Unit 1 ENT600 INTRO

UNIT 1:

INTRODUCTION TO

TECHNOLOGY ENTREPRENEURSHIP

Entrepreneurship Dept, FBM (2009) 1ENT600/UNIT 1 : INTRO

TECHNOLOGY ENTREPRENEURSHIP

(ENT600)

Definition of Entrepreneurship

• Entrepreneurship is a dynamic process that involveschange and creation

• Entrepreneurship can be defined as the identification,evaluation and exploitation of previously unexploitedopportunities. The focus is on creation of a newenterprise or business as well as the wealth associatedwith it. Essential dimensions or ingredients includewillingness to take calculated risk, the skill to applycreative solutions and new ideas and finally, being pro-active to act on opportunities while others are stillconfused or unaware of the potential at hand.


Understanding Entrepreneurship

• Entrepreneurship encompasses several

dimensions or ingredients that help explain what

makes it a unique concept

• The key dimensions of entrepreneurship include:

– Risk

– Creativity & innovation

– Opportunity exploitation

– Pro-activeness


Dimensions of Entrepreneurship:

Risk

• Risk indicates elements of uncertain outcomes or events

that is inherent in the process of exploiting an opportunity

and starting a business

• Entrepreneurs take risks in order to obtain the higher

rewards that come from higher risk but are careful to

evaluate the risk first.

• Success comes from taking a calculated, carefully-

thought out approach to risk where everything possible is

done to identify and minimize potential problems

Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 4


Creativity & Innovation

• Entrepreneurship is characterized by newness or

the specific effort of bringing something new and

something different to the market.

• Being creative and innovative are essential

dimensions of newness

• Creativity focuses on thinking of new things while

innovation focuses on doing new things



Opportunity Exploitation

• Entrepreneurship is focused on takingadvantage or exploiting of previouslyunexploited opportunities

• The exploitation of opportunities often result inthe creation of a new enterprise or business aswell as the wealth associated with it

• The new enterprise should be beneficial to thesociety and make a positive change



Pro-activeness

• Pro-activeness refers to the propensity to act oninformation, ideas and opportunities in a timelyand speedy manner

• Acting at the right time and in the right manneron the superiority of an idea or opportunity candifferentiate between better success or lesssuccess or even between success and failure


• Technology entrepreneurship can be defined as a form of

entrepreneurship and business leadership focused on identifying

high-potential, technology-intensive business opportunity for

possible exploitation into new products, processes or services

• Technology entrepreneurship can be based on revolutionary

breakthrough in technology (inventions or radical innovations) or

a technological advancement (incremental innovations)

• Can target existing market or create an entirely new one

• The process is relevant for both independent startups or within

established corporations

(Adapted from Dorf & Byers, 2005)


Definition of Technology Entrepreneurship

The Entrepreneurial Process

• The entrepreneurial process in general

encompasses all the cognitive (thinking)

and behavioral (action) steps from the

initial emergence of a rough business idea

until the creation of a new business venture

or the process is terminated.

(Adapted from Davidsson (2005)


• The entrepreneurial process is generally

composed of three key phases

– The idea generation or idea discovery phase

– The idea evaluation and development phase

– The idea exploitation phase

• Figure 1 shows the entrepreneurial process with

examples of activities at each stage

Entrepreneurship Dept, FBM (2009)

ENT600/UNIT 1 : INTRO 10

The Entrepreneurial Process

Fig 1: The Entrepreneurial Process


Idea Search &

Generation Phase

Idea Evaluation &

Development Phase

Idea Exploitation

Phase

Idea Discovery

Idea Screening

Research & Development

(Invention/Innovation)

Concept Testing

Prototyping

Test Marketing

Technology Blueprint

Business Start-up

Technology

Commercialization

Monitoring &

Evaluation

Entrepreneurial Process:

Idea Search and Generation Phase

• This phase is also known as the opportunity formation oropportunity discovery phase

• Both the terms ‘idea’ and ‘opportunity’ indicate thepossibility of bringing something new to the market

• Individuals or groups of individuals enter this phase byeither:

– Actively searching for business possibilities that theycan offer in a better, more creative or efficient form or

– Discovering a solution for their own problemexperienced at work, play or in the marketplace thathas the potential of being shared with others who arewilling to pay for the solution



Idea Search and Generation Phase

• In technology entrepreneurship, this ideaformation or discovery phase may berecognizable by the fact that the business ideaor problem solution involves creating a newtechnology or adapting an existing technology

• Technology refers to devices, processes, tools,methods and materials applied to industrial andcommercial purposes.



