Entrepreneurship as a Vehicle to Encourage Grass Roots

Innovation

Howard Alper

Chair

Government of Canada’s Science, Technology and Innovation Council

Smart Villages

Kuching, Sarawak, Malaysia

January, 2015

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Entrepreneurship Education Nordic Council of Ministers

• “All activities aiming to foster entrepreneurial mindsets, attitudes and

skills and covering a range of aspects such as idea generation, start-

up, growth and innovation”

Entrepreneurship Education Nordic Council of Ministers

• Entrepreneurship education is to improve student skills,

competencies and mindset to think creatively, see solutions and

to transfer ideas into action.

• That concerns

- Ways of thinking (possibility)

- Approaches to learning (usability)

- Transferring knowledge to action (transferability)

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The Evolution of Entrepreneurship

• Entrepreneurship is derived from the French entreprendre,

meaning “to undertake” (e.g. some task).

• A person who organizes and operates a business or enterprise,

taking on greater than normal financial risks in order to do so.

Or

• An owner or manager of a business enterprise who, by risk and

initiative, attempts to make profits.

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Robert C. Ronstadt put together a summary description:

• Entrepreneurship is the dynamic process of creating incremental

wealth. This wealth is created by individuals who assume the

major risks in terms of equity, time and/or career commitment of

providing value for some product or service. The product or service

itself may or may not be new or unique but value must somehow be

infused by the entrepreneur by securing and allocating the

necessary skills and resources.

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An Integrative Model of Entrepreneurial Inputs and Outcomes

Inputs

• Environmental opportunities

• Entrepreneurial individuals

• An organizational The Entrepreneurial Process

context

• Unique business

concepts

• Resources

Outcomes

• A going venture

• Value creation

• New products,

services

• Processes

• Technologies

• Profits and/or

personal benefits

• Employment, asset,

revenue growth

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Identify

Opportunity

Assesses and

acquire necessary

resources

Implementation

Entrepreneurial Intensity

Number of events (and)

degree of entrepreneurship

Innovation Proactiveness

Risk taking

Who are Entrepreneurs?

• Entrepreneurs, driven by an intense commitment and determined

perseverance, work very hard to achieve success. They are

optimists who have strong connections as to the veracity of their

new product, process of innovation. Integrity is their signature, as is

excellence. They burn with the competitive desire to excel.

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Entrepreneurial Management

• Entrepreneurship is based upon the same principles, whether the

entrepreneur is an existing large institution or an individual starting

his or her new venture single-handed. It makes little or no

difference whether the entrepreneur is a business or a nonbusiness

public-service organization, nor even whether the entrepreneur is a

governmental or nongovernmental institution. The rules are pretty

much the same, the things that work and those that don’t are pretty

much the same, and so are the kinds of innovations and where to

look for them. In every case there is a discipline we might call

Entrepreneurial Management.

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Common Characteristics Associated with Entrepreneurs

• Commitment, determination,

and perseverance

• Drive to achieve

• Opportunity orientation

• Initiative and responsibility

• Persistent problem solving

• Seeking feedback

• Internal locus of control

• Tolerance for ambiguity

• Calculated risk taking

• Integrity and reliability

• Tolerance for failure

• High energy level

• Creativity and innovativeness

• Self-confidence and optimism

• Independence

• Team building

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The Dark side of Entrepreneurship

1. Confrontation with risk

2. Stress

3. Ego

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1. Confrontation with Risk

• Financial risk

• Career risk

• Family and social risk

• Psychic risk

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What is Entrepreneurial Stress?

• To the extent entrepreneurs’ work demands and expectations

exceed their abilities to perform as venture initiators, they are likely

to experience stress.

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Sources of Stress

• Loneliness

• Immersion in business

• People problems

• Need to achieve

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Dealing with Stress

• Networking

• Getting away from it all

• Communicating with employees

• Finding satisfaction outside the company

• Delegating well

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An Overbearing Need for Control

• Sense of distrust

• Overriding desire for success

• Unrealistic optimism

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Role of Creativity

• Creativity is the generation of ideas that result from discoveries or

inventions, in new things of potential value in the market place (e.g.

new drug for treatment for arthritis, or lightweight materials for the

transportation (auto, aircraft) industry).

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Innovation

STIC Definition

• The process by which individuals (e.g. entrepreneurs), companies,

and organizations develop, master and use new products, designs,

processes and business methods. These can be new to them, if

not their sector, their country, or the world.

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Sources of Innovation

• Unexpected occurrences

• Incongruities

• Process needs

• Industry and market changes

• Demographic changes

• Perceptual changes

• Knowledge-based concepts

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Financial Support for Innovation

• Two major sources of financial backing are:

- Venture Capital/Angel

- Government support

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Impact of Entrepreneurial Firms

• Entrepreneurial firms make two indispensable contributions to an

economy:

1. They are an integral part of the renewal process that pervades and

defines market economies.

2. They are an essential mechanism by which many people enter the

economic and social mainstream of society.

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Gazelles

• A “gazelle” is a business establishment with at least 20% sales

growth every year (for 5 years), starting with a base of at least

$100,000.

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Gazelles- Innovation

• Gazelles are leaders in innovation.

• Gazelles produce twice as many product innovations per employee

as do larger firms.

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Gazelles- Survival and Success

• About half of all start-ups last 5-7 years. Others fail earlier, and

some success leading to medium and large companies.

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First Regional Smart Villages Workshop Arusha, Tanzania, 2-5 June 2014

Examples of Entrepreneurship Strategies

• 1. Embark Energy—Tanzania (Joshua Kabugo)

Empower clean energy entrepreneurs to see and service their

products on a global basis. The company:

(a) Provides education and training to entrepreneurs

(b) Provides access to demonstrate new products and technologies

(c) Facilitates access to finance. Identifies bottlenecks as SMEs pass

through different stages of growth and development. Identifies

potential sources of seed, working and growth capital

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First Regional Smart Villages Workshop Arusha, Tanzania, 2-5 June 2014

• 2. Global Cycle Solutions (GCS)-Tanzania (Jodie Wu)

Quality solar lights for rural communities. GCS:

(a) Trains and supports local micro-entrepreneurs

(b) Provides training courses twice a year, which cover the basics to

operate a business, product and service knowledge, as well as

addressing needs/objectives of the customer

Key challenges to GCS and the micro-entrepreneurs include poor

infrastructure, maintenance, illiteracy, and risk aversion

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First Regional Smart Villages Workshop Arusha, Tanzania, 2-5 June 2014

Key points re-Entrepreneurship

1. Entrepreneurs could benefit from supportive policies and

regulatory frameworks. There needs to be indirect support to industry

by government through tax credits[direct support programs by

government are also essential]. In addition regulatory frameworks,

without being onerous, need to protect stakeholders.

2. “Financing costs for mini-grids can be punitive as lenders often

perceive risks to be high. Socially oriented “impact investors” who are

able to offer lower than commercial rates may also play an important

role. Such “impact investors” may appropriately build a relationship

with entrepreneurs similar to venture capital funders”

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