MODULE NAME: BASICS OF

ENTREPRENEURSHIP

MODULE CODE: GST 05203

FOR: NTA 5 STUDENTS 2019/20

Prepared By Mwase, D
General Studies Department
Office No. G01-IRRIGATION BUILDING
 1. Basic concepts of
entrepreneurship
At the end of this topic the students should
be able to explain:
 Meaning of :-
• Entrepreneur
• Entrepreneurship
Learning Contents:
• Enterprise
• Basic concepts of
entrepreneurship  Types and characteristics of
entrepreneurs
• Self-employment and wage/paid
employment  Rationale/need of entrepreneurship in
economic development
• Business ideas and business
opportunities
• Viable and feasible business
opportunities
• Forms of business ownership
• Components of a business plan
• Stock taking and stock control
 The concept of
entrepreneur
Attn: Task 1 (5 minutes)- Think-Pair-share
1.Individually think and write on;
“Who is an entrepreneur?”
2.Share your answer with your neighbor
3.Write down important points from your
discussion with your neighbor
4.Share what you have discussed
 The concept of
entrepreneur …
• The concept is perceived differently by people/authors
• People do perceive an entrepreneur as an innovator,
as a risk taker, as a resource organizer, as optimistic,
committed etc.
• Normally an entrepreneur is all combined as a person
who:
 Organizes business, undertakes innovation and assumes
risk with aim of gaining competitive advantage and profit.
 Exhibits the characteristics of self-development,
creativity, self-decision making and risk-taking.
 Combines sound judgment and planning with risk taking
to ensure success of his/her own business.
 An ambitious leader who combines land, labour and
capital to create and market new product or service.
 The concept of
entrepreneur …
• An entrepreneur is an individual who recognizes
opportunities where others see chaos, contradictions
and confusion
• Entrepreneurs are different from small –business
owners
• Normally small business owners do not engage in
new/innovative practices, do not have growth
perspectives, prefer more stable (Sales, profit, growth
etc) and less challenging approaches in running their
businesses
• Entrepreneur’s principal objectives are innovation,
profitability and growth
• Thus, the 2 differ in their perspectives especially on
developing their firms
 The concept of
entrepreneur …
• In short, An Entrepreneur can be defined as a person
who takes risk of setting up his/her own business for
perceived rewards. OR
• A person who organizes and manages a business
undertaking, assuming the risk for sake of profit
• He/she is a person who identifies and validates a
business idea, formulates a plan, organizes resources
and puts the plan into action to achieve his/her goal
Note:
There are differences between an Entrepreneur and
manager and The differences between Entrepreneur
and Intrapreneur
 The concept of
entrepreneur …
There are differences between an Entrepreneur
and manager
1.Entrepreneur is the owner of the enterprise while
the manager is the employee
2.Entrepreneur generate profit while the manager
receive salary for the service rendered to the
enterprise
3.Entrepreneur is employer (job provider) while
manager is employee (job seeker)
4.Entrepreneur make strategic decisions while
manager take operational decisions
 The concept of
entrepreneur …
There are differences between Entrepreneur and
Intrapreneur
1.Entrepreneur is independent in his operation while the
intrapreneur is dependent on the entrepreneur/owner
2.Entrepreneur raise all funds required to set the
enterprise while intrapreneur does not raise all funds
3.Entrepreneur operates from outside while intraprenur
operate within the organization
4.The primary motive of an entrepreneur is goal-
oriented, self-reliant and self motivated while
Intrapreneur have access to corporate resources and
also responds to corporate rewards and recognition
 The concept of
entrepreneur …
Attn : Task 2 (10 minutes)

