Introduction to Entrepreneurship
The Role and Significance of Entrepreneurship in
Society
What is Entrepreneurship?
Origin of the term: The word "entrepreneur" comes from the French word "entreprendre,"
meaning "to undertake."
Historical context: In the Middle Ages, traveling merchants and artisans, known as
"tradespeople," offered goods and services in exchange for payment, playing a vital role in the
economy.
Modern definition: Creating, organizing, and operating a new business venture to generate
profit while taking on financial risk.
Who are the Entrepreneurs?
Definition: Individuals who undertake the risks and challenges of starting new businesses.
Key actions: Introduce new goods, services, or concepts to the market for profit.
Mindset: Willing to take risks, think of captivating ideas (innovative or re-envisioned), and are
curious about new knowledge and the unknown.
Advantages of owning a business: Flexible hours, independent decision-making, freedom
from obligation, complete autonomy and power.
Challenges: The journey involves risk, hard work, sacrifices, and setbacks.
Importance of Entrepreneurship in Society
1. Employment Creation: Entrepreneurs hire employees, increasing employment and decreasing
unemployment, benefiting the overall economy.
2. Economic Development: Entrepreneurial businesses drive economic growth through
expansion, investment in technology, and workforce strengthening, contributing to national
prosperity.
3. Technological Advancement: Entrepreneurs introduce innovations that change how people
live, from groundbreaking technologies to more efficient business models (e.g., the impact of
the tech industry and the internet).
4. Market Dynamics: New competition expands consumer options, leading to better goods/
services at lower prices. This also pushes existing businesses to enhance their offerings.
5. Socio-Cultural Changes: Entrepreneurs develop innovative, effective, and sustainable business
solutions to address social and cultural challenges, taking initiative where government or large
businesses may not.
Types of Entrepreneurship
1. Agripreneurship:
Involves the production and selling of agricultural goods and inputs.
Examples of profitable areas: Crop cultivation, aquaculture, animal health and feeds, agro-
bio products, biotechnical services, energy-saving and ecological agro-production
systems.
Example: Edita Aguinaldo Dacuycuy, a farmer-scientist who established the first organic
dragon fruit farm in Northern Philippines, creating Refmad-V Enterprise.
2. Buyer Entrepreneurship:
Business individuals with substantial capital who acquire established companies or merge
with smaller businesses.
These acquired entities typically have an established brand, customer base, and revenue
streams.
Example: Tony Tan Caktiong, who acquired brands like Greenwich pizza, Chowking, Red
Ribbon Bakeshop, and Mang Inasal, alongside owning Jollibee.
3. Ecopreneurship:
Creating "green" businesses that aim to save the Earth while generating profit.
Example: Jamico Yco Jamlang, founder of The Bamboo Company, a social enterprise
promoting bamboo production and eco-friendly lifestyles.
4. Imitator Entrepreneurship:
Copying or adapting an existing business concept, successful product, or service.
Example: Bin Lin, co-founder of Xiaomi, whose company was noted for copying Apple's
iPhone design and using Google's Android system.
5. Intrapreneurship:
Acting as an entrepreneur within an existing company or organization, taking risks, and
developing new ideas for improvement.
Example: Paul Buchheit, who developed Gmail as a project within Google, with support
from its founders.
6. Large Business Entrepreneurship:
Taking calculated risks to develop new market offerings to remain competitive and adapt to
changing markets and customer needs.
Example: Ernest Cua, owner of Globe Telecom, which leverages its brand and network to
deliver financial services through partnerships.
7. Scalable Startup Entrepreneurship:
Launching a small-scale enterprise with the goal of rapid expansion into a highly lucrative
company, often focusing on disruptive innovation.
Example: Roland Navarro de Ros, Founder and President of Kumu, a social entertainment
app that has rapidly grown its user base.
8. Small Business Entrepreneurship:
Starting a business on a smaller scale, often managed by one person or a minimal team,
without the aim of becoming a large corporation.
Examples include single-location restaurants, small retail shops, or a sari-sari store.
Example: Nericel Bonus, a micropreneur who found success with live selling of thrift
clothes during the COVID-19 pandemic.
9. Social Entrepreneurship:
Focusing on innovating and creating novel solutions to address pressing social issues (e.g.,
poverty, education, healthcare).
