Enterprise Development

Demystifying entrepreneurship

By Okechukwu Charles Okidegbe

The introduction of entrepreneurship as a concept to modern economic theory and practice can be traced back to the early 18th century French economist Richard Cantillon. From then onwards, several authorities have examined and commented about the role of entrepreneurship in the production process. While some adjudged it as a risk taking(Adam Smith), others concur that its functions go far beyond that in view of its organizational cum coordinating and control functions. In conjunction with labour, they form the personified elements among the factors of production that include land and capital. However, entrepreneurship as the think-tank, plays far more proactive role than labour.

Although entrepreneurship has a long history, it is only recently in this millennium that; in-depth analysis and application of the phenomenon got intensified. This is not surprising given that currently, research and studies have proven that entrepreneurship development impacts positively on economic progression. By spurring up the level of innovation and competitiveness, entrepreneurship results in the creation, renewal, enhancement and realization of values. And where it existed in plenty, it plays a pivotal role in poverty alleviation (Landes 1998)
Unfortunately, a lot of lies, misconception, myths or perhaps misrepresentation have for long been peddled about entrepreneurship which constitutes a slap on the face of abundance of knowledge in this subject. Some of these lies depict entrepreneurs as gamblers, deceptive, social, academic misfits and profit racketeers etc.

There is no gain saying that the aforementioned misconceptions and falsehood have tremendous implication on the realization of the immense benefits of entrepreneurship development and propagation; if unchecked. It is therefore imperative that we demystify entrepreneurship by dispelling these underpinnings. By so doing, some important contribution would be made to the existing body of knowledge in this discipline. It could as well act as useful reference point to potential entrepreneurs and students of entrepreneurship studies.

One aspect of demystifying entrepreneurship is identifying commonalities among successful entrepreneurs opined Irving Grousbeck – one time head of business studies at Stamford University, in United States. This he put as: unending dissatisfaction with status quo, healthy self confidence, willingness to be lonely and able to make tough decisions. The list could also include: diligence, perseverance, pragmatism, ability to network, foresight- intuitive ability to discern future trend in taste and preferences and design products and services towards satisfying those needs.

According to Alfred Marshal (1890,1930) entrepreneurs must be able to bear in mind many things at the same time, must have everything ready when wanted, ability to act promptly and show resource when anything goes wrong, to accommodate oneself quickly to change, ability to be steady and trustworthy, to have always a reserve of force.

Though the attributes discussed above are important traits that mark-off entrepreneur, Marshal however lamented that the abilities of the entrepreneurs are so great and numerous that very few people can exhibit them all in a very high degree. Again, opinion is divided as to whether these characteristic are hereditary or can be acquired. This debate has been there for decades and it seems there is no end to it insight. According to research findings by Scott Shane and others, about 40 percent of entrepreneurial traits can be classified as hereditary; that is - are influenced by genetic factors while 60 percent can be learned or acquired.

John J Rooney while acknowledging innate influence in entrepreneurship disposition opined that these traits can as well be taught and learned and as such those without the initial inclination towards business or entrepreneurship success can flourish with dedication, practice and hard work. He further re-iterated that the very in-born traits that are seen as leverage to entrepreneurship success can have a flip side when entrepreneurs rely heavily on their innate skills and not enough on acquired skills through learning.

It is clear that the debate between nature and nurture influence on entrepreneurship disposition is inconclusive as the mathematics behind quantitative modeling is rather complicated; scientists and academic intellectuals will therefore take side as the debate endures. In this vein, Bo Fishback, believes that entrepreneurship gene studies are largely curiosities. According to him, what is important is opening up entrepreneurship possibilities to more people.

From the discourse above, it clear that both nature and nurture factors impact on entrepreneurship disposition. The fundamental issue at stake is the determination of which has profound influence? The findings of Scott and Shane suggested that nurture has higher degree of influence than nature. Many researchers are of this view too and i am tilted towards that side of the spectrum for obvious reasons. Prime, been that it embodies training and orientation.
Simply put, entrepreneurship is a process and can be learned. More -so, behavioral sciences have proved that human behavior is not deterministic neither is it static but rather varies with circumstances. Indeed, empirical evidence has shown that about 52% of new entrepreneurial start-ups are run and operated by people who are first to venture in their family genealogy. Again evidence are abound about entrepreneurial failures among descendants of successful entrepreneurship moguls .A case in point was the Akamba Modern Bus Services Company in Kenya that collapsed due to siblings feuding, lack of foresight, laxity and inadequate management credentials.

Again nurture encompasses exposure which is influence by environmental variables including government policies. An economic setting, for instance - be it rural or urban with high population density, would most likely have high level of unemployment, all things being equal. The prevailing high unemployment level could spur up entrepreneurship initiatives as a way of making ends meet. Further- more, government policies affect the degree, intensity and direction of entrepreneurship nurturing. Where policies are pro- entrepreneurship, the quantity and quality of entrepreneurship will be high than where policies are in the contrary.