You are provided with various entrepreneurs, their

business ventures and humble beginnings
Required
1)Examine the entrepreneurs, their business
ventures and humble beginnings
2)What lessons can you draw from them
 The concept of
entrepreneurship
• The concept of entrepreneurship has been defined
differently as well
• It is generally more than the mere creation of
business.
• It is the process of creating value after recognizing a
business opportunity, management of risk associated
to the opportunity, using management skills to
mobilize human, financial and material resources
necessary to a project to execution.
• It is the process of setting a new business by
devoting the necessary time and effort, with the
accompanying financial and social risks, and receiving
in return monetary rewards, personal satisfaction and
independence.
 The concept of
entrepreneurship…
• In short we can say, Entrepreneurship is a dynamic
process of identifying business opportunities, gathering
necessary resources to initiate and manage successfully a
business activity.
• From the definition, we can say that entrepreneurial attitude
is characterized by; freedom of thought (beyond
limits/outside the box), motivation to change and action
• This business activity can be new or expansion of existing
businesses
• Can carried out by an individual or by a team. Inside or
outside organizations
• So, the process include ability to recognize business
opportunities, willingness to take risks, ability to mobilize
resources, ability to plan on how to utilize the resources
effectively in order to meet the goal/target.
 The concept of
entrepreneurship…
Therefore, entrepreneurship involves combining personal
characteristics/attributes, resources (both financial and
physical) with in the environment in order to form and run the
business successful.
Entrepreneurship is a process, not a static phenomenon.
Hence, It involves a number of activities:
1)Opportunity recognition: Entrepreneurship is about sensing an opportunity
at a regent time where others see chaos, contradiction and confusion as it
takes an enterprise ahead of others who take time to catch up.
2)Establish a vision: An entrepreneur further moves to establish a vision – a
dream for future. Even if some market forces change, h/she would re-adjust
his vision to reap his dream viable and fruitful.
3)Persuade others: An entrepreneur cannot work alone; h/she needs multiple
skills to make business successful.
He prepares the business plan to make the vision and means of
achieving the vision charter to the others who would join the team including
financiers and family members who put in their trust in the entrepreneur.
 The concept of
entrepreneurship…
4) Gather Resources: A business enterprise needs resources to
become successful. Resources can be considered in four
categories:
a) Financial resources: It is the life blood of any
organization or business. It includes Personal savings, family
and friends, retained capital, banks, government institutions,
NGOs etc.
b) Human Resources Management: Human resources are the
only living and vibrant part of the organization or business. It
can provide the cutting edge over the others.
c) Information Resources: Organizations have to work hard to
run an efficient Information Systems in order to have timely
information about customers, markets, external environment
and even their employees.
d) Operating Resources: Building, plant, office equipment, raw
material, electricity, management, transportation, and
operating procedures.
 The concept of
entrepreneurship…
5) Create New Venture: The next step is the creation of
new venture and running the business successfully this
requires an entrepreneur to have passion (personal or
emotional commitment in the business) as h/she has to
overcome many hurdles and obstacles. i.e if h/she has
causal interest in the business will not succeed.
6) Change with Time: A change has become the rule of the
game in today’s business environment; it requires
adaptability of human resources towards the change
environment.
 The concept of
entrepreneurship…
Entrepreneurship is characterized by the following
features:
1)Economic and dynamic activity: Entrepreneurship is an
economic activity because it involves the creation and
operation of an enterprise with a view to creating value or
wealth by ensuring optimum utilisation of scarce resources.
2)Related to innovation: Entrepreneurship involves a
continuous search for new ideas.
3)Profit potential: “Profit potential is the likely level of return
or compensation to the entrepreneur for taking on the risk of
developing an idea into an actual business venture.”
4)Risk bearing: The essence of entrepreneurship is the
‘willingness to assume risk’ arising out of the creation and
implementation of new ideas.
 The concept of Enterprise
• Enterprise is the commercial undertaking aimed at producing
goods/services for profit. OR is the business organization that is
formed and which provides goods and services, creates jobs,
contributes to national income, exports and over all economic
development.
• It involves turning new ideas into realities.
• The task of turning the ideas involve risks
i.e The money invested are at risk, professional reputation and other
threats like changes in customers preferences, increased
competition, introduction of new policies etc.
• Because of these threats, a successful enterprise has to be
manage with a strong drive for achievement.
i.e the goal(s) for opening an enterprise must be defined, list all
possible alternatives for achieving such goal(s), consider all
obstacles that may hinder achievement of such goals
• In Tanzania enterprises are classified into four (4) main categories:
a) Micro
b) Small
c) Medium and
d) large enterprises
The concept of Enterprise..
• The classification of enterprises in Tanzania as pointed out
by enterprises Development Policy of 2003 is based on
capital invested in the business and the number of
employees as shown below:

