WHAT IS ENTREPRENEURSHIP
An entrepreneur is one who combines the land of one, the “labour of another and capital of yet another and thus, produce a product. By selling the product in the market, he pays interest on capital, rent on land and wages to labourers and what remains is his or her profit. The entrepreneur has been described by Collins, 1964 as a “risk taker” a person who braves uncertainty, strikes out on his own through native wit, devotion to duty and singleness of purpose somehow creates an industry where none existed before.
Mbaegbu (2008) submitted that there is, therefore no “one-best” definition for the entrepreneur. He however stated, “Anyone who creates a business, establishes it, and nurses it to growth and profitability or takes over an existing business because the founder is dead or has sold it, on a man who inherited it and continues to build and innovate on it, or a man who runs a franchise qualifies as an entrepreneur in our usage.
Entrepreneurship has been defined by various professions to mean many things since the middle age. The entrepreneur has been seen as an actor, innovator or a developer of technology. Ossai (2008) defined entrepreneurship as the process of creating some new or different values by developing the necessary time, assuming the accompanying financial, psychic and social risks, and receiving the resulting rewards of most personal satisfaction. Entrepreneurship is the process of bringing together creative and innovative ideas and coping them with management and organization skill in order to combine people, money and resources to meet an identified need and thereby, creating wealth. Although, each of these definitions or description views entrepreneur from a slightly different perspective, they all contain similar notions such as risk taking, organizing, creating wealth, initiative and newness.
Entrepreneurial skill can be defined as the ability to create something new with value by devoting the necessary time and effort, assuming the accompanying financial, psychic and social risks, and receiving the resulting rewards of monetary and personal satisfaction and independence (Hisrich & Peters, 2002).
Entrepreneurial skill is the ability to of an individual to exploit an idea and create an enterprise (Small or Big) not only for personal gain but also for social and developmental gain (Olagunju, 2004). Formal descriptions/definitions characterize entrepreneurial skills as ability to have self-belief, boldness, tenacity, passionate, empathy, readiness to take expert advice, desire for immediate result, visionary and ability to recognize opportunity (Salgado-banda, 2005).
Kilby (1971) states that the array of possible entrepreneurial skills encompasses the perception of economic opportunity, technical and organizational innovations, gaining commands over scarce resources, taking responsibilities for internal management and for external advancement of the firm in all aspects (of teaching enterprise)
Historical Background Of Entrepreneurship Development
Entrepreneurship is defined as the process of starting a business. Today, entrepreneurs are romanticized as being the cornerstones of a successful capitalist economy. But where did entrepreneurship begin? Who were the first entrepreneurs? In a global economy dominated by big businesses, what does the future hold for entrepreneurship?
The Beginnings of Entrepreneurship and Trade
Believe it or not, the first entrepreneurs can be traced back to nearly 20,000 years ago. The first known trading between humans took place in New Guinea around 17,000 BCE, where locals would exchange obsidian (a volcanic glass prized for its use in hunting tools) for other needed goods – like tools, skins, and food. This early type of entrepreneurship continued for millennia. Hunter-gatherer tribes would trade goods from different parts of their respective regions to provide an overall benefit for their tribe.
Entrepreneurship and the Agricultural Revolution
The first big shift in entrepreneurship took place during the Agricultural Revolution, which occurred about 12,000 years ago when humans started to domesticate plants and animals. Instead of having to roam, forage, and hunt for their food in different regions throughout the year, human populations could remain stationary in one location and farm the land. This was a fundamental shift in human history. Villages and towns started developing close to fertile lands. There was no longer a need for everyone in the community to be directly involved with food production. People didn’t need to spend all day hunting and gathering for their own sustenance – it was more efficient to let a smaller number of farmers handle food production while the rest of the population focused on other tasks. By specializing in different professions, members of the community could trade valuable goods for food. These were the earliest entrepreneurs in human civilization. Some common areas of specialization included:
• Hunting and gathering
• Fishing
• Cooking
• Tool-making
• Shelter-building
• Clothes-making
Farmers could grow more food than they needed to support their own families. Thus, they would sell food at the market to say, a clothes-maker. The farmer’s family no longer needed to make their own clothes. They could rely on the specialized services within a community to provide for them. As time went on, new areas of specialization began to emerge. Early entrepreneurs would work in areas like: Pottery, Carpentry, Wool-making, Masonry etc.
