ENTREPRENEURSHIP · 2016-06-30 · Entrepreneurship and education Entrepreneurship and education are two such extraordinary opportunities that need to be leveraged and interconnected

ENTREPRENEURSHIP

What do they have in common?

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Entrepreneurship and education

Ghana’s Experience With Development Approaches

Overview of Entrepreneurship

DEFINITIONS & HISTORY




The Course: Entrepreneurial and Innovation Management – A Subject of

Study

Entrepreneurship has emerged over the last two decades as arguably the

most potent economic force the world has ever experienced

With that expansion has come a similar increase in the field of

entrepreneurship education. Today, only in the USA, entrepreneurship

education has burgeoned to more than 2,200 courses at over 1,600

schools.

And a number of major academic institutions throughout the world have

developed programmes in entrepreneurial research

University of Ghana– since 1994

Many Universities in Ghana subsequently


Entrepreneurship and education are two such extraordinary

opportunities that need to be leveraged and interconnected if Ghana is

to develop the human capital required for building the societies of the

future.

Entrepreneurship is the engine fuelling innovation, employment

generation and economic growth.

There can never be a better time than this when entrepreneurship

education in Ghana is needed.

Entrepreneurship education, in particular, needs to come back to the top

of the priorities of governments and the private sector and be seen as

the fundamental mechanism for attaining sustainable economic

development and societal progress


GHANA’S EXPERIENCE

WITH DEVELOPMENT APPROACHES


Colonialism

State controlled economy

Mixed economy

Free market economy

Public-Private sector collaboration


GHANA’S DEVELOPMENT

PROGRAMMES –

State Controlled, Imports substitution,

Rural Development, ERP, SAP, FINSAP, HIPC, Debt Forgiveness

alias Cancellation, MCA

None with any resounding success

Now we need to change the structures and orientation of

the people

The missing link entrepreneurship, HENCE

Introduction of entrepreneurship – at all levels:

Individuals

Organisations

National

Popularity of the Study of Entrepreneurship


The World of the Entrepreneurship:

Internationally popular

The 1980s – Declared the Decade of the

Entrepreneur

Being offered many Universities (304 out 317 US

Universities do offer entrepreneurship course)

Imperatives for Introducing the Course


Criticism of the Traditional Educational System

Need to review university curricula in response to

societal development needs

Response to Global Recession since late 1970s

Rejuvenation of ailing economies – of aging economies

Developmental strategy: Transformation of Eastern

Europe, Quickening the pace of development in the

developing countries

Imperatives for Introducing the Course (contd)


Making firms competitive - Emphasis on innovation,

flexibility, etc.

“Small is beautiful”; flexible specialisation (post-

Fordist and Taylorism)

GHANA – Capturing the Entrepreneurial Wave –

Underlying Reasons

Graduate unemployment


Only 2% (410 out of 20,500) of graduates produced annually get employed – Former VC of KNUST (Reported in December, 2014).This means 98% of graduates become unemployed a year after National Service50% of graduates remain unemployed after 3 years of graduation – ISSER

GHANA – Capturing the Entrepreneurial Wave –

Underlying Reasons (cont’d)

Paradigm shift – from being an employee to

becoming an employer

Private Sector as the Engine of Growth

The Entrepreneur in the driver’s seat

Human Resource Development – towards

self-employment

Renewal of Public Institutions


What is Entrepreneurship – Overview

pg.17/18

What is meant by entrepreneurship?

The concept of entrepreneurship was first established in

the 1700s, and the meaning has evolved ever since.

Many simply equate it with starting one's own business.

Most economists believe it is more than that.



(Contd)

To some economists, the entrepreneur is one

who is willing to bear the risk of a new venture

if there is a significant chance for profit.

Others emphasize the entrepreneur's role as an

innovator who markets his innovation.

Still other economists say that entrepreneurs develop

new goods or processes that the market demands and

are not currently being supplied.



(Contd)

In the 20th century, economist Joseph Schumpeter

(1883-1950) focused on how the entrepreneur's

drive for innovation and improvement creates

upheaval and change.

Schumpeter viewed entrepreneurship as a force of

"creative destruction." The entrepreneur carries out

"new combinations," thereby helping render old

industries obsolete.

