foundations of entrepreneurship elikem nutifafa kuenyehia class two: introduction to...
TRANSCRIPT
FOUNDATIONS of
ENTREPRENEURSHIP
Elikem Nutifafa Kuenyehia
CLASS TWO: INTRODUCTION TO ENTREPRENEURSHIP
Class Outline
• Hand in class questionnaire• Recap of class 1• Recap of real life case study• Introduction to entrepreneurship– Definitions–
Recap of Class One
• What did you learn about entrepreneurship from Class One?
• What did you learn about opportunities and challenges of entrepreneurship in Ghana?
• What did you learn from the Guest Speaker Kwaku Ofosu-Bediako
Class Questionnaire
• Hand in to Malik now please
Case Study Write Up
Introduction to Entrepreneurship
History and Development of Entrepreneurship
- Entrepreneurship evolved from French word “entreprendre” meaning “to undertake”- Other referrals include middleman, director of resources, tax contractor- Richard Cantillon maintains entrepreneurs as middlemen in his postulation of agents of economy (landowners, entrepreneurs, hirelings- In mid 20th century definition of entrepreneurship were based on economic situations
Some Definitions An entrepreneur is ‘a necessary
destabilising force bringing economic growth through the disequilibrium of constant change and innovation’.
-Joseph Schumpeter
‘Individual who undertook formation of an organisation for commercial purposes’.
- Adam Smith
‘It is possessing the know-how to find, marshal and control resources (often owned by others)
- Timmons
My Definition
• ‘Is the process of risking resources based on an idea (or series of ideas) to develop the idea or ideas into goods and/or services that people perceive as valuable and are willing to pay for, in such a way as to maximise profit for the enterprise risking the resources’
Entrepreneurship as a process
Entrepreneurial process begins with an idea which develops into an opportunity or vice-versa eg. Elizabeth Villars – Camelot idea in 1974
Idea and opportunity are intertwined by size of willing patronisers
Idea must remove an existing pain Key resources risked include time,
human and capital resources One Cycle Entrepreneurship vs
Repeated Cycle
Entrepreneurship as a state of mind or series of attributes
• Entrepreneurship as a characterisation of attributes that enable people to exploit opportunities for financial reward
- Motivation factor is the individual’s state of mind
• Entrepreneurship as a pattern of behaviour
• Ability to build a vision from nothing-Timmons
• Complementing one’s skills by building a venture team
Forms of entrepreneurship Social Entrepreneurshipo Creating social change through an
enterpriseo Enterprises include non-profit organizations
and businesses set up with a social purpose o Examples – Grameen Bank, Sinapi Aba
Trust, Teachers Fund Financial Services
Intrapreneurshipo Formation of new idea within an existing
organisationo Entrepreneurial concept belongs to the
organisation and not the intrapreneur.o Financial rewards also go to the company
(Intrapreneur’s reward is limited)o Examples – Google (3M), MET Insurance
(MET2U)
Forms of entrepreneurship cont’d
Extrapreneurshipo Break off from existing companyo New company may carry similar idea
from parent companyo May have financial and social support
from parent company o New enterprise may be in the same
business line as the existing company or a supplier to it
Incubation
• Involves “nurturing” start-up business with an enabling environment, material and intangible resources
• Set up by universities or high tech parks• Examples - Busy Internets Incubation
Program, Meltwater Foundation to establish a Non-Profit Incubator In Ghana?
Opportunity entrepreneurship vs. Necessity entrepreneurship
o Opportunity entrepreneur develops an idea to exploit an existing opportunity
o Necessity entrepreneurs result from lack of alternatives
Entrepreneur vs. Businessmano All entrepreneurs are businessmen but not all
businessmen are entrepreneurso A Businessman establishes a business for personal
goals while an entrepreneur establishes an enterprise for profit and growth –Beaver and Jenkins
Evolution of entrepreneurship in Ghana
Entrepreneurship began before the arrival of the Europeans
Europeans were also entrepreneurs as they risked resources to identify trading opportunities in Ghana
Post independence witnessed the introduction of a mixed economy in Ghana
Nkrumah’s Government encouraged private enterprise The NLC government also supported local
entrepreneurs when it published in 1968, ‘The Promotion of Ghanaian Business Enterprise’
Busia’s government was the first to extensively draw up policies and establish bodies to aid entrepreneurs
Evolution of entrepreneurship in Ghana cont’d
Rawlings Government introduced ERP and SAP
Kufour’s government is dedicated to making the private sector the engine of growth in the economy. Policies aimed at encouraging entrepreneurship can be found in ‘KOE’
Mills Government ‘better Ghana agenda’ aim to provide various incentive schemes to ease credit delivery to entrepreneurs, to establish export trade houses, and develop an incubation policy
Role of entrepreneurship in a country’s economy
development
• Creates jobs• Drives economic growth• Frees up states resources• Fosters competition• Fosters innovation• Increases productivity• Provides a tax base for government
Challenges facing Ghanaian Entrepreneurs
• Access to finance• Low incomes and corresponding low
savings culture• Little initiative by banks to be
creative• Human Capital • Unfriendly government machinery• Political and economic instability• Access to information
Factors favouring entrepreneurship
Political stability Macro-economic stability Secure property rights Ease of starting a business Free flow of information The rule of law and mechanism for contract
enforcement Availability of human capital Access to finance Size of the market in terms of numbers and income
levels Regulation of businesses Culture
Institutions that help entrepreneurship to thrive
• An independent central bank• An independent judiciary• An independent media and easy access
to credible information• Neutral and professional army or
security forces
Why become an entrepreneur?
Most graduate students take regular executive or civil service career paths while
Some, after a few years of experience quit to start their own enterprise or buy one.
Appeal for joining ‘Corporate Ghana’ or civil service:
o More securityo Certainty of incomeo Greater training opportunitieso Lower levels of stresso Smaller personal risko Responsibilityo Autonomy & desire to control one’s own destinyo ....etc
Why become an entrepreneur?
• Others still prefer entrepreneurship because;
• Autonomy & Desire to control own destiny
• Flexibility• Opportunity to reap unlimited profits• Unemployment & Underemployment• Family