The Expansion of Trade Routes from 2000 BCE Onward
Between the Agricultural Revolution and 2000 BCE, cities started to appear around the world. Early areas of civilization were concentrated around rivers, particularly the Nile, the Tigris and Euphrates, the Indus, and the Yellow and Yangtze.
By 3,000 BCE, cities in Sumeria (modern day Iraq) contained tens of thousands of people. The city of Uruk, found on the banks of the Euphrates, was home to 50,000 people in the same amount of space that would have previously supported just one tribe of hunter-gatherers. As cities sprang up around the world, entrepreneurship took an important turn. Entrepreneurs were still specializing in all of the areas listed above (pottery, carpentry, tool-making, etc.). But they began to realize that profits could be made by trading between cities and cultures.
Entrepreneurship and the Beginnings of the Marketplace in the Medieval Period
Starting in the medieval period, markets became more and more popular. Larger populations required larger marketplaces where they could purchase food, clothing, services, and other important things. The population spurt starting around 1470 solidified the market’s connection with entrepreneurship. Here are some of the important developments that took place in entrepreneurship during this period:
• Banking grew to new heights and complexities as small business owners had greater financing needs.
• The guild system expanded, giving skilled craftsmen and other entrepreneurs a way to organize their business together, regulate the quality of the goods produced, and develop reputations for certain goods in towns across medieval Europe.
• Entrepreneurs were able to purchase goods from abroad, turn those goods into finished products, and then sell those goods for a profit at a wider scale than ever before.
Mercantilism, Explorers, and the New World from 1550 to 1800
The period from 1550 to 1800 gave rise to the philosophy of mercantilism. Followers of this philosophy believed that there was only a finite amount of wealth in the world. A country’s wealth and value was solely based on how much treasure and gold it could obtain, and how many more exports it could sell compared to imports.
Columbus’s “discovery” of the New World in 1492 would permanently change entrepreneurship. Mercantilist ideals combined with a vast New World to discover made early explorers some of the wealthiest entrepreneurs. During this period, entrepreneurs were known more as merchants and explorers than as entrepreneurs. These individuals would raise capital, take risks, and stimulate economic growth (much like the entrepreneurs of today). Many see this period as the beginnings of capitalism.
Some of the key advances of this period were related to the goods and materials brought back from the new world. Silver imports from the New World, for example, fuelled expanded trade across the Atlantic Ocean. Later on, gold would provide similar motivation. Another key advance in entrepreneurship during this period were Luca Pacioli’s accounting advances. Pacioli created standardized principles for keeping track of a firm’s accounts. These principles would later be used by the era’s explorers and merchants.
Entrepreneurship in the 1800s Onward: Machines and Markets
Many people see the last 200 years of entrepreneurship as being fuelled by “machines and markets”. Capitalism became more entrenched in societies around the world. The theories of capitalism were solidified in Adam Smith’s 1776 work An Inquiry into the Nature and Causes of the Wealth of Nations, where he destroyed the idea of mercantilism. Instead, he argued that self-interested was the driving force in societies around the world.
Thus, entrepreneurs of this period were able to act in self-interest while still improving society as a whole. Robert L. Heilbroner explains this theory in The Worldly Philosophers:
The Industrial Age and Entrepreneurship
The Industrial Revolution marked yet another profound shift in the history of entrepreneurship. Starting in the 18th century, entrepreneurship moved from small-scale production in small towns to large-scale production in big cities. Two things fuelled this fundamental change in entrepreneurship, including:
a. Availability of Energy Production: Businesses were no longer restricted by small-scale energy powered by wind (which was weather-dependent) or falling water (which was location-dependent). Instead, they could rely on technologies like electricity, steam, the internal combustion engine, the locomotive, the automobile, and oil. This gave them the means to make large-scale factories.
b. Availability of Labor: Huge populations began moving to Industrial Revolution cities starting in the 1700s. This gave entrepreneurs a large pool of cheap labor with which to work.
Post World War II Entrepreneurship
After World War II, entrepreneurship began to change for a few different reasons. First and most importantly, the economy was increasingly global and becoming more global every decade. Better means of shipping and communication made it easy for entrepreneurs to sell products and services to a global audience. Massive economies like America could no longer afford to concentrate solely on selling products to American marketplaces.
