Understanding Entrepreneurship: A Guide to Innovation and Business

Posted on Aug 19, 2024 in Economy

What is Entrepreneurship?

Entrepreneurship is a way of understanding the world – a positive way to deal with the uncertainty of tomorrow. Entrepreneurs are, essentially, innovative people, able to adapt to changes and take advantage of them. The entrepreneurial spirit is wanting to build capacity for change, experiment with your own ideas, and respond with greater openness and flexibility to current and future challenges.

Origins of the Term Entrepreneur

Since its inception, the term “entrepreneur” has been used to define someone who starts a new project, especially an innovative one.

Effects of Change

The changes in the business world have outlined a series of effects:

  • The tastes of consumers changed significantly, requiring the constant emergence of new business initiatives to meet those needs.
  • The rapidly changing socio-economic climate causes the obsolescence of a large number of businesses but, in turn, the emergence of new “market deposits.”
  • It becomes very difficult to plan long term, since the conditions presented in the market today are not guaranteed to be the same tomorrow.
  • Large companies increasingly outsource activities (outsourcing), which creates new demands for services.
  • The Information Society requires new services.

Why Do We Need the Entrepreneurial Spirit?

Entrepreneurship is the best way to deal with the uncertainty of a changing environment. It brings innovation, creativity, and initiative to the market. Our world today is constantly changing, and that ongoing change in the “rules” requires that “players” are able to reinvent themselves. The entrepreneur is one who has the skills necessary for carrying out this reinvention.

Is the Entrepreneur Born or Made?

The entrepreneur is not a mythical character doomed to success, possessing innate abilities granted only to a few “chosen” individuals. Entrepreneurship is not a mysterious gift that nobody knows how it is transmitted or acquired. Entrepreneurship requires a number of qualities that, if not inherent, can be developed and trained. Entrepreneurship cannot be learned according to some predetermined rules. It’s more a style of doing things, a sensibility, rather than a rational method of learning. It promotes the skills and attitudes to make entrepreneurship germinate. The entrepreneur must be able to innovate, try new things, or make existing things differently. Entrepreneurship education requires training students in responsibility, commitment, effort, perseverance, and work ethic.

Entrepreneurship vs. Intrapreneurship

Entrepreneurship should not be confused with Intrapreneurship:

  • Intrapreneurship involves being able to identify opportunities and bring together the resources to turn them into business within an existing organization.
  • Entrepreneurship goes beyond that, seeking to develop skills and create real change in the environment, experimenting with new ideas and responding with openness and flexibility towards new challenges.

Not all entrepreneurs are intrapreneurs, and not all intrapreneurs are entrepreneurs.

Where Entrepreneurship Can Occur

  • Through the launch of one’s own projects, assuming the risk and responsibility for them, with resilience and problem-solving skills.
  • Or by carrying out projects proposed by others with the same principles of responsibility, autonomy, and innovation.

Although the term seems to refer to an entrepreneur starting a business, it is also used to describe one that uses innovative formulas in existing businesses. Entrepreneurship is not confined to the birth of the company; it is a way of doing things that is desirable for the employer throughout their career.

Values of the Entrepreneur

There are a number of values that are necessarily associated with the entrepreneurial spirit. Such values are of two types:

Personal Values

  • Creativity
  • Autonomy
  • Self-reliance
  • Tenacity
  • Sense of responsibility
  • Ability to take risks

Social Values

  • Leadership
  • Team spirit
  • Solidarity

Definitions of Personal Values

  • Creativity: Ability to imagine new ideas and projects, propose original solutions, and analyze and investigate.
  • Autonomy: Acting without continuous supervision, being able to choose (decision making), and taking the initiative.
  • Self-confidence: Perceiving oneself positively, building on their own skills and abilities, and trusting one’s own resources and possibilities.
  • Tenacity: Showing constancy and perseverance in what is undertaken, persevering in achieving our dream, and guiding actions in line with our idea.
  • Sense of Responsibility: Meeting the obligations to oneself, customers, and employees, assuming responsibility for errors, and being willing to make sacrifices for the project.
  • Ability to Assume Risk: Willingness to act decisively in difficult situations, making compromises to achieve an improvement, even though there is some uncertainty about the outcome.

Definitions of Social Values

  • Leadership: Involving others in projects, influencing others, and utilizing personal qualities, knowledge, and skills.
  • Team Spirit: Ability to work closely with others, sharing objectives and methods of operation.
  • Solidarity: Being okay with and feeling responsible for the choices of the group or organization, incorporating post-materialist values into our project (environmental protection, corporate social responsibility, gender equality, integration of disabled individuals, etc.).

Other Qualities and Skills of the Entrepreneur

Other qualities and skills that should be generated in the entrepreneur are:

Personal

  • Spirit of accomplishment
  • Self-control
  • Critical thinking
  • Flexibility
  • Positive spirit
  • Self-discipline

Social

  • Cooperative attitude
  • Communication skills
  • Ability to interact with the environment
  • Sensitivity to the needs of others
  • Ability to present and defend ideas

Management

  • Planning
  • Dealing with problems and solutions
  • Persuasiveness
  • Organizational capacity
  • Resource optimization

Innovation at the Heart of Entrepreneurship

Innovation is sewn by observing reality, identifying concerns or problems, and generating solutions to them. Innovation is the key driver of competitiveness and economic growth in social territory and is the main element of entrepreneurship. It is the instrument through which the entrepreneur innovates the company and their project. Innovation does not refer to specific advanced sectors but to advanced companies in any sector that are equipped with updated products and efficient processes.

