Entrepreneurial Studies

Dr Noor Muhammad

Your Expectations From

This Module

Module Purpose and Core Skills

1.

Broad aims: To provide an awareness of the contribution

2.

The educational aims: As given in module descriptor.

entrepreneurship makes to the economy and society and to

recognise the essential requirements of successful
entrepreneurs.
There are four learning outcomes:
1.
2.

3.
4.

Discuss the theories and concepts of entrepreneurship.

Recognise and discuss the essential elements of the
entrepreneurial process, including the role of the
entrepreneur, opportunity recognition, business planning,
resource issues, innovation and growth.
Evaluate research relating to entrepreneurship,
intrapreneurship and small business.
Apply analytical and enterprise skills in evaluating an
entrepreneurial business.

Information Sources
1.

Textbooks

2.

Academic journal articles

3.

Business magazines, newspapers and other news

sources

What is an Entrepreneur?
What is Entrepreneurship? What
is its Importance?

Who is an Entrepreneur?

A person who sets up a business or businesses, taking on greater

financial risks in order to do so.
New Oxford Dictionary of English

Entrepreneurial History
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Richard Cantillon (1730) Bearer of uncertainty

Jean Baptist Say (1816) Agent who unites factors of
production
Frank Knight (1921) Uncertainty
Joseph Schumpeter (1934) Innovator
Penrose (1963) Spot opportunities
Harvey Leibenstein (1968; 1979) Fill gaps
Israel Kirzner (1979) Spot opportunities
Gartner (1988) New organisations
Bruyat and Julien (2000) Add new value
Peter Drucker (2000) Shifts economic resources

Richard Cantillon (1755)

Chell et al (1991) identify the French economist
Richard Cantillon as the first person to identify
the role of the entrepreneur. According to his
view, entrepreneur is a key player-market maker.
Cantillon (1755) recognized that entrepreneurs
are accountable for all the exchanges and
circulations within the economy. Cantillons
entrepreneur is an individual that bears risk.

Jean-Baptise Say (1767-1832)

Hebert and Link (1988) define the perception of
Jean-Baptise Say, the first professor of political
economy in France, who invented the term
Entrepreneur and stressed
the crucial and
imaginative role of the entrepreneur in the
economy as predictor, project appraiser and risk
taker.

Alfred Marshall (1842-1924)

Alfred Marshall (1842-1924) was an economist
who identified the need for entrepreneurs to be
innovative and imaginative in their approach to
business
establishment
and
growth.
He
recognized two types of business owner: those
who will search for new, advanced techniques for
engaging in business and in so doing cannot avoid
taking some form of risk and those who are
attached to the tried and trusted methods for
doing business.

Carl Menger (1840-1950)

Carl Menger (1840 - 1921), recognized the
subjectivist perspective of economics in his book
Principles of Economics (1871). According to his
statement, he gave the name of change agent to
the entrepreneur, because he or she transfers
resources into useful goods and services, often
creating the circumstances that lead to industrial
or economic development.

Joseph Schumpeter (1883-1950)

The father of modern entrepreneurship, is an
Austrian who published his book The Theory of
Economic Development (1911) and within it
expressed the role of the entrepreneur. He argued
that the disequilibrium brought about by the
proactive innovative entrepreneur is the norm of
a healthy economy.

Joseph Schumpeter (1883-1950)

Schumpeter argued that an entrepreneur is an
innovator an individual who caries out one of the
following tasks.

The
The
The
The
The

creation of new goods or a new quality.

creation of a new method of production.
opening of a new market.
capture of a new source of supply.
creation of a new organization or industry.

(Schumpeter, 1934:66)

Joseph Schumpeter (1883-1950)

Schumpeter stressed that everyone is an
entrepreneur when he or she brings new
innovation to their businesses. He states that
economic development happens through a
method whereby the old structures, products,
processes, and organizations are continually
changed by new innovative motion, his theory of
economic development was based on new
combinations or innovations.

Israel Kirzner (1973)

Kirzner (1973) suggests that entrepreneurship is
the outcome of innovations planned to exploit the
opportunities
afforded
by
disequilibrium.
Therefore, both continuous and discontinuous
innovations may be regarded as contributing to
entrepreneurship.

Israel Kirzner (1973)

Kirzner persists that the entrepreneur facilitates
the adjustment process that supports market
movement towards ever changing levels of
equilibrium, which he defines in the traditional
classical economic model as, that state in which
each decision correctly anticipates all other
decisions (Kirzner, 1979:110). He contends that
the problem is that knowledge is never complete
or perfect in a dynamic economy and thus
markets are in everlasting disequilibrium.

Do We Know Now What is an

Entrepreneur?
No commonly agreed definition.
Gartner (1990) analysed 90 definitions obtained from
academics and business leaders but the conclusion is
no real agreement.

My Definition of Entrepreneur?

An individual who has a vision to see things differently and has

or can develop a capability to do things in a way that is better

than it was done previously.

Some Very Famous & Successful

Entrepreneurs

The Top Entrepreneurs of the Last 100

Years

http://www.focus.com/fyi/other/top
-entrepreneurs-last-100-years/

Entrepreneurs Views (Burns, 2011)

We learned the importance of ignoring conventional wisdom and

doing things our way....Its fun to do things that people dont think
are possible or likely. Its also exciting to achieve the unexpected.
Michael Dell

Entrepreneurs Views (Burns, 2011)

I am often asked what it is to be an entrepreneur and there is
no simple answer. It is clear that successful entrepreneurs are
vital for a healthy, vibrant and competitive economy.
If you look around you, most of the largest companies have
their foundations in one or two individuals who have the
determination to turn a vision into reality.
Richard Branson

What is Entrepreneurship?
1. Lowe and Marriott (2006): The art and science
of not standing still.
2. Richard Cantillon: Entrepreneurship is defined
as self-employment of any sort.
3. Gartner: Entrepreneurship is the creation of
organisations. This serves as a demarcation line
between entrepreneurs and non-entrepreneurs. He
mentions two types of approaches to the study of
entrepreneurship:
1. Behavioural approach where an entrepreneur is seen as a
set of activities involved in the creation of organisations.
2. Trait approach where an entrepreneur is seen as a set of
personality traits and characteristics.

Entrepreneurship
4.

The Entrepreneurship Centre at Miami University of

Ohio has an interesting definition of entrepreneurship:
Entrepreneurship is the process of identifying,
developing, and bringing a vision to life. The vision may
be an innovative idea, an opportunity, or simply a better way
to do something. The end result of this process is the
creation of a new venture, formed under conditions of risk
and considerable uncertainty.