Example: Bryan Benitez McClelland, President of Bambike, which manufactures bamboo
bicycles and partners with Gawad Kalinga to address poverty and promote sustainability.
10. Technopreneurship:
Combining entrepreneurial skills with technology to solve complex business problems and
bring uniqueness to business processes.
Example: Diosdado Banatao, who developed key technologies in the computer industry,
such as Ethernet chips and graphics accelerator chips.
Small, Medium, and Micro-sized Enterprises
(SMME)
Definition: Businesses or enterprises engaged in industry, agribusiness, and services,
regardless of their legal structure (sole proprietorship, cooperative, partnership, corporation),
whose total assets (excluding land) fall within specific capitalization ranges.
Type of Enterprise Capital Requirement
Micro Less than P50,000
Cottage P50,001 to P500,000
Small P500,001 to P5,000,000
Medium P5,000,001 to P20,000,000
Forms of Business Ownership
Understanding ownership structures is crucial for entrepreneurs, impacting decisions, rights,
and responsibilities.
1. Sole Proprietorship:
Description: Initiated, organized, owned, and managed by a single person.
Advantages: Easy to create and terminate, ownership and rewards in one person, flexibility,
minimum regulation and taxation.
Disadvantages: Unlimited personal liability, limitations in capital, ends with the owner's
death/illness, limited skills and capabilities.
2. Partnership:
Description: Two or more partners co-own a business to make a profit.
Advantages: Pooling of resources, ability to obtain capital, incentive for each partner,
limited regulation and taxation.
Disadvantages: Unlimited liability (solitary liability), termination can happen, difficult to
reconcile personal or business interests, problems in share liquidation.
3. Corporation:
Description: Exists as a legal entity separate and distinct from its stockholders.
Advantages: Limited liability for stockholders, legal entity protected by law, ownership is
transferable, easier to obtain capital, employee benefits, right to vote for significant
decisions.
Disadvantages: Legal formality and regulations, costly and time-consuming, separate
taxation, potential loss of control by the owner.
4. Cooperative:
Description: A duly registered group of persons with a common interest who voluntarily
join to achieve a lawful social and economic end.
Advantages: Open and voluntary membership, democratic control by members, mandated
education, cooperation among members, direct benefits to members and community, tax
privileges.
Disadvantages: Limited interest in shares, inequality of profit distribution, pro-poor bias
might deviate from profit orientation.
Entrepreneurial Competencies and Motivation
Core Competencies for Entrepreneurs
Leadership: Displaying passion, vision, and mission in all interactions.
Articulate: Facilitating clear communication in all directions within an organization.
Sociable: Aligning organizational approach with the unique characteristics of the business
and its employees.
Adaptable: Being decisive, passionate, and willing to make changes.
Collaborative: Connecting with managers, investors, partners, and stakeholders as equals,
valuing each person's contribution.
Multifaceted: Being adaptable and multi-skilled to manage all business aspects (sales,
marketing, client/stakeholder management).
Resilient: Embracing failure, not giving up easily, viewing setbacks as learning opportunities.
Proactive: Taking initiative to address problems before they arise.
Innovative: Developing new market offerings to meet changing demands and satisfy
customers.
Risk-taker: Aware of potential risks and proactive in mitigating them.
Creative: Possessing relentless curiosity to explore novel concepts and prospects.
Passion: A constant source of motivation to achieve targets and introduce innovative
concepts.
Motivation Theory
Definition: Theories suggest behavior is driven by a purpose to achieve specific objectives.
Entrepreneurial motivation refers to an entrepreneur's drive to engage in entrepreneurial
activities (taking risks, identifying opportunities, pursuing innovation).
Types of Motivation:
1. Extrinsic Motivation: Driven by external rewards like money, gifts, or treats. This motivation
fades when the reward is absent or unappealing.
2. Intrinsic Motivation:
Driven by internal passion for the business or activity itself.
Achievement motive: Strong motivation to succeed, achieve greatness, and conquer
difficulties.
Power motive: Desire for control, influence, and the ability to impact others and change
circumstances.
Affiliation motive: The act of pursuing, upholding, or revitalizing an emotional
connection with others.