Established ways of doing business are destroyed

by the creation of new and better ways to do them.



(Contd)

Business expert Peter Drucker (1909-2005) took this

idea further, describing the entrepreneur as

someone who actually searches for change,

responds to it, and exploits change as an

opportunity. A quick look at changes in

communications – from typewriters to personal

computers to the Internet – illustrates these ideas.

Israel Kirzner- Suggests that entrepreneurship is

“closing market asymmetries”



(Contd)

Most economists today agree that entrepreneurship

is a necessary ingredient for stimulating economic

growth and employment opportunities in all

societies.

In the developing world, successful small businesses

are the primary engines of job creation, income

growth, and poverty reduction.

Therefore, government support for entrepreneurship

is a crucial strategy for economic development.



(Cont’d) The culture of a community also may influence how

much entrepreneurship there is within it.

Different levels of entrepreneurship may stem from

cultural differences that make entrepreneurship

more or less rewarding personally.

Are Kwahu’s Chisel or Entrepreneurial



(Cont’d)

A community that accords the highest status to those

at the top of hierarchical organizations or those

with professional expertise may discourage

entrepreneurship.

A culture or policy that accords high status to the

"self-made" individual is more likely to encourage

entrepreneurship.



(Contd pg.19-22)

This overview is the first in a series concerning the

fundamental elements of entrepreneurship:

Why and how do people become entrepreneurs?

Why is entrepreneurship beneficial to an economy?

How can governments encourage entrepreneurship,

and, with it, economic growth?


The TRIPOD of Entrepreneurial Success pg. 258


The TRIPOD

THE ENTREPRENEUR (The Actor with certain characteristics, attributes, attitudes, background and experiences)

The Business Opportunity Identified The Organizing Environment (Prospective, viable,) (Enabling, Supportive and Friendly)

The Entrepreneurial Success

Week 1: End Here


Conceptualising Entrepreneurship pg. 19


Definition: Several attempts towards definition: No universally

acceptable definition

It means different things to different people in different contexts

Origins of the word: French - Entreprendre - meaning to “undertake any risky

venture” Cantillion, popularised by Jean Batiste Sey

German –Unternehmer - meaning “a person who owns and runs business”

English – Owner-manager of a small business – Adam Smith’s Wealth of Nations (1776)

Conceptualising Entrepreneurship(Contd)

pg.20


“Entreprendre” - Meaning “to undertake”, e.g.

European Military expeditions, explorations,

merchandising etc.

That is, to undertake any venture of which the

outcome is shrouded in a state of uncertainty, hence

making it risky

Conceptualising Entrepreneurship(Contd)

pg.26


Multidisciplinary nature of entrepreneurship with different meanings–

Sociology - income generating activity

Economics – a fourth factor of production (cf. Land, labour,

Capital)

Psychology – being in control over own affairs

Marketing – identifying and satisfying customer (human) needs

Management – organisation of resources towards the

achievement of a particular goal

Thus, there are other cognate forms of

entrepreneurship, we can talk of:

Political – e.g. Nkrumah, Paa Grant,

Big Six etc

Moral – Luther King, Rosa Louise

McCauley Parks


Thus, there are other cognate forms of

entrepreneurship, we can talk of:

Regina Agyare- Tech Needs

Girls

Muhammad Yunus of the

Grameen Bank

Social entrepreneurs


Towards a Working Definition: Schumpeter’s

Definition Revisited pg. 29


Joseph Alois Schumpeter (February 8, 1883 – January 8, 1950) was an economist from Austria and a giant in the history of economic thought.

His conceptualisation of entrepreneurship seems to stand the test of time as it remains convincing

To Him:

Entrepreneurship is a new process where an individual or group of people creates something new, and that something new could be:

a new product,

a new method of production,

a new source of material and

a new market, hitherto, unexploited

1889 –KARL BENZ

http://en.wikipedia.org/wiki/February_8

http://en.wikipedia.org/wiki/1883

http://en.wikipedia.org/wiki/January_8

http://en.wikipedia.org/wiki/1950

http://en.wikipedia.org/wiki/Economist

http://en.wikipedia.org/wiki/Austria

http://en.wikipedia.org/wiki/History_of_economic_thought

a new product


a new product (cont’d)

The term “new product” in itself, embraces a

continuum from revolutionary, radical new-to-the-

world (“pioneering”) products that represent

disruptive technology and discontinuities in customer

behavior to simple alterations tweaking existing

products.

