Changing the meaning of Innovation

ENTREPRENEURSHIP

DISCUSSION/AGENDA

• Entrepreneurship

• Introduction

• Historical Background

• Role in Economic Development

• Models/Theories of Entrepreneurship

• Entrepreneurship in Pakistan

• Examples of Some Successful Entrepreneurs

INTRODUCTION • The act of being an entrepreneur, which can be

defined as "one who undertakes innovations,

finance and business acumen in an effort to

transform innovations into economic goods“

• The capacity and willingness to undertake

conception, organization, and management of a

productive venture with all attendant risks, while

seeking profit as a reward.

HISTORICAL BACKGROUND

• Origins are centuries old

• Marco Polo- the first modern entrepreneur

• Industrial Revolution in 17th and 18th century saw

many successful entrepreneurs

• 20th century saw the evolution of

entrepreneurial history developing its most

recent form

ROLE IN ECONOMIC DEVELOPMENT

• Dominant role in Economy

• Employment to masses

• Contribution toward research and development

• Creates wealth for nation

• Entrepreneurship provides self sufficiency

MODELS/THEORIES OF

ENTREPRENEURSHIP

Opportunity (2) Resources (4)

Team (3)

Communication

Ambiguity

Creativity

Uncertainty

Leadership Exogenous Forces

Capital Market Context

Founder

(1)

Timmons Model

KEY FACTORS OF TIMMONS MODEL

1) Entrepreneur(Founder)

2) Opportunity

3) Team

4) Resources

THEORIES OF ENTREPRENEURSHIP

• Economic Theory

• Sociological Theory

• Psychological Theory

• Innovation Theory

• Achievement Motivation Theory

ECONOMIC THEORY

• Favorable economic conditions

• Economic incentives as motivators

• Incentives include taxation policy, industrial

policy, sources of finance and raw material,

infrastructure availability, investment and

marketing opportunities, technology etc.

SOCIOLOGICAL THEORY

• Society’s values

• Customs & traditions

• Religious beliefs

• Social changes

• Influence the behavior of individuals in a society.

PSYCHOLOGICAL THEORY

• Necessary psychological characteristics

Vision

Foresight

Ability to face opposition

Need for high achievement

Self-Reliance

ACHIEVEMENT MOTIVATION THEORY

• People with high achievement orientation are more likely to become entrepreneurs

• Not influenced by money or external incentives

• Consider profit to be a measure of success and competency

ENTREPRENEURSHIP IN

PAKISTAN

ENTREPRENEURSHIP IN PAKISTAN

• Current State in Pakistan

• Factors for poor business environment

• Conclusions and Recommendations

CURRENT STATE OF ENTREPRENEURSHIP

• Inequality between large and small enterprises

• Crippled Innovation

• Rent Seeking and Land Development

• Non-commercial cities

CURRENT STATE OF ENTREPRENEURSHIP

• 22 families control:

• 66% industrial assets

• 70% of the insurance

• 80% banking interests

• Enterprise survey by The world bank:

• Only 17.01% of the 965 firms have ISO certification

Factors for Poor

Business Environment

Attraction of Rents

Costs of Corruption

Lack of Research

and Development

Poor Legal Framework

Financial Constraints

Lack of Trust and Social

Capital

Factors for Poor

Business

Environment in

Pakistan

FACTORS FOR POOR BUSINESS ENVIRONMENT

• Corruption:

• Government departments (15-20) visit enterprises with

various threats and extort small sums

• They collect from 0.2% to 5% of annual sales

• Businesses dedicate 1 -3 people for dealing with

extortion

• Lack of Innovation:

• Only 0.57% capital is spent on R&D.

0

5

10

15

20

25

30

35

40

45

50

Top 10 Constraints to Firm Investments in Pakistan

Rec

omm

enda

tions

Reinventing the Role of Government

Building Growth Cities

Releasing the Energy of the Domestic sector

Brand Development and Management

A New Growth Strategy

Promotion of Guarantees, Warrantees and Returns

Recommendations

CONCLUSION

• Pakistan has a large market of 180 million

people waiting to be exploited

• Move from current focus of Government

planning to a more market and commerce

based approach.

Innovation distinguishes between a

leader and a follower

FAMOUS

ENTREPRENEURS

Now we will discuss some famous inventors and

entrepreneurs like:

• Thomas Edison

• Michael Dell

• Bill Gates

• Steve Jobs

Famous Entrepreneurs

THOMAS EDISON

• Born in 1847.

• Most famous for inventing electric bulb, but his

first commercial success was actually the

phonograph.

• Introduction of DC power.

• In 1887 there were 121 Edison generating plants

in the U.S.

MICHAEL DELL

• Dell is Chairman and CEO of Dell computers. His

company worth of about $30 billion.

• Born in February 1965.

• In 1984 with just $1,000 and an idea to provide

affordable personal computers to college students.

• Michael Dell revolutionized the personal computer

industry by skipping the middle man and selling directly

to the customer.

STEVE JOBS

• Born in 1955.

• Steve Jobs was the co-founder of Apple

Computers and Pixar Animation Studio. He

became a member of the board of directors of

The Walt Disney Company in 2006.

• In 1984, Steve Jobs founded NeXT computers.

• In 1996, Apple announced that it would buy NeXT for

$429 million. The deal was finalized in late 1996, bringing

Jobs back to the company he co-founded.

• He earned only $1 a year as CEO of Apple,but held

5.426 million Apple shares, as well as 138 million shares

in Disney. Forbes estimated his net wealth at $8.3 billion

in 2010.

• After Steve Jobs return to Apple as CEO in 1997, Apple

Computers has had a renaissance in product

development with the iMac, iPod, iPhone, iPad and more.

BILL GATES

• Bill Gates, founder of Microsoft, was born on October

28, 1955.

• From an early age he had an interest in computers and

started programming them at age 13. He went to study

at Harvard, but dropped.

• He and Paul Allen adapted the BASIC programming

language for use on the Altair 8800 - the first

successful personal computer.

• He ranks as the richest person in the world.

According to 2006 estimate the net worth of his

company was about $50 billion.

• Bill Gates is perhaps the most famous

entrepreneur of this era. He had the vision to

predict the evolving importance of the personal

computer.

REFERENCES • http://www.brighthub.com/office/entrepreneurs/articles/73336.aspx

• http://www.innovationventures.sg

• http://www.wikipedia.org/

• http://www.internationalentrepreneurship.com/asia/pakistan/

• http://pakistan.wikia.com/wiki/Entrepreneurship