Idea Evaluation & Development Phase

• This phase is characterized by efforts to betterunderstand what it will take to bring the idea oropportunity into a full-fledge economic activity orbusiness

• In technology entrepreneurship, some key activities atthis stage include

– doing the research and development work to invent orinnovate a new technology-based product, process orservice

– preparing the initial technology blueprint

– concept testing

– prototyping,

– market testing



Idea Exploitation Phase

• This phase is generally characterized by the decision to

pursue the business opportunity or not

• The decision at this phase can take three basic forms

(Fig 2):

– proceed to exploit the opportunity

– abandon the current idea and go back to search for

other ideas

– terminate the process totally and not pursue any other

business ideas


Fig 2: Idea Exploitation Decision Options

Idea Exploitation

Decision

YES

NO

Proceed & Exploit

Opportunity

Abandon

Current Idea Terminate Processor



Idea Exploitation Phase

• If the decision is to exploit the opportunity,

among the key activities include the registering

of the business entity (in the case of an own new

business), hiring workers and starting business

operations

• In a technology based business, a unique

activity at this phase is the commercialization of

the technology-based product, process or

service that may or may not require the creation

of a new business venture.


Entrepreneurship & the Economy:

The Role of Entrepreneurship

• Economic growth and vitality can be generated byencouraging entrepreneurial activity in the society.

• Entrepreneurial activity is centered around entrepreneurswho act as agents of progress

• In order to contribute to economic growth, entrepreneursmust

– Mobilize natural, financial and intellectual capital ascapital inputs in the economy and

– utilize the capital inputs to create products, processesand services as economic outputs


Fig 3: A Model of Role of Entrepreneurship in the Economy


Economy

Entrepreneurs

as agents of

progress

Natural capital

Financial capital

Intellectual capital

Beneficial outputs

Undesired waste

outputs

Adapted from Dorf & Byers (2005)


The Economic Inputs

• Natural capital

– Consist basically of natural resources such asminerals, fuels and energy

– Can also include nature’s biological capacityto produce (e.g. oxygen) or absorb

(e.g. pollution)

– As such this natural capital can be irreversiblydepleted through neglect or irresponsibleusage



The Economic Inputs

• Financial capital

– Refers to financial assets such as money and shares

– Can include exclusive use of technological designsand products that have financial value

• Intellectual capital

– Refers to knowledge that is accessible within anbusiness because it has been recorded (e.g. indocuments and reports), explained (e.g. throughknowledge sharing processes ) and disseminated(e.g. through inter-team or inter-department project orresearch work)



The Economic Inputs

• There are three key sources of intellectual capital

– Human capital

• This is the combined knowledge, skill and abilitiesof the entrepreneurial team and the businessemployees

– Organizational capital

• This is the management structure and peripherals(including hardware, software, databases patentsand systems) that support the human capital

– Social capital

• The relationships and the quality of therelationships that the business maintains with itssuppliers, partners and customers



The Economic Outputs

• Economic progress and growth (outputs) is essentially in

two forms of:

– The beneficial outputs (e.g. increase in new

business ventures that create new jobs)

– The undesired inefficiencies and waste outputs

(e.g. pollution from growing numbers of industries)

– The benefits should be maximized while waste and

inefficiencies need to be minimized for

entrepreneurship to have the desired impact on the

economy


References

• Dorf, Richard C., & Byers, Thomas H. (2005).

Technology Ventures: From Ideas to Enterprise.

New York,USA: McGraw Hill

• Davidsson, Per. (2005). Proceedings, Academy

of Management Conference, Hawaii

(http://eprints.qut.au/active/00002064 retrieved

25 June 2008)


http://eprints.qut.au/active/00002064

Documents

Unit 1 ENT600 INTRO