Without the introduction of new products,

deterioration of the firm’s market position is

inevitable (if you stop growing, you start dying!). –see Rolls Royce 2014


a new product (cont’d)

Without new products, firms will inevitably stagnate.

Initial or early entry of new products, on the other

hand, can result in new market development, long-

term market dominance, and foreclosure of

competitors’ responses.

Failure to respond to competitive new product

introductions with appropriate speed can result in

late market entry, a permanent loss of market share

and dissipated profits (Kotler, 1988).


a new method of production





In 1913, Henry Ford installs the first moving

assembly line for the mass production of an entire

automobile. His innovation reduced the time it took

to build a car from more than 12 hours to two hours

and 30 minutes.

In order to lower the price of his cars, Ford knew he

would just have to find a way to build them more

efficiently.



The workers who built his Model N cars (the Model

T's predecessor) arranged the parts in a row on the

floor, put the under-construction auto on skids and

dragged it down the line as they worked.

Later, the streamlining process grew more

sophisticated.

Ford broke the Model T's assembly into 84 discrete

steps, for example, and trained each of his workers

to do just one.




Assembly Line Video

Play Ford Video (Week 2A)


a new source of material


a new source of material


Practical, Working or Performative Definition

of Entrepreneurship pg.31


Entrepreneurship is an innovative process where a prospective individual identifies and seizes opportunity (be it an idea, or business) ; organises existing resources to convert those opportunities into workable/marketable products or services; thus by adding value through time, efforts, money, or skills for the benefit of society; assumes the risks of the competitive marketplace to implement these ideas; and realises the rewards from these efforts

Likely rewards (expectations, valued outcomes) of the entrepreneurial intent are: monetary, status, recognition etc., essentially – autonomy, i.e., independent, self-determination, status; and wealth , i.e., financial)

Entrepreneur Video

Week 2A: Ghana’s Under 30 Entrepreneurs


Week 2: End Here


Entrepreneurship as an Integrating Subject

Understanding the Various Schools of Thought

The three models of entrepreneurship

Theories, Models & Stereotypes

of Entrepreneurship


NOW, Theories, Models and Stereotypes of

Entrepreneurship pg.32-42


Theories: A theory is a set of concepts and relationships that tie them together into an explanation of a phenomenon of interest.

So far entrepreneurship has not got its own theory.

At best, it is resting on the theoretical foundations of other disciplines of study, e.g., psychology, economics, political science, sociology and management etc.

So far we can only talk of entrepreneurial models

Models pg.32


Model, defined

“A simplistic representation of any complex phenomenon, system, structure or idea’

Thus, the three models are simplistic representation of the complex behaviour of entrepreneurs or one who becomes an entrepreneur

These models only try to describe the background of entrepreneurs and the patterns of their behaviour

The three models of entrepreneurship pg.33


The Psychological model,

The psychodynamic model,

The social marginality model

These three models inter se answer the following five questions

are entrepreneurs born or made?

is entrepreneurship an art or science?

can anyone become a successful entrepreneur?

can entrepreneurship be taught?

Who becomes an entrepreneur?

I. The Psychological model pg.33


This is also known as the trait, behavioural model

That entrepreneurs are born

They are born with certain inborn characteristics, attributes, attitudes

Once an entrepreneur, always an entrepreneur, since an

entrepreneur is a personality, a state of being that doesn’t go away

Attributes of Ghanaian

Entrepreneurs - Research Agenda

What Makes Someone an Entrepreneur

Who can become an entrepreneur? There is no one

definitive profile.

Successful entrepreneurs come in various ages, income

levels, gender, and race. They differ in education and

experience.

