ST.

PAUL’S UNIVERSITY

SCHOOL OF BUSINESS AND LEADERSHIP STUDIES

Department of Business
Course Title: ENTREPRENEURSHIP, INNOVATION & DEVELOPMENT
Course Code: UCC 406
Course Facilitator: Dr. Anne-Marie Wairimu M.

TOPIC EIGHT

ENTREPRENEURSHIP AND DEVELOPMENT

8.1 INTRODUCTION

Entrepreneurship refers to the means of stimulating innovative and creative undertakings for a
better business community or world. It is the act or process of identifying business opportunities
and gathering the right resources to initiate a successful business activity. Derived from the French
word “Ëntreprendre” which means to undertake, to start or to begin, entrepreneurship undertakes
and focusses on a business enterprise. It goes further to understand how an individual can come
up with a business idea and create value on the idea. A potential entrepreneur should therefore
show interest to seek out investment opportunities in the market, this will allow them to run the
enterprise successfully based on the identifiable opportunities.
The lesson covers:
• Lesson objectives
• Entrepreneurship concepts
• Entrepreneurship contributions
• Entrepreneurial behavior and mindset
• Women Entrepreneurship Development.

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 • Entrepreneurship Development in Rural Areas.
• Entrepreneurship Development in the Service Sector.
• Learning activities
• Summary

Learning Objectives

1. Define concepts of Entrepreneurship

2. Discuss the entrepreneurial mindset and behavior
3. Analyze the role of women in entrepreneurship development
4. Examine entrepreneurship development in the rural areas
5. Describe the entrepreneurship in the service sector

8.2 ENTREPRENEURSHIP

Entrepreneurship has been defined as a function which covers multiple functions such as:
• Building organizations.
• Providing self-employment
• Utilization of available resources
• Innovation applied to the novel concept
• Bringing together multiple factors of production in a tangible manner.
• Identifying and exploiting business opportunities within the available market.

There is a calling for an ―entrepreneurial revolution‖ to fix social and economic problems. The
call simply assumes that more entrepreneurs are needed to address these issues. Increasing the
number of entrepreneurs, however, is not as critical as persuading entrepreneurs to improve their
societies through growth, innovation and social transformation. The revolution should be one of
transforming contemporary entrepreneurial culture to make it more socially minded.
Venture Capitalists – VCs are like bankers, but since they aren’t subject to strict regulations as
bankers, they take greater risks in making investments – organized as formal businesses, they
expect to reap 25– 30% annually and get more actively involved in the ventures than bankers do.
Angel capitalists are private individuals who invest directly in firms and receive equity stake in

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return – they act as advisers to founders.
Entrepreneurship is the process of creating something different with value by devoting the
necessary time and effort, assuming the accompanying financial, psychic, social risks and
receiving the resulting rewards of monetary and personal satisfaction and independence.

8.3 ADVANTAGES OF ENTREPRENEURSHIP

To an Individual
(a) Provides Self Employment for the entrepreneur
(b) Entrepreneur can provide employment for near & dear one as well
(c) Entrepreneurship often provides an employment and livelihood for next generations as
well.
(d) Freedom to use own ideas – Innovation and creativity
(e) Unlimited income / higher retained income – Bill Gates has risen to become richest in the
world in a single life time through entrepreneurship
(f) Independence
(g) Satisfaction.
To the Nation
(a) Provides larger employment – Entrepreneurs provide employment for self as well as
other people and is source of employment creation.
(b) Results in wider distribution of wealth – This is a logical sequel of above issue. Higher
the employment, greater the distribution of wealth
(c) Mobilizes local resources, skills and savings.
(d) Accelerates the pace of economic development – Entrepreneurship is the govt’s one of
the most trusted vehicles for economic development
(e) Stimulates innovation & efficiency

