MS3024 New Venture Creation Week 1 Coordinator: Lyn Batchelor EW S21 [email protected].

MS3024 New Venture Creation

Week 1Coordinator: Lyn Batchelor

EW [email protected]

MS3024 New Venture Creation 2

Why study this course?Enterprise is no longer an initiative - it’s becoming characteristic of the global

business system.

• To be a better job candidate you need to have enterprise capability– creativity, innovation, risk-management and risk-taking, and a can-do attitude

and the drive to make ideas happen

• How can enterprise education events at University help you?– enterprise capability, supported by better financial capability and economic

and business understanding

• We combine entrepreneurship and employability skills through concept of Enterprise Education which embraces future employees, not just future entrepreneurs, and social enterprise.


Why enterprise?Why join in the University events?

• Enterprise is no longer an initiative - it’s becoming characteristic of the global business system.

• To be a better job candidate you need to have enterprise capability– creativity, innovation, risk-management and risk-taking, and a can-do attitude

and the drive to make ideas happen

• How can enterprise education events at University help you?– enterprise capability, supported by better financial capability and economic

and business understanding, plus professional skills

• We combine entrepreneurship and employability skills through concept of Enterprise Education which embraces future employees, not just future entrepreneurs, and social enterprise.


Inside the University

• Business School events• College of Arts and Social Sciences events• University led events

– by Research and Innovation– e.g.Innovate

• Innovate with Aberdeen is an occasion for businesses across Scotland to learn more about the wide range of world class research being carried out at the University of Aberdeen. Innovate is an afternoon and evening of exhibitions, talks and 'meet the expert' sessions.

– What’s in it for me?

http://www.abdn.ac.uk/r&i/

http://www.abdn.ac.uk/innovate/


(Scottish Institute forEnterprise) SIE

http://www.sie.ac.uk/


SIE at AberdeenScottish Institute of Enterprise (SIE) • a free service for all of Scotland's

students to encourage enterprising spirit and skills, and help start-up companies become the businesses of tomorrow.

Three points of contact:• Interns (students like you)• Careers service

– Janice Montgomery• On campus SIE Business Advisor

– Simon Fraser• Student Enterprise Society



Act on your ideas• Skills Development Scotland

– Business Gateway• Princes Scottish Youth Business Trust• Business Plan Comps

– SIE Business Plan Competition– Blue Skies Business Plan Competition

• Winners + • One-off events in the Business School

– Industry guests

• Entrepreneur-in-residence

http://www.scottish-enterprise.com/sedotcom_home/stp.htm?siblingtoggle=1

http://www.psybt.org.uk/

http://www.abdn.ac.uk/blueskies/

http://www.soloequestrian.com/

http://www.dominion-gas.com/

http://aberdeen.ac.uk/business/cent/inresidence.shtml



Student scoops topbusiness award

An enterprising Aberdeen music student has added an innovative string to his bow by securing the top prize in a prestigious entrepreneurship competition.

Chris Williamson, a third year music student at the University of Aberdeen, entered the competition through his association with the Centre for Entrepreneurship, and scooped the winning entry in the Scottish Institute for Enterprise's (SIE) New Ideas Competition.

The competition invited students and recent graduates in Scotland to submit their idea for a new business, product or entirely new invention.

20-year-old Chris's concept for a revolutionary violin peg offers a pioneering solution to an age old musical problem. He was chosen from over 100 submissions to win the hotly contended accolade. Chris received a £2000 cash prize for his achievement and business support for a year, to help him turn his winning concept into a reality.

Chris said: "When I entered the competition I didn't think that my business idea would get to the final let alone win the top prize. But winning has given me a real boost in confidence to consider making a future career out of my violin peg concept. My ambition now is to work hard on developing the idea with the hope that it will one day make it onto the market.“


Where to you wantyour degree to take you?

• Success will depend on - becoming aware of what goes on in business and industry and coming to an understanding of the factors affecting it– Demonstrating this is vital to you at interview

• Knowledge is power. The more you can demonstrate your knowledge to the interviewer the more credible you will sound.

http://www.ft.com/home/uk

http://news.bbc.co.uk/1/hi/programmes/working_lunch/default.stm



Engage tobe work-ready


Who are we? On Monday n=65

Gender Male 43

Female 22

Birth years Between 1972-1989 n=23 in 1988

Year of study 3rd=38 4th=27

Degree intention

MA DES ACCOUNT 1 MA FIN-MAN STDS 1

MA DES FINANCE 1 MA INFO-MANAGE 3

MA DES MNG STUD 5 MA MNG ST-PHIL 1

MA ECON-ENTRP 2 MA MNGMNT STUD 26

MA ECON-MAN ST 1 MA PROPERTY 1

MA ENTREP-FINCE 1 NG ARTS FULL YR 1

MA ENTREPRENEUR 13 NG ARTS HS1 1

MA ENTR-FRENCH 1 NG MAN'T S ERAS 1

MA FINANCE 5

Course textbook

• Burns, P. (2007) Entrepreneurship and Small Business, Palgrave. 2nd edition

978-1-4039-4733-8

• Deakins, D. and Freel, M. (2002) Entrepreneurship and Small Firms, McGraw-Hill (ISBN: 0077099931)

http://www.palgrave.com/products/title.aspx?PID=270472


Stuff you should know

Teaching• 2 x 1 hour lecture/seminar sessions per week, i.e. some formal

lecturing, explaining the concepts, and interactive work in a workshop format. You will be expected to prepare case material in advance for the session.

