Personal Perspective Of Entrepreneurship And Innovation Business Essay

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January 19th, 2012, The Global Entrepreneurship Monitor Organization released 13rd annual report-Global Entrepreneurship Monitor 2011 Global Report. The report showed that in 54 countries, there are now reached 400 million people joining the surging tide of global entrepreneurship and creating new employment opportunities for the future. From 2010 to 2011, the TEA (Early-stage Entrepreneurial Activity) index has been greatly improved. Especially in 16 developing economies, the index rose by 25%. And in 2010, the TEA index of China, Argentina, Chile is higher than the average and high more in 2011. Of course, the research of entrepreneurship is still one of the most important parts in economic growth.

Part1: entrepreneurship

"What is entrepreneurship?" written by Davidsson in 2004, proposed that defining entrepreneurship as the competitive behaviors that drive the market process has much to commend it(Davidsson 2004). And the author provided several reasons. First, for the emphasis: behavior rather than assuming a dispositional stance that has proven largely unfruitful(Gartner,1989). Second, the definition gives a more accurate and coherent description for the entrepreneurship. Third, it portrays entrepreneurship as a micro-level phenomenon.

But what I want to say is that though so many researchers being committed to the study of entrepreneurship,there is no unified view of this research object! The concept first appeared in the 18th century, and has been evolving. And in the 20th century, the economist Joseph Schumpeter presented that entrepreneurship is the force of "creative destruction", old industries have been eliminated by entrepreneur with new combination,and the original mode of operation is destroyed by new and better methods. Further, the management expert, Peter Drucker improved this concept, saying that entrepreneurs are willing to seek changes, and treat the reaction of the changes as opportunity. Today most economists agree that entrepreneurship is a necessary factor for stimulating economic growth and create employment opportunities. There are two working definitions as the representative(Bygrave &Hofer 1991):

An Entrepreneurial Event involves the creation of a new organization to pursue an opportunity.(Bygrave, 1989a. b. c)

The Entrepreneurial Process involves all the functions, activities and actions associated with the perceiving of opportunities and the creation of organizations to pursue them.

Another one based on these two definitions immediately follows(Bygrave &Hofer 1991):

An Entrepreneur is someone who perceives an opportunity and creates an organization to pursue it.

From my opinion,the definition of entrepreneurship should include three important themes:

First, Pursuit Of Opportunities. Entrepreneurship is the pursuit of the environmental trends and changes to which others have not been attention.

Second, Innovation. Entrepreneurship contains changes, innovation, conversion and the introduction of new methods-new products, new services and new business modes.

Third, Growth. Entrepreneurs pursue growth, they are not satisfied to stay in the small-scale or existing scale. Entrepreneur hopes that his business will grow as much as possible and the employees work hard. Because they are constantly looking for new trends, opportunities, innovation, new products and new modes of operation.

Part 2: the entrepreneur

The definition of entrepreneur

An entrepreneur is an individual who establishes and manages a business for the principal purposes of profit and growth. The entrepreneur is characterized principally by innovative behavior and will employ strategic management practices in the business(Carland et. Al 1984). This is a definition which is provided in the" Differentiating entrepreneurs from small business owners: A conceptualization"(1984).

Actually, the definitions of entrepreneur are also numerous. Early French economist said that entrepreneur is an adventurer, is the factor combined with land, labor, capital, entrepreneur bears the risk of the possibility of bankruptcy.

The British economist Marshall believes that entrepreneurs are who discover and eliminate the imbalance of the market, create trade opportunities, propose direction of the production process and organize the factors of production with their own creativity, insight and leadership.

About the American economists, Drucker think that entrepreneurs are the innovators who have the courage to take risks, the destination to look for the source of innovation, the ability to capture change as exploitable opportunity. Schumpeter considers that entrepreneurs constantly work for revolution mutation, creative destruction and achieve economic innovation.

The characteristics of entrepreneur:

From these definitions, we can know that entrepreneurs are adventurer and innovator, are one kind of management who has adventurous and innovative spirit of the characteristics. So we should distinguish an entrepreneur from the manager. There is a list of the characteristics of entrepreneurs proposed by many researchers from (Carland et. Al 1984 ):