8.4 FACTORS FAVORING ENTREPRENEURSHIP

1. Developed Infrastructure Facilities – Availability of infrastructure reduces the cost &
efforts and improves viability of projects through higher profit margins.
2. Financial Assistance – Easy availability of cheap funds is vital for promoting
entrepreneurship.
3. Protective and Promotional Policies – Most of the entrepreneurship projects start very

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 small and have no resilience. They are extremely vulnerable to competitors, market,
money markets, etc, for considerable time. Favourable Govt policies shelter them from
such vagaries.
4. Growth of Education – Science, Technology & Management – Growth of education is
believed to be promoting entrepreneurship. However, there are enough examples to
suggest otherwise. A very large proportion of first generation entrepreneurs are low
educated.
5. Risk Taking Abilities – Risk taking ability is one of the pillars of entrepreneurial spirits.
6. Hunger for Success (Capitalistic View) – Fire in the belly and dreams of riches is what
drives most entrepreneurs on this risky path. Any person content with what he has would
take the easier route of salaries job.
7. Environment/Culture Impact – Entrepreneurship is contagious. Some communities like
Punjabies, Kikuyu’s and Kisii’s are historically entrepreneurial. They are known for
seeking and exploiting business opportunities in most remote areas. It is a culture that
propels them.
8. Social Security – Social security acts as a safety net against failure of enterprise.
9. Technical/Industrial Training Facilities – Industrial Training facilities on one hand
generate skilled manpower so vitally required for setting up enterprises while on the other
hand they are also nursery for future entrepreneurs. Among the educated entrepreneurs, a
majority is product of technical institutes
10. Globalization – Globalization has provided another avenue for business. Many dare
devils have taken a head– along plunge into this uncharted water and have written new
success stories.

8.5 Entrepreneurial Decision Process

A person decides to do something either because something in that activity lures him or he takes
it as option in lieu of something else, i.e., he is forced to do it by people or circumstances. The
factors which lure a person to become entrepreneur are called Pull factors and the factors that
compel him are called Push factors.
Pull Factors
(a) Perception of Advantages – If a person feels that he can earn better or overall gains in

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 terms of money. Status, security, future, etc. as an entrepreneur are better than working as
an employee, he tends to turn an entrepreneur.
(b) Spotting an Opportunity – Many employees spot a business opportunity in the course of
their work and decide to exploit that opportunity rather than pass it on to their employer.
Many employees buy unsuccessful businesses at throw away prices from their former
employers and turn them around.
(c) Government Policies – Govts very often formulate policies to promote certain business
activity or backward areas which offer tax concessions/holidays, cash subsidies, cheap
land, etc., which improve success and profit prospects.
(d) Motivation from biographies or success stories
(e) Influenced by Culture, Community, Family Background, Teachers, Peers, etc.
Push Factors
(a) Job Dissatisfaction – Many people start their own venture because they feel dissatisfied
with their existing jobs/boss/work environment.
(b) Relocation – Repeated or especially unhappy relocation sometimes prompts some people
to entrepreneurship.
(c) Joblessness – This is the biggest source of micro level entrepreneurships. Many parents
help their academically poor children, who fail to find a job, to start their own micro
ventures. But success rate in such ventures is poor. The very traits responsible for their
academic failure led to business failure.
(d) Lay off – Lay offs often lower the market value of an employee to half. Thus, if a person
is laid off and he is unable to find a suitable job for him, he might think of starting his own
business.
(e) Retirement – Many retired, but physically and mentally fit, people start their own business
either to supplement their pension/savings or just to keep themselves gainfully occupied.
(f) Boredom – This is applicable to many ladies from well to do families. With their army of
servants to take care of home, they find an avenue to keep the boredom away and start
ventures like boutiques, fashion designing, etc.

8.6 ENTREPRENEURIAL BEHAVIOR AND MINDSET

Entrepreneurs are known for creating new ventures that creatively solve problems. It is about
consciously incorporating social goals into entrepreneurs‘ strategic thinking as a means to

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maximize personal and collective benefits. It demands getting rid of the paradigm that only
governments and established companies are capable of addressing social needs.
Entrepreneurial mindset refers to a specific state of mind which orientates human conduct
towards entrepreneurial activities and outcomes. Individuals with entrepreneurial mindsets are
often drawn to opportunities, innovation and new value creation. Characteristics include the ability
to take calculated risks and accept the realities of change and uncertainty.

