Unit 1 ENT600 INTRO
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Transcript of Unit 1 ENT600 INTRO
UNIT 1:
INTRODUCTION TO
TECHNOLOGY ENTREPRENEURSHIP
Entrepreneurship Dept, FBM (2009) 1ENT600/UNIT 1 : INTRO
TECHNOLOGY ENTREPRENEURSHIP
(ENT600)
Definition of Entrepreneurship
• Entrepreneurship is a dynamic process that involveschange and creation
• Entrepreneurship can be defined as the identification,evaluation and exploitation of previously unexploitedopportunities. The focus is on creation of a newenterprise or business as well as the wealth associatedwith it. Essential dimensions or ingredients includewillingness to take calculated risk, the skill to applycreative solutions and new ideas and finally, being pro-active to act on opportunities while others are stillconfused or unaware of the potential at hand.
Entrepreneurship Dept, FBM (2009) 2ENT600/UNIT 1 : INTRO
Understanding Entrepreneurship
• Entrepreneurship encompasses several
dimensions or ingredients that help explain what
makes it a unique concept
• The key dimensions of entrepreneurship include:
– Risk
– Creativity & innovation
– Opportunity exploitation
– Pro-activeness
Entrepreneurship Dept, FBM (2009) 3ENT600/UNIT 1 : INTRO
Dimensions of Entrepreneurship:
Risk
• Risk indicates elements of uncertain outcomes or events
that is inherent in the process of exploiting an opportunity
and starting a business
• Entrepreneurs take risks in order to obtain the higher
rewards that come from higher risk but are careful to
evaluate the risk first.
• Success comes from taking a calculated, carefully-
thought out approach to risk where everything possible is
done to identify and minimize potential problems
Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 4
Dimensions of Entrepreneurship:
Creativity & Innovation
• Entrepreneurship is characterized by newness or
the specific effort of bringing something new and
something different to the market.
• Being creative and innovative are essential
dimensions of newness
• Creativity focuses on thinking of new things while
innovation focuses on doing new things
Entrepreneurship Dept, FBM (2009) 5ENT600/UNIT 1 : INTRO
Dimensions of Entrepreneurship:
Opportunity Exploitation
• Entrepreneurship is focused on takingadvantage or exploiting of previouslyunexploited opportunities
• The exploitation of opportunities often result inthe creation of a new enterprise or business aswell as the wealth associated with it
• The new enterprise should be beneficial to thesociety and make a positive change
Entrepreneurship Dept, FBM (2009) 6ENT600/UNIT 1 : INTRO
Dimensions of Entrepreneurship:
Pro-activeness
• Pro-activeness refers to the propensity to act oninformation, ideas and opportunities in a timelyand speedy manner
• Acting at the right time and in the right manneron the superiority of an idea or opportunity candifferentiate between better success or lesssuccess or even between success and failure
Entrepreneurship Dept, FBM (2009) 7ENT600/UNIT 1 : INTRO
• Technology entrepreneurship can be defined as a form of
entrepreneurship and business leadership focused on identifying
high-potential, technology-intensive business opportunity for
possible exploitation into new products, processes or services
• Technology entrepreneurship can be based on revolutionary
breakthrough in technology (inventions or radical innovations) or
a technological advancement (incremental innovations)
• Can target existing market or create an entirely new one
• The process is relevant for both independent startups or within
established corporations
(Adapted from Dorf & Byers, 2005)
Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 8
Definition of Technology Entrepreneurship
The Entrepreneurial Process
• The entrepreneurial process in general
encompasses all the cognitive (thinking)
and behavioral (action) steps from the
initial emergence of a rough business idea
until the creation of a new business venture
or the process is terminated.
(Adapted from Davidsson (2005)
Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 9
• The entrepreneurial process is generally
composed of three key phases
– The idea generation or idea discovery phase
– The idea evaluation and development phase
– The idea exploitation phase
• Figure 1 shows the entrepreneurial process with
examples of activities at each stage
Entrepreneurship Dept, FBM (2009)
ENT600/UNIT 1 : INTRO 10
The Entrepreneurial Process
Fig 1: The Entrepreneurial Process
Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 11
Idea Search &
Generation Phase
Idea Evaluation &
Development Phase
Idea Exploitation
Phase
Idea Discovery
Idea Screening
Research & Development
(Invention/Innovation)
Concept Testing
Prototyping
Test Marketing
Technology Blueprint
Business Start-up
Technology
Commercialization
Monitoring &
Evaluation
Entrepreneurial Process:
Idea Search and Generation Phase
• This phase is also known as the opportunity formation oropportunity discovery phase
• Both the terms ‘idea’ and ‘opportunity’ indicate thepossibility of bringing something new to the market
• Individuals or groups of individuals enter this phase byeither:
– Actively searching for business possibilities that theycan offer in a better, more creative or efficient form or
– Discovering a solution for their own problemexperienced at work, play or in the marketplace thathas the potential of being shared with others who arewilling to pay for the solution
Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 12
Entrepreneurial Process:
Idea Search and Generation Phase
• In technology entrepreneurship, this ideaformation or discovery phase may berecognizable by the fact that the business ideaor problem solution involves creating a newtechnology or adapting an existing technology
• Technology refers to devices, processes, tools,methods and materials applied to industrial andcommercial purposes.
