ch 1 entrepreneurship

EntrepreneurshipRichard K. Lazaro, MM

Course Instructor

Ch. 1 Nature and Relevance of EntrepreneurshipConcept of Entrepreneurship

Entrepreneurship comes from the French word entrepreneur "one who undertakes or manages," agent noun from Old French entreprendre "undertake".


“The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.” -- Peter Drucker


Entrepreneurship • is one of the key engines of economic growth.• is perceived to be the symbol of business innovation, determination,

perseverance, and achievement.


Entrepreneurship • SMEs are concrete manifestations of entrepreneurship. • According to UN, in developing countries, SMEs account for 90% of

all jobs, sales, and value added; as opposed to developed countries, they account for only 50%


What really is Entrepreneurship?• “Having profits from bearing undertainty and risk” (Knight, 1921)• “ Carrying out of new combinations we call “enterprise”-- new products,

new services, new sources of raw material, new methods of production, new markets, new for of organization” (Schumpeter, 1934)

• “Uncertainty-bearing, others with the coordination of productive resources, others with the introduction of innovation, and still others with the provision of capital” (Hoselitz, 1952)


What really is Entrepreneurship?• “Purposeful activity to initiate and develop a profit-oriented business”

(Cole, 1959)• “ Taking moderate risk” (McClelland, 1961)• “Entrepreneurship involves a kind of behavior that includes initiative

taking,organizing and recognizing social mechanism to turn resources and situations topractical account, and the acceptance of risks and failures.” (Shapero, 1952)


What really is Entrepreneurship?• “Entrepreneurship, then, is behavior rather than personality trait. And

its foundation lies in concept and theory rather than in intuition.” (Drucker, 1985)

• “ Entrepreneurship is an activity that involves the discovery, evaluation, and exploitation of opportunities to introduce new goods and services, ways of organizing, markets, process, and raw materials through organizing efforts that previously had not existed ” (Shane, 2003)


What really is Entrepreneurship?• “ A dynamic process of vision, change, and creation that requires an

application of energy and passion towards the creation and implementation of new ideas and creative solutions.” (Kuratko, 2009)


What really is Entrepreneurship?

Although the definitions view entrepreneurship from different perspectives, they contain the same elements:

• innovation• oportunity seeking• resource mobilizing• encountering risks and uncertainties• economic and personal rewards


Entrepreneurial countriesA lot of factors influence the friendliness of a country to entrepeneurs, among these are: employment regulations, bankruptcy laws, and tax policies.


Top 10 Most Entrepreneurial Countries Source: Approved Index (2015)

1. Uganda2. Thailand3. Brazil4. Cameroon5. Vietnam

6. Angola7. Jamaica8. Botswana9. Chile10. Philippines


2016 Global Entrepreneurship IndexWorld's Most Strongest Entrepreneurial Ecosystems

1. United States (GEI ranking: 86.2)2. Canada (79.5)3. Australia (78.0)4. Denmark (76.0)5. Sweden (75.90)

6. Taiwan (69.70)7. Iceland (68.90)8. Switzerland (67.80)9. United Kingdom (67.70)10. France (66.40)


In order to compile the rankings the report’s authors spoke to over half a million participants across the 132 countries included in the index, focusing on 14 key pillars.

These ranged from start-up skills to networking ability, cultural support to risk capital and even product innovation.


According to the report’s authors, each region has a key area for focus in 2016.

• Asia-Pacific: Increase export-focus among entrepreneurs• Europe: Help individuals perceive entrepreneurship opportunities• Middle East/North Africa: Reduce overall business risk• North America: Improve the visibility of entrepreneurs in their communities• South and Central America/Caribbean: Invest to develop new technology from within

the region• Sub-Saharan Africa: Support post-secondary education


As was the case with last year’s index, the world is said to be at 52 per cent of its entrepreneurial capacity. Which means there’s clearly a whole lot more room for the many fledgling entrepreneurs who are currently finding their feet in business.