Entrepreneurial intentions - Motivational factors that influence individuals to pursue

entrepreneurial outcomes.
Intention is stronger when an action is perceived to be feasible and desirable.
▪ Entrepreneurial self-efficacy - Conviction that one can successfully execute
the entrepreneurial process.
▪ Perceived desirability - The degree to which an individual has a favorable
or unfavorable evaluation of the potential outcomes.
Top management must create an environment that encourages employees to think and act
entrepreneurially.
Employees will realize that entrepreneurial action within the firm is both personally desirable and
feasible. Most established companies find it hard to maintain the initial entrepreneurial spirit that
helped them through during start up. They need more entrepreneurial activities to grow, attain
competitive advantage and to keep up with talent and technology.
Entrepreneurial behavior can be influenced by the entrepreneur's aspirations instead of a set of
inflexible strategic goals (it's possible that the entrepreneur's expectations are more realistic and
ambitious than those of other firm managers). Entrepreneurial behavior is defined as identifying
possibilities and putting good ideas into action. An individual or a group of people may carry out
the succession of activities that this conduct necessitates, which normally demand ingenuity,
determination, and personal initiative. Many people are born to be business owners. Behavior
associated with entrepreneurship makes the major contribution to surviving external changes. It
also has the decisive impact of achieving competitive advantages. Resultantly, encouraging
entrepreneurial behavior has become a major aim in entrepreneurship, despite the fact that the
method is still slightly elaborated through influences of the social institutions.

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8.7 ROLE OF WOMEN IN ENTREPRENEURSHIP DEVELOPMENT

Today, women entrepreneurs account for up to a third of all businesses operating in the formal
economy worldwide. However, the majority of those in developing and transitioning economies
are very small and micro enterprises, with little potential for growth. Apart from being under-
represented in enterprises of all sizes, the bigger the firm the less likely it is to be headed by a
woman. The ILO estimates that while 22 per cent of men’s productive potential is underutilized,
women’s is as high as 50 per cent.
By fostering a spirit of community, female founders instinctually create an environment conducive
to growth and empowerment. Through mentorship programs and initiatives, they inspire and guide
aspiring women entrepreneurs, helping others navigate the challenges and fulfill their potential.
Women entrepreneurs make a substantial contribution to societal progress, economic
development, and the sustainable development of the world's future with the educational
attainment of women in society, well-nurtured younger generations, family well-being with a
higher standard of living, better health standards. Women business owners help the economy
thrive, reduce poverty, and have a greater chance of shaping a country’s destiny. Women’s
business growth rates vary from country to country, and this variation is influenced by the fact that
countries can be broadly categorized as either developed or developing (Ramya, et, al.,2024).
Women play a vital role in entrepreneurship development by driving innovation, fostering
economic growth, creating jobs, and promoting gender equality, while also contributing to social
and environmental well-being.
Further, investing in women is one of the most effective means of increasing equality and
promoting inclusive and sustainable economic growth. Investments in women-specific
programmes can achieve significant ripple effects for development, since women generally spend
more of their income on the health, education and well-being of their families and communities
than men do. While targeted measures can bridge the gap for women, in parallel it is also essential
to remove discriminatory aspects of economic and social policies, programmes and practices that
may impede women’s full participation in the economy and society (Olarewaju, & Fernando,
2020).

