Chapter 1

Entrepreneurship:
Evolution and Revolution

Haider Ali
Objectives
1. To begin our exploration of entrepreneurship and the
environment
2. To distinguish between business and social entrepreneurs
3. To distinguish between entrepreneurs and small-business
owners
4. To explain the importance of entrepreneurs for economic
growth
5. To examine the historical development of entrepreneurs
and of entrepreneurship
6. To define entrepreneurship and explore the major schools
of entrepreneurial thought
7. To realise that entrepreneurship is a pathway to freedom
Entrepreneurs facing the unknown

Famous roller coaster entrepreneur Carl Miler’s brilliant

innovation swept away by global warming.

4
What do entrepreneurs care
about climate change and global warming?
• For centuries
entrepreneurs exploited
the environment without
any thought for
sustainability.
• Henry Ford and Thomas
Edison accelerated global
warming.
• Will modern Henry Ford,
entrepreneurs reverse Model A Elon Musk
the toxic trend? Tesla Model S
Enterprising human beings have changed the
world’s climate and entrepreneurs must share
some of the blame.
 Why we are hopeful
• How can we as entrepreneurs • Entrepreneurs recognise
stop this global opportunities where others
environmental catastrophe? see chaos or confusion.
• Who is best positioned to • Entrepreneurs could well be
commercialise existing the saviours of our planet.
innovations and create new • ‘Entrepreneurs who respond
technologies? to the challenge will reap
• Entrepreneurs never waste a commercial success’
good crisis
Various types of entrepreneurs
Driven by a
Business profit motive –
entrepreneu constantly
rs innovating for
market share

Driven by a
Social mission to fill
entrepreneu gaps left by the
rs market and
public sector
Entrepreneurs different from
small business owners
• Prefer a more stable
and less aggressive
Small approach
busines • Would rather exploit
s existing opportunities
owners • Operate in existing
markets
Enterprising mind set
• Entrepreneurs have an enterprising mindset.
• Enterprising:
– ‘marked by imagination, initiative and readiness to
undertake new projects’.
• Entrepreneurial:
– ‘willing to take risks in order to create value’.
• Anyone can be enterprising.
 Entrepreneurs as Starship Enterprise
• ‘Boldly go where no [one]
has gone before’.
• ‘Space… the final frontier’
• ‘To explore strange new worlds, to
seek out new life and new
civilizations’
• Enterprising is an ‘attitude of
exploring, of developing, of leading
and of taking initiatives’.
?
• What does the word
‘entrepreneur’ mean to you?
• In your language or culture, what
is the word for entrepreneur?
• What is its “root meaning” in your
language?
• Write it down on a sheet of paper
for use later.
 Derivation & Definition
• The word ‘entrepreneur’ is a French verb entreprendre,
meaning ‘to take in between’, or ‘to undertake’
(someone who undertakes)
• Today it means a social or business innovator
• who recognises and seizes opportunities;
• converts those opportunities into workable/marketable ideas;
• adds value through time, effort, money or skills;
• assumes the risks of the competitive marketplace to implement these
ideas; and
• realises the rewards from these efforts.
In other languages and cultures
• usahawan (Malay) − someone who does a commercial
activity at some financial risk.
• pupagongan (Thai) − ‘someone who assembles other
people together’.
• Māori of New Zealand:
• ngira tuitui − the ‘needle that binds things together’
• tinihanga − the ‘tricks of Māui’ (a Polynesian demigod famous for
his entrepreneurial spirit, heroism, altruism and brashness).
• His innovative hook pulled New Zealand out of the ocean

