished in 1896, was built in a little brick shed in his garden. Driven by a two-
cylinder, four-cycle motor, it was mounted on bicycle wheels. Named the Thin
Lizzie, the car had no reverse gear or brakes.
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By August, 1899, Ford had raised enough money to start his own company. His
first group of investors withdrew after Ford had spent $86,000 without producing
a car that could be sold. Eventually he produced a car that appeared at the
Grosse Pointe Blue Ribbon track at Detroit. Its performance helped him to sell
6,000 $10 dollar shares in his new company.

This also ended in failure and in June, 1903, he found twelve more people willing
to invest a total of $28,000 in another motor company. Ford now began
production of the Model A car. The car sold well and the company flourished and
by 1907 the profits reached $1,100,000. In 1909 Ford took the decision to
manufacture only one type of car, the Model T.

Initially it took 14 hours to assemble a Model T car. By improving his mass

production methods, Ford reduced this to 1 hour 33 minutes. This lowered the
overall cost of each car and enabled Ford to undercut the price of other cars on
the market. Between 1908 and 1916 the selling price of the Model T fell from
$1,000 to $360.

On the outbreak of the First World War in Europe, Ford soon made it clear he
opposed the war and supported the decision of the Woman's Peace Party to
organize a peace conference in Holland. After the conference Ford was
contacted by America's three leading anti-war campaigners, Jane Addams,
Oswald Garrison Villard, and Paul Kellogg. They suggested that Ford should
sponsor an international conference in Stockholm to discuss ways that the
conflict could be brought to an end.

Ford came up with the idea of sending a boat of pacifists to Europe to see if they
could negotiate an agreement that would end the war. He chartered the ship
Oskar II, and it sailed from Hoboken, New Jersey on 4th December, 1915. The
Ford Peace Ship reached Stockholm in January, 1916, and a conference was
organized with representatives from Denmark, Holland, Norway, Sweden and the
United States. However, unable to persuade representatives from the warring
nations to take part, the conference was unable to negotiate an Armistice.

After the war Ford became increasingly interested in politics. He joined the
Democratic Party and in 1918 was narrowly defeated when he failed to win a
seat in the U.S. Senate.

In the 1920s the Ford Motor Company continued to grow rapidly. In 1925 Ford
was producing 10,000 cars every 24 hours. This was 60 per cent of America's
total output of cars. However, his decision not to bring out new models allowed
other companies to challenge his dominance. By 1927 Ford had sold over
15,000,000 Model T cars. However, sales were on the decline and the General
Motors's Chevrolet was the current best-selling car.
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In the 1930s Ford opposed Franklin D. Roosevelt and the New Deal.
He refused to recognize the United Automobile Workers Union and
used armed police to deal with industrial unrest.

Ford had a stroke in 1938 but returned to run the company after his
son, Edsel Ford, died in 1943. Although initially an opponent of the
USA becoming involved in the Second World War, after Pearl
Harbour, Ford turned over his vast production resources to his
country. For example, the Ford plant at Willow Run produced over 8,000
Liberator bombers during the war. Henry Ford died on 7th April, 1947.

Eli Whitney and his Cotton gin

The third best known American inventor of the pre-atomic age, after Thomas Edison and
Alexander Graham Bell, is probably Eli Whitney. Whitney certainly transformed the
economies of the antebellum North and South. But among invention aficionados, his
invention of the cotton gin is a matter of some dispute.

Whitney was born in Westboro, Massachusetts in 1765. As a child, he showed an instinct

and talent for machinery. He worked as a blacksmith, and invented a nail-making
machine. Whitney's dream of attending Yale College was frustrated for some years,
because no college then taught or much appreciated the "useful arts." But Whitney did
attend Yale, and graduated at the age of 27, only to find that there were no jobs for
engineers either. So he accepted a teaching position in South Carolina.

En route, in early 1793, Whitney was befriended by Katherine Greene, the widow of a
Revolutionary War general. When Whitney's teaching job later fell through, Greene
invited him to stay at her plantation, Mulberry Grove, where she thought he might make
himself helpful. As Whitney soon discovered, most cotton plantations were then on the
brink of insolvency, because "green seed" cotton, the only strain that would grow inland,
took too long to cull from its seeds. To sift out a single "point" of cotton lint from its
surrounding seeds required ten hard hours of hand labor.

