Week#1

The Nature and Importance of

Entrepreneurs

Hisrich
Peters

McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. Shepherd
Nature and Development of
Entrepreneurship
 Entrepreneur – An individual who takes
initiative to bundle resources in
innovative ways and is willing to bear
the risk and/or uncertainty to act.
 Being an entrepreneur today:
 Involves creation process.
 Requires devotion of time and effort.
 Involves rewards of being an entrepreneur.
 Requires assumption of necessary risks.

1-2
Nature and Development of
Entrepreneurship (cont.)
 Entrepreneurial action - Behavior in
response to a judgmental decision under
uncertainty about a possible
opportunity for profit.

1-3
 Role of Entrepreneurship in
Economic Development
The role of entrepreneurship in economic
development involves more than just increasing
the per capita output; it involves initiating and
constituting change in structure of business and
society.

1-4
 Role of Entrepreneurship in
Economic Development
 Innovation is depicted as a key to economic
development.
 Product-evolution process - Process through
which innovation is developed and
commercialized.

1-5
 Figure 1.1 - Product Evolution
 Product evaluation process illustrated in
figure 1.1, the traditional symbol begin with
base technology and science such as
thermodynamics, fluid mechanics and ends
with product or services the critical point
in product evaluation process is
intersection of knowledge and a
recognized social need which begins the
product development phase. This point is
called iterative synthesis where
entreprenurer fails to evolve into
marketable innovation. 1-6
Role of Entrepreneurship in
Economic Development (cont.)
 Three types of innovation:
 Ordinary - New products with little technological
change.
 Technological – New products with significant
technological advancement.
 Breakthrough – New products with some
technological change.

1-7
Figure 1.1 - Product Evolution

1-8