Category Capital invested No. of

employees
Micro TSh. 0-5 Million 1-4
Small 5-200 Million 5-49
Medium 200-800 Million 50-99
Large 800 and Above 100 and above
The concept of Enterprise..
Note: In the event of enterprise falling under more than one
category, then the level of investment becomes the deciding
factor
•The Tanzania SME policy [2003], uses the SME
nomenclature is used to mean Micro, Small, Medium
Enterprises [MSMEs] which covers non farm economic
activities, mainly manufacturing, mining, commerce and
services.
•Thus SMEs are micro, small and medium sized enterprises in
manufacturing, mining, commerce and services.
The concept of Enterprise..
SMEs in Tanzania are particularly attractive as engines of
development due to the following advantages:
1)They are relatively easy to set up, even in rural areas (why?
SMEs do not require as much capital, technology,
management, or utilities as larger enterprises).
2)They can be started and operated on part time basis
3)The low level of investment for every job created that makes
them potentially attractive to financiers and the owners.
4)Freedom for the owners to make their own decisions, take
their own risks and reap the rewards of their efforts
5)They act as a training ground for entrepreneurs and thus set
the foundations on which future industrial growth can be built.
6)Many Small businesses are found in informal sector (i.e not
registered with BRELA but only pay tax at local level)
The concept of Enterprise..
SMEs are important in economic development because they:
1.They contribute to about 35% of the Tanzania Gross
Domestic Product (GDP)
2.SMEs are labour-intensive so they create employment
opportunities whose level is relatively low in Tanzania.
3.Utilizes the available resources by using simple, affordable
and appropriate technology
4.SMEs serve as training ground for entrepreneurship and
managerial development
5.Income generation and stimulation of growth in both urban
and rural areas which in-turn contribute to the development of
the country as a whole economically, socially and even
politically.
The concept of Enterprise..
CHARACTERISTICS OF SME’S
a)Independent ownership and operation: Most SMEs are owned
and operated independently, for example, a barber shop, a café, a
boutique, restaurant, mini-markets, hardware etc.
b)Close control by owners who also contribute most of the
capital: Capital of a SME mainly comes from the owner(s) and/or
loans funded by family, relatives or friends
c)The owners make the decisions: The owner(s) of SME is/(are)
usually the manager(s) and the decision maker(s).)
d)Small office or at times home based office: Many SMEs are
rather small in size, employing a few people and have a small office.
Some SMEs even have no employee. The owner would work from
home.
e)Industries: SMEs in Tanzania engage in different industries.
Ranging from trade, manufacturing to services.
f)Most large corporations started as SMEs: Most large
corporations grow from SMEs, for example, Barharesa and the
companies, Mengi and IPP group of companies, even Microsoft
which was originally started by Bill Gates
The concept of Enterprise..
CHARACTERISTICS OF SME’S…
g)They work as the outsourcing partners of large corporations:
Many large corporations outsource some of their work to SMEs, e.g. a
large bank outsources its computer system development work to a
medium-sized software house or Large construction Company
outsource its architecture work to small/medium sized architecture
designers. i.e SMEs work as outsourcing partners of large
corporations; and
h)Very high failing rate in the first year: SMEs have a very high
failure rate due to limited capital, lack of management expertise, weak
market position, etc.
Challenges/problems facing SMEs
1.Lack of business management skills
2.The owners are fully liable for business debt especially if registered
as a sole proprietorship
3.Lack of economies of scale leading to higher marginal costs
4.Lack of capital etc.
Task 3 (5 minutes)- use Venn diagram to relate the concepts;
Entrepreneur, entrepreneurship and enterprise
 The three concepts
together-summary
The relationship that exist in the concepts of
Entrepreneurship, Entrepreneur and Enterprise can
be expressed as follows:-
Entrepreneur is a person who starts an enterprise.
The process of creation is called entrepreneurship.
THEREFORE, The entrepreneur is the actor and
entrepreneurship is the act. The outcome of the
actor and the act is called the enterprise.
 Types of entrepreneurs
• Entrepreneurs are found in every economic
system and in every form of economic activity as
well as in other social and cultural activities.
• They are found amongst laborers, artisans,
exporters, importers, supervisors, engineers,
bankers, professionals and also amongst farmers
and fishermen.
• We find entrepreneurs even amongst
philosophers, politicians, musicians, doctors and
lawyers.
 Types of entrepreneurs…
1.Classification on the basis of ownership;
A. Founders or “Pure Entrepreneurs” These individuals
are the founders of the business who conceptualize a
business plan and then put in efforts to make the plan
a success
B. Second-generation operators of family owned
business: Those who inherit the business from their
parents and forefathers.
C. Franchisees: The franchisor (owner) licenses his
trademarks and tried even to proved methods of doing
business to a franchisee in exchange for a recurring
payment. i.e owner tells you what to do, can even
provide machine
D. Owner-Managers: When a person buys a business
from the founder and then invests his time and
resources in it, he is called the owner-manager.
 Types of entrepreneurs…
2.Classification on the basis of personality traits and their
style of running the business
A. The Achiever: These are self-driven individuals and
can rightly be called go-getter. They have personal
desires to excel. The only drive that pushes them is
the desire to achieve something in life, the desire to
make a mark in society, the desire to prove their
excellence.
B. The Induced Entrepreneur: These are induced by
some external factors to start a business such as
unemployment, family support, incentives, tax benefits
offered by the government and policies.
C. The Idea Generator: These kinds of entrepreneurs
are highly creative people who are always in search of
innovative ideas for setting up new business ventures.
They have the ability to sense the demand much
ahead of others.
 Types of entrepreneurs…
D. The Real Manager: The real managers run the
business in a systematic manner. They analyze
business situations, assess the demands of future,
both in terms opportunities and treats and then take
actions based on the above assessment.
E. The Real Achievers: The real achievers are full of
life. They are looking for the achievement of not even
their own goals but also of people associated with
themselves like suppliers, distributors and employees.

