WALLAGA UNIVERSITY

COLLEGE OF ENGINEERING & TECHNOLOGY

COURSE TITLE: ENTREPRENUERSHIP FOR AN ENGINEERS
1. Introduction to Entrepreneurship
Comparison of self employment and salaried workers
Salaried Self employment

Regular salary Financial freedom

A boss to report You are your own boss
Limited potential to grow Creativity
Office politics Independence
Insecure future Unlimited potential gain
 Introduction
 Entrepreneurship, like many other economic
concepts, has long been debated.
 It has been used in many ways and in various
senses, that means it cannot be defined
precisely in a single word.
 The word ‘entrepreneurship’ is derived from a
French root which means ‘to undertake’.
 Today people call it by various names, (eg.)
‘adventurism(risk taking), ‘thrill seeking’, and
‘innovating’ etc.
 Cont….
 Entrepreneurship is the process of creating and
building something of value from practically
nothing.
 That is, it is the process of creating or seizing on
opportunity and pursuing it regardless of the
resources currently controlled.
 Definition of entrepreneurship
 Entrepreneurship refers to an individual’s ability to
turn ideas into action.
 It enables people to think creatively and to be an
effective problem solver (European Commission).
 Entrepreneurship is an organizational and
management approach that enables persons to
respond to change and solve problems in whatever
situation (either business or non-business) they
may find themselves.
 Entrepreneurship is the act of being an
entrepreneur, who starts any economic activity for
being self-employed.
 Defn….
 Entrepreneurship is strategic thinking and risk-taking
behavior that results in the creation of new
opportunities for individuals and/or organizations.
 Entrepreneurship is the process of creating
something different, with value, by devoting
necessary time and effort, by assuming the
accompanying financial, psychological, and social
risks, and receiving the resulting rewards of
monetary and personal satisfaction.
 Entrepreneurship is the pursuit of opportunity
through creativity, innovation and hard work without
regard for the resources currently controlled.
 Benefits of entrepreneurship

The opportunity to:

• Create your own destiny
• Make a difference
• Reach your full potential
• Reap impressive profits
• Contribute to society and to be recognized for your efforts
• Do what you enjoy and to have fun at it
Five “M” of Entrepreneurship
 Men
 Money
 Material
 Marketing
 Manage
 There are five elements of entrepreneurship:

• Observing the environment/identifying gaps,

• Identifying opportunities,
• Gathering the necessary resources,
• Implementing the activity and
• Receiving rewards.
 Role of Entrepreneurship in Economic Development
1. Entrepreneurship promotes capital formation by mobilizing the idle saving of the public.
2. It provides immediate large-scale employment (i.e. helps to reduce unemployment in
the country)
3. It provides balanced regional development.
4. It helps reduce the concentration of economic power.
5. It stimulates the equitable redistribution of wealth, income and even political power in
the interest of the country.
6. It encourages effective resources mobilization of capital and skill which might
otherwise remain unutilized and idle.
7. It also induces backward and forward linkages which stimulated the process of
economic development in the country.
8. It promotes country’s export trade i.e. an important ingredient for economic
development
The Potential Drawbacks of Entrepreneurship
Entrepreneurship also presents risk and uncertainty, like:
• Uncertainty of income –”The entrepreneur is the last one
to be paid.”
• Risk of losing their entire investment

• Long hours and hard work

• Lower quality of life until the business gets established

• High levels of stress

• Complete responsibility
• Discouragement
The Ten Deadly Mistakes of Entrepreneurship
These may include:
• Management mistakes

• Lack of experience

• Poor financial control

• Weak marketing efforts

• Failure to develop a strategic plan

• Uncontrolled growth

• Poor location

• Improper inventory control

• Incorrect pricing
 Who is an entrepreneur?
• The word 'entrepreneur' is derived from the
French word 'entreprendre' which means
'to undertake'.
• Richard Cantillon - was the first person to use
the term “entrepreneur” to refer to economic
activities.
• According to him – An Entrepreneur as a person
who buys factor of production at certain prices
with a view to sell its product at uncertain prices
in future.
 Entrepreneur….

