Overview of Entrepreneurship
|✅ Paper Type: Free Essay||✅ Subject: Business|
|✅ Wordcount: 3832 words||✅ Published: 6th Sep 2021|
Entrepreneurship is the act of an entrepreneur, which is defined as “one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods”. It result in new organizations or it may be a part of revitalizing mature organizations in response to a perceived opportunity. In recent years, the term has been extended to include social forms of entrepreneurial activity. When entrepreneurship is defined as activities within a firm or large organization it is referred to as intra-preneurship and it include corporate venturing, when large entities spin-off organizations. These functions and attributes subjectively may not apprehend complete personality of an entrepreneur but depict their features, how they work and deal in certain situations and essentialities of becoming an entrepreneur.
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These entrepreneurial attributes may have been changes since its origin to present. And these Entrepreneurs are characterised by various qualities and functions which were defined in different ways by economists with some similarities. Cantillion first coined the term entrepreneur portraying as one who ‘discharges the function of direction and speculation’. Adam smith the father of political economy defined that ‘entrepreneur is a capitalist supplier regulating the intervention between labour and consumer. He states entrepreneur as manager, and an employer’. He mainly insists entrepreneur to be a capitalist. F.H Knight propounded that entrepreneurs are ‘specialised people dealing with uncertainty and risk’. Timmons, J.A. (1999) states ‘anyone who wants to experience the deep, dark canyons of uncertainty and ambiguity: and who wants to walk the breathtaking highlands of success can be entrepreneurs’. Most of the People might want to become entrepreneurs for the reason to be dreams, independent, earn income to have monarchic authority may influenced by different environment conditions how the individual is brought up. In that way people for the above reasons strive for an entrepreneurial job where they might be satisfied doing the desired work.
Functions of Entrepreneur
According to Schumpeter entrepreneurs functions are categorised for 1) Innovation 2) Opportunitism 3) Creativity. For the innovation and creative activities may portrayed in diversified like technology, research, management patterns, employment, and relations based on the entrepreneur. Innovation amongst them plays a vital role in an entrepreneurial function. An entrepreneur identifies an idea and then creatively works to achieving success and the progress of the firm established. There are many attributes which can be well assigned to an entrepreneur depicting his physiological traits theoretically which forms the base for his success and thrust of action.
Characteristics of entrepreneur
Entrepreneurs are known by the following characteristics which play a vital role in development of entrepreneurial. These characteristics may also be shared by some of which its execution and proper conditioning makes up all the differences. Therefore the main characteristics of an entrepreneurs are:
- Goal orientation
- Hard work
- Need for achievement
- Problem solving ability
- Risk taking
Achievements of entrepreneur
According to McClelland (in 1961) the individuals with the high level of need for achievements are likely to involve in the tasks involving high level of responsibilities and undergo entrepreneurial tasks in accordance. And also some research studies concluded that the needs for achievement are a good predictor for the differences between managerial and non managerial employees. Hence need for achievement contributes as an essential characteristic for an entrepreneur.
Entrepreneurs bear ample Individual risk. According to recent estimates, to reimburse for the extra risk entrepreneurial returns (return to private equity) should exceed public equity by at least 10 percent. Yet the evidence shows no signs of a positive premium. A number of hypotheses have been offered to explain this puzzle; all of them are based on the idea of that entrepreneurs have a different set of preferences (e.g. risk tolerance).
Locus of control
Individuals who has higher internal locus of control feels that they are completely responsible for outcome (which might be either loss or gain) in a firm where they accept ownership. This attribute acts as one of the differentiator between the general population (has external locus of control) and establisher of a firm or business.
Independence is one of the characteristics which itself states the sense of responsibility of an individual. Studies as well proved that entrepreneur roles are dealt by independence as they are solely responsible for the outcome of a firm. People wants to be independent for the reason being not to rely on other decisions and thereby mostly pursue entrepreneurial career. People who are motivated and willing to seek entrepreneurial tasks, though initially may not posit the attributes can impart them by practice to drive a successful career.
My characteristics to act entrepreneurially
I pretend some of the characteristics confined to entrepreneurs discovered in different aspects. I analysed that I don’t possess some characteristics to act entrepreneurially which I imbibe pursuing career in respect. They are as follows.