3. Classification based on the type of business

A. Industrial Entrepreneur: The one who engaged into
manufacturing of a product at industrial unit. He
manufactures products to satisfy the needs of
customers after identifying them
Types of entrepreneurs…
B. Trading Entrepreneur: Is one who undertakes trading
activities (buying and selling of goods and services).
He identifies potential markets, stimulates demands
and generates interests among buyers to purchase a
product.
C. Corporate Entrepreneur: Is a person who
demonstrates his innovative skills in organizing and
managing a form of business organization which is
registered under the Act and has legal entity. An
individual who plans, develop and manages a
corporate body.
D. Agricultural Entrepreneur: A person who undertakes
business related to agricultural activities like rising and
marketing crops, farm equipments, fertilizers and other
inputs of agriculture. They are found in plantation,
horticulture, dairy, forestry etc.
 Types of entrepreneurs…
4. Based on the stages of Development
A. First Generation Entrepreneur: One who starts an
industrial unit by means of an innovative skills
combining different technologies to produce a
marketable product. He posses inborn innovative skills.
B. Modern Entrepreneur: One who undertakes a
venture which suits the current market needs.
C. Classical entrepreneur: A stereo-type entrepreneur
whose aim is to maximize the economic returns at a
level consistent with the survival of the firm without
growth element.
 Types of entrepreneurs…
5. Based on functional characteristics
A.Innovative Entrepreneurs: They are innovative in their
approach to business, products, production methods, markets
and forms of organization in their enterprise.
Innovative entrepreneurs are the one who introduces new
goods, inaugurates new method of production, discover new
market and re-organize the enterprise.
They work only if there is certain level of development.

