Entepreneur

UNITED STATES INTERNATIONAL UNIVERSITY-AFRICA

BUS 4010:SMALL BUSINESS ENTREPRENEURSHIP

INSTRUCTOR: DR.G.O. K’AOL

ENTREPRENEURSHIP THEORIES.

1.ECONOMIC THEORIES

• Economic theories of entrepreneurship focus on the effects that the economic environment has on entrepreneurial activities and what impact entrepreneurs have upon the economy.

• From the economic perspective an entrepreneur is as a person who brings together the resources or factors of production into combination that make their value greater than before.

• Economic theories help in providing missing links in the environment that are necessary for business start-up and survival.

• Proponent of economic theory believe that entrepreneurship and small business development is influenced by factors such as:

- Market structure and opportunities

- Investment climate

- Government restrictions or encouragements

• An entrepreneur is seen as someone who specializes in taking judgmental decisions about the coordination of scarce resources (Casson, 1982).

• Entrepreneurship is likely to succeed under conditions that provide enabling environment in term of policies, infrastructure, market information, and credit availability.

• Within the economic context the entrepreneur is seen as:

a) A risk taker or the bearer of uninsurable risks (Cantilon, 1755)

b) A combiner of resources or factors of production such that wealth is created (Say, 1832)

c) Innovator who bring new combinations into production process (Schumpeter, 1942). Schumpter saw the entrepreneur as the engine of economic development which resulted in new combinations (called an enterprise)

The new combinations may include:

- Introduction of a new product or service

- Introduction of a new method of production

- Opening of a new market

- Finding new source of supply of raw materials or components

- Providing industrial reorganization

2 . PSYCHOLOGICAL THEORIES...