Unit 1 Introduction to Entrepreneurship PDF

ENTREPRENEURSHIP: BUS 403 UNIT 1 INTRODUCTION TO ENTREPRENEURSHIP   Defining Entrepreneurship  Reasons people become entrepreneurs  Entrepreneurship in Jamaica  What is an Entrepreneurial Mindset...

ENTREPRENEURSHIP: BUS 403 UNIT 1 INTRODUCTION TO ENTREPRENEURSHIP   Defining Entrepreneurship  Reasons people become entrepreneurs  Entrepreneurship in Jamaica  What is an Entrepreneurial Mindset  The Entrepreneurial Process Unit 1  Forces in the Environment that Facilitate and Introduction to Constrain Levels of Entrepreneurship Entrepreneurship  How to Encourage Greater Levels of Entrepreneurship  Sociological and Psychological Characteristics  The Different Types of Entrepreneurs   1. This course is designed to offer a broad overview and introduction to entrepreneurship. 2. Entrepreneurship is approached as a way of Course thinking and acting, as an attitude and behaviour. Overview & 3. Students will learn that entrepreneurship is a process which can be learned, repeated, Objectives and applied to any human endeavour. 4. In this course, students will be asked to develop a concept for a viable, scalable business.  1. Topics will include: Feasibility studies, opportunity recognition, idea and product development, business model and business plan development. 2. Explain the role of entrepreneurship and small business in the Jamaican economy Course 3. Identify the factors that are driving the growth of entrepreneurship Overview & 4. 5. Identify and develop successful business ideas Appreciate and master the issues surrounding Subject- implementation of an entrepreneurial idea– avoiding mistakes Matter 6. Explain the purpose, role and importance of business models, including the key elements of a business model and the interactions and interdependencies among the elements. 7. Develop effective feasibility study, business model and business plan.  1. Identify and assess entrepreneurial characteristics and opportunities 2. Prepare a business concept and critique the Course viability of business concepts Overview & 3. Complete feasibility analyses to determine concept viability Outcomes 4. Critique new venture ideas and the underlying opportunities that give rise to those venture ideas 5. Research and write a full business plan  Defining Entrepreneurship There is a huge interest in entrepreneurship globally, especially in the last three decades. Activity or process that is designed to bring products to market Need to fail before you succeed  What is Entrepreneurship?  Academic Definition (Stevenson & Jarillo) Copyright ©2016 Pearson Education, Inc.  Entrepreneurship is the process by which individuals pursue opportunities without regard to resources they currently control.  Venture Capitalist (Fred Wilson)  Entrepreneurship is the art of turning an idea into a business.  Explanation of What Entrepreneurs Do  Entrepreneurs assemble and then integrate all the resources needed – the money, the people, the business model, the strategy – to transform an invention or an idea into a viable business.  What is entrepreneurship? 8  Entrepreneurship Strategic thinking and risk-taking behavior that results in the creation of new opportunities for individuals and/or organizations.  Entrepreneurs Risk-taking individuals who take actions to pursue opportunities and situations others may fail to recognize or may view as problems or threats. Management - Chapter 6  What is entrepreneurship? 9  Entrepreneurs are …  Founders of businesses that become large-scale enterprises.  People who: Buy a local franchise outlet Open a small retail shop Operate a self-employed service business  People who introduce a new product or operational change in an existing organization. Management - Chapter 6  Creativity, Innovation & Entrepreneurship  Creativity,Innovation, and Entrepreneurship are three separate but related activities/processes  Understanding what each activity is and how they are related to each other is important to understanding the entrepreneurship process  Quite often in public presentations -- the distinction between the three activities are blurred– and the tendency is to used the terms interchangeably.  Defining Creativity  Creativity – the generation of novel ideas –  New interpretations/developing novel or original ideas  The use of imagination or original ideas -- right brain  The ability to transcend traditional ideas or paradigms  Creativity is the process of generating a novel or useful idea.  Opportunity recognition may be, at least in part, a creative process.  Copycat – Japan, China & Asia  Borrowing ideas from other parts of the world - Learning by doing -- moving up the learning curve -  Learning to improve things/processes  Defining Creativity  Building a Culture to foster creativity & innovation Need left brain also – analytical ideas also needed to build a balanced team to be successful  Creativity can be learned through focused practice. Example of how a culture of creativity and innovation can be fostered is At IDEO www.ideo.com A culture that fosters “creative confidence” -- refer to the ability or skill in generating, embracing, and acting on new ideas..  Creativity & Innovation  What stops creativity?  