Unit I - SOCSC12.pdf

Unit I. The Entrepreneurial Mind: an Overview SOCSC 12 – The Entrepreneurial Mind  Objectives At the end of the unit, the student must have: 1. explained the role of the entrepreneur and the importance of an entrepreneurial mindset; 2. discussed the origins of...

Unit I. The Entrepreneurial Mind: an Overview SOCSC 12 – The Entrepreneurial Mind  Objectives At the end of the unit, the student must have: 1. explained the role of the entrepreneur and the importance of an entrepreneurial mindset; 2. discussed the origins of the entrepreneurial ideas that focused on the economic, political, social and technological conditions of the time; 3. explained the influences of the worldly philosophers on entrepreneurship; and 4. discussed the elements of the entrepreneurial ecosystem. COLLEGE OF ARTS & SCIENCES Department of Languages & Literature  Content A. The Macro Economy and the Role of the entrepreneur B. The importance and benefits of the entrepreneurial mindset C. The influences of the “worldly philosophers” on entrepreneurship D. The entrepreneurial ecosystem elements and entrepreneurship COLLEGE OF ARTS & SCIENCES Department of Languages & Literature A. The Macro Economy and the Role of the entrepreneur MACROECONOMICS "Macro-economic theory is that part of economics which studies the overall averages and aggregates of the system." - Boulding "Macroeconomics deals with the functioning of the economy as a whole." – Shapiro "Macroeconomics concerns with such variables as the aggregate volume of the output of an economy, with the extent to which its resources are employed, with the size of national income and with the general price level". – Ackley Gardner  MACROECONOMICS macroeconomics, the study of the behavior of a national or regional economy as a whole. It is concerned with understanding economy- wide events such as the total amount of goods and services produced, the level of unemployment, and the general behaviour of prices. (https://www.britannica.com/money/macroeconomics) Macroeconomic Factors Influencing Entrepreneurship 1. Economic conditions 3. Social conditions Gross Domestic Product (GDP) Demographics Inflation rates Social attitudes Unemployment rates 2. Political Conditions 4. Technological conditions Government policies Innovation and R&D Political stability Digital Transformation The Role of the Entrepreneur in the Macro Economy Identifying opportunities Adapting to changes Driving economic growth Mitigating risks  B. The importance and benefits of the entrepreneurial mindset What is an Entrepreneurial Mindset: Importance and Benefits The key to successful entrepreneurship is a continuously expanding and growing mindset (Neck et al., 2016). To develop an optimal mindset for entrepreneurship, there is need to recognize its importance and consciously take the steps to nurture it through the practice of self-leadership, creativity, and improvisation. Building a strong mindset, enables us to identify exciting opportunities and to take action to begin new ventures, products, and organizations  An entrepreneurial mindset is a set of skills that enable people to identify and make the most of opportunities, overcome and learn from setbacks and succeed in a variety of settings. It can make one more adaptable to the rapid changes in today's job market. “Those who are able to identify problems or opportunities and then work to generate creative solutions to those issues can also improve situations in their personal lives”, (Livengood, 2021) Research shows that an entrepreneurial mindset is valued by employers, boosts educational attainment and performance, and is crucial for creating new businesses.  Further, research recognizes that an entrepreneurial mindset differs from a managerial mindset, and the shift from a managerial to an entrepreneurial mindset can create a sustained competitive advantage (Wright, Hoskisson, Busenitz, & Dial, 2000). In fact, scholars note that a better understanding of an individual’s entrepreneurial mindset (EM) will advance the study of entrepreneurship and related disciplines (Kirzner, 1997; McGrath & MacMillan, 2000) Benefits and Importance of Having an Entrepreneurial Mindset The top benefits of having an entrepreneurial mindset include the following: 1. Gives a “Go-Getter Attitude”. Having an entrepreneurial mindset helps you to quickly identify problems and provide a timely solution. You’re not one to sit around and wait, you have a strong intuition and if you want something you’ll go get it. 2. It provides full understanding of the Importance of planning. Having this mindset means you know the importance of moving forward even when difficult. Being able to plan ahead and foresee potential problems will help you to stay organized and less stress 3. No fear to experiment. An entrepreneurial mindset means you’re not afraid to experiment and take risks. You’re not afraid to try new things and see potential where others may not. 4. A Creative Mindset (innovative mind). Successful entrepreneurs are known for thinking outside of the box. They’re able to come up with creative ideas that set them apart from the competition in the market. 