Concept and Value of Entrepreneurship

Question: What is entrepreneurship? Illustrate your answer with suitable examples from your home country. Nowadays, entrepreneurship places an important determinant of development in the society and regarded as the “rock stars” in the business world. According to Global Entrepreneurship Monitor (GEM), entrepreneurship is defined as: 'any attempt to create a new business enterprise or to expand an existing business by an individual, a team of individuals or an established business’. It means that the individuals or an established business are able to make a unique, innovative and creative contribution whether in employment or self-employment.

At the same time, entrepreneurship represents people who are driven to act on opportunities and environmental catalysts in the face of limited resources. At its core, entrepreneurship is starting a business from idea conception to managing the company for the long term. There is no doubt that entrepreneurship deserves the reputation for the reason that it has the level of freedom of which traditional managers can only dream. ( Morrison, 2000) In order to inquire entrepreneurship deeply, this article illustrates two essential parts to analysis entrepreneurship.

The first aspect is giving the concept of entrepreneurship including the explanation of entrepreneurship and discussing whether entrepreneurship is aroused from nature or nurture. The second part is considering the value of entrepreneurship. Part one: the concept of entrepreneurship Entrepreneurship can be explained into various approaches, including economic approach, personality approach and other approaches. In this part, the article put emphasis on the economic dimension and personality dimension to analyze the features distinguished entrepreneurs.

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The role of entrepreneurship is embedded in the mainstream economic models. Considering the direction of causality between entrepreneurship and economy, it can be proved that economic development generates many opportunities which can transform new ideas and create the new enterprises. On the contrary, the creation of new industries and the innovation of existed firms which stimulated by entrepreneurship may stimulate the economic growth. Therefore, entrepreneurship can be regarded as both the cause and effect of economic development.

From an economic perspective, the measure of entrepreneurship is the contribution of new firm formation. Entrepreneurs are more than a business man, they are the speculative trader which is skilled to put forward new ideas, grasp the opportunities and combine the effective management with innovation in the risk and uncertainty background. When starting up a new enterprise, there are a number of jobs available can be generated. When facing with the economic slump and financial crisis, entrepreneurs can drive the company get out of the trouble by seizing opportunities and making innovation.

There comes a conclusion that the entrepreneurs as the agent of economic change so that it makes huge contributions to economic growth. ( Oscar, Javier & Pablo, 2009) It is far from enough for explaining the entrepreneurship in economic rationale. Economic perspective ignores the special human abilities and differences in human values, capabilities and power of human will result in different practical solutions. Therefore, it is essential to take the personality into account. Personality traits aim to using the characteristics of individual to explain the differences of individual actions when facing the similar conditions.

Personality traits also explain the behaviors of entrepreneurs. There is no doubt that the individual personality of entrepreneurs stimulates their passions, social interactions and creativeness. In order to give a deep understanding of entrepreneurship, there are several traits which have a close relationship with entrepreneurship. ( Littunen, 2000) Innovation is the soul of entrepreneurship. Hampered by uncertainty and limited resources, entrepreneurs should to reply the variety agile efficiently and become creative in facing the challenges.

Since the essence of entrepreneurship is doing the different things rather than making something better, the lack of innovation will result in the decline of enterprise, even perishing. In the point of view of CEO Zhang Ruimin, entrepreneurship is the creative destruction, if the enterprise attempts to make great achievements, there is a need for enterprise to destroy themselves, and otherwise they will be destroyed by other firms. Thus, recently, Haier put forward an idea that enterprises should be adapt to the demand of epoch development other than willing to success.

Haier relies on the pursuit of innovation perseverance by the means of setting up an independent operation mode of the win-win body successfully become a leader in the industry. ( Okpara, 2007) Adventure is the nature of the entrepreneurial spirit. Facing with the potential risks and uncertainty, it is impossible to possess entrepreneurship if lacking of adventure. It is said that you must kiss a large number of frog to find the princess. It means that entrepreneurs should have to experience setbacks and failures in order to be success. Liu chuanzhi is the representative of entrepreneur in china.