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Economic Growth and Job Creation:
• Women entrepreneurs, especially in emerging economies, are powerful agents of
growth and job creation.
• Their businesses contribute to national income and wealth creation, while also
supporting families and communities.
• Studies indicate that increasing women's participation in entrepreneurship can lead
to higher economic growth rates and poverty reduction.
Innovation and Diversification:
• Women entrepreneurs bring unique perspectives and leadership styles to the
business world, fostering creativity and innovation.
• Their diverse backgrounds and experiences can lead to more comprehensive
solutions to global challenges.
• By embracing women's contributions, societies can develop a richer and more
dynamic economy.
Social and Environmental Impact:
• Women-owned businesses are more likely to invest in their communities and
prioritize social and environmental responsibility.
• Women's entrepreneurship can lead to improvements in areas such as education,
health, and community development.
Empowerment and Role Modeling:
• Successful female entrepreneurs serve as role models and inspire young girls to
pursue their ambitions, breaking down traditional gender norms and paving the way

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 for future generations.
• By providing mentorship and support, they help other women overcome barriers
and achieve their entrepreneurial goals.
Challenges and Opportunities:
1. While women entrepreneurs face numerous challenges, including limited access to finance,
technology, and markets, there are opportunities to promote gender equality through policy
interventions and support initiatives.
2. Governments and organizations should invest in programs that empower women and create
a more inclusive environment for entrepreneurship.
3. Supporting women in entrepreneurship not only benefits them but also contributes to a
more just and prosperous society.
4. To aid in household growth and development, women entrepreneurs create, launch,
interact, and manage businesses. In an attempt to navigate the unpredictable economic
landscape, women entrepreneurs begin to consider, take, and manage business risks by
combining different production aspects
5. In addition to its economic benefits, female entrepreneurship is essential for attaining
sustainable growth in the social and environmental spheres as well as economic diversity
and sustainability. Ladies are seen as superb and unrelenting protectors of their households,
communities, and culture. Nonetheless, there are far fewer chances and obstacles for
women to fully realize their potential in many nations, especially in resource-rich and
emerging governments.
6. Research indicates that women possess exceptional skills, including the capacity for
innovative and creative thought, strong leadership qualities, social awareness, and a keen
sense of opportunity.

Women entrepreneurs make major contributions to economic growth, social advancement,

and environmental sustainability, playing a key part in reaching the SDGs.

8.8 ENTREPRENEURSHIP DEVELOPMENT IN THE RURAL AREAS

Entrepreneurship development in rural areas involves empowering local residents with the skills,
resources, and environment needed to start and grow businesses, ultimately driving economic

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growth, creating jobs, and improving living standards.
Impact of rural entrepreneurship
Economic Growth:
Rural entrepreneurship can stimulate local economies by creating new businesses and markets.
• Job Creation:
Entrepreneurship initiatives can lead to the creation of jobs in rural areas, reducing unemployment
and improving livelihoods.
• Improved Living Standards:
Increased incomes and access to goods and services can lead to an improved quality of life for
rural communities.
• Reduced Urban Migration:
By providing economic opportunities in rural areas, entrepreneurship can help reduce the flow of
people to cities, alleviating pressure on urban resources.
• Sustainable Development:
Promoting sustainable practices and local resource utilization can help ensure long-term economic
and environmental benefits.

Key Strategies for Rural Entrepreneurship Development:

• Skill Development and Training:
Providing entrepreneurs with the skills, knowledge, and training needed to start and manage
businesses is crucial. This includes training in areas like business planning, finance, marketing,
and technology.
• Access to Financing:
Facilitating access to finance through loans, grants, or other financial instruments can help
entrepreneurs get their businesses off the ground.
• Infrastructure Development:
Investing in infrastructure, such as roads, communication networks, and access to utilities, is
essential for supporting rural businesses.
• Networking and Collaboration:
Connecting entrepreneurs with each other and with potential mentors, investors, and other
stakeholders can help foster innovation and collaboration.

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 • Promoting Local Products and Services:
Supporting local businesses by promoting their products and services can help build local
economies and improve livelihoods.
• Policy Support:
Governments can play an important role in creating an enabling environment for rural
entrepreneurship by implementing supportive policies and regulations.
Examples of Rural Entrepreneurship Initiatives:
• Agri-businesses:
Promoting entrepreneurship in the agricultural sector through value-added processing, marketing,
and distribution of local agricultural products.
• Tourism:
Supporting rural tourism initiatives by providing training, resources, and marketing support to
local entrepreneurs.
• Craft and Handicrafts:
Supporting local artisans and craftsmen by providing them with access to markets, training, and
funding.