I feel to have independent decisions in application of tasks, pursuing careers, decisions and in most cases and don’t want to rely on others or do leave things to happen in their own accord. Up till I have taken my own decisions independently for pursuing careers, development of habits, important decision and insist to be independent always for a given set of tasks.
Autonomy is which relative to independence. Likewise I don’t exactly want to have dependency for any aspects even if it is out of my reach. I struggle to achieve tasks and deal them up to my maximum capability. Thereby autonomy attributes me to act entrepreneurially.
I have got a strong biological bag round and vast subject knowledge that deal with unseen objects, imagination and evaluation of data. I am also an artist for portraits and landscapes since childhood and thus confess this attribute to have gained for acting entrepreneurially.
Hard work is the developmental traits that can be obtained habitually. Though one may not have them initially can be inculcated by different factors. Some people may have consistency of purpose to achieve, may have been brought from highly disciplined conditions, or may have under gone stress and hardships.
As part of my job profile I used to deal with training tasks for fellow employees and have taken many initiatives to increase revenues for business development, managing events and played decisive roles for prejudices which affect the outcome of business by a careful analysis. I can rely on these attributes I posses and also understand the necessities and strive to develop to fill up the requirements.
A rapid growth in technology, communication and information resources changed the economic structure in 21st century. Electronic business transactions, managing methodologies, internet communications, and usage of the digital technologies have altered the traditional usage of resources in industries. This has revolutionised the economic changes in a broad way in the areas of sciences, finance and other Interdisciplinary subjects. These changes have impulse rapid evolution of many economies based on knowledge in all the fields and also facilitated the change for policies, regulatory measures, intellectual property rights, governance, mark tic strategies and all other related aspects. From the entrepreneurial behaviour point the approach for innovation, creative application, consistency in work and other functions are changed along with their attributes in a broad category since past years.
Factors contributing in creation of Knowledge Economy
Knowledge Economy can be stated as the state of economy that utilises knowledge assets, ICT’s and economic learning to achieve high economic growth and mainly related with production, distribution and use of knowledge.
An information and communication technology (ICT) plays an important role in knowledge creation and economic development then resulting in the emergence of knowledge economies. Creation of knowledge is responsible for economic growth and the development of ICT’s has changed its performance. Government is stimulating drive to knowledge generation like universities, labs, through financial incentives. A good business environment, regulatory frame work and coordinative policies are also required for promoting innovation. Technology widens the gap and also assists in optimising and maximising the developmental efforts. Apart from the above factors knowledge clusters, innovation networks and E-development helped in the creation and development of knowledge economy.
Innovation networks are the real infratechnologies and infrastructures that assist in innovation for public and private domains. E-Development is a set of tools, and practices that accelerates political, economic and social developments which are essential in conversion of developing economies to knowledge economies. Innovation process specified to an economy mainly depends on the relative interaction for its elements (labs, universities, govt. etc.) which generates the knowledge clusters like norms and frame works.
Functional variations in a Knowledge based Economy and Implications
Entrepreneurs deals with utilises and opportunities all opportunities for growth and development of a firm as told by many economists. Entrepreneurs strive for success and in a way may approach legally or illegally towards profit maximisation. Entrepreneurs undergoing the managerial tasks get access to not the internal capital resources but also the external capital resources. Thereby moves through the knowledge outcome creatively for new plans, ventures, business activity via the exit barriers denying all risks, uncertainties, and optimistically with full zest. There are many implications with both positive and negative, acting in various types of angles which may or may not reflects physically but have helped for economic growth of nations by entrepreneurial self seeking attitude. If an entrepreneurial activity results in higher out comes then the sources involved might be based on economic rent and entrepreneurs are likely of less risk when their knowledge is of high one. Entrepreneurs use knowledge resources of the organisations like human capital assets (Internal, ISK) for more than one use and external sources of knowledge like skilled labour etc., which are considered as valuable knowledge resources of economic activity. These resources are equivalent to the wages, costs and profits obtained from the firm. Though the variance to increase or decrease both the internal and external knowledge resources is made, there may not be a great change seen in profits obtained from a Finance economic market prospective. Due to the increase in technical progress through innovation the base for internal knowledge is increased which thereby influence the scope for managerial activity and bureaucracy wing that is influenced by the impact of increased specialisation. Thus entrepreneurs are pressurised by the changes incurring for knowledge (both internal and external) and are subjected to functional changes for growth maximisation, firm development and other areas of the firm.
