Utilium

When you have finished studying this module, you will be able to fulfill the following learning objectives:

• Define entrepreneurship.
• Analyze the role of entrepreneurs in a market economy.
• Summarize the national and global dimensions of entrepreneurship today.
• Characterize entrepreneurship as a career.
• Assess the characteristics and qualities of successful entrepreneurs.
• Analyze interviews with entrepreneurs to find common and unique elements.

The module opens with Steve Jobs giving a commencement speech in 2005. What does Steve say about pursuing your dreams and passions? Why is pursuing your passions so important in the context of entrepreneurship?

A common misconception among students is that entrepreneurship is synonymous with small business ownership. There are key differences, however. Experts such as Joseph Schumpeter have distinguished the concept of entrepreneurship by defining it in relation to innovation (McCraw, 2007). The entrepreneur introduces new products, production methods, markets, or forms of organization; undertakes new risks; and creates new wealth. Use the following resources to develop a composite definition of entrepreneurship.

Compare your definition of entrepreneurship to the definition provided on Wikipedia. What changes would you make to improve Wikipedia’s definition?

Entrepreneurial activities may be seen as the engine of an economy (Khosla, 2002). The traditional role of entrepreneurs, seen in even the earliest market economies, is to supply markets with new goods and services and to provide new factories and jobs.

In free market systems entrepreneurs are vital to economic growth. The Global Entrepreneurship Monitor (GEM) conducts cross-national research on entrepreneurial activity to track the impacts of that activity on economic development in diverse countries. In reviewing the GEM Global Summary Results, what can be said about the relationship between entrepreneurial activity and Gross Domestic Product (GDP)? What generalizations can you make about the relationship between entrepreneurship and innovativeness? What is the role of entrepreneurs in stimulating economic growth and the role of governments and societies in helping or hindering economic growth?

Compare the entrepreneurial activity in the the United States or Canada with activity on a global level. What observations can you make in this comparison?

Entrepreneurial activity also can be analyzed from a demographic standpoint, as in the Kauffman Index of Entrepreneurial activity. What can you conclude from the Kauffman Index about the relationships between entrepreneurship and gender, age, race, and nativity?

Note, too, that different states and metropolitan areas have different levels of entrepreneurial activity. What factors at the state or municipality level might account for these differences in entrepreneurial activity? Why are these factors important?

A career as an entrepreneur can be very rewarding. In addition to potentially earning financial returns, entrepreneurs work for themselves and are able to pursue their areas of interest or passion. They also develop a broad set of functional, analytical, and soft skills (from problem solving and data crunching to marketing and social networking) that will support their working career. Because starting a venture is rarely routine, entrepreneurship can also be exciting.

Although there are benefits to a career in entrepreneurship, entrepreneurs also face great challenges. Entrepreneurs face significant financial risk, for example, with many new ventures failing within the first few years of operation (Shane, 2008). Entrepreneurs potentially also face the stigma of business failure. Depending on your ability to manage time and achieve a work-life balance while meeting the needs of your venture, an entrepreneurial career also may be challenging for other people in your life.

On average, the risks of entrepreneurship should decline with each successive new venture an entrepreneur launches (Shepherd, Douglas, and Shanley, 2000). With each new venture launched, an entrepreneur develops critical knowledge and skills that inform the next venture. For this reason, investors often prefer investing in ventures in which one or more members of the founding team have significant new venture experience.

Use the following resources to answer these questions: In what ways can entrepreneurship be a career? How can you prepare for an entrepreneurial career?

What are some key myths about entrepreneurship and how might they inform your decision making about your entrepreneurial career?

What does the interview with Kelly Perdew suggest about the role of experience in venturing and the process of becoming a serial entrepreneur?

Entrepreneurs come from a variety of backgrounds and have a range of personality characteristics. However, certain generalizations about entrepreneurs can be made. Many entrepreneurs have worked for a new venture at some point in their career, for example, or come from a family of entrepreneurs and small business owners. Entrepreneurs also tend to exhibit certain characteristics, such as a desire for independence, an ability to cope with uncertainty, and strong self-motivation. Aside from these generalizations, entrepreneurs are every age, of both sexes, and in every ethnic group and society (Fairlie, 2006). Individuals become entrepreneurs both after dropping out of college and after obtaining their MBAs and having careers with large companies. Becoming an entrepreneur is, above all, a choice.

Do most entrepreneurs start in the garage or with sales from a car trunk? Why is working for other organizations, and particularly new ventures, important for starting a new venture?

Are successful entrepreneurs jacks-of-all-trades or specialists, and what are the advantages and disadvantages of each?

How would you rate yourself as a prospective entrepreneur, and what are your strengths and weaknesses?

Being a successful entrepreneur requires a range of skills in addition to a compatible temperament and practical experience. For example, successful entrepreneurs must develop skills in human resource management, product and service development, project management, marketing and sales, operations, budgeting and financial analysis, negotiation, strategic planning, and social networking.

What are the characteristics and skills requirements of successful entrepreneurs? Address this question in a comparative analysis of two of the following interviews.