Entrepreneurship as a concept has always shown significant association with trade or commerce. This is in line with the thinking of the originators of this subject. However this is parochial; and in recent times entrepreneurship has broadly been extended to include elements not related to business formative activities. As a multidimensional phenomenon and a conceptualization of mind-set; entrepreneurship can be conducted in any field of endeavor.
This fact comes alive when one appreciates that entrepreneurship embodies personalities that have tremendous amount of initiative, high level of willingness to take risk coupled with leadership capacity to bring together capital and other resources and the required management skills to press the initiative through. Better still, entrepreneurship remains that – urge, ability, willingness, motivation, instinct that makes people to think or do things differently resulting in the creation of a niche, improvement in a given school of thought or idea, process or procedure that results in creative new dimension making difference in people’s lives.

As such, entrepreneurship can be executed in any field of human endeavor as has already been observed. Whence when President Abraham Lincon failed to be elected to both houses of representative and senate of the United States of America but went ahead to win the presidency in subsequent elections, that was a mark of political entrepreneurship. In this vein, new discoveries in science and engineering are driven by spirit of entrepreneurship.

It is good to mention in the passing that scientific entrepreneurs have an inherent advantage over others in that they are closer to the future then the rest. This cutting edge positioning serves as an advantage to starting enterprises based on science that are basically breakthrough in nature.

Furthermore, it is also important to clarify that running a business be it in trade, science, engineering etc, though essentially, is a stepping stone towards becoming an entrepreneur, but does not automatically qualifies one as such unless new ideas and thoughts are constantly engineered in the activities. Needless to say that one can enterprise as an employee. Entrepreneurial minded employees are known as intrapreneurs. What am emphasizing here is that entrepreneurship knows no boundary it can occur in an individual, in small groups of persons and in large corporations.

Intrapreneurs inject fresh ideas and thought processes that help organizations remain innovatively going concern. In a nutshell, entrepreneurs make “things happen in whatever they are involved”. Better still, enterprising entrepreneurs leave impression or mark totally different from the status quo in what they do. Meaning that there must be constant introduction of innovative ideas that are breakthrough oriented bearing in mind that change is the only constant.

One of the most misconceived aspects of entrepreneurship limitation is finance this is understandable in that the relationship between finance, entrepreneurship and economic growth presents complex analysis. Suffice it is to say that the level and structure of a financial system do have bearing on the availability of funds for entrepreneurship and thus affect the quality and quantity of entrepreneurship just as the intensity of entrepreneurship influences economic development. The question is to what extent does availability of capital or inadequacy of it affect entrepreneurship? This has to be viewed in context with socio –economic variables that includes: economic settings, the level of economic development; the level and sophistication of the financial system, government policies and cultural parameters.
Free enterprise economies with developed financial system do provide access to external financing, through money and capital markets, than socialist or command economy depending on off-course the direction of government policies. While internal financing from friends and family sources are expected to be pre-eminent in socialist and command economies due to close family ties guided by the spirit of communalism.

The indication is that funds are by and large readily available depending on how strong the entrepreneurial initiative is. It follows therefore that any special thought, idea or process should have avenues to source for funds especially if such invention or thought process has exploitable commercial value and or contributes to human sustainability.

The in-thing therefore is to have a pool of ideas, it is also important to critically interrogate each and every idea so as to determine and select only those that can be designed into bankable concepts. Some of the generated ideas might be capital intensive, while others might require lesser capital. It is prudent to start with those within means and progress as funds flow. Initial funding can therefore be sourced from owner’s personal savings, family and friends sources, social networks, etc.

For trading entities, the adversity of substantial capital requirement can be ameliorated by engaging ‘down-stream’; a kind of cutting into the tail- end of the distribution channel. Again Rare and brilliant ideas can attract funding from foundations, keen members of the public, donor community, the government, banks and other financial institutions without many hassles. In a nutshell, it is the idea generation and fine tuning, concept formulation and practicality that limits entrepreneurship more than availability of funds.

It is believed that entrepreneurship is synonymous with success. In other words, ‘entrepreneurs do not fail’. Meaning that failure automatically disqualifies one as an entrepreneur. This is absurd in that any endeavor that lacks adequate preparation is bound to fail. More so, entrepreneurial activities are investment oriented and investment goes into the future that is un-predictable. The un-predictability of the future exposes entrepreneurs to a measure of failure even when all precautions have been taken. And in the words of Richard Branson – failure is one of the secrets to success, meaning entrepreneurs take the possibility of failure in their stride.

In effect, what marks off entrepreneurs anchor on the inner strength to continue to strive, to try and re-try and the willingness to go the extra mile to ensure that the desired result is accomplished. Entrepreneurs always hope that things will eventually work out and thus persevere through resilience. An instance is Thomas Edison’s 10,000 protracted but successful trials in the process of inventing the incandescent light bulb. As far as he was concerned, the trials were not failures per se but successful attempts of identifying ways through which the bulbs could not be made.

The mystery about the 'dos and don’ts' of entrepreneurship will continue to be elusive to the risk averse but to those who have large hearts to dare – will always find out that entrepreneurship, though challenging, is equally fascinating and rewarding. Entrepreneurship demystification must therefore continue to help in the provision of solutions to questions asked by potential entrepreneurs like: How do I raise finances? How do I market my products? How do I locate my business? How do I identify my target customers and their needs? How do I work with people? How do I manage the risk?

The source of entrepreneurship initiative or idea generation will always provide a lee-way towards solving issues of design and marketing of products or