Fig: 1 Opportunistic behaviour and fraud – Toms, S. (2006). Accounting for entrepreneurship: A knowledge based view of the firm, Critical perspectives on accounting, 17, Pg: 336-357.
Industrial revolution of Great Britain depicts the changes, effects, influences for knowledge diversion, division, and establishment from the above figure in practice. The early East India Company, canals, railway projects required large technological knowledge accumulation, manpower, and managerial staff with demanding social capital mobilisation (quadrant 1). It shows the balance for knowledge and the profit obtained.
Knowledge resources were balanced to the intrapreneur groups, managerial groups and resources. Utilisation of resources for one or more subsidiaries of the same firm managing the uncertainty of human resources has led to the growth of firms by entrepreneurs. (Quadrant 2)
Knowledge resources were stabilised by the profits by a way of arbitraging strategies of the entrepreneurs in terms of available knowledge sources (Quadrant 3).
Entrepreneurs rather than concentrating on firm basis execute in individual aspect more or less similar to venture capitalists wherein deploy and redeploy of capital plays a prominent role for their profit maximisation. There is a serial investment of capital on one firm and its profit reinvestment on the other as observed in the Quadrant 4.
Thereby many factors for knowledge and their loops for stimulation of growth internal and external) from the above models since past have altered the behavioural patterns of entrepreneurs so as to enact and accomplish their task prescribed as per their responsibility under various circumstances for many decades in chronological history of changing economy. Many entrepreneurs by controlling the internal factors made significant changes in their profits. There are entrepreneurs who has acted illegally and raised their revenues. This shows the self seeking attitude of the entrepreneurs. Their plays have helped in the significant growth of economies for many decades but there were many fraudulent activities by many entrepreneurs.
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Knowledge based sector
A knowledge based sector is a broad area that was emerged out, wherein knowledge and its elements being its base to undergo transactions for production of income. Intellectual planned frame work for a nation plays vital role for emergence of new ventures and entrepreneurial firms as the factors for tax laws, norms issued to institutions, incentives, their inter-communications, knowledge aspects, capital to invest and other cultural factors come in picture to deal with both positive as well as negative implications.
Biotechnology a fast growing knowledge based industry
Biotechnology is one of the fastest emerged sectors of knowledge based economy. Its performance has shown that it has a large scope in future prospective and has attracted all the countries around the world having understood its importance. It has accounted very large scale investments on R&D and boosted industrial development globally. Singapore has planned to expand its wings in Biotechnology industry and has invested relatively a high amount in its development in the last few decades relatively than any other industry. This industry is also meeting the demands of the government and people on a big extend.
Biotechnology industry first appeared in USA in 1970 Cetus was the company first started in the year 1971 then come Genentech, Biogen, and Genex industries. Initial firms invested on R&D and directed to pharmaceutical products in market with increase in technology, knowledge in this interdisciplinary science, later in European nations rapid emergence of biotechnological clusters (Powell et al., 1996) came up which are also called by bio ventures in Japan for biotech firms. By 1995, 500bioventures were listed in stock exchange for Europe and 250 in USA. The large difference in time for development might be due to the facts ethics involved, knowledge expansion and other aspects. Japan has later significantly observed many changes. They initially concentrated on R& D investments and in due time genetic engineering, beverage production, antibody production using new technology has accounted a large success in their economy leading it as commercial leader in biotechnology. Japanese market is expected to increase to by $208 billion dollars by 2010. (Biotechnology Strategy Guidelines’, Biotechnology Strategy, Council, Tokyo, December 2002) (7).
Fig 2: Biotechnology patents report. (1997) Benchmarking the Competitiveness of Biotechnology in Europe. EuropaBio Independent Report, EuropaBio, Brussels (7).