Māori demogods
Entrepreneurship
through the ages
• Primitive hunter gatherers sought
niche advantage in the wild market
place.
• Ancient Assyrian had innovation and
a corps of knowledge workers.
• Phoenician traders peacefully
connected cultures through trade.
• Roman nobles let slave run their
enterprises. ‘He [who] lends at usury and takes
excessive interest. Will such a man
• The Bible forbade entrepreneurship
live? He will not! Because he has
(‘usury’) done all these detestable things, he
will surely be put to death and his
blood will be on his own head’.
 Entrepreneurship
through the ages
• Islam promoted entrepreneurship.
The Prophet Mohammed was a trade agent.
• During the Dark Ages, wealth creation came
through conquest; innovation was separate to
wealth creation.
• With the industrial revolution came a strong link
between entrepreneurial activity and wealth.
• Mark Twain’s Connecticut Yankee entrepreneur
transported magically back to King Arthur’s court.
Contemporary definitions
• Rugged individualists cherish
individual liberty and self-
reliance
• Closely linked with free enterprise
and capitalism.
• Definition has broadened beyond
financial or business value to
creating social value.
• Entrepreneurs are seen as
innovators, non-conformist, pioneers
on the frontier of business and
enterprise.
Dolly Parton & Richard Branson
are classic entrepreneurs.
 Contemporary definitions
• Essential ingredients:
– Willingness to take calculated risks (time, equity, career)
– Ability to formulate an effective venture team
– Creative skill to marshal resources
– Skill of building a solid business plan
– Vision to recognise opportunity among chaos, contradiction and
confusion
– Entrepreneurs considered heroes of free enterprise
and social venturing.
– Many people now regard entrepreneurship as
pioneership
 Entrepreneurship theory
• A theory can predict future activity, or at
least prescribe the right action in particular
circumstances.
• A theory of entrepreneurship is defined
as
• a coherent formulation of relationships
• or underlying principles that explain
entrepreneurship.
• Entrepreneurship is interdisciplinary.
• Let’s examine the ‘schools of thought’
Theory: schools of thought
 • Social and cultural
Macro schools of thought – focus on external factors and
conditions shaping the
entrepreneur.
Social • Financial/capital
Financial/ – focus on how to seek seed
and
capital capital and growth funds.
cultural • Displacement
• Factors that prevent a person
from doing other activities due
to group membership
Displacem • Ecological
Ecological – Focus on natural systems
ent and constraints and
includes ‘green economics’
 • Entrepreneurial trait
Micro schools of thought – Traits common to successful
entrepreneurs. Self-efficacy,
proactive personality, tenacity,
need for achievement and
Venture stress tolerance
Entreprene
opportunit • Venture opportunity
urial trait –
y Right idea/right time/right
market niche. The
importance of preparation
and awareness
• Strategic formulation
– The importance of planning to
Strategic successful enterprise. Leveraging
formulation unique, identifiable elements to
form a venture
 Are all entrepreneurs gazelles?

• Myths about gazelles

• All entrepreneurs should be
gazelles.
• Only gazelles get venture
capital.
• Gazelles were never mice.
• Gazelles are high tech.
• Gazelles are global.
 Generations
of entrepreneurs
• Gen X and Baby Boomers more
entrepreneurial than Gen Y.
• Gen Ys are also less risk averse
• Boomers have everything needed to
make a business successful.
• Generation Z (1995-2009) never knew
the pre-internet world.
• Generation Alpha (2010+). For them,
smartphones have always existed.
 Entrepreneurship as a
pathway to freedom
• Economic activity is the
objective and the primary
means of enhancing human
freedom
• ‘The usefulness of wealth lies
in the things that it allows us
Entrepreneur to do – the substantive
ship is a freedoms it helps us to
mode of self- achieve’.
actualisation.
The circle of life: Modern professions that
Which pathway for you?
are self-employed
Farmers 73%
Writers and 67%
authors
Photographers 60%
Fishers 57%
Multimedia 57%
Artists
Artists 50%
Musicians and 36%
singers
Jewellers 33%
Psychologists 33%
Interior designers 26%
Animal carers 25%
Fashion designers 25%
Optometrists 25%
Entrepreneurial ecosystems
 Thank you

Haider.ali@gcu.edu.pk