Everyone agreed that the solution was a machine to do this work; but no one had been
able to make one. According to legend, within ten days of his arrival Whitney had
observed the manual process and built a machine that did the same thing much faster. It is
clear that his very first model did not work. In it, the bulk cotton was pressed against a
wire screen, which held back the seeds while wooden teeth jutting out from an adjacent
rotating drum teased the cotton fibers out through the mesh. This model invariably
jammed. The next version was a complete success, thanks to thin wire hooks replacing
the wooden teeth, and a moving brush that constantly cleared away the collected fibers.

By all accounts, Greene encouraged Whitney. The vexed question is whether the key
element, the wire hooks, was his idea or hers. Greene supporters cite the claim of a friend
of a friend of her plantation foreman, that Greene invoked "a woman's wit" and told
Whitney to replace his wooden pegs with the wires of a fireplace cleaning brush.
 By: [A] [K] [I]

Whitney supporters cite a letter to the editor of Southern Agriculturalist magazine, whose
author heard from admittedly shadowy sources that Whitney had explicitly asked Greene
for a pin to experiment with at the start of his efforts. (Note that for some time during his
Massachusetts days, Whitney had been the New World's sole manufacturer of hatpins.)

Whatever the comparative contributions, the cotton gin ("gin" is simply short for
"engine") was a stupendous success. After Whitney gave a one-hour demonstration, in
which the machine did the day's work of many men, farmers raced to sow their fields
with green seed cotton. As the cotton grew, Whitney's workshop was broken into and his
machine was examined in detail: soon, copies were everywhere. Whitney could not
possibly have manufactured one tenth of the gins that that first crop would require; but it
is nonetheless unfair that his patent (granted in 1794) guaranteed him only ten years of
legal battles, which ended in penury.

In 1804, Whitney left the South forever, disappointed and disgusted. In his words, "An
invention can be so valuable as to be worthless to the inventor." In fact, Whitney never
attempted to patent any of his later inventions (for example, a milling machine). But after
settling in New Haven, Connecticut, Whitney re-invented American manufacturing as a
whole, through mass production.

Whitney wanted to enable unskilled laborers to make complex products. He managed this
by designing products (his test case was rifles) with interchangeable parts. These were cut
and shaped by machines that each performed one precise function over and over again.
The workers would merely put each machine through its motions.

Mass production is not a romantic notion. But it allowed for an unprecedented boom in
American industry, and eventually provided employment for thousands of workers who
were unwilling or unable to acquire apprenticeships in skilled crafts. And by all accounts,
Eli Whitney himself treated his "manufactory" workers with appreciation and respect: the
awful abuses of laborers that came about after his death in 1825 were a perversion of his
system.

Also read http://www.inventorsmuseum.com/whitney.htm

Thomas Edison

Without a doubt, the greatest inventor of the modern era has been Thomas Edison. Many
of his over one thousand inventions have profoundly changed the lives of nearly
everyone in the world.

Thomas Alva Edison was born in Milan, Ohio on February 11, 1847. In 1854, his family
moved to Port Huron, Michigan. There, "Al's" favorite hobbies were reading, and
performing chemistry experiments in his basement lab. But his teachers considered young
Edison a failure; and his mother soon decided to home-school him.
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Edison's first job (1859) was operating a newstand on the railroad that ran from Port
Huron to Detroit. To make the trips more interesting, Edison installed a printing press and
chemistry lab in a boxcar. In 1862, he learned to use a railroad telegraph. Edison then
spent many years traveling around Canada and the US, working as a telegraph operator
and doing scientific experiments in his free time. Finally, in 1869, he decided to become
a full-time inventor.

On June 1st of that year, Edison was granted his first patent (#90,646), for an electric
voting machine. But no one wanted to use the machine, and Edison resolved never again
to invent what would not sell. His next invention fared much better: an improved stock
market tickertape machine (1869), which earned him an instant $40,000 [about $700,000
today]. With his friend Franklin T. Pope, Edison formed an electrical engineering firm,
based in Newark, New Jersey. With Pope, and later alone, Edison eventually earned
about 200 patents for telegraph systems and devices.

