ORIGIN AND NATURE OF ENTREPRENEURSHIP

Introduction

The concept of Entrepreneurship has gone through an evolution or process that

commenced with providing service in a feudalistic society. Even in its early beginnings
or inception, there was no indication that Entrepreneurship or Entrepreneurism was not
purely a business activity with profit as the primary motive or purpose. From the service
orientation, it has evolved into a kind of endeavor still without definite bias as to whether
an entrepreneur exists in the business that is purely meant for personal gain (profit) or
simply providing services in general. Nor was there also any categorization that an
entrepreneur is the capitalist or the business owner and at the same time, the manager
himself, or that entrepreneurship means small-scale business.

Moreover, an entrepreneur is an inventor and developer of ideas, change agent,

creative, persistent, and a class of his own having his own value system.
Entrepreneurship is now prevalent in various professions from education, engineering,
law, and other areas of orientation, including those who never had any formal schooling
in business education. Further characterization of Entrepreneurship is that it is an
approach and a dynamic process. The approach of an entrepreneur is focused on
growth and expansion orientation. As a dynamic process, an entrepreneur goes
through a stage that is nurtured by his immediate environment and the kind of scenarios
and experiences he has gone through. Entrepreneurship is a culture that is not a fad,
but a very promising career option that can prepare a person for a prosperous future
and a nation that is progressive and prosperous as well.

Evolution of Entrepreneurship

The term and idea on entrepreneurship appears to be familiar, however there is much
more than what is commonly perceived. Its origin remains to be unclear, but there are
indications that the term entrepreneur or entrepreneurship originated in Europe
sometime in the Middle Ages. There is no controversy that the word entrepreneur is of
French origin from the word entreprendre, which simply means "to undertake".

There was, however, a convergence of views among researchers and scholars that
entrepreneurship refers to undertaking the business for himself (i.e. self-owned and self-
managed business) or doing it for someone else (i.e. employment in a business
enterprise). From the literature available, it was reported that early entrepreneurs
provided men and materials needed by feudal lords to wage war against their enemies.
The emergence of an entrepreneur or entrepreneurship at the height of feudal conflict in
France is an indication that the kind of activity is "provision of services," and there was
even no hint at that time that entrepreneurs were doing it for personal gain or profit.

Aside from the above-mentioned notion, there are also other terms an entrepreneur
has, that can also be translated to mean "between-taker" or "go-between". Cited as a
typical example reflective of the term entrepreneur as "go-between" or "between-taker"
is Marco Polo who attempted to establish trade routes to the Far East during his time.

The twentieth century saw a number of scholars focusing their research and studies on
the concept of entrepreneurship. With the growth of academic offerings in the field of
business, management, and finance, the subject area of entrepreneurship has been
added to the list of curricular directions among schools.

Contemporary Views on Entrepreneurship

Lloyd Shefsky, in his book entitled, Entrepreneurs are Made Not Born, defined
entrepreneur by dissecting the word entrepreneur Into three parts as follows:

entre means to enter

pre means before; and
neur means nerve center

Shefsky's practical view on the term entrepreneur leads to a definition of the word as
someone who enters a business- any business - in time to substantially form or change
that business nerve center. It is not concerned with whether people start their
businesses, buy them, inherit them, win them in a poker game, gain control of them in a
fight, or even own them. All that matters is that individuals develop or change the nerve
center of the business.

Karl Vesper describes an entrepreneur in a broader perspective by postulating that

entrepreneurship is now a concern of various professions. For instance, to an
economist, an entrepreneur is one who brings resources, labor, materials, and other
assets into combinations that make their value greater than before, and also one who
introduces changes, innovation, and a new order.