• 1 x 2 hour tutorial each alternate week– The class is split into two groups, Group A and Group B, such that half the class will be in one

group and half the class in the other. Group A tutorials start in the week beginning October 5th, Group B tutorials start in the week beginning October 12th.


Contacting me

Email is best: [email protected]• When emailing for any reason, please use the

course number in your subject line, e.g. MS3024 appointment request

Consultation times• I have committed to a consultation time

before the first lecture on Tuesdays (this might change).– Tuesday 9:00-1000

mailto:[email protected]

mailto:[email protected]?subject=MS3024%20appointment%20request


Assessment method

Assessment will be weighted as follows:

• Written examination 60%• Business Plan 40%

(30% written plan, 10% presentation)


The assignment

• Students will learn, individually and in groups, to integrate the knowledge and skills required to develop and translate ideas into viable business or career opportunities through the construction of a business or project plan based on am start-up opportunity.

• What does this mean?


‘We now stand on the threshold of a new age - the age of revolution. In our minds, we know the new age has already

arrived: in our bellies, we’re not sure we like it. For we know it is going to be an age of upheaval, of tumult, of fortunes

made and unmade at head-snapping speed. For change has changed. No longer is it additive. No longer does it move in a

straight line. In the twenty first century, change is discontinuous, abrupt, seditious.’

Gary Hamel


Entrepreneurs

Entrepreneurs use innovation to exploit or create change and opportunity for the

purpose of making profit.


Entrepreneurs

Entrepreneurs use innovation to exploit or create change and opportunity for the

purpose of making profit.

They do this by shifting resources from an area of lower productivity into an area of higher productivity and greater yield,

accepting a high degree of risk and uncertainty in doing so.


‘We learned the importance of ignoring conventional wisdom and doing things our way....It’s fun to do things that people don’t

think are possible or likely. Its also exciting to achieve the unexpected.’

Michael Dell

http://encarta.msn.com/media_461532659_761577404_-1_1/Notable_Inventions_and_Discoveries.html

http://www1.euro.dell.com/content/topics/topic.aspx/emea/segments/odg_search?c=uk&l=en&s=gen&cs=


Managers, Owner-managers &Entrepreneurs

Owner-managers Managers

Entrepreneurs

http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article6850819.ece

The antecedence of modern entrepreneurship

Cantillon (1755)

Introduced the concept of entrepreneur from ‘entreprendre’ (ability to take charge)

Jean Baptist Say (1803, 1815)

Emphasised the ability of the entrepreneur to ‘marshal’ resources in order to respond to

unfulfilled opportunities


Carl Menger (1871, 1981)

Noted the ability of entrepreneurs to distinguish between ‘economic goods’ -

those with a market or exchange value - and all others


Ely and Hess (1983)

Attributed to entrepreneurs the ability to take integrated action in the enterprise as a

whole, combining roles in capital, labour, enterprise and entrepreneur


Schumpeter (1911/1934, 1928)

Envisioned that entrepreneurs proactively ‘created’ opportunity using ‘innovative

combinations’ which often included ‘creative destruction’ of passive or lethargic economic

markets


Knight (1921)

Suggested that entrepreneurs were concerned with the ‘efficiency’ in economic

factors by continually reducing waste, increasing savings and thereby creating

value, implicitly understanding the opportunity-risk-reward relationship


Hayek (1948, 1952, 1967)

Continued the Austrian tradition of analytical entrepreneurs giving them capabilities of

discovery and action, recognising the existence of information asymmetry which

they could exploit


Shapero (1975, 1984, 1985)

Attributed a ‘judgement’ ability to entrepreneurs to identify ‘credible

opportunities’ depending on two critical antecedents – perceptions of ‘desirability’

and ‘feasibility’ from both personal and social viewpoints


Drucker (1974)

Attributed to entrepreneurs a sense to ‘foresee’ market trends and make a timely

response


Kirzner (1973, 1979, 1997, 1999)

Attributed to entrepreneurs a sense of ‘alertness’ to identify opportunities and

exploit them accordingly



Entrepreneurs and new ventures

• How do the preceding definitions inform us about new ventures?

• Do you think there is there a link between the two?

• How do categorise businesses?• Micro, small, medium, or large

– SMEs? What are they?


What is an SME?• Recognised abbreviation for Small and Medium Sized Enterprises.