B.Imitative/adoptive Entrepreneurs: They are risk-aversive

and don’t try out new ideas or products. They are
characterized by readiness to adopt successful innovation
inaugurated by innovative entrepreneurs. They imitate the
techniques and technology innovated by innovative
entrepreneurs. Most of these entrepreneurs are found in less
developed countries. Why? Partly due to lack of fund for
research and new developments
 Types of entrepreneurs…
C. Fabian Entrepreneurs: They are highly cautions and
skeptical in their approach especially in experimenting any
change in their enterprises. They imitate only when it
become perfectly clear that failure to do so would result in
loss of their position in the market. i.e they change only if
there is threat to their existence.
They are not readily interested in introducing any change in
their organization unless a point comes when they are
about to be thrown out of market.
D. Drone entrepreneurs: they are characterized by refusal
to adopt opportunities to make changes in production even
at the cist of severely reduced returns relatively to other
like producers. They may even suffer from losses and not
being ready to make changes in their existing production
method.
They are conservative and like to maintain their status quo
 Characteristics of
entrepreneur
 When you see entrepreneurs, you find that some run their
businesses successfully called “successful entrepreneurs”
while other do not.
 Then, a question arises what makes the entrepreneurs
successful?/ what characteristics/qualities do they
possess?
 These characteristics are popularly known as Personal
Entrepreneurial Competencies (PECs)
• Competence= is an underlying characteristic of a person
which leads to his/her effective or superior performance in a
job
Therefore, Entrepreneurial competencies are set of skills,
related knowledge and motive or attitude required by an
entrepreneur to perform a task or an entrepreneurial activity
(business).
 Characteristics of
entrepreneur…
Thus, entrepreneurial competencies include the following
essential components;
a)Knowledge= Collection and retention of information in
one’s mind. Knowledge is necessary to perform task but not
sufficient. E.g describe how to drive a car
b)Skills= Ability to demonstrate a sequence of action which
result in something observable/one can see
c)Motive =An urge/wish/desire to achieve one’s goal
Thus,
Entrepreneurial competencies are;
 Characteristics of entrepreneurs
The ones that lead to the demonstration of entrepreneurial
skills and abilities
The one that must lead to effective and superior performance
of entrepreneurs
 Characteristics of
entrepreneur…
They Include;
1.Creativity and innovativeness
Creativity is the ability to develop new ideas and discover new
ways of looking at problems and opportunities.
Innovation is application of creative solutions to problems or
opportunities to enhance/enrich peoples lives.

2.Leadership and team building

Leadership is the basic quality of an entrepreneur. They have
ability to influence actions of subordinates. The quality is
demonstrated in the way they plan, organize, communicate,
solve problems, generate resources, build teams etc.
Entrepreneurs also have ability to build stong entrepreneurial
team (with common mission, share knowledge, competencies
and with mutual trust) that help in handling venture’s growth
and development
 Characteristics of
entrepreneur…
3. Opportunity seeking and initiative
• Entrepreneurs can search and pursue opportunities at any time.
Along with opportunity seeking ability,
• Entrepreneurs also have initiative to start, grow and expand their
businesses and minds. i.e taking the lead rather than waiting for
others to start.
• Entrepreneurs are self-starter who appear to others to be
internally driven by a strong desire
4. Risk taking and decision – making ability
• Risk is the most integral element for an entrepreneurs.
• Entrepreneurs are not gamblers, they are calculated risk takers
• Thus, they decide to bear calculated risk after getting
clarifications of what they are thinking/ what they want to act on.
• Entrepreneurs are confronted with; Financial risks, career risks,
family and social risks, psychological risk/impact (greatest
risk of all)
Note: risks are broadly categorized as Insurable and Non-insurable
risks. Entrepreneurs they do bear non-insurable risks
 Characteristics of
entrepreneur…
5. Tolerance for ambiguity and uncertainty
• Entrepreneurs have ability to respond to positively to ambiguous
situations( i.e situations that are not adequately
structured/categorized due to lack of sufficient clues)
• Businesses are full of uncertainties. The start-up entrepreneurs
may not get profit, lack customers, get stress from new customers,
co-workers, suppliers, regulators, staff, family members which all
need tolerance.