In 1876, in Menlo Park, New Jersey, Edison founded his famous "invention factory."
"The Wizard of Menlo Park" was a workaholic and a demanding employer, but he did not
resent failures in the lab: "That's one more way it won't work, so we're closer to a
solution." Edison's first great Menlo Park invention was the phonograph (1877),
although he did not bring it to market for ten years. He was busy with his greatest project:
a workable electric light system that would replace candles and gaslight forever, at home
and in public.

In 1878, Edison created his prototype incandescent light bulb: a thin strip of paper,
attached to wires, enclosed in a vacuum inside a glass bulb. When electricity flowed into
the paper "filament," it heated up, and glowed. The only problem was that the paper burnt
out very quickly. After thousands of tests, an "Edison Pioneer," Lewis H. Latimer, found
the optimal filament material: carbonized cotton thread (1897).

Edison installed the first reliable, durable electric lights in his own labs, and later built the
first public power station, in Manhattan's financial district (1882). However, Edison's
DC-current system had only a three-mile range, and was later superseded by
Westinghouse's and Tesla's AC-current system.

By that time, Edison had built a new and much bigger research complex (now a National
Monument) in West Orange, New Jersey. There his first project was to redesign his
phonograph, in light of recent improvements by others. Edison soon marketed a wax-
cylinder phonograph as a dictation machine (1888), and later, as a musical home
entertainment system (1896). These commercial efforts were, by and large, failures, but
Edison continued to refine his favorite invention into the 1920s.

In 1889, an associate, William Dickson, working at Edison's direction, invented the

celluloid-strip motion picture camera and projector (1889) --- whose silent movies were
viewed inside the machine, through a peephole. Although Edison later broke with
Dickson, George Eastman and others helped Edison to establish the basis of the motion
picture industry.
 By: [A] [K] [I]

After 1911, Edison was mainly dissatisfied in his work, feeling that many of his ideas
were being ignored or worse yet, stolen. Throughout the '20s, he also had poor health. He
died on October 18, 1931, at the age of 84.

In total, Edison accumulated 1,093 US patents. Only a few inventors have earned half as
many. Edison inventions not mentioned above include: the printing telegraph, the electric
"stencil pen," a magnetic mining process, an electrical torpedo, a synthetic rubber, and
improved alkaline batteries, cement mixers, and microphones.

It must be said that Edison used other inventors' ideas much more freely than he shared
his own. For example, the wax cylinder phonograph was first patented by Chichester A.
Bell and Charles Sumner Tainter (1886), whose offer of a joint venture Edison rejected;
the disc "gramophone" was first patented by Emile Berliner (1887); and even the so-
called "Edison Effect," the observed emission of electrons from a hot filament, was
actually discovered by an Edison engineer named William J. Hammer (1883).

But nothing can gainsay the tremendous effect that Edison's career as a whole has had on
our everyday lives. By the volume, variety and spectacularity of his inventions, Edison
more than any other person made it seem like no miracle was beyond the reach of modern
American technology. As an inspiration to aspiring engineers and inventors, then as now,
Edison is peerless. Indeed, above all others, as his Congressional Medal of Honor
certificate declared: "He illuminated the path of progress by his inventions."

Biographies of Edison can be found on-line at: http://web.mit.edu/invent/www/inventorsA-H/edison2.html

[linked above]
http://learning.loc.gov/ammem/edhtml/edbiohm.html
http://www.minot.k12.nd.us/mps/edison/edison/edison.html

Andrew Carnegie: The Richest Man in The World

http://www.pbs.org/wgbh/amex/carnegie/

Emergence of the Entrepreneurial Class in the LCDs

Entrepreneurship-led development strategies have been successful in several countries.

The following case studies provide a glimpse at some of the policies that have been used
to increase the supply of entrepreneurship.

Entrepreneurship in Nigeria

Africa is the poorest, less-developed continent in the world. In most countries in Africa,
the governments have typically played a significant role in determining the course of
development. Many state-owned enterprises in Africa were created when it was believed
that the fastest route to development occurred when the state took on the role of the
entrepreneur. Unfortunately, in many countries, the performance of these state-owned
firms, or parasatals, has been substandard. Part of the problem with the state-owned
enterprises is that they are run by bureaucrats and are plagued with red-tape. Thus, these
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firms are typically run according to state procedures, instead of according to cost-cutting
and profit-maximizing concerns. The typical result is rampant inefficiency (Elkan, 1988).
Although Nigeria was at one time characterized by such inefficiencies, it has recently has
pursued entrepreneurship encouragement policies, and the initial indicators suggest that
the policies have been successful.