5. Importance of Value Creation. As an entrepreneur, you know the importance of creating value for customers to help sell products or services. This sales skill will set you up well for any path in business. C. The influences of the “wordly philosophers” to entrepreneurship The Evolution of the Entrepreneurial Mind: The Worldly Philosophers The subject of The Worldly Philosophers are the great economists, those theorists whose words and thoughts concern the creation and distribution of wealth that has a major impact on society. An overview of the political, social, and ethical concepts of economic thought. a study of the theories of some of the greatest economic thinkers who have swayed and shaped the world. Their common interest: the human drive for worldly wealth these economists did not appear on the scene of world events until long after the advent of history, philosophy, science, politics, art, and statecraft. Adam Smith 18th century Scottish philosopher Founder/father of economics The Wealth of Nations original name: The Nature & Causes of the Wealth of Nations Known by his invisible hand - the unobservable market force that helps the demand and supply of goods in a free market to reach equilibrium automatically is the invisible hand - a natural force that self-regulates the market economy Adam Smith Belief in Free Markets ü Essential to prevent societal chaos ü Free markets naturally achieve equilibrium without intervention Invisible Hand Argument üIndividual self-interest leads to efficient resource allocation for society üTransforms personal gain into societal benefit Economic Metaphor ü Invisible hand symbolizes unseen forces in a free market ü Individual self-interest and freedom drive societal welfare Wealth Creation in a Country ü Private ownership of land, factories, and businesses ü Right to own property and profit from businesses Free-Market Dynamics ü Interaction of self-interested buyers and sellers regulated by competition ü Encourages innovation and economic growth Thomas Malthus (1766 – 1834) English cleric and scholar Famous 18th-century British economist Published - "An Essay on the Principle of Population“ (Believed population growth would outpace food supply) Malthusian Doctrine - Population grows exponentially, food supply grows linearly; predicted population would double every 25 years Population Control Mechanisms ü Positive Checks: War, disease, famine, poverty ü Preventive Checks: Sexual abstinence, late marriages Thomas Malthus (1766 – 1834) Pessimistic View of Population Growth ü Feared increasing population would lead to widespread misery ü Opposed charity and relief projects, believing they would worsen poverty Criticism and Legacy ü Malthus' predictions did not come true due to modern birth control and agricultural advances üDespite criticism, his work influenced economic thought, earning economics the title "the dismal science" Henri de Saint Simon (1760 – 1825) French social theorist and businessman Founder of French socialism Advocated for a society led by industrial chiefs, with scientists as the new priests Emphasized production of useful goods and universal peace through association Call for a "Science of Society“ - Influenced the development of sociology and economics as scientific disciplines Major Work: "Nouveau Christianisme" (1825) - Predicted a global crisis leading to universal religion and social organization; Aimed at improving the condition of the poor Advocated for state ownership of property Believed history was moving toward peace and industrial development Proposed that society should focus on improving the lives of the poorest classes David Ricardo (1777 – 1823) British economist and influential economic theorist Known for his work on political economy, particularly the theory of rent and wages Focused on the impact of the Corn Laws, which protected British grain prices by imposing duties on imports Theory of Rent ü Rent Origin: Explained as the difference in productivity between high-quality and less-productive land ü Land as Monopoly: Viewed land as a monopoly, where landlords profited at the expense of capitalists and workers ü High grain prices increased landlords' income, squeezing capitalists' profits David Ricardo (1777 – 1823) Iron Law of Wages ü Wages tend to remain at a subsistence level due to population growth ü Workers' income only allows for basic survival; wage increases lead to more children, increasing labor supply View on Society ü Saw society as a bitter struggle between workers, capitalists, and landlords ü Predicted a bleak future where workers remained at subsistence wages and capitalists' profits were consumed by landlords Despite being a landlord himself, Ricardo opposed the Corn Laws Became a champion for industrial capitalists, advocating for free trade and the abolition of the Corn Laws Robert Owen (1771 – 1858) Early life mirrors a rags-to-riches story; rose from humble beginnings in Wales Purchased and