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
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