INTRODUCTION TO ENT

TECHNOLOGY ENTREPRENEURSHIP
(ENT600)

UNIT 1:
INTRODUCTION TO
TECHNOLOGY ENTREPRENEURSHIP

Entrepreneurship Dept, FBM (2009)

ENT600/UNIT 1 : INTRO

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Definition of Entrepreneurship
• Entrepreneurship is a dynamic process that involves change and creation
• Entrepreneurship can be defined as the identification, evaluation and exploitation of previously unexploited opportunities. The focus is on creation of a new enterprise or business as well as the wealth associated with it. Essential dimensions or ingredients include willingness to take calculated risk, the skill to apply creative solutions and new ideas and finally, being proactive to act on opportunities while others are still confused or unaware of the potential at hand.

Entrepreneurship Dept, FBM (2009)

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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
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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, carefullythought out approach to risk where everything possible is done to identify and minimize potential problems

Entrepreneurship Dept, FBM (2009)

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Dimensions of Entrepreneurship:
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 dimensions of newness

are

essential

• Creativity focuses on thinking of new things while innovation focuses on doing new things

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Dimensions of Entrepreneurship:
Opportunity Exploitation
• Entrepreneurship is focused on taking advantage or exploiting of previously unexploited opportunities
• The exploitation of opportunities often result in the creation of a new enterprise or business as well as the wealth associated with it
• The new enterprise should be beneficial to the society and make a positive change
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Dimensions of Entrepreneurship:
Pro-activeness
• Pro-activeness refers to the propensity to act on information, ideas and opportunities in a timely and speedy manner
• Acting at the right time and in the right manner on the superiority of an idea or opportunity can differentiate between better success or less success or even between success and failure

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Definition of Technology Entrepreneurship
• 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)
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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)

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The Entrepreneurial Process

• 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

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(2009)

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Fig 1: The Entrepreneurial Process

Idea Search &
Generation Phase

Idea Discovery
Idea Screening

Idea Evaluation &
Development Phase

Research & Development
(Invention/Innovation)
Concept Testing

Prototyping
Test Marketing

Idea Exploitation
Phase

Business Start-up
Technology
Commercialization
Monitoring &
Evaluation

Technology Blueprint

Entrepreneurship Dept, FBM (2009)

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Entrepreneurial Process:
Idea Search and Generation Phase
• This phase is also known as the opportunity formation or opportunity discovery phase
• Both the terms ‘idea’ and ‘opportunity’ indicate the possibility of bringing something new to the market
• Individuals or groups of individuals enter this phase by either: – Actively searching for business possibilities that they can offer in a better, more creative or efficient form or
– Discovering a solution for their own problem experienced at work, play or in the marketplace that has the potential of being shared with others who are willing to pay for the solution
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Entrepreneurial Process:
Idea Search and Generation Phase
• In technology entrepreneurship, this idea formation or discovery phase may be recognizable by the fact that the business idea or problem solution involves creating a new technology or adapting an existing technology
• Technology refers to devices, processes, tools, methods and materials applied to industrial and commercial purposes.

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Entrepreneurial Process:
Idea Evaluation & Development Phase
• This phase is characterized by efforts to better understand what it will take to bring the idea or opportunity into a full-fledge economic activity or business • In technology entrepreneurship, some key activities at this stage include
– doing the research and development work to invent or innovate a new technology-based product, process or service – preparing the initial technology blueprint
– concept testing
– prototyping,
– market testing
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Entrepreneurial Process:
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

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Fig 2: Idea Exploitation Decision Options

Proceed & Exploit
Opportunity

YES
Idea Exploitation
Decision

NO

Abandon
Current Idea

Entrepreneurship Dept, FBM (2009)

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or

Terminate Process

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Entrepreneurial Process:
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.
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Entrepreneurship & the Economy:
The Role of Entrepreneurship
• Economic growth and vitality can be generated by encouraging entrepreneurial activity in the society.
• Entrepreneurial activity is centered around entrepreneurs who act as agents of progress
• In order to contribute to economic growth, entrepreneurs must – Mobilize natural, financial and intellectual capital as capital inputs in the economy and
– utilize the capital inputs to create products, processes and services as economic outputs

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

Natural capital

Economy
Financial capital
Intellectual capital

Entrepreneurs as agents of progress Beneficial outputs

Undesired waste outputs Adapted from Dorf & Byers (2005)

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Entrepreneurship & the Economy:
The Economic Inputs
• Natural capital
– Consist basically of natural resources such as minerals, fuels and energy
– Can also include nature’s biological capacity to produce (e.g. oxygen) or absorb
(e.g. pollution)
– As such this natural capital can be irreversibly depleted through neglect or irresponsible usage Entrepreneurship Dept, FBM (2009)

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Entrepreneurship & the Economy:
The Economic Inputs
• Financial capital
– Refers to financial assets such as money and shares
– Can include exclusive use of technological designs and products that have financial value
• Intellectual capital
– Refers to knowledge that is accessible within an business because it has been recorded (e.g. in documents and reports), explained (e.g. through knowledge sharing processes ) and disseminated
(e.g. through inter-team or inter-department project or research work)

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Entrepreneurship & the Economy:
The Economic Inputs
• There are three key sources of intellectual capital
– Human capital
• This is the combined knowledge, skill and abilities of the entrepreneurial team and the business employees – Organizational capital
• This is the management structure and peripherals
(including hardware, software, databases patents and systems) that support the human capital
– Social capital
• The relationships and the quality of the relationships that the business maintains with its suppliers, partners and customers
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Entrepreneurship & the Economy:
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 Entrepreneurship Dept, FBM (2009)

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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)

Entrepreneurship Dept, FBM (2009)

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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) Entrepreneurship Dept, FBM (2009) ENT600/UNIT 1 : INTRO 24