Examples of Innovation in Entrepreneurship

  • Someone had to get a message across – an entrepreneur saw a need and created the Postal Service.
  • The Postal Service is slow in some cases – an entrepreneur saw a need and created Rush Service, using the best communications.
  • New technologies are being used much less – an entrepreneur sees a need and creates a Digital Signature Certifying Body, generating services for official documents.

Business Entrepreneurship

The entrepreneurial spirit is not simply having the courage to start a business. The entrepreneurial spirit is closely tied to the legacy of innovation, growth, and exploration of a market gap – a niche that nobody else has seen. This is what expands the possibilities of any economy.

Reasons for Starting a Business

Many new entrepreneurs decide to start their business for the following reasons:

  • They are unemployed.
  • They are dissatisfied in their current job.
  • They want to have time available.

However, these are very legitimate but insufficient grounds to characterize entrepreneurship. Identifying opportunities and verifying if they have a chance to penetrate the market is the primary condition to start any business. The courage required to deal with uncertainty is an essential aspect of entrepreneurship. The entrepreneurial spirit is something different from the spirit of adventure. It is the ability to challenge what is established.

The Entrepreneur

The entrepreneur is the individual that creates and maintains an innovative business, a new venture. They face all the risks and uncertainties that are inherent in this type of act with the purpose of obtaining profits or benefits through the identification of opportunities to meet the wishes and needs of customers and detecting sources of funds needed for financing, allowing the overall project feasibility.

The Entrepreneur as an Analyst

  • The entrepreneur’s ideas are born from their curiosity, their experience as an employee, the customer, and so on.
  • They get the opinion of others.
  • They discuss with potential customers.
  • They research – find out how this need or desire is being met now.
  • If their idea is feasible and provides more profit or benefit than current solutions, then they have their chance.

Characteristics of the Entrepreneur

  • The entrepreneur is a machine for creating opportunities.
  • They have a lot of receptivity and enthusiasm for new ideas.
  • They are characterized by their flexibility and imagination.
  • They have a great capacity to orient themselves easily in anarchy or unstructured environments.
  • They have strong ambition and responsibility.
  • They are very persistent in pursuing the objectives to be achieved.
  • As great innovators, they run the risk of dispersion.
  • They must be very careful in the maturation of their ideas, not to be jumping from one company or institution to another but never attaining what they want.
  • They feel a preference for moderate risks.
  • They have confidence in their abilities.
  • They have enough ability to develop and influence the other members of the company or institution where the enterprise operates.
  • Their guidance is turned toward the future.
  • They have the ability to organize.
  • Their fulfillment needs outweigh all others.
  • They have a high level of commitment.
  • They are proactive.
  • They are oriented towards realization.
  • They have control over their own destiny.

Benefits of Owning Your Own Business

  • The opportunity to gain control over their destiny.
  • The opportunity to reach their highest potential.
  • The opportunity to make unlimited profits.
  • The opportunity to contribute to society and receive recognition for their efforts.

Challenges of Owning Your Own Business

  • Uncertain return.
  • Possibility of losing the capital invested.
  • Having to work hard for long hours without the right to holidays, Saturdays, and Sundays.
  • Having a sacrificial life, until you get results from a profitable venture.
  • Assuming great responsibilities.

Factors that Encourage Entrepreneurship

  • Entrepreneurs are seen as heroes.
  • Many people have positive attitudes towards entrepreneurship.
  • The emergence of schools and/or training courses for entrepreneurs.
  • Individuals sympathize with the option of being an entrepreneur (having their own business).
  • Technological advances (fax, computer, Internet, etc.) make it easier for entrepreneurs to act to conceive, create, start, and run Micro, Small, and Medium Enterprises.
  • Independence, as many individuals do not want to continue as employees and prefer to have their own business.

Want to Grow in Taking Your Attitude?

  • Do things, don’t make excuses.
  • Each time you fall, get up.
  • Trace or draw a plan for tomorrow.
  • Be a creator of something.
  • Note that work is a privilege.
  • Have passion, willpower, initiative.

What is Creativity?

Creativity is a tool that we all have; we just need to put our imagination to work to have different options to solve problems or situations. One of the authors who contributed the most to shape the concept of creativity is Guilford (1967), for whom creativity is an indirect consequence of at least four skills: fluency, flexibility, originality, and elaboration, which are characteristic of divergent production. So, he determined that divergent thinking is creative thinking.

What Do You Do to Be Creative?

  • First: Ask yourself and imagine.
  • Second: Look and keep wondering.
  • Third: Practice and ask yourself… practice and ask.

What Thoughts Must Be Avoided to Avoid Damage to Your Creativity?

  • Don’t be afraid of making mistakes or think that things will go wrong.
  • Don’t just sit while thinking.
  • Avoid thinking that there is only one answer.

What Practices Help You Be More Creative?

Ask, imagine, think, and ask.