8.9 ENTREPRENEURSHIP IN THE SERVICE SECTOR

Entrepreneurship thrives in the service sector due to the sector's adaptability, the rise of
freelancing, and the increasing demand for personalized, specialized services.
Here's a more detailed look:
• Sector Growth:
The service sector has emerged as a significant force in both developed and developing economies,
driven by rising investment, employment, trade, and GDP share.
• Adapting to Demand:
The sector's flexibility allows for the rapid adaptation to customer needs and technological
advancements, fostering a dynamic environment for innovation.
• Rise of Freelancing:
The development of freelance services is a growing trend, presenting many opportunities for
entrepreneurs, though challenges related to business financing also exist.
Examples: Examples of service-oriented entrepreneurship include tech companies, green energy
businesses, handymen, and locksmiths, catering to both specific skills and current trends.

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 • Entrepreneurial types:
Entrepreneurship can be classified as small businesses, scalable startups, large companies or social
entrepreneurs.
• Challenges:
There are also challenges, such as employment relationships limiting the growth of labor-intensive
businesses.

The development of freelance services is becoming more widespread both in individual countries
and in the world. As any phenomenon, freelancing has its peculiarities, advantages and
disadvantages. A wide range of problems in the development of entrepreneurship and
entrepreneurial activity in the freelance service sector, the stability of business financing is directly
related and is addressed through effective management through the development and
implementation of a business development strategy. Traditional, benchmarking strategies for
business development are the development of the market and product, the strengthening of market
positions, and so on. In order to develop and implement strategies for business development in the
freelance service sector, it is necessary to apply a scientific approach that takes into account a
number of factors and components.

LEARNING ACTIVITIES

1. Define concepts of Entrepreneurship

2. Discuss the entrepreneurial mindset and behavior
3. Analyze the role of women in entrepreneurship development
4. Examine entrepreneurship development in the rural areas
5. Describe the entrepreneurship in the service sector

7.8 SUMMARY
Entrepreneurship is the process of creating something different with value by devoting the
necessary time and effort, assuming the accompanying financial, psychic, social risks and
receiving the resulting rewards of monetary and personal satisfaction and independence.

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7.9 FURTHER READING
1. Babu, V., & Hisrich, R. (2023). Negotiation for entrepreneurship: Achieving a
successful outcome. Anthem Press.
2. Wang, Y., Zhou, H., Zhang, Y., & Sun, X. (2022). Role of entrepreneurial behavior in
achieving sustainable digital economy. Frontiers in Public Health, 10, 829289.
3. Ramya, U., Pushpa, A., & Ghosh, N. (2024). Women entrepreneurship–A way towards
sustainability. In The framework for resilient industry: A holistic approach for
developing economies (pp. 281-299). Emerald Publishing Limited.
4. Olarewaju, T., & Fernando, J. (2020). Gender inequality and female entrepreneurship in
developing countries. In Decent work and economic growth (pp. 473-481). Cham:
Springer International Publishing.
5. Garry, D. and Bruton , C. (2018). Entrepreneurship: The Art, Science, and Process for
Success. McGraw-Hill Education
Recommended Reference Materials
1. Baron, A. and Shane, S. (2004). Entrepreneurship: A Process Perspective. Thomson
Learning.
2. Lisa K.G., & Jill R. K. 2006). Entrepreneurship Strategy: Changing Patterns in New
Venture Creation, Growth, and Reinvention. Sage Publications.
3. Marian V. & Pavlos, D. (2004) Emerging Paradigms in International
Entrepreneurship. Edward Elgar Pub.
Journals
1. International Small Business Journal
2. The Journal of Entrepreneurship

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