To a psychologist, entrepreneur could refer to such a person as typically driven by

certain forces: need to obtain or attain something, to experiment, to accomplish, or
perhaps to escape from authority of others. To one businessman, an entrepreneur
appears as a threat, an aggressive competitor, whereas to another businessman, the
entrepreneur may be an ally, a source of supply, a customer, or someone to invest in
the same person is seen by capitalist philosopher as one who creates wealth for others
as well, who finds better ways to utilize sources, and reduce waste, and who produces
jobs others are glad to get.

Professor Robert Nelson of the University of Illinois defines entrepreneur as "a person
who is able to look at the environment, identify opportunities to improve the
environment, marshal resources and implement action to maximize those
opportunities." He further emphasizes that the term entrepreneur is meant to be used in
the broadest sense and would include persons in work situations in large, medium, and
small business enterprises, as well as those in cooperatives and government.

In his essay entitled Change and Entrepreneur, Joseph Schumpeter described

entrepreneurship as doing things that are not generally done in the ordinary course of
business routine. It is essentially a phenomenon that comes under a wider aspect of
leadership.

For its part, Jeffry Timmons and his co-authors of the book entitled New Ventures
Creation, has described entrepreneurship as "the ability to create and build a vision
from practically nothing." Fundamentally, it is a human and creative act. This vision
requires a willingness to take calculated risks - both personal and financial - and then to
do everything possible to reduce the chances of failure. Entrepreneurship also includes
the ability to build an entrepreneurial or venture team to complement your own skills and
talents.

Author Albert Shapero who has studied other works on entrepreneurship has opined
that in all of the definitions of entrepreneurship, there is an agreement that we are
talking about a kind of behavior that includes the following:

- initiative taking
- the organizing and recognizing of social, economic mechanisms to turn resources and
situations to practical account
- the acceptance of risks and failure

Entrepreneurship is the process of creating something different with value by devoting

the necessary time and effort, assuming the accompanying financial, psychic, and
social risks, and receiving the resulting rewards of monetary and personal satisfaction.

It now appears that in the studies about the evolution of entrepreneurship, doing actual
creations services is nowhere to be found or ascribed to as the main role of
entrepreneurs as perceived by many. Nor was there any emphasis on describing the
business itself.

Dr N. A. Orcullo, Jr., in his book Contemporary Entrepreneurship, mentioned William

Bygrave about his recent studies on entrepreneurship declaring the last decade of the
20th century as the entrepreneurial age. His idea of entrepreneurship revolves around
the notion that:

First, an entrepreneur is someone who perceives an opportunity and creates an

organization to pursue it.

Second, the entrepreneurial process involves all the functions, activities, and actions
associated with perceiving opportunities and creating organizations to pursue them.

Entrepreneurship is a process and approach

Entrepreneurship is also described by renowned scholars as a dynamic process and an

approach.

As an approach, the entrepreneur considers the business opportunity as a chance to

solve the problem rather than solving the problem itself. A striking difference between a
traditional manager and the entrepreneurial manager is the bias towards growth and
expansion scenarios. As Camposano puts it, the entrepreneur differs from the manager
or small business owner, not so much on goals or in activities, but in approach in doing
his business. As cited also by Hisrich and Peters, the growth orientation can be
measured in terms of the owner's intention when starting the business, their propensity
for fostering the firm's growth, or their initiation of strategic plans designed to promote
growth in the firm. It should be recognized that growth-oriented managers in larger
corporations share these orientations. Hence, growth orientation may be a means of
differentiating an entrepreneur from a small business owner, but it does not differentiate
between growth-oriented people on their own or in large corporate organizations.

Albert Shapero pointed out that entrepreneurship is a dynamic process of innovation

and new-venture creation through five major dimensions- individuals, organization,
environment, process, and institutions. Shapero further postulated that the particular
action taken by an individual is a major shift from one path to another is a product of
situational environment. The entrepreneurial event focuses on the process of
entrepreneurial activity and includes the following factors:

a) Initiative: An individual or group takes the initiative.

b) Organization: Resources are brought together in organization to accomplish some
objective (or the resources in existing organization are reorganized).