• The majority of the workforce is employed by SMEs. Statistics for 2007 published by the BIS (previously BERR) Small Business Service (SBS) Statistics Unit show that out of 4.7 million businesses in the UK, 99.3% were small firms with fewer than 50 employees, and 0.6% were medium firms with 50-249 employees (Small and Medium Sized Enterprise Statistics for the UK and Regions 2007, published 30th July 2008)

Despite governments and many of the multinational organisations targeting this group for special financial business support, there is no single definition for a SME either nationally or internationally.

http://www.lib.strath.ac.uk/busweb/guides/smedefine.htm

http://stats.berr.gov.uk/ed/sme/

http://stats.berr.gov.uk/ed/sme/


SME Definitions

Micro SmallMedium

Max. employees 9 49 249

Max. turnover (euros) - 7m 40m

Max. total assets (euros) - 5m 27m


Defining Characteristics of SMEsBolton Report 1971

• Market influence

• Independence

• Personal influence


Characteristics of Small Firms• Most are very small• Strong influence of owner-manager (+ family)• Short-term horizons• Short of cash• Raising finance a major problem• Local orientation• Little influence on market• Scope of activity limited• Over reliance on small number of customers


Lifestyle Firms

• Provides ‘comfort level’ of activity

• Provides acceptable income

• Routine, tactical management


• Set up to grow

• Rapid change

• Risky

• Strategic management

Growth Firms


Characteristics of Growth Firms• Strong influence of entrepreneur (+ family)• Operates in uncertain, risky environment - Personal implications of failure important influence - Strongly intuitive, but self reliant and confident - Good at resolving conflict and ambiguity• Sees opportunities and pursues them - Uses innovation to create competitive advantage - Short-term, incremental approach to decisions - Flexible, adaptive, emergent approach to strategy• Relationship based approach to management

http://www.virgin.com/AboutVirgin/RichardBranson/WhosRichardBranson.aspx

http://www.virgingalactic.com/


Factors Influencing Small Firms Growth

• Shift from manufacturing to service

• Deconstruction of large firms

• Growth of subcontracting

• Technology

• Social trends

• Economic trends


‘I am often asked what it is to be an entrepreneur and there is no simple answer. It is clear that successful entrepreneurs are vital

for a healthy, vibrant and competitive economy.

If you look around you, most of the largest companies have their foundations in one or

two individuals who have the determination to turn a vision into reality.’

Richard Branson


What do we know about Entrepreneurship trends?

The Global Entrepreneurship Monitor (GEM) research program is an annual assessment of the national level of entrepreneurial activity. Started as a partnership between London Business School and Babson College, it was initiated in 1999 with 10 countries, expanded to 21 in the year 2000, with 29 countries in 2001 and 37 countries in 2002. GEM 2009 is set to conduct research in 56 countries.

• http://www.gemconsortium.org/default.aspx


Global Entrepreneurship MonitorECONOMIC GROWTH

LEVEL OF ENTREPRENEURIAL ACTIVITY

Demography Education CultureEconomic

Infrastructure

EntrepreneurialOpportunity

EntrepreneurialCapacity

http://www.gemconsortium.org/default.aspx


Economists’ perspectives on entrepreneurship

Industrial economist’s perspective:Growth of SMEs is explained by attractiveness of market entry into an industry because of its profitability, growth, the barriers to entry and its concentration


Economists’ perspectives on entrepreneurship

Labour market economist’s perspective:Analysis of the factors influencing individuals to set up an SME


Focus of Evolutionary Theory

KNOWLEDGE

INNOVATION

http://abc.net.au/tv/newinventors/


Focus of Evolutionary Theory

KNOWLEDGECHANGE

INNOVATION


Evolutionary Theory

Why entrepreneurship encourages growth:1. It encourages competition by increasing the

number of enterprises. 2. It is a mechanism for ‘knowledge spill-overs’ –

transmission of knowledge from its point of origin to other individuals or organizations.

3. It generates diversity and variety among enterprises in any location.

http://www.abc.net.au/tv/newinventors/txt/s1867343.htm

http://www.bbc.co.uk/dragonsden/index.shtml?survey=no&url=www.bbc.co.uk/dragonsden/index.shtml&site=dragonsden&js=yes


Exam question that mightcome from Week 1

• Is entrepreneurship just for the middle aged?– You need theory– You need to give examples to show you

understand how the theory relates to the question– You need to make an argument either for or

against the statement– Are there guidelines? Yes!


For your first tutorial

• Handwrite the answer to Is entrepreneurship just for the middle aged?– bring it to class WITHOUT your name on it– we will evaluate them in class– Benefit to you?

• Exam practise• Get an idea for how marks are awarded• See other’s view on the world


For next week

Week Topic and preparationTutorial Details

Week 2 Ideas and Opportunities Group 1 - first tutorial

Week beginning 5th October Required Reading Introduction to business networking

Burns, Ch 3 Group formation and timetable planning

Business idea generation

Support from you

News and finance that will impact on New Venture Creation

MS3024 New Venture Creation Week 1 Coordinator: Lyn Batchelor EW S21 [email protected].

Documents

Transcript of MS3024 New Venture Creation Week 1 Coordinator: Lyn Batchelor EW S21 [email protected].