Entrepreneurship Dept, FBM (2009) 13ENT600/UNIT 1 : INTRO
Entrepreneurial Process:
Idea Evaluation & Development Phase
• This phase is characterized by efforts to betterunderstand what it will take to bring the idea oropportunity into a full-fledge economic activity orbusiness
• In technology entrepreneurship, some key activities atthis stage include
– doing the research and development work to invent orinnovate a new technology-based product, process orservice
– preparing the initial technology blueprint
– concept testing
– prototyping,
– market testing
Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 14
Entrepreneurial Process:
Idea Exploitation Phase
• This phase is generally characterized by the decision to
pursue the business opportunity or not
• The decision at this phase can take three basic forms
(Fig 2):
– proceed to exploit the opportunity
– abandon the current idea and go back to search for
other ideas
– terminate the process totally and not pursue any other
business ideas
Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 15
Fig 2: Idea Exploitation Decision Options
Idea Exploitation
Decision
YES
NO
Proceed & Exploit
Opportunity
Abandon
Current Idea Terminate Processor
Entrepreneurship Dept, FBM (2009) 16ENT600/UNIT 1 : INTRO
Entrepreneurial Process:
Idea Exploitation Phase
• If the decision is to exploit the opportunity,
among the key activities include the registering
of the business entity (in the case of an own new
business), hiring workers and starting business
operations
• In a technology based business, a unique
activity at this phase is the commercialization of
the technology-based product, process or
service that may or may not require the creation
of a new business venture.
Entrepreneurship Dept, FBM (2009) 17ENT600/UNIT 1 : INTRO
Entrepreneurship & the Economy:
The Role of Entrepreneurship
• Economic growth and vitality can be generated byencouraging entrepreneurial activity in the society.
• Entrepreneurial activity is centered around entrepreneurswho act as agents of progress
• In order to contribute to economic growth, entrepreneursmust
– Mobilize natural, financial and intellectual capital ascapital inputs in the economy and
– utilize the capital inputs to create products, processesand services as economic outputs
Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 18
Fig 3: A Model of Role of Entrepreneurship in the Economy
Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 19
Economy
Entrepreneurs
as agents of
progress
Natural capital
Financial capital
Intellectual capital
Beneficial outputs
Undesired waste
outputs
Adapted from Dorf & Byers (2005)
Entrepreneurship & the Economy:
The Economic Inputs
• Natural capital
– Consist basically of natural resources such asminerals, fuels and energy
– Can also include nature’s biological capacityto produce (e.g. oxygen) or absorb
(e.g. pollution)
– As such this natural capital can be irreversiblydepleted through neglect or irresponsibleusage
Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 20
Entrepreneurship & the Economy:
The Economic Inputs
• Financial capital
– Refers to financial assets such as money and shares
– Can include exclusive use of technological designsand products that have financial value
• Intellectual capital
– Refers to knowledge that is accessible within anbusiness because it has been recorded (e.g. indocuments and reports), explained (e.g. throughknowledge sharing processes ) and disseminated(e.g. through inter-team or inter-department project orresearch work)
Entrepreneurship Dept, FBM (2009) 21ENT600/UNIT 1 : INTRO
Entrepreneurship & the Economy:
The Economic Inputs
• There are three key sources of intellectual capital
– Human capital
• This is the combined knowledge, skill and abilitiesof the entrepreneurial team and the businessemployees
– Organizational capital
• This is the management structure and peripherals(including hardware, software, databases patentsand systems) that support the human capital
– Social capital
• The relationships and the quality of therelationships that the business maintains with itssuppliers, partners and customers
Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 22
Entrepreneurship & the Economy:
The Economic Outputs
• Economic progress and growth (outputs) is essentially in
two forms of:
– The beneficial outputs (e.g. increase in new
business ventures that create new jobs)
– The undesired inefficiencies and waste outputs
(e.g. pollution from growing numbers of industries)
– The benefits should be maximized while waste and
inefficiencies need to be minimized for
entrepreneurship to have the desired impact on the
economy
Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 23
References
• Dorf, Richard C., & Byers, Thomas H. (2005).
Technology Ventures: From Ideas to Enterprise.
New York,USA: McGraw Hill
• Davidsson, Per. (2005). Proceedings, Academy
of Management Conference, Hawaii
(http://eprints.qut.au/active/00002064 retrieved
25 June 2008)
Entrepreneurship Dept, FBM (2009) 24ENT600/UNIT 1 : INTRO