But research indicates that most successful entrepreneurs

share certain personal attributes, including: creativity,

dedication, determination, flexibility, leadership,

passion, self-confidence, and "smarts."


contd

• Creativity is the spark that drives the development of

new products or services, or ways to do business. It is the

push for innovation and improvement. It is continuous

learning, questioning, and thinking outside of prescribed

formulas (the BOX).

• Dedication is what motivates the entrepreneur to work

hard, 12 hours a day or more, even seven days a week,

especially in the beginning, to get the endeavor off the

ground. Planning and ideas must be joined by hard

work to succeed. Dedication makes it happen.



contd

Determination is the extremely strong desire to

achieve success. It includes persistence and the ability

to bounce back after rough times.

It persuades the entrepreneur to make the 10th

phone call, after nine have yielded nothing.

For the true entrepreneur, money is not the

motivation. Success is the motivator; money is the

reward.



Contd.

Flexibility is the ability to move quickly in response to

changing market needs. It is being true to a dream

while also being mindful of market realities.

A story is told about an entrepreneur who started a

fancy shop selling only French pastries. But customers

wanted to buy muffins as well.

Rather than risking the loss of these customers, the

entrepreneur modified her vision to accommodate these

needs.


Contd.

Leadership is the ability to create rules and to set

goals. It is the capacity to follow through to see that

rules are followed and goals are accomplished.

Passion is what gets entrepreneurs started and keeps

them there. It gives entrepreneurs the ability to convince

others to believe in their vision. It can't substitute for

planning, but it will help them to stay focused and to get

others to look at their plans.


contd

Self-confidence comes from thorough planning, which

reduces uncertainty and the level of risk. It also comes

from expertise. Self-confidence gives the entrepreneur

the ability to listen without being easily swayed or

intimidated.

“Smarts” is an American term that describes common

sense joined with knowledge or experience in a related

business or endeavor. The former gives a person good

instincts, the latter, expertise. Many people have smarts

they don't recognize.


contd

A person who successfully keeps a household on a

budget has organizational and financial skills.

Employment, education, and life experiences all

contribute to smarts.

Every entrepreneur has these qualities in different

degrees. But what if a person lacks one or more? Many

skills can be learned. Or, someone can be hired who has

strengths that the entrepreneur lacks. The most important

strategy is to be aware of strengths and to build on

them.


So, Desired Entrepreneurial Characteristics pg.34


Creative independent

Risk-taking resilient

Innovative bold, confident

Determined visionary

Courageous flexible

Persistent love for ambiguities

Persevering thrive on chaos

Etc.

Indicative

McClelland’s View pg.38


McClelland summed up all the constellation of entrepreneur’s

characteristics in the 3 needs, (the APA needs) that must be

instilled in citizens of a nation, viz:

High need for achievement (n’Ach),

High need for power or internal locus of control, Those who

believe they have control over aspects of their environment

and destiny are said to have an internal locus of control,

whereas those who feel controlled by their environment are

said to have an external locus of control.

High need for affiliation.

The Psychological Model and Ghanaians, what do you say?

II. The Psychodynamic model pg.39-41


According to this model:

entrepreneurs come from a group of people whose childhood

socialisation process was characterized by deprivation (economically,

politically, socially etc.). As a result of this depravity, they turn to acquire

the characteristics of the person born.

So, instead of coiling in and singing songs of pity, they

become more aggressive and say to themselves never

again, I will make it by all means.

That is this sense of strong willpower to make it by all

means gives him a sense of achievement, determination

etc. just like the person already born with entrepreneurial

traits

The Psychodynamic Model (contd)


Effect of deprived childhood socialisation

A Personality:

With internalised norms

Who becomes Deviant, ready to take control

over his own affairs


NB: The unhappy and deprived

early life experiences make the

resulting individual adult to become

a somewhat deviant personality

who, is generally unable to operate

effectively in any organisation or

structured social environment.

His/Her psychological problems are

centred around:




Low self-esteem

Insecurity

lack of self-confidence

Anti-authority

Seeking independence and self-sufficiency

Innovative rebelliousness

Hence, striving to create own source of wealth, entrepreneurial ventures/enterprises.