There were also microeconomic factors like the number of people owning cars. Especially in America, car ownership made it more important to have highways between major cities. As highways became more important, restaurants were needed where people could eat while traveling. This is the environment where entrepreneurs like Ray Kroc made their millions. Kroc created a standardized restaurant that cut down on costs by serving a limited number of men items. Then, he replicated that model.
Other companies that prospered during this period included General Electric, aircraft companies like Lockheed, IBM, and Holiday Inns.
Other countries around the world experienced similar boosts in growth following World War II. Japan, for example, became one of the world’s largest economies by exploiting a large population available for cheap wages. Germany experienced a similar trajectory.
Modern Entrepreneurship
Today, entrepreneurs are the lifeblood of economies all over the world. Even in command economies like China, entrepreneurs are valued for their contributions to the economy and encouraged to innovate to compete with companies around the world.
The global economy – combined with modern infrastructure and communications – has introduced a new age of competition to the world of entrepreneurship. No longer are you competing with entrepreneurs in your tribe, town, village, or city: you’re competing with entrepreneurs all over the world. Many of these entrepreneurs can access cheaper means of production than you. They may have better access to raw resources of cheap labor, for example. This has made modern entrepreneurship more challenging – and arguably more rewarding – than ever before.
REFERENCES
Esomonu B.N (1998). The state of entrepreneurship education in Nigeria.
Fajana, S. (2000) Functioning of the Nigeria labor market, Lagos labonfin and company.
Idehen M, (2008). Infrastructure is the biggest challenge to business in Nigeria.
Igbo, B. C (2006). Understanding Entrepreneur Business. Nsukka, Fulladu Publishers.
Kanothi RN, (2009). The dynamics of entrepreneurship in ICT: case of mobilize phones downstream service in Kenya
Kuratka DF (2009). Introduction of Entrepreneurship. 8th ed. Australia: South Western.
Morphy R (2008). Nigeria: youth unemployment, poverty –a time bomb for country. Leadership, Wednesday, 27, August.
National planning commission (2005). National Economic Empowerment and Development Strategy (NEEDS). Reprinted by CBN.
Okafor E.E (2011) youth unemployment and implications for security and stability of democracy in Nigeria.
Onyebueke and Ochongo, (2002). Entrepreneurship and economic development Enugu: precision printers and publishers.
Ossai, (2008).” Entrepreneurs and Entrepreneurship in Nigeria” Lagos: Gold Land Business Co. Ltd.
Rami L. Adeleke (2010): Using Entrepreneurship development and corporate social responsibility as strategies for conflict resolution in the Niger-Delta region in Nigeria (A paper presented at the 43th Annual SPE International Conference in Tinupa-Calabar)
Salami CGE (2011) Entrepreneurship interventionism and challenges of youth unemployment in Nigeria. Global journal of management and business research volume II Issues 7 version 10 July 2011.
Schumpeter, P (1994). Tough times Never last but tough people do.
Youth unemployment in Nigeria: Some implication for the third Millennium. Global J. Soc. Sci. 2 (1): 21-26.
Adeyemo, S.A. (2003). Studies of the effects of aptitude, instructional leadership styles and learning; Environment on student’s achievement in physics. Doctoral Thesis, University of Lagos; Nigeria
Das, R.C. (2006). Science Teaching in Schools, Sterling publishers private limited, New Delhi-110020.
Federal Ministry of Education (FME, 1981): National Policy on Education (revised), Lagos, Federal Government press.
Kilby, P. (1971). Hunting the Heffalump in P KILBY ed. Entrepreneurship and Economic Development. pp:1-40. New York: The free press
Hisrich, Richard D. & Peters, Michael P., (2002). Entrepreneurship. Boston:McGraw-Hill/Irwin.
Kilby, P. (1971). Hunting the Heffalump in P KILBY ed. Entrepreneurship and Economic Development. pp:1-40. New York: The free press.
Olagunju, Y.A. (2004). Entrepreneurship Small Scale Business Enterprises Development in Nigeria. Ibadan University Press Plc.
Rae, D. (2007). Entrepreneurship; from Opportunity to Action. New York: Palgrave, Macmillan.