Entrepreneurship- refers to the economic activity of a person who starts,
manages, and assume the risk of a business enterprise. The person who undertakes entrepreneurial activities is called an entrepreneur. An Example of Entrepreneurship Activity Entrepreneur's Concern Problem at Hand Entrepreneur's Action 1. High income families are not 1. Establish a high school education with satisfied with the services higher standards than the current high 1. Identifying an economic need provided by high schools in their schools are providing. area. 2. Resources must be made 2. Acquire funds, hire people, construct 2. Assembling resources required available. buildings, and the like.
3. Assuming risk 3. Venture must be made. 3. Prepare project study, advertise,
maintain good relationship with employee and customers, among others. ENTREPRENEURS-performs the function of harnessing the potentials of any or all of the various elements ECONOMIC DEVELOPMENT-is a scheme aimed at improving the living standards of the nations citizenry. To achieve the following goals, proper management of the following elements is necessary 1. Human resources (labor supply, education, discipline and motivation) 2. Natural resources (land, mineral, fuel and climate) 3. Capital formation (machines, factories, roads) 4. Technology (science, engineering, management and entrepreneurship) THE ENTREPRENEURS TASK & RESPONSIBILITIES 1. TO PROVIDE PRODUCTS AND SERVICES FOR CUSTOMERS AND PRODUCERS 2. TO PROVIDE EMPLOYMENT 3. TO HELP IN GAINING TAXES REVENUE FOR THE GOVT. 4. TO PROVIDE DEMAND FOR SUPPLIERS, PRODUCTS AND SERVICES 5. TO PROVIDE TRAINING FACILITIES FOR FUTURE ENTREPRENEURS. Land Labor Capital (Natural Resources) (Human Resources) (Financial Resources)
Entrepreneur
Production Process
Finished Goods and Services
THE ENTREPRENEUR PERFORMS THE FOLLOWING FUNCTION TO MAKE PROFITS
1. TO SUPPLY THE NECESSARY CAPITAL
2. TO ORGANIZE PRODUCTION BY BUYING AND COMBINING INPUTS LIKE MATERIALS AND LABOR 3. TO DECIDE ON THE RATE OF OUTPUT, IN THE LIGHT OF HIS EXPECTATION ABOUT DEMAND 4. AND TO BEAR THE RISK INHERENT TO THE VENTURE INNOVATION-maybe defined as the introduction of a new method, procedure, custom, device, among others could be any of the following 1. New Product 2. New Process of Production 3. SUBSTITUTION of a cheaper material in an unaltered product 4. REORGANIZATION OF PRODUCTION, internal function, or distribution arrangement leading to increase efficiency, better support for a given product, or lower cost. 5. Improvement in Instrument or methods of doing innovation. Innovation may also be viewed as the last stage in important process consisting of the following Invention-refers to the discovery or devising of new products and processes Development-refers to the process by which ideas techniques and principles are generated Innovation-refers to the actual introduction of a new product or process INNOVATION must reduce costs or improve the quality of products or services offered for sales THE TRANSITION FROM A NEW VENTURE TO A SUCCESSFUL LONG-TERM ENTERPRISES 1. PRESTART-UP STAGE- PLANNING, STUDYING, FROM QUESTIONING THE FEASIBILITY OF AN IDEA, PRODUCT AND SERVICES.
2. START-UP STAGE-FORMATION OF BUSINESS, GENERATION OF NECESSARY CAPITAL,
PURCHASE OF EUIPMENT, CONSTRUCTING PROTOTYPE PRODUCTS AND TESTING THE MARKET
3. EARLY GROWTH STAGE-FOLLOWS AFTER THE ESTABLISHING FEASIBILITY.
WHAT PROFITS OR NOT
4. LATE GROWTH STAGE-FINAL STAGE BEFORE THE NEW VENTURES MATURE
THE FACTORS OF PRODUCTION AND THEIR REWARDS Factors of Production Economic Reward Limiting Factor for Rewards Received Land Rent Supply and Demand
Capital Interest Industry rates/government
mandates rates Labor Wages/Salary Supply and demand Legislation Entrepreneur Profits Skill of Entrepreneur As the landowners earns rent for allowing the use of his property, Owner of the Capital earns interest for allowing use of his capital. The laborer on duty earns wages for his effort Entrepreneur earns profit for deciding how the business shall be run Innovation and Its Possible Effects on Competing Firms Entrepreneur Entrepreneur Entrepreneur 1 2 3 Year 1 introduce innovative product Inactive Inactive
Year 2 reap moderate profits Introduce innovative product Inactive
Year 3 maximize profits Reap moderate profits Introduce innovative product
Year 4 profits decline Maximize profits Reap moderate profits
Year 5 introduce innovative product Profits decline Maximizze profits
EXAMPLE OF INNOVATIONS 1. OFFERING BUSINESS SERVICES DURING SUNDAY AND HOLIDAYS 2. MANUFACTURE AND SALE OF NEW PRODUCT 3. SELLING ON A DEFERRED PAYMENT SCHEME