Although he has been relieved from this office, he still keens to start new businesses. Regardless of facing risks and many challenges, he intends to transform Lenovo into an enterprise which produces enterprises. It can be drawn that entrepreneurs have the spirit of adventure and dare to be the first one. (Hadji, Cocks & Mueller, 2007) Social vision is the key to entrepreneurship. Social vision can be regarded as a strong sense of obligation and destiny to satisfy human needs. Possessing social vision promotes entrepreneurs to find the opportunities and act as an agent of social age.

Li kaifu, the CEO of Innovation Works, stress that entrepreneurs should spare no effort to produce more social returns. He proves himself through actions. September 4, 2009, Kaifu Lee resigned from Google to run his Innovation Works as an angel investor and create new models for society by his huge influence. Li kaifu has the sense of obligation and aspiration to make contribution to social and economic development by creating new business and innovation. What’s more, there are many other characteristics which are associated with entrepreneurship such as locus of control, determination, and trusting and trustworthy.

When entrepreneurship attracts public’s attention, there is a heated debate aroused about whether entrepreneurship is caused by nature or nurture. Some groups believed that genetic factors existed to drive people to engage in entrepreneurial activity. There is no doubt that some kinds of specialities are people born with, such as the innovativeness, adventurous and locus of control. These characteristics are determined by genetic factors rather than training or other environmental factors. It is insisted that genes may have an influence on chemical mechanisms in the brain so that people maybe more willing to pursue entrepreneurial activity.

Genes also affect individual characteristics which can make entrepreneurs different from others, such as people who possess characteristics of innovativeness and locus of control are more likely to throw themselves to the entrepreneurial activity. ( Kroeck, Bullough & Reynolds, 2010) Genes entrust people the ability to be more sensitive than others to environmental stimuli, it means that entrepreneurs are easier than others to master the social change in order to prepare in advance. What’s more, genes may make people to good at find favourable factors and opportunities to ensure the company development.

Therefore, it is nearly impossible to find a simple formula or entrepreneurship that can be trained, the specific characteristics and habits possessed by the successful entrepreneurs was inherent. ( Kenney & Mujtaba, 2007) However, some groups take the opposite view that entrepreneurial leaders are made rather than born. They consider that there is hardly existed entrepreneurship gene for the reason that the majority of entrepreneurial leaders start at a young age. According to the survey, about 33% of the entrepreneurial leader said that working in the corporate environment makes essential contribution to the success of their business.

At the same time, 45% of entrepreneurs establish their own businesses after the age of thirty. Although there still have young entrepreneurial leader, it is no doubt that the knowledge they acquire in the college and the personal experiences through the corporate and social environment are essential to their success. In spite of the young age, over a half of entrepreneurs regarded themselves as the “transitioned leader” for the reason that they have spent a much time in the traditional employment before starting their own business. The education and experiences lay great foundation on the entrepreneurs.

It can be concluded that entrepreneurs are aroused from both nature and nurture. Some unique characteristics of entrepreneurship which include creativeness, locus of control and risk-takers are born with and can not be taught, these characteristics make the entrepreneurial leaders apart from the traditional managers. Nevertheless, becoming successful entrepreneurs and running the business successfully in the long term are not simply requiring the specialties, but also depending on the combination of internal and external factors, consisting of education, timing, culture, social environment and sometimes luck.

Part two: the value of entrepreneurship Almost without exception, entrepreneurship brings a lot benefits to individual, companies and society. Most importantly, entrepreneurship indeed generates great economic benefits so that it should be attach importance to. Actually, entrepreneurship is regarded as a challenge for people. It requires people to break the traditional thinking of managers and become the risk-taker and create a new business. Although it may be difficulty for people due to the lower median incomes and more volatile and less secure, entrepreneurs could earn self satisfaction and rewards which is an opportunity for them.