• Bernard F. De Bolidar - An entrepreneur is one who

performs the task of bringing labour and material at
certain price and selling the resultant product at a
'contracted price'.
• E.E. Hagen - Entrepreneur is an economic man, who
tries to maximize his profits by innovations.
• Innovations involve problem solving and entrepreneur
gets satisfaction from using capabilities in attacking
problems.
 Entrepreneur….
• Leon Walras – An entrepreneur as co-ordinator of factors
of production.
• Galbraith - An entrepreneur must accept the challenge
and should be willing hard to achieve something.
• Peter F. Drucker – An entrepreneur as the one who
always searches for change, responds to it and exploits it
as an opportunity. Innovation is the specific tool of
entrepreneurs, the means by which they exploit changes
as an opportunity for different business or service.
 Entrepreneur….
• Joseph Schumpeter - An entrepreneur basically as an
innovator who carries out new combinations to initiate and
accelerate the process of economic development.
• Innovation may occur in the following forms:
The introduction of new product in the market;
Instituting new production technology which is not
yet tested by experience in the branch of
manufacturing concerned;
The opening of new market into which the specific
product has not previously entered;
The discovery of a new source of supply of raw
materials;
The carrying out of new form of organization of a
business venture.
 Entrepreneur….
• United States of America - An entrepreneur is one who discovers
new ideas, organises the business, and often manages its
operations to provide economic goods and services for the public.
• Germany - An entrepreneur is viewed as the one with power and
property, i.e., the person who owns and runs a business.
• International Labour Organization (ILO) - Entrepreneurs are
people who have the ability to see and evaluate business
opportunities; together the necessary resources to take
advantage of them; and to initiate appropriate action to ensure
success.
• Webster's New World Dictionary - Entrepreneur as "one who
organizes a business undertaking, assuming the risk for the sake
of the profit".
• Oxford English Dictionary - Entrepreneur as "one who undertakes
an enterprise, especially a contractor-acting as intermediary
between capital and labour".
 New Concept of Entrepreneur
• According to R.A. Sharma - one who detects and evaluates
the new situations in his environment and directs the
making of such adjustments in the economic systems, as he
deems necessary.
• Performs one or more of the following functions:
 Perceives opportunities for profitable investments,
 Explores the prospects of starting such a manufacturing
enterprise,
 Obtains necessary industrial licences,
 Arranges initial capital,
 Provides personal guarantees to the financial institutions,
 Promises to meet the shortfalls in the capital, and
 Supplies technical know-how.
 Types of entrepreneurs
According to Clarence Danhof - the Entrepreneur
may be broadly classified in the following ways:
1. Innovative Entrepreneur
• Innovative Entrepreneur is one who assembles
and synthesis information and introduces new
combination of factors of production.
• He sees the opportunity for introducing a new
technique or a new product or a new market and
• He may raise money to launch an enterprise,
assemble various factors of production, choose
top executives and set the organization going.
 2. Adoptive or Imitative Entrepreneurs
• They simply adopt successful innovation introduced
by other innovators.
• Instead of innovating the changes themselves, they
just imitate the technology and techniques
innovated by others.
• Such entrepreneurs are important in
underdeveloped countries, because they contribute
significantly to the development of such economies.
• They are most suitable for underdeveloped nations
because in these nations people prefer to imitate the
technology, knowledge and skill already available in
more advanced countries.
3. Fabian Entrepreneur

• They have neither will to introduce new changes nor

desire to adopt new methods innovated by the most
enterprising entrepreneurs.
• Such entrepreneurs are lazy.
• Their dealings are determined by custom, religion,
tradition and past practices.
• They are not much interested in taking risk and they try
to follow the footsteps of their predecessors.
 4. Drone Entrepreneur
• Drone entrepreneur is characterized by a refusal to adopt
and use opportunities to make changes in production.
• Such entrepreneurs may even suffer losses, but they do
not make changes in production methods.
• They are laggards as they continue to operate in their
traditional way and resist changes.
• When their product loses marketability and their
operations become uneconomical they are pushed out of
the market.
• They are conventional in the sense that they stick to
conventional products and ideas.
 Characteristics of Entrepreneur
• Entrepreneurs are action oriented, highly motivated
individuals who takes risks to achieve goals.
• Entrepreneurs will have high degree of commitment.
• They are creative and result oriented.
• They work hard in return for personal and financial
rewards.
• Entrepreneurs accept responsibilities.
 Charact…
• Entrepreneurs have self confidence; they are
dedicated, setting self determined goals and markets
for their ideas responding to existing market.
• Entrepreneurs are thinkers and doers, planners and
workers.
• Entrepreneurs can foresee the future, as a salesman’s
persuasiveness, a financial talent for manipulating
funds, as an auditors precision etc.
• Entrepreneurs depend on the intelligence,
imagination and strength of purpose of the individual.
• Willingness to accept risk, work hard and take action
• Entrepreneurs are independent and flexible
Skills needed by successful entrepreneurs
 Basic business skills
 Communication skills
 Decision-making skills
 Human relations skills
 Math skills
 Problem-solving skills
 Technical skills
 Entrepreneurial Functions in Business
• Identify gaps in the market and turn these gaps
into business opportunities.
• Finances and mobilizes resources for the business

• Organize and manage the business.

• Bear the uncertainties and risks of the business.

• Encourage competition

• Self-employed and applying entrepreneurship

Personal efforts to be an Entrepreneur:
• Works long hours
• Always concerned about the business
• Needs high energy
• Sacrifices other important aspects of life
• Limited social life
• Not much time with family and friends
• Financial investment
Thank You For Your Attention!