Mill: riskbearing (1848) Weber: source of formal authority (1917) Schumpeter: innovation, Initiative (1934) Sutton: desire for responsibility (1954) Hartman: source of formal authority (1959) McClelland: risk taking, need for achievement (1961) Davids: ambition; desire for independence; responsibility; self-confidence (1963) Pickle: drive/ mental; human relations; communication ability; technical knowledge (1964) Palmer: risk measurement (1971) Hornaday & Aboud: need for achievement autonomy; aggression; recognition; innovative/independent (1971) Winter: need for power (1973) Borland: Internal locus of control (1974) Liles: need for achievement (1974) Gasse: personal value orientation (1977) Timmons: drive/self-confidence; goal oriented moderated risk taker; internal locus of control; creativity/ innovation (1978) Sexton: energetic/ ambitious; positive reaction to setbacks (1980) Welsh & White: need to control; responsibility seeker; self-confidence/ drive; challenge taker; moderate risk taker (1981) Dunkelberg & Cooper: growth oriented; independence oriented; craftsman oriented (1982)

A combination of the list and my perspective, the characteristics of entrepreneurs include the following aspects:

First, Psychological characteristics: innovation; risk taking; need for achievement; source of formal authority; self-confidence,desire of responsibility and compressive strength.

Second, Ability characteristics: operating capacity, management, communication ability and leadership.

Third, knowledge characteristics: technical knowledge and moral knowledge.

The functions of entrepreneur:

It is easy to find that there are several basic functions entrepreneur should have: organization; management; decision-making; planning; innovation; risk bearing and so on. There are two theories about the functions of entrepreneur from Schumpeter and Casson. Schumpeter propose in his theory that entrepreneurs are the soul of innovation and innovation is entrepreneurs control and deploy new products, new markets, new production methods, developing of new organizations and new sources of raw materials. The "Entrepreneurial judgement" believes that the function of the entrepreneur is entrepreneurial judgement and entrepreneurs are specifically for judging the coordination of the scarce resource.

Part 3: Identifying business opportunities

Opportunity is one of the most important parts of the entrepreneurship, it is an agreement of the researchers. And from my perspective, I would prefer a more complete definition of entrepreneurship: It is the process of recognizing, seizing, pursuing and exploiting opportunities without regard of the resources you currently control. This definition describes the importance of the opportunities. An opportunity is the gap in a market by those who currently serve it, and an entrepreneur is responsible for scanning the environment for unexploited opportunities or possibilities that something might be done both differently or better than done at the moment and create a value. Further, an entrepreneurial opportunity is a combination of idea for a new way to create value and people to give substance to the idea and context to ground the idea in time and space(lecture7/9,2012).

There are four characteristics of good entrepreneurial opportunities (Jeffrey):

First, it is able to attract customers;

Second, it will work in your entrepreneurial environmentï¼›

Third, it must be implemented before your competitors already have the same ideas and products to the market;

Fourth, you should have the resources.

Entrepreneurs should grasp the good opportunity, seize every fleeting venture opportunities, it is half the battle. So how to identify business opportunities?There are some propositions (Shane2000):

PROPOSITION1: All individuals are not equally likely to recognize a given entrepreneurial opportunity

PROPOSITION 2: People can and will discover entrepreneurial opportunities without actively searching for them

PROPOSITION 3A: People's prior knowledge about markets will influence their discovery of which markets to enter to exploit new technology

PROPOSITION 3B: People's prior knowledge about how to serve markets will influence their discovery of how to use a new technology to serve a market

PROPOSITION 3C: People's prior knowledge of customer problems will influence their discovery of products and services to exploit a new technology

From these propositions, you will do better in identifying business opportunities. But another point to note is entrepreneurial experience also influence opportunity identification. There is a conclusion that habitual entrepreneurs appear to be more likely to identify more business opportunities( Shane2000).

Part 4: entrepreneurial process

Entrepreneurial process is concerned with three questions (lecture7/9,2012):

First, why, when and how opportunities for the creation of goods and services come into existence?

Second, why, when and how some people and not others discover and exploit these opportunities?

Third, why, when and how different modes of actions are used to exploit entrepreneurial opportunities?

There is a table that the entrepreneurial process is combined with focus, fit and configuration. Focus relates to the venture having the resources, and the resource balance that is right for the opportunity it seeks to exploit. Fit relates to the venture having a structure and systems and processes that are appropriate to exploiting the opportunity. Configuration relates to the way in which the venture acquires, controls and shapes its resources (lecture7/9,2012).


Entrepreneurship is a real hot topic of the global. Although our ancestors have done a lot research of the entrepreneurship and every entrepreneur aspire to be successful. The rate of entrepreneur success is still very low. I think that theoretical knowledge may be helpful, but we still should remember that: Let theory guide your observations, but till your reputation is well established, be sparing in publishing theory. It makes persons doubt your observation.(Charles Darwin,1863)