revolutionized textile mills at New Lanark, Scotland New Lanark: A Model Workers' Community ü Improved worker conditions by raising wages, reducing work hours, and enhancing sanitation ü Provided housing and education for workers' children ü Demonstrated that treating workers humanely could increase productivity and profits Believed that people are shaped by their environment; improving it could lead to a better society Advocated for "Villages of Cooperation" where people lived and worked together in planned communities Proposed communal living arrangements and shared facilities, promoting cooperation over competition Robert Owen (1771 – 1858) Advocated for "Villages of Cooperation" where people lived and worked together in planned communities Proposed communal living arrangements and shared facilities, promoting cooperation over competition Sold New Lanark to fund New Harmony, a cooperative community in Indiana (1826) The project failed due to poor planning, bad associates, and lack of support Owen lost much of his fortune but remained committed to his ideals Continued to promote cooperative ideas and worker rights upon returning to England Influenced the development of the consumer cooperative movement, exemplified by the Rochdale Pioneers Formed the Grand National Moral Union (1833), an early attempt at industrial trade unionism Advocated for social reforms, including better wages, working conditions, and the abolition of money John Stuart Mill (1806 - 1873) Authored Principles of Political Economy (1848), recognized as the greatest economist of his time Challenged the concept of laissez-faire, arguing that the distribution of wealth is based on society's customs and laws, not economic laws Proposed that wealth distribution could be guided by ethics and morality Differed from Malthus and Ricardo by envisioning hope through education and population control Advocated for workers to form cooperatives and unions for higher wages Supported limited government intervention, particularly to protect women and children in factories Called for taxes on inheritance and rent, modifying the laissez-faire doctrine Founder of utilitarianism; significant contributions to political science and ethics Authored On Liberty, a seminal work advocating individualism and opposing despotism Later identified as a socialist, with a philosophy balancing between capitalism and socialism Early advocate for equal rights and education for women, highlighted in The Subjection of Women (1869) Karl Marx (1806 - 1873) Marx's belief in dialectical materialism, derived from Hegelian dialectics. Developed economic interpretation of history: class struggle drives historical events. Predicted the inevitable revolution of the proletariat and the downfall of capitalism. The Communist Manifesto: Revolutionary aims of communism; capitalism's self- destruction. Das Kapital: Scientific analysis of capitalism's mechanisms and eventual demise. Focus on "surplus value": labor exploitation as the source of capitalist profit. The Laws of Motion in Capitalism ü Falling profits as the economy expands. ü Innovation and competition drive cycles of boom and depression. ü Large firms dominate, smaller firms perish. ü Predicted ultimate proletarian revolution. Key Terms and Concepts Marxism - Strict adherence to Marx's theories. Scientific Socialism - Laws explaining historical and economic determinism. Capitalists vs. Proletariat - The exploiters vs. the exploited. Bourgeoisie - Middle class, owners of private property. Anarchism - Rejection of all government, extreme left ideology. D. The entrepreneurial ecosystem elements and entrepreneurship entrepreneurial ecosystem - a set of social, economic, cultural, and political factors that influence the development of entrepreneurs and small businesses. - Commonly recognized components of an entrepreneurial ecosystem include finance, business support, public policy, markets, human capital, infrastructure, research and development (R&D), and culture, but it is their strength as an interconnected whole that determines the health of the ecosystem and its capacity to support entrepreneurs. https://www.oregon.gov/biz/programs/roi/pages/entrepreneurialecosystem.aspx#:~:text=The%20entrepreneurial%20ecosystem%20is%20a,of%20entrepreneurs%20and%20small%20businesses. Key Elements of the Entrepreneurial Ecosystem 1. Policy Government support and regulations Role of government 2. Finance Access to funding Financial institutions 3. Culture Entrepreneurial mindset Societal support 4. Supports Infrastructure Professional services 5. Human capital Education and training Talent pool 6. Markets Access to customers Market dynamics 7. Mentorship and networks Mentors and advisors Networking opportunities The Role of the entrepreneur in the ecosystem 1. Leveraging resources 2. Contributing to the ecosystem 3. Navigating challenges Get in Touch With Us Send us a message or visit us City of Batac, Ilocos Norte, Philippines (63) 77-600-0459 [email protected] Follow us for updates facebook.com/MMSUofficial www.mmsu.edu.ph