More education tend to promote less creativity....  Less open to criticism – unsafe environment  Need a safe environment to fail – need to praise creative approaches even when there is failure… employee must be truly trying to improve and (2) not taking too much risk..not too reckless  Need left brain also – analytical ideas are needed to build a balanced team in order to be successful  Innovation & Creativity  Innovation is the ability to generate and execute on new ideas. These ideas can be incremental, evolutionary, or revolutionary. Innovative organizations repeatedly bring new products or services to market over time.  Innovation Starts with Creativity  Enter creativity: Your tool to embrace and drive change  The future is going to look different - first let’s understand that innovation starts with creativity. Creativity & Innovation  Defining Innovation  Innovation follows on where creativity stops  The art and science of bringing new ideas to fruition  Innovation drives entrepreneurship and sustains the process  Three (3) key elements of the process:  Creativity  Collaboration—  Teamwork—  These are the underpinnings of innovation  Three (3) Types of Innovation Product Innovation  Product innovation can come in three different forms.  1) The development of a new product, such as the Fitbit or Amazon’s Kindle.  2) An improvement of the performance of the existing product, such as an increase in the digital camera resolution of the iPhone 11.  3) A new feature to an existing product, such as power windows to a car.  Driven by technological advancements, changes in customer requirements, or outdated product design.  Product innovation is generally visible to the customer and should result in a greater demand for a product.  Three (3) Types of Innovation  Process Innovation  This is the implementation of a new or significantly improved production or delivery method.  Include changes in the equipment and technology used in manufacturing (including the software used in product design and development), improvement in the tools, techniques, and software solutions used to help in supply chain and delivery system, changes in the tools used to sell and maintain your good, as well as methods used for accounting and customer service.  Product innovation is more visible to customers, process innovation is typically only seen and valued internally. Speaking generally, changes in process reduce costs of production more often than they drive an increase in revenue.  Examples:  Henry Ford’s invention of the world’s first moving assembly line -- simplified vehicle assembly and reduced the time necessary to produce a single vehicle from 12 hours to 90 minutes.  Three (3) Types of Innovation  Business Model Innovation  Business model innovation does not necessarily imply changes in the product or even in the production process, but in the way as it is brought to the market.  The most challenging type - presents an organization with major requirements for change -- which can threaten elements of the company identity and come into conflict with brand expectations or promises.  Business model innovation is almost always radical, risky, and transformative. Some examples of business model innovation include AirBnB, Uber, Netflix, or Spotify. These are perfect examples of fast-moving companies that were able to disrupt age-old markets (hotel, taxi, movies, music) by tweaking or inverting their industry’s traditional business model.  Startups have a big advantage due to their ability to iterate and adapt their model during their initial stages of their development; however, there are several large, well-established organizations that have leaned into their advantages of a larger customer base and greater resources to challenge their existing business model and “disrupt” themselves.  Examples:  IBM has managed changes in customer offers from mainframes to personal computers to technology services.  Amazon found a new channel to the customer through technology by eliminating the traditional retail distribution channel and developing direct relationships.  Reasons people become entrepreneurs 1-20 They are three primary reasons that people become Copyright ©2016 Pearson Education, Inc. entrepreneurs and start their own firms Desire to be their own boss Desire to pursue their own ideas Financial rewards  Entrepreneurship in Jamaica GEM – Global Entrepreneurship Monitor  The Global Entrepreneurship Monitor (GEM) is the largest study of entrepreneurship in the world. GEM began in 1999 as a joint project between Babson College (USA) and the London Business School (UK). The aim was to consider why some countries are more entrepreneurial than others. For this latest report, 65 countries participated, covering 69.2 per cent of the world's population and 84.9 per cent of the world's GDP. Jamaica is the only Caribbean country in, and UTech, Jamaica is one of 300-plus academic and research institutions doing the research work on the ground.  Through a consortium of universities, GEM data is derived from an Adult Population Survey (APS) which tracks the entrepreneurial attitudes, activities and motivation of entrepreneurs in the participating countries and a National Experts Survey (NES) which monitors entrepreneurial framework conditions in each country which promote or hinder the growth of entrepreneurship, such as financial support, government policies, commercial and service infrastructure and physical infrastructure.  