At the same time, developing the entrepreneurship can generate self sufficiency which can create the wealth. According to the top ten popular entrepreneurs in china which is ranked by Forbes, consisting of CEO Ma huateng in Tencent, CEO Ma yun and other entrepreneurs, the aim of ranking is to make entrepreneurship internationally respected and admitted. Therefore, facing uncertainty risks and challenges, entrepreneurs are still willing to create their own business and achieve their values. Firth & Mcelwee, 2009) Entrepreneurship also plays the dominant role in the enterprise development; it is the major source of the enterprise core competitiveness. The core competitiveness of enterprise is regarded as the extension of entrepreneurship and it can be reflected by the visionary and vigorous leader. As being the unique position in company, it is important for entrepreneurs to take responsibility of risk activities such as the organization innovation, management innovation and value innovation.

For example, in 2002, Huawei was facing the challenge of lacking of technology advantages and entering the cyclical downturn, CEO Ren zhengfei carried out the deep reform which includes industrial restructuring and internal restructuring and finally enterprise met the success. It proved that entrepreneurship does not simply constitute the internal driving force of development, but also become the external development opportunities. Entrepreneurship makes huge contribution to the social development, especially in economy.

Entrepreneurship generates a large number of employment opportunities by the establishment of new business which is treated as a significant input to economy. It is also improving the level of productivity by boosting the GDP rates or tax contributions. Moreover, entrepreneurs are able to create many innovations which promote the boom of inventions the world would have been a much dry place to live in. Especially in recent years, China is experiencing the economic downturn influenced by the global economic crisis; it is in urgent need of entrepreneurship to promote the economic recovery.

Sun mingnan is the represent of the generation of 80s, which was the most attractive young entrepreneur in Summer Davos, his successful experience proved that young entrepreneurs attach importance to the economic development in China. ( Santo, 2012) Above all, entrepreneurship has substantial value, it is increasingly treated as a vital driver of economic, productivity, innovation and employment development, and it is believed to be a key aspect of economic dynamism and a key factor to determine the birth and death of firms and their growth and downsizing.

It is also promoting the self satisfaction and sufficiency. Since creating a new business and participating in self-employment has become a common activity in the world, entrepreneurship is widely recognized as the major drive in economic growth. After the basic analysis of entrepreneurship among the economic and political ways, as well as whether entrepreneurship is caused from nature or nurture, it can be concluded that entrepreneurs indeed have some kinds of characteristics which are born with, also need the knowledge and experiences. Combined with both nature and raining, entrepreneurs have the ability to make contribution to individual, enterprises and the society. In a conclusion, entrepreneurship is deserved for both people and government to pay attention to. References: Firth, K & Mcelwee, G(2009), “Value-adding and Value-extracting Entrepreneurship at the Margins”, Journal of Small Business and Entrepreneurship, vol. 22, pp39-53 Hadji, M, Cocks, G & Mueller, J(2007), “Toolkit for leaders: entrepreneurship and leadership prerequisites for a winning performance”, Journal of Asia Entrepreneurship and Sustainability, vol. , pp1-13 Kenney, M & Mujtaba, BG(2007), Understanding Corporate Entrepreneurship and Development: A Practitioner View of Organizational Entrepreneurship, Journal of Applied Management and Entrepreneurship, vol. 12, pp73-88 Kroeck, KG, Bullough, AM & Reynolds, PD(2010), “Entrepreneurship and Differences in Locus of Control”, Journal of Applied Management and Entrepreneurship, vol. 15, pp21-49 Littunen, H(2000), “Entrepreneurship and the characteristics of the entrepreneurial personality”, International Journal of Entrepreneurship Bhaviour & Research, vol. , pp295 Morrison, A(2000), “Entrepreneurship: what triggers it? ”, International Journal of Entrepreneurial Behavior & Research, vol. 6. 2, pp 59-72 Okpara, FO(2007), “The Value of Creativity and Innovation in Entrepreneurship”, Journal of Asia Entrepreneurship and Sustainability, vol. 3, pp1-14 Oscar, GB, Javier, GB & Pablo, MG(2009), “Role of entrepreneurship and market orientation in firms’ success,” European Journal of Marketing, vol. 43, pp500-522 Santo, FM(2012), “A Positive Theory of Social

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