He/she then assumes the character of the one with the desirable traits as under the psychological model

The Psychodynamic Model - criticism


Criticisms

Like the trait model, the psychodynamic model did not

escape criticisms

The psychodynamic model appears to cast the small

businessman or the entrepreneur in a somewhat

unfavourable light. It seems to over-stress the

importance of the social misfit and inadequacy in the

account of the start-up entrepreneurial activities.



that the model ultimately boils down to a stereotypical

image of the entrepreneur as someone unable to fit into

conventional organisational life,

that it tends only to describe accurately the extremes of a

given population and leaves the vast majority untouched,

that the model may only be applicable to entrepreneurs

with particular backgrounds and life experiences and not

applicable to all entrepreneurs,



that the description does not even differentiate a particular type of entrepreneurs from individuals from other walks of life with similar deprived backgrounds. For instance, “why not they also engage in other occupations other than entrepreneurship” or choose other environments where a deviant can equally resolve his inner feelings of distrust for authority and,

that if the model were to be valid, it should be possible to identify a set of reasons, consonant with the deviant stereotype, which typify the entrepreneur.

Remarks


Although the importance of early socio-psychological experiences in shaping personality, motivation, knowledge and business ability cannot be denied, it is necessary to recognise that what happens to the entrepreneur once he has started in business is also crucial in shaping his future or later behaviour.

Not only does the environment continuously offer constraints and opportunities with which the entrepreneur must contend with but his own decisions and actions also produce a reaction from the environment.

contd


This interaction between his own behaviour, the

environment and the consequences of his actions

boomeranging to him provide a learning situation for

the establishment of certain habits and practices

which possess a greater or lesser capacity to enhance

business activity and success.

Contd.


NB: As a group, they do not have the qualities of patience, understanding and charity most of us may admire and wish to have for our fellows. This is understandable. In the long run and the trying way of the entrepreneur such qualities may come to be so much excess baggage.

What is necessary to the man who travels this way is great imagination, fortitude, and hardness of purpose.

The men who travel the entrepreneurial way are, taken on balance, not remarkably likeable people. This too is understandable.

As any one of them might say in the vernacular of the world of entrepreneurs, – Nice guys don’t win

III. The Social Marginality Model pg.41-42


The third model is described as the social marginality model.

From sociological perspective

That certain group of individuals, are structurally (i.e. socially, religiously, politically, educationally) marginalized

The main sources of marginality include

(a) Religion - as in the case of dissenters and Jews;

(b) Ethnicity - as in the case Overseas Chinese, the Jews all over the world, the Overseas Indians;


The caste system in India

The Social Marginality Model – contd.


(c) Social - where a class or group of people have lost their

traditional position of power and status and try to re-establish

themselves in a new area, for example the English convicts that

were banished to South Africa, Australia (in 1788) and New

Zealand around the middle of the 18th century and Japanese

samurai

Model could be called “3M theory”, for the central concepts

are marginality, migrant and minority groups

The Social Marginality Model


Entrepreneurs characteristically arise from an interaction between social exclusion and access to resources which others ignore or cannot grasp.

This means that all of the minority groups who turn to entrepreneurial activity seem to stand in a fundamentally similar relationship to the opportunity structure in society.

They are often left out the main stream of economic and political life. They are not part of the core society.

they search for new avenues to power and prestige.

The Social Marginality Model


the deprivation experienced by these groups may encourage them to seek entrepreneurial outlets for their untapped capabilities and energies.

Minorities engage in entrepreneurial activities when there is a perceived gap between an individual’s personal attributes and the roles and positions they hold in society.

The Social Marginality Model - criticism


Are black Americans entrepreneurial?

The environment is more important, since the organizing environment

is suppose to be enabling, favourable and facilitating

Artificial and institutional blockage are used to stop people from

becoming entrepreneurs

The model was not only applicable to minority groups in or within a

society but also to certain individuals in an organisation. In

organisations around us one often minorities, deviants and other non-

conformists.

How does it apply to Ghana?

Synchronising the 3 Models


The three are interrelated

Are there any universal qualities

Human behaviour can be understood within context of

time, space, experiences

Documents

ENTREPRENEURSHIP · 2016-06-30 · Entrepreneurship and education Entrepreneurship and education are two such extraordinary opportunities that need to be leveraged and interconnected