From the above information it can be observed that Japan has contributed around 76% of all patents around the world. Moreover 10 pharmaceutical products have accounted for $1Billoon US dollars in 2004. Also the relationships with the universities and firms for biotechnology sector accounted their annual expenditure of US $ 1 million in 1997. R&D plays an important role for best out come in ventures. Universities funding should be established and handled to a good responsible management facilities and regulated to fasten the research process. There is also a need to develop the technology transfer offices that might help in patenting and licensing. Thereby technology transfer mechanisms are necessitated for healthy and rapid development of
Knowledge based sectors to enact in terms of good entrepreneurial business (7).
Legislation, Technology transfer and Entrepreneurial Activity
Understanding the fact that university relations, technological transfer offices, and financial aid requirement helps to commercialise the research and expand the business ventures, Japanese government has enforced new law so as to compete their counterparts. The laws were helpful in development of technology licensing organisations at institutional bodies, employment and patent ownerships.
These organisations have accounted for ¥850 million by 2003. This has increased the university led business ventures shoot up leading to many professors to start up business. This Knowledge based sector has provided upliftment of institutional bodies and their transformation to a greater extend. It also helped in the emergence of many (SME) Small medium enterprises through small business ventures and drastically increased the entrepreneurial activity and entrepreneurship in practice (7).
Along with the transformation of universities, governance and other aspects there was a large industrial niche for this sector providing a firm base and large scope for the future. There were nearly 81 firms developed by September 2001 accounting for a large scale economic activity in Japan. Most of the emerged industries were into the fields of Biotechnology equipments, database, Bioinformatics, pharmaceutical equipment, Genomics, Protein analysis, Cloning, Reproductive medicines, gene therapy, Testing, and genetic modification (7).
Fig 3: Growth in the number of bio ventures. Ref: 2005, Bio venture Statistics Survey Report, Japan Bio industry Association, Tokyo. (2006); Japan Bio industry Letters, vol. 23, no. 1, JBA, Tokyo.
There were 167 bio ventures by the year 1998, which significantly arose to 387 by 2003 accounting the market capitalisation to $4.6 billion. The number has there on increased to 531 by 2005. Important aspect of the survey is that all the bio ventures emerged was in the form of bio clusters. Institutional bodies, Companies, technology transfer offices and government bodies were in a mutual understanding for their various means of interdependence and triggered the boom of this knowledge based sector and also largely increased the growth of Bio entrepreneurial activity impacting in diversified aspects of entrepreneurial behaviour(7).
Academic Links and Transformation
Most of the firms have relied on the knowledge based on research institutes, universities for technology development and commercialisation. Some of the company establishers held positions in research institutes, some coordinated both the activities dually and some left the universities and totally engaged in entrepreneurial activity to raise business venture for commercialisation of products.
Most of the companies more or less are dependant on the IPR from research organisations, universities and other scientific bodies. One company may have links with one or many research organisations for its product development. Similarly a firm may have relation with foreign universities and home based ones. Platform technology Bio ventures had larger numbers in operation than therapeutic-based bio ventures. This limitation difference is for various reasons that involve securing grants from the government for clinical trials, some take longer duration by the time product gets commercialised.
Evolution of firms has a logical development in any economy and specifically for a defined sector. There were many factors which were mentioned earlier have influenced entrepreneurial behaviour since many decades. These key elements have changed the formulations, regulations, new technologies, way of management structure and others patterns. They are there by responsible for emergence of new economies in the time line and knowledge economy in the present context. This emerged knowledge economies and various sectors based on it have changed the entrepreneurs thought flow, administration standards, amount of dependency or reliability for a business activity, conscious understanding and many aspects. All these changes were brought out by their new experiences in business activity, past references for certain things that state a specific idea, environmental conditions, people and government interaction. From the points mentioned earlier and the model given, there are certain facts that can be drawn out about knowledge based sectors. There was a rapid development in technology usage, amplified inter relationship networks amongst various subjects, reform changes in governance and institutional bodies, exploitation of knowledge, economic growth, large scale employment opportunities and higher standards of living. Thereby entrepreneurs are highly sophisticated in their objectivity and revolutionised the today’s world dramatically and the emerged knowledge economy has played prominent role by its influence for this achievement.
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