TECHNOLOGY ENTREPRENEURSHIP

(ENT600)

UNIT 1:
INTRODUCTION TO
TECHNOLOGY ENTREPRENEURSHIP

Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 1

 Definition of Entrepreneurship

• Entrepreneurship is a dynamic process that involves

change and creation

• Entrepreneurship can be defined as the identification,

evaluation and exploitation of previously unexploited
opportunities. The focus is on creation of a new
enterprise or business as well as the wealth associated
with it. Essential dimensions or ingredients include
willingness to take calculated risk, the skill to apply
creative solutions and new ideas and finally, being pro-
active to act on opportunities while others are still
confused or unaware of the potential at hand.

Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 2

 Understanding Entrepreneurship

• Entrepreneurship encompasses several

dimensions or ingredients that help explain what
makes it a unique concept

• The key dimensions of entrepreneurship include:

– Risk
– Creativity & innovation
– Opportunity exploitation
– Pro-activeness

Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 3

 Dimensions of Entrepreneurship:
Risk
• Risk indicates elements of uncertain outcomes or events
that is inherent in the process of exploiting an opportunity
and starting a business

• Entrepreneurs take risks in order to obtain the higher

rewards that come from higher risk but are careful to
evaluate the risk first.

• Success comes from taking a calculated, carefully-

thought out approach to risk where everything possible is
done to identify and minimize potential problems

Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 4

 Dimensions of Entrepreneurship:
Creativity & Innovation

• Entrepreneurship is characterized by newness or

the specific effort of bringing something new and
something different to the market.

• Being creative and innovative are essential

dimensions of newness

• Creativity focuses on thinking of new things while

innovation focuses on doing new things

Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 5

 Dimensions of Entrepreneurship:
Opportunity Exploitation

• Entrepreneurship is focused on taking

advantage or exploiting of previously
unexploited opportunities

• The exploitation of opportunities often result in

the creation of a new enterprise or business as
well as the wealth associated with it

• The new enterprise should be beneficial to the

society and make a positive change

Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 6

 Dimensions of Entrepreneurship:
Pro-activeness

• Pro-activeness refers to the propensity to act on

information, ideas and opportunities in a timely
and speedy manner

• Acting at the right time and in the right manner

on the superiority of an idea or opportunity can
differentiate between better success or less
success or even between success and failure

Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 7

 Definition of Technology Entrepreneurship

• Technology entrepreneurship can be defined as a form of

entrepreneurship and business leadership focused on identifying
high-potential, technology-intensive business opportunity for
possible exploitation into new products, processes or services

• Technology entrepreneurship can be based on revolutionary

breakthrough in technology (inventions or radical innovations) or
a technological advancement (incremental innovations)

• Can target existing market or create an entirely new one

• The process is relevant for both independent startups or within

established corporations

(Adapted from Dorf & Byers, 2005)

Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 8

 The Entrepreneurial Process

• The entrepreneurial process in general

encompasses all the cognitive (thinking)
and behavioral (action) steps from the
initial emergence of a rough business idea
until the creation of a new business venture
or the process is terminated.

(Adapted from Davidsson (2005)

Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 9

 The Entrepreneurial Process

• The entrepreneurial process is generally

composed of three key phases
– The idea generation or idea discovery phase
– The idea evaluation and development phase
– The idea exploitation phase

• Figure 1 shows the entrepreneurial process with

examples of activities at each stage

Entrepreneurship Dept, FBM

ENT600/UNIT 1 : INTRO 10
(2009)
 Fig 1: The Entrepreneurial Process

Idea Search & Idea Evaluation & Idea Exploitation

Generation Phase Development Phase Phase

Idea Discovery Research & Development Business Start-up

(Invention/Innovation)
Idea Screening Technology
Concept Testing
Commercialization
Prototyping
Monitoring &
Test Marketing Evaluation
Technology Blueprint

Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 11

 Entrepreneurial Process:
Idea Search and Generation Phase
• This phase is also known as the opportunity formation or
opportunity discovery phase

• Both the terms ‘idea’ and ‘opportunity’ indicate the

possibility of bringing something new to the market

• Individuals or groups of individuals enter this phase by

either:
– Actively searching for business possibilities that they
can offer in a better, more creative or efficient form or

– Discovering a solution for their own problem

experienced at work, play or in the marketplace that
has the potential of being shared with others who are
willing to pay for the solution
Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 12
 Entrepreneurial Process:
Idea Search and Generation Phase

• In technology entrepreneurship, this idea

formation or discovery phase may be
recognizable by the fact that the business idea
or problem solution involves creating a new
technology or adapting an existing technology

• Technology refers to devices, processes, tools,

methods and materials applied to industrial and
commercial purposes.

Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 13

 Entrepreneurial Process:
Idea Evaluation & Development Phase

• This phase is characterized by efforts to better

understand what it will take to bring the idea or
opportunity into a full-fledge economic activity or
business

• In technology entrepreneurship, some key activities at

this stage include
– doing the research and development work to invent or
innovate a new technology-based product, process or
service
– preparing the initial technology blueprint
– concept testing
– prototyping,
– market testing
Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 14
 Entrepreneurial Process:
Idea Exploitation Phase

• This phase is generally characterized by the decision to

pursue the business opportunity or not

• The decision at this phase can take three basic forms

(Fig 2):
– proceed to exploit the opportunity
– abandon the current idea and go back to search for
other ideas
– terminate the process totally and not pursue any other
business ideas

Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 15

 Fig 2: Idea Exploitation Decision Options

Proceed & Exploit YES

Opportunity Idea Exploitation
Decision

NO

Abandon or Terminate Process

Current Idea

Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 16

 Entrepreneurial Process:
Idea Exploitation Phase
• If the decision is to exploit the opportunity,
among the key activities include the registering
of the business entity (in the case of an own new
business), hiring workers and starting business
operations

• In a technology based business, a unique

activity at this phase is the commercialization of
the technology-based product, process or
service that may or may not require the creation
of a new business venture.
Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 17
 Entrepreneurship & the Economy:
The Role of Entrepreneurship

• Economic growth and vitality can be generated by

encouraging entrepreneurial activity in the society.

• Entrepreneurial activity is centered around entrepreneurs

who act as agents of progress

• In order to contribute to economic growth, entrepreneurs

must
– Mobilize natural, financial and intellectual capital as
capital inputs in the economy and

– utilize the capital inputs to create products, processes

and services as economic outputs

Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 18

 Fig 3: A Model of Role of Entrepreneurship
in the Economy

Natural capital Beneficial outputs

Economy

Financial capital Entrepreneurs

as agents of
progress Undesired waste
Intellectual capital
outputs

Adapted from Dorf & Byers (2005)

Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 19

 Entrepreneurship & the Economy:
The Economic Inputs

• Natural capital
– Consist basically of natural resources such as
minerals, fuels and energy

– Can also include nature’s biological capacity

to produce (e.g. oxygen) or absorb
(e.g. pollution)

– As such this natural capital can be irreversibly

depleted through neglect or irresponsible
usage
Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 20
 Entrepreneurship & the Economy:
The Economic Inputs
• Financial capital
– Refers to financial assets such as money and shares
– Can include exclusive use of technological designs
and products that have financial value

• Intellectual capital
– Refers to knowledge that is accessible within an
business because it has been recorded (e.g. in
documents and reports), explained (e.g. through
knowledge sharing processes ) and disseminated
(e.g. through inter-team or inter-department project or
research work)

Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 21

 Entrepreneurship & the Economy:
The Economic Inputs
• There are three key sources of intellectual capital
– Human capital
• This is the combined knowledge, skill and abilities
of the entrepreneurial team and the business
employees

– Organizational capital
• This is the management structure and peripherals
(including hardware, software, databases patents
and systems) that support the human capital

– Social capital
• The relationships and the quality of the
relationships that the business maintains with its
suppliers, partners and customers
Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 22
 Entrepreneurship & the Economy:
The Economic Outputs
• Economic progress and growth (outputs) is essentially in
two forms of:
– The beneficial outputs (e.g. increase in new
business ventures that create new jobs)
– The undesired inefficiencies and waste outputs
(e.g. pollution from growing numbers of industries)
– The benefits should be maximized while waste and
inefficiencies need to be minimized for
entrepreneurship to have the desired impact on the
economy

Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 23

 References

• Dorf, Richard C., & Byers, Thomas H. (2005).

Technology Ventures: From Ideas to Enterprise.
New York,USA: McGraw Hill

• Davidsson, Per. (2005). Proceedings, Academy

of Management Conference, Hawaii
(http://eprints.qut.au/active/00002064 retrieved
25 June 2008)

Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 24