The Filipino Entrepreneur

With the influence of western culture, having been previously colonized by Spain who
introduced trading business, as well as been colonized, too, by the Americans, it can be
expected that in the realm of entrepreneurship, that Filipinos stand to duplicate how its
former colonizers really undertake its business. In fact, the generic views about
entrepreneurship in the United States, according to Dr. Orculo, Jr., as reported by Peter
Drucker, "entrepreneurship is essentially starting a business of its own, new and small-
scale business." Being no purely copy-cat, however, there are some differences and/or
variations principally brought about by culture and traditions which, unfortunately, some
of which are constraints to entrepreneurism.

Unlike the Westerners who have spent substantial research on the subject of
entrepreneurship and whose state of economy favors entrepreneurial spirits, there has
been no exhaustive or comprehensive purposive study on entrepreneurial traits or
characteristics of a typical Filipino entrepreneur. What is prevalent are the various write
ups and documentations of various "successful entrepreneurs" have, in many ways,
provided a compendium of materials pointing to various traits and characteristics of a
successful Filipino businessman or entrepreneur. Quite obvious is that many of the
documented success stories were focused on the notion that entrepreneurship means
or refers to that of being engaged in small and medium enterprises or establishing and
managing a business of his own.

The Challenge to Entrepreneurs

Unlike the previous decades where technology, globalization, and trade liberalization
did not play a dominant role, the third millennium is mainly characterized by a globalized
trading system and the predominance of revolutionary information technologies. This
scenario, according to Dr. Orcullo, Jr., is where the real challenge for the upcoming
entrepreneurs and organizations in the so-called "borderless world" is both a challenge
and opportunity. Where the Filipino entrepreneur used to develop and market his
products locally, he is now faced with local competition not anymore with Filipino
entrepreneurs themselves, but also with imported products and services now available
in the local market. Filipino entrepreneurs have to contend with casting out the colonial
mentality of the local market with its preference for imported brands. Where before it
was deemed a bit relatively difficult to export a locally made product, the environment
nowadays is such that it is conducive to developing and marketing export-quality
products owing to the various incentives and supports available.

The resurgence and constantly improving information technology sector is a

development to watch, and its benefits are for entrepreneurs to grab and exploit.
Entrepreneurship and innovation are important tools for productivity and
competitiveness vis-à-vis the large business organizations and the foreign competitors
in general. By exploiting the benefits of the so-called cyber space or information
highway and the various software available in the market, one can easily network with
the foreign markets. The proliferation of computers both in offices and in households
has revolutionized business operations and systems, allowing every place practically a
base for business operations.

The third millennium is surely a challenging and exciting world for businessmen with
entrepreneurial orientation. It is an opportunity for stretching out the limits of one's brain.
There is a lot of room for innovation, ventures creation, strategic position, and business
alliances and partnerships. Such a kind of scenario, which is characterized by a highly
competitive market and with various technologies now available to him, is the opportune
time for outward-looking and quality conscious entrepreneurs and a doom scenario for
traditional management systems.

Entrepreneurship and Philippine Education

With the perennial problem of unemployment, a self-employment and livelihood

opportunity for every citizen is the cry of politicians and the unemployed. It is in fact the
continuing dilemma of the lack of a job for everyone that entrepreneurship as a self-
employment option has become popular in recent years.

There are indications that entrepreneurship education is seeping into the Philippines'
educational system at the secondary level. In fact, some vocational courses/subjects
and books at the secondary level include chapters dealing with entrepreneurship. To
drive home this point, former Education Secretary Andrew Gonzalez said that
college education "is not a right of every citizen" as he suggested that higher education
was better left to students who have aptitude and talent for it.

