CHAPTER 1
The Nature and
Importance of
Entrepreneurship
Saint Mary's University | School of Accountancy and Business
GEntrep: The Entrepreneurial Mind
Learning Objectives
By the end of this session, you will be able to:
Explain Entrepreneurship Describe the Process Identify Start-Up Types
Understand the concept of Identify and explain the four Distinguish between the three types of
entrepreneurship and trace its historical interconnected phases of the start-up ventures and their characteristics
development from ancient trade to entrepreneurial journey
modern innovation
Discuss Economic Role Understand Ethics
Analyze how entrepreneurship drives economic development and Recognize the importance of ethics and social responsibility in
job creation building sustainable businesses
FILIPINO SUCCESS STORY
Socorro Ramos
Founder, National Book Store
The Beginning The Vision The Legacy
Started in 1942 with She believed that Today: Over 200
just ₱200 in capital every Filipino branches nationwide,
during World War II. deserves access to employing thousands of
While others saw crisis books and education, Filipinos. Still family-
and uncertainty, she regardless of owned and operated. At
recognized opportunity economic status. She 96 years old, her story
in the Filipino people's persisted through proves that
hunger for knowledge devastating fires, entrepreneurship is
and education. economic crises, and about creating lasting
countless challenges value.
with unwavering
determination.
From a small book stall in Escolta to the largest bookstore chain in the
Philippines — What makes an entrepreneur?
What is Entrepreneurship?
• Entrepreneurship is the process of creating
something new with value by devoting the
necessary time and effort, assuming the
accompanying financial, psychic, and social
risks, and receiving the resulting rewards of
monetary and personal satisfaction and
independence.
The word entrepreneur comes from French, meaning "between-
taker" — someone who bridges gaps in the market
ENTREPRENEURSHIP
Creation Process
Something new with value for a market that needs it. This could be a product,
service, or innovative solution to an existing problem.
Time and Effort
Significant devotion of personal resources to make the venture operational.
Entrepreneurs invest countless hours beyond typical employment.
Risk Assumption
Financial risks of losing capital, emotional stress of uncertainty, and social risks of
reputation. Not everyone is willing to bear these burdens.
Rewards
Monetary gains through profits, personal satisfaction from achievement, and
independence from controlling your own destiny.
Historical Development of Entrepreneurship
How the concept evolved through the centuries
Earliest Period - Marco Polo Era 1
Project Managers: Merchant-adventurers
traded goods, taking physical and
emotional risks. Capitalists funded the
ventures and took most profits while 2 Middle Ages
adventurers bore the dangers. Risk Returns: Entrepreneurs managed
large projects like building castles and
17th Century 3 cathedrals using government resources.
Capital vs. Labor: Richard Cantillon defined
They bore no personal financial risk.
entrepreneurs as risk-takers who buy at certain
prices to sell at uncertain prices, introducing the 4 18th-19th Century
concept of entrepreneurial risk.
Innovation Focus: Distinguished
entrepreneurs from capital providers. Andrew
20th Century 5 Carnegie exemplified this through innovation
Modern Era: Entrepreneurs as innovators and industry, building massive enterprises
who reform production patterns. Creation of through creative vision.
new products, methods, and markets.
Joseph Schumpeter championed this view of
"creative destruction."
Entrepreneur vs. Inventor
Understanding the key differences between creating and commercializing
INVENTOR
• Creates something for the first time
• Motivated by personal ideas and curiosity
• Falls in love with the invention itself
• Measures success by patents and recognition
• May reluctantly modify for market acceptance
•
Example: Agapito Flores (debated fluorescent lamp inventor) —
focused on the technical breakthrough
ENTREPRENEUR
• Creates value from ideas and opportunities
• Motivated by market opportunity and customer needs
• Falls in love with the organization and business
• Measures success by growth, profit, and impact
• Adapts constantly to changing market demands
• Example: Tony Tan Caktiong (Jollibee) — turned ice cream
parlor into global fast-food empire
The Entrepreneurial Process
Four distinct but interconnected phases that guide venture creation
1. Identify 2. Develop 3. Determine 4. Manage
Opportunity Business Plan Resources Enterprise
• Market need • Executive • Current resources • Management style
assessment summary inventory development
• Real vs perceived • Marketing plan and • Resource gaps • Control systems
value analysis strategy identification implementation
• Competition • Financial • Supplier • Problem solving
evaluation projections identification and adaptation
• Risk and return • Operations plan • Capital acquisition • Growth strategy
analysis and timeline strategy execution
Types of Start-Up Ventures
Which path fits your entrepreneurial goals?
Lifestyle Firm Foundation Company High-Potential Venture
Supports the owner's lifestyle with Created from R&D, lays foundation for Receives greatest attention from investors
modest, sustainable growth new industry or market segment and media due to rapid scaling
Characteristics: Characteristics: Characteristics:
• Privately held • 40-400 employees • 500+ employees
• 30-40 employees • ₱500M-₱1B revenue • ₱1B+ revenue
• ~₱100M annual revenue • Private investors • VC/PE funding
• Limited expansion goals • 5-10 year growth trajectory
• Called "gazelles"
• Focus on work-life balance • Industry innovation focus
Filipino Example: Family-owned Filipino Example: CDO • Exponential growth
carinderia or sari-sari store that Foodsphere (meat processing) — Filipino Example: Jollibee Foods
provides steady income for built an entire category in Corporation — from single store to
generations Philippine market global fast-food powerhouse
Role in Economic Development
How entrepreneurship drives the Philippine economy forward
MSMEs are the backbone of the Philippine economy,
employing 63% of the total workforce. These new
ventures create livelihood opportunities and reduce
Job Creation unemployment.