Generally when there is discrepancy between person’s expectations

and ability to meet demand entrepreneurial stress do arise.
• Some of the possible Sources of entrepreneurial stress are;
Loneliness, Immersion in business, People problems, Need to
achieve etc.
• Some Ways/techniques of reducing/coping with stress are;
Networking, Getting away from it for sometime and find satisfaction
outside the business, Communicating with partners, ,Delegating
etc.
 Characteristics of
entrepreneur…
6. Motivation to excel
Entrepreneurs are motivated to create something new, have
autonomy, wealth and financial independence, achieve
personal objectives etc. as a result, they always ask for
feedback on their performance so that they can judge if
they are improving or not. feedback is central to their
learning.
7. Problem solving
Entrepreneurs are problem solvers. They solve problems
arising in different situations (do not run away from
problems).They solve problems in a logical manner: define
problem, gather information, identify various solutions,
evaluate and select best option, take action and evaluate
the action taken.
 Characteristics of
entrepreneur…
8. Goal oriented
Entrepreneurs they know what they to achieve (in a short and
long period).Thus they have vision (what to be) and
SMART objectives that do help in measuring performance
and providing feedback.
9. Self- confidence and adaptability
Entrepreneurs are self confident (they believe on their
strengths and abilities) and adaptive to changing
environment (internal and external). i.e good in managing
changes.
Thus, entrepreneurs do not afraid of failure and mistakes. They
belief if they are not making mistakes they are probably
engaging in a very easy task where there is little chance of
failure.
 Characteristics of
entrepreneur…
10. Internal locus of control
Entrepreneurs have internal locus of control. i.e they believe on
themselves. i.e any success or failure they experience is
due to their personal actions and they have ability to
influence events
This competence is consisted with high need for achievement,
desire to take responsibility and self confidence.
11. Persistence, persuasion and networking
Entrepreneurs display persistence as they are not discouraged
by problems that come up in the business. They make
repeated efforts to overcome obstacles that get in the way
of reaching goals. They are also good at making network
and influence others to do what they actually want from
them (persuasion).
 Characteristics of
entrepreneur…
Other include;
1)Information seeking
2)Systematic planning
3)Efficiency monitor: supervise the work to be done as per
standards
4)Quality consciousness
5)Independent
6)Have vision
7)Commitment to work contract
8)Good communication skills
9)Negotiation skills
10)Time management
NB: Entrepreneurial competencies are developed in human
minds through education and training
 Roles of entrepreneurship
in economic development
The level of entrepreneurship in any country has significant
effect on the economic development of such country. i.e
Entrepreneurship is one of the most important input in the
economic development of a country
So, whatever form of social, cultural, economic or political set
up, entrepreneurship can not be separated from economic
development.
Entrepreneurship is needed in economic development of less
developed country such as Tanzania because of the following
benefits:
1) Create employment: Through entrepreneurial process
new ventures/businesses are created which in turn
create jobs for the people. Entrepreneurship can offer
employment to the pool of graduates who are seeking
for employment in both private and public sectors.
 Roles of entrepreneurship
in economic development..
2) Creates wealth, income for nation and for individuals:
All individuals who search business opportunities usually,
create wealth by entering entrepreneurship as a career.
The wealth created by the same play a considerable role
in the development of nation. The business as well as the
entrepreneur contributes in some or other way to the
economy, may be in the form of products or services or
tax contributions. Their ideas, thoughts, and inventions
are of great help to the nation.
3) Foster Invention and innovation in the society: In the
process of entrepreneurship, new technologies, new
methods, new materials are discovered which are all
concerned with invention. On the other hand,
innovation is concerned with the utilization of inventions
to produce new and better quality
 Roles of entrepreneurship
in economic development..
products that give greater satisfaction to customers and
high profit to entrepreneurs.