Source: https://thegedi.org/global-entrepreneurship-and-development-index/

Ch. 1 Nature and Relevance of EntrepreneurshipBrief History of Entrepreneurship in RP

RP is an entrepreneurial country: • 99.7% of all firms are SME, employing 69% of the labor force• 47% of the 803,476 registered establishments are SMEs owned by

women


RP is an entrepreneurial country: Factors that stimulate entrepreneurship• regulatory frameworks• financial resources• support programs for entrepreneurs• business practices and social attitudes towards entrepreneurship


RP is an entrepreneurial country: SME friendly laws• RA No. 10644: “An Act Promoting Job Generation and Inclusive

Growth Through the Development of Micro, Small and Medium Enterprises”, otherwise known as the “Go Negosyo Act”.


RP is an entrepreneurial country: • RA No. 10644 Salient features:• Establishment of Negosyo Centers in all provinces, cities and municipalities

nationwide• Establishment of a Start-up Fund for MSMEs to be sourced from the MSME

Development Fund and BMBE Fund• Technology Transfer, Production and Management Training, and Marketing

Assistance for SMEs• Recomposition of the MSME Development Council and its additional functions


RP is an entrepreneurial country: • RA No. 9178, otherwise known as the Barangay Micro Business

Enterprise (BMBE) Act of 2002 redefined the categories. Hence, the present structure, by law, is as follows :• Micro - up to 3,000,000• Small - P3,000,001 - 15,000,000• Medium - P15,000,001 - 100,000,000 • Large - above P100,000,000


RP is an entrepreneurial country: • RA No. 9178 incentive and benefits:• Exemption from Taxes and Fees. – All BMBEs shall be exempt from income

tax for income arising from the operations of the enterprise.• Exemption from the Coverage of the Minimum Wage Law. The BMBEs shall

be exempt from the coverage of the Minimum Wage Law. Provided, That all employees covered under this Act shall be entitled to the same benefits given to any regular employee such as social security and healthcare benefits.


RP is an entrepreneurial country: • RA No. 9178 incentive and benefits:• Credit Delivery. – Upon the approval of this Act, the Land Bank of the

Philippines (LBP), the Development Bank of the Philippines (DBP), the Small Business Guarantee and Finance Corporation (SBGFC), and the People’s Credit and Finance Corporation (PCFC) shall set up a special credit window that will service the financing needs of BMBEs registered under this Act.


RP is an entrepreneurial country: • RA No. 9178 incentive and benefits:• Technology Transfer, Production and Management Training, and Marketing

Assistance. – A BMBE Development Fund shall be set up with an endowment of Three Hundred Million Pesos (P300,000,00) from the Philippine Amusement and Gaming Corporation (PAGCOR) and shall be administered by the SMED Council.


RP is an entrepreneurial country: • RA No. 9501 “Magna Carta for Micro, Small and Medium Enterprises

(MSMEs)"• Defines the current national policy to promote, support, strengthen, and

encourage the growth and development of MSMEs.


RP is an entrepreneurial country: • RA No. 9501 “Magna Carta for Micro, Small and Medium Enterprises

(MSMEs)"• Enacted by the Philippine Congress in 1991 as RA 6977, amended by

Republic Act 8289 in 1997, and further amended by RA 9501 in 2008, the law is geared towards the development of the Filipino entrepreneurial spirit by providing a business environment conducive for MSMEs.


For complete texts of the laws visit: http://www.dti.gov.ph/dti/index.php/resources/sme-resources/sme-laws

Ch. 1 Nature and Relevance of EntrepreneurshipLet's perform

1. Move around your community. Record 5 micro, sme that have been established there for at least 5 years. Find out the effects of their presence in your community

2. Look for woman entrepreneur in your community. Ask her about the reasons for her engaging in entrepreneurship.

3. Report in class what you have learned.

ch 1 entrepreneurship

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