• Example: Jollibee, from a single ice cream parlor, now
employs thousands globally.
Entrepreneurial activity leads to new products, services, and
solutions, showcasing Filipino ingenuity in addressing local
Innovation and global needs.
• Example: Angkas revolutionized motorcycle taxi services;
GCash transformed digital payments.
Local entrepreneurs reinvest in their communities, supporting
Community local suppliers and families. Their businesses often
Development strengthen social bonds and contribute to vibrant local
economies.
Three Mechanisms for Bridging
Science and Market
• Government as Innovator
• The government fosters entrepreneurship through supportive policies,
funding, and infrastructure development.
• Example: DTI and DOST provide critical startup support; QBO
Innovation Hub nurtures the ecosystem.
• Challenge: Bridging the commercialization skills gap between research
and market.
Three Mechanisms for Bridging
Science and Market
• Independent Entrepreneurship
• Individuals starting ventures from scratch independently, offering full
autonomy but with higher risk.
• Example: Tony Tan Caktiong (founder of Jollibee) built an entirely new
structure from individual vision.
Three Mechanisms for Bridging
Science and Market
• Corporate Entrepreneurship (Intrapreneurship)
• Innovation within existing large organizations, leveraging
company resources for lower risk.
• Example: Globe Telecom's innovation labs continuously
create new digital services.
Ethics and Social Responsibility
Building businesses that benefit everyone
• Key Ethical Questions:
1. For whose benefit should the firm be managed?
2. Are resources fairly deployed among stakeholders?
3. Who are the stakeholders we serve?
Stakeholders to Consider:
• Employees
• Fair wages, safe working conditions, growth opportunities, respect and
dignity
• Customers
• Quality products, honest marketing, fair pricing, excellent service
• Suppliers
• Timely payments, fair negotiations, long-term partnerships, mutual
respect
• Community
• Environmental care, local support, social impact, sustainable practices
Ethical Filipino Entrepreneur
Example
• Human Nature: Dylan Wilk and Anna Meloto-Wilk
created a social enterprise providing livelihood to
poor communities while selling natural Filipino
products. They prove that profit and purpose can
coexist.
• Filipino Context: Entrepreneurs often rely on
personal values shaped by faith, family, and
community rather than formal ethical codes —
making integrity deeply personal
Key Takeaways
Essential concepts to remember
1 Entrepreneurship is a Process
It involves creating value by devoting time and effort, assuming financial, psychic, and social
risks, and receiving rewards of independence, satisfaction, and monetary gain.
2 Four-Phase Journey
The entrepreneurial process has four interconnected phases: identify opportunity, develop
business plan, determine resources, and manage the enterprise effectively.
3 Three Venture Types
Lifestyle firms support owners' lifestyles, Foundation companies grow moderately and build industries,
High-potential ventures are "gazelles" with rapid, exponential growth.
4 Economic Engine
Entrepreneurship drives economic development through job creation, innovation, and community
development. MSMEs are the backbone of the Philippine economy, employing 63% of workers.
5 Ethics Matter
Success should benefit all stakeholders: employees, customers, suppliers, and the community.
Sustainable businesses balance profit with social responsibility and environmental care.
CLASS ACTIVITY
Filipino Entrepreneur
Profile
Discover the entrepreneurial
journey of successful Filipino
business owners in your
community or province
Time: 45 minutes | Group Activity: 4-5 members
Activity Instructions
01 Profile Questions to Answer:
Form Groups 1. Background: Who is this entrepreneur? What was their starting point and life situation before the venture?
Create groups of 4-5 members. Assign roles: researcher, writer, presenter,
2. Opportunity: What need or gap did they identify in the market? Why did they think they could fill it?
timekeeper.
3. Risks Taken: What financial, social, or emotional risks did they face? How did they overcome challenges?
02 4. Type of Venture: Is it a lifestyle firm, foundation company, or high-potential venture? Explain your classification.
Choose a Local Entrepreneur 5. Economic Impact: How does this business contribute to the local economy, employment, and community?
Select a Filipino entrepreneur from Nueva Vizcaya, Cagayan Valley, or one 6. Lesson Learned: What can aspiring entrepreneurs learn from this person's journey and decisions?
you personally know.
03
Research and Analyze
Use your phones to research or recall personal knowledge about the
entrepreneur's journey.
04
Create Profile and Present
Complete the profile sheet and prepare a 3-minute presentation for the class.
Suggested: Local bakeries, carinderias, agri-businesses,
online sellers, or service providers you know!
Activity: Filipino Entrepreneur Profile
• 8/9 members per group
• Output:
• Activity Sheet
• 6 slide PPT
• Presentation on February 5.
• To be submitted in GClass by 1 representative
Thank You
Questions? Let's discuss!
"The entrepreneur always searches for change, responds to it, and
exploits it as an opportunity."
— Peter Drucker
Next Session: Chapter 2 - The Entrepreneurial Mindset