Note that, invention and innovation in

entrepreneurship are essential because of the desire to
succeed that entrepreneurs have, competition in the business
environment that require entrepreneurs to think of new
production techniques, new sources/ materials in order to come
up with better and quality products that will satisfy the market
segment in which they are serving.
4)It speed up the process of activating/combine means of
production hence improved productivity: Entrepreneurs are
agents/actors who combines the means of production such as
land, labor, capital knowledge to produce goods/services hence
higher rate of economic growth.
 Roles of entrepreneurship
in economic development..
5) Entrepreneurship provides self sufficiency:
Entrepreneurship provides self sufficiency to the
entrepreneur its employees (through better standards of
living). The basic factors behind sufficiency may be liberty,
monetary rewards, and the feeling of commitment that one
gets after doing the job.
6) Diversification of economic activities and development
of less developed regions: i.e Entrepreneurs help to
remove regional disparities through setting up of industries
in less developed and backward areas. The growth of
industries and business in these areas lead to a large
number of public benefits like road transport, health,
education, entertainment, etc.
Fact about Tanzania;
 The economy of Tanzania is agricultural based economy
 Through entrepreneurship more economic activities are re-
organized so as to stimulate economic growth.
 Roles of entrepreneurship
in economic development..
Through entrepreneurship rural-urban migration can even be
reduced
Throw up sufficient number of entrepreneurs in less developed
regions to provide the goods/services that are needed by the
people hence economic development for less developed
regions.
7)It encourages effective mobilization of resources such
capital and skill which might otherwise remain unutilized
and idle. Entrepreneurial activities can shift economic
resources out of an area of low productivity into area of high
productivity. So, small businesses are initiated, established and
maintained in such societies.
8)It promotes country’s export trade which is an important
ingredient to economic development
9)It also promote linkages which stimulate the process of
economic development.
 Roles of entrepreneurship
in economic development..
10) Increasing Gross National Product and Per Capita
Income: Entrepreneurs are always on the look out for
opportunities. They explore and exploit opportunities,
encourage effective resource mobilization of capital and
skill, bring in new products and services and develops
markets for growth of the economy. In this way, they help
increasing gross national product as well as per capita
income of the people in a country.
In general, Entrepreneurship lead to the overall Development .
Entrepreneurs act as catalytic agent for change which
results in chain reaction by multiplying their entrepreneurial
activities, thus creating an environment of
enthusiasm/interest and conveying a motivation/push for
overall development of the area
In summary the role entrepreneurship in economic
development of any country can not be overlooked. i.e the
economy is the effect for which entrepreneurship is the
 Remember
• Entrepreneurs should act ethically
• Ethics is a set of moral principles that govern decisions and
actions.
• Entrepreneurs should behave ethically because:
 Customers are more confident when buying goods and
services from an ethical company.
 An ethical workplace motivates employees.
 Ethical behavior also prevents legal problems.
So maintain/establish an ethical workplace by creating
transparency, or openness and accountability in business
decisions and actions.
 sWhen faced with an ethical decision, it’s best to rely on your
own strong personal values to help guide your response
 Reflection questions
1. Discuss the 3 concepts; Entrepreneur, entrepreneurship
and enterprise
2. Evidences shows that there has been slow growth of
entrepreneurship in developing countries as compared to
developed countries to mention few USA, Germany and
Japan. What do you think are the factors behind slow
growth of entrepreneurship in less developed countries like
Tanzania.
3. Entrepreneurs are risk takers and can tolerate on
ambiguities. Discuss
4. What are the causes of entrepreneurial stress? How can
they be reduced?
5. Discuss the roles of entrepreneurship in the economy of
less developed country like Tanzania