More than just capitalizing or banking on entrepreneurship as a potential cure to solve

unemployment dilemma, the culture of entrepreneurship has been made a part of the
curricular offerings in some schools at the secondary level. Moreover, courses leading
to specialization on entrepreneurship or major areas of study subsumed under the
course leading to a degree in business management or business administration.
The need for policy shifts in the educational sector, particularly in the area of business
education programs, has been long-delayed. We now have new guidelines for a degree
program in Entrepreneurship.

The Council of Management Educators (COME), composed of academicians, has in

some ways acknowledged entrepreneurship as part of the management education.
Recently, the Society for Entrepreneurship Education, Inc. (SEED) has come into
the arena of further promoting entrepreneurship education both in the formal and non-
formal sectors and a number of entrepreneurs themselves who continually talk about it
and unwillingly share their experiences and expertise, hoping that doers and believers
of entrepreneurship will multiply in number.

Socio-economic benefits from Entrepreneurship

For years and decades, the role of entrepreneurship in the economy appeared not so
well-emphasized in literature. Entrepreneurs have seldom received the attention and
respect shown to the executives of large corporations. Early economists recognized the
essential role of the entrepreneur in ensuring the welfare of a free enterprise economic
system. Entrepreneurs have proven over and over again to be the pioneers who convert
ideas into products and dreams into reality. Entrepreneurs blend creativity, innovation
and risk taking with hard work to form and nurture new ventures.

Today, entrepreneurs play a major role as a provider of employment for the

entrepreneur himself and his immediate environment. Small and medium-scale
entrepreneurs abound and co-exist with large business organizations. Entrepreneurs -
and entrepreneurship culture as well - are now regarded as a potent force and
recognized sector of the economy, and one that is to be relied upon, given its number
and the magnitude of contribution it provides to a country, may it be a developing one or
a developed country.

Other than the aforementioned broad impacts of entrepreneurship upon the economy, it
also brings the following socio-economic benefits:

a.) Promotes self-help and unemployment. Through entrepreneurship, the spirit and
culture of self-help, self-reliance, and self-sufficiency among citizens of nations is
addressed. In the process, every entrepreneur helps or assists the government not only
by providing employment for himself, but also for providing employment to those
employed by the firm.
b.) Mobilizes capital. Every person that goes into entrepreneurship or puts up his own
business means releasing or mobilizing capital that should fire up the economy. Idle
capital kept in the vaults of households will now be mobilized and pumped into the
financial system and the economy which means more business options for others and
more income or returns for the capital owners themselves.

c.) Provides taxes to the economy. The entry of the entrepreneur into the world of
business means tax sources for the government. Every entrepreneur contributes to the
economy a kind of income out of the real estate, income tax, sales tax, fees, and all
other forms of payment to the nation, as local government units.

d.) Empower individuals. The real indicator of economic well-being among citizens
and the masses are in some ways gauged by the amount of financial resources that
every citizen accumulates. Because of the high income-earning potential of
entrepreneurs as compared to those who are employed, the possibility of wealth
accumulation is enhanced and is his economic standing in society, and so the powers
that go with money and other financial resources that goes with entrepreneurial
endeavors.

e.) Enhance national identity and pride. The quantity and quality of products and
services produced by every entrepreneur is a source of pride and identity for a country.
It is not only the entrepreneur that directly benefits from his/her entrepreneurial
endeavors, but the country also takes pride in the honor that goes with it.

f.) Enhance competitive consciousness. Innovation, being the essence of

entrepreneurship, is a catalyst to a consciousness and culture of competition, which, in
the long term breeds quality and international/global competitiveness. An entrepreneur,
therefore, does not only bring in competitiveness for his products and services but it
goes with it an aura and image that can benefit other people or sectors as well.

g.) Improves quality of life. The entrepreneur's penchant for innovation and
development of new products, as well as creation of new markets, redounds to the
betterment of the products and services - and hence the quality of life.

h.) Enhances equitable distribution of income and wealth. With entrepreneurs

succeeding in their respective endeavors, chances are that equitable distribution of
income and wealth can be likewise expected.