Some of the key findings of the GEM Jamaica 2016 Report are that slightly more females (50.6%) than males (49.4%) are involved in entrepreneurship; Jamaicans are driven to engage in entrepreneurship by opportunities that exist and do not fear failure and small, easy to start-up businesses dominate the entrepreneurial landscape in Jamaica. However, while the possibility of operating a business is perceived positively, Jamaicans generally feel more comfortable having a job compared to being self-employed.  UTech, Jamaica has led the research programme for Jamaica since 2005.  Entrepreneurship in Jamaica  The MSME sector is supported by the Updated MSME & Entrepreneurship Policy (2018). On July 3, 2018, the updated MSME & Entrepreneurship Policy was tabled in the Houses of Parliament as a White Paper.  The policy present the goals that will support the MSME sector throughout the entrepreneurship process.  The goals of the policy are:  An enabling business environment that results in growing levels of formality in the economy;  The availability of innovative and inclusive financial systems that are appropriate, affordable and accessible throughout the MSME business lifecycle;  Timely, relevant and measureable business development and capacity building services that are available to the MSME sector island wide;  A culture of entrepreneurship and Innovation that promotes creativity, research and development in business operations and throughout the education system;  The seamless integration of cross cutting issues in the sector are weaved seamlessly into major programmes to ensure inclusive growth.  The Updated MSME & Entrepreneurship Policy will serve as a roadmap for the implementation of key activities in the MSME sector.  What is an Entrepreneurial Mindset  Creativity is not based on genetics -Myth surrounding creativity, that you have it or you don't, and only the “sage on the stage,” like a Steve Jobs, can generate new ideas.  “When people transcend the fears that block their creativity, all sorts of new possibilities emerge. Instead of being paralyzed by the prospect of failure, they see every experience as an opportunity they can learn from. The need for control keeps some people stuck at the planning stage of a project. With creative confidence, they become comfortable with uncertainty and are able to leap into action.”  DAVID & TOM KELLEY Authors of Creative Confidence  The Entrepreneurial Process The Entrepreneurial Process Consists of Four Steps Step 1: Deciding to become an entrepreneur. Step 2: Developing successful business ideas. Step 3: Moving from an idea to an entrepreneurial firm. Step 4: Managing and growing the entrepreneurial firm.  Forces in the Environment that Facilitate and Constrain Levels of Entrepreneurship  DOING BUSINESS IN JAMAICA  What are the critical activities that businesses must address to get started and move to the growth stage?  The following link below provides useful guidance:  https://www.micaf.gov.jm/content/i-want  The first three chapters of the MSME & Entrepreneurship Policy (available on MICAF’s website) provide some insights on the entrepreneurship landscape in Jamaica and highlight some of the forces that stymie the development of entrepreneurial firms……  Implementing Policy Initiatives How to  Improvethe doing business Encourage environment Greater Levels of  Makingavailable business Entrepreneurship development support services  Improving access to financing  Fostering creativity & innovation  Addressing cross-cutting issues – crime, ethics, etc.  Economic Impact of Entrepreneurial  Innovation Firms Copyright ©2016 Pearson Education, Inc.  Isthe process of creating something new, which is central to the entrepreneurial process.  Small innovative firms are 16 times more productive than larger innovative firms in terms of patents per employee.  Job Creation  Small businesses create a substantial number of net new jobs in the United States.  Firms with 500 or fewer employees create 65% of new jobs on an annual basis.  Sociological & Psychological Characteristics  Typical characteristics of entrepreneurs:  Internal locus of control  High energy level  High need for achievement  Tolerance for ambiguity  Self-confidence  Passion and action-orientation  Self-reliance and desire for independence  Flexibility Study Question 1: What is entrepreneurship? 30  Typical characteristics of entrepreneurs:  Internal locus of control  High energy level  High need for achievement  Tolerance for ambiguity  Self-confidence  Passion and action-orientation  Self-reliance and desire for independence  Flexibility Management - Chapter 6  The Different Types of Entrepreneurs Different Criteria for categorizing entrepreneurs  GEM Framework Necessity-Driven Entrepreneurs Opportunity-Driven Entrepreneurs  Planning Ahead —Study Questions 32  What is entrepreneurship?  What is special about small businesses?  How does one start a new venture?  What resources support entrepreneurship and business development? Management - Chapter 6