In Nigeria the state-owned enterprises traditionally clogged business opportunities and

state restrictions prevented entrepreneurs from entering the market. However, in the mid-
1980s, Nigeria abolished its marketing board, which prevented entry into certain
industries, and opened up its markets to competition from domestic entrepreneurs.
Additionally, lower taxes and increased price ceilings have increased the incentives to
entrepreneurs. Although Nigeria is still plagued by many development problems,
"preliminary evidence suggests a favorable response by the private sector to the new
entrepreneurial opportunities thus created" (Elkan, 1988).

Technopreneurship in South and South East Asia

Entrepreneurship in parts of South and South East Asia has recently undergone rapid
revitalization. The term "technopreneur" arose from within Singaporean culture to
describe an individual whose entrepreneurial endeavors focus on a technology-centered
enterprise. The government of Singapore has embraced technopreneurship and has
launched several initiatives to promote technopreneurship as a means of economic
development. In the past three years, Singapore has restructured the focus of many of its
economic policies to fully support the growth and development of domestic
technopreneurial firms.

Singapore is a small island city-state and has few natural resources that it can exploit in
order to promote economic development. Thus, Singapore has had to largely rely on its
people and human capital for the sustainment of development. Initially, the government
improved the country's human capital by dedicating a large amount of the annual budget
to education expenditure. However, now that the country can boast high literacy rates,
traditional human capital development is no longer sufficient to sustain economic growth.

Recognizing the need for a new strategy for economic growth, Singapore's government
turned towards the technology sector. With the creation of the Technopreneurship 21
Initiative and Ministerial Committee, Singapore began promoting technopreneurship
encouragement policies. For example, the government now sponsors university courses
on technopreneurship and helps connect venture capital companies with budding
technopreneurs. This greater openness has encouraged many new start-ups to form, and
the country is well on its way to fully integrating itself into the New Economy.
Singapore's success with technopreneurship policies has influenced other Asian countries
to begin such initiatives. For example, Malaysia recently launched its Multimedia Super
Corridor to encourage domestic technology development, and Hong Kong recently
completed the construction of its CyberPort, a technopreneurship-friendly business
district. Finally, technopreneurship encouragement has also taken place in certain cities in
India.
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India

As a whole, India is still one of the most underdeveloped countries in the world. Despite
the grim situation that faces much of the country, several technology-focused cities have
recently had impressive success with technology driven development. In 1991, the Indian
government introduced numerous market reforms to overhaul the Indian economy. The
information technology industry is probably that which has benefited most from the
reforms. For the educated urban class, information technology businesses have provided
a new source of income. To utilize the educated youth, who have been trained in
engineering and computer programming, international IT companies began locating in
India, particularly in Bangalore. The result is that Bangalore has become a powerhouse
for software production. Although Indian technopreneurs were not originally at the center
of Bangalore's technology development, they are now beginning to pop up throughout
southern India, largely due to the government's help in creating "the right climate to
encourage this sunrise industry" (Soota, 1998). The government created policies to boost
technopreneurial education and to encourage the creation of domestic software parks.
Additionally, domestic entrepreneurship is encouraged in Bangalore with tax incentives
and a relatively advanced communications infrastructure (Soota, 1998).

Bangalore's localized success is gaining great praise for its rapid development. Although
Bangalore was the first major technology center in India, Hyderabad is now following its
example. Although smaller in scale, the success of Hyderabad suggests that the
Bangalore model of technology-led development may be applied in other parts of the
country. Since much of India is still far behind Bangalore and Hyderabad in terms of
human capital development, it is unreasonable to suggest that all of India should adopt
policies to promote technopreneurship. Nonetheless, the rest of the country could likely
benefit from the implementation of policies that encourage entrepreneurs to fill the
market's deficiencies, whatever they may be in the local markets and specific regions of
India.

Besides these a good amount of material for writing your answers will be available
on http://ye.entreworld.org/5-2001/mentmess.cfm Also don’t forget to take the quiz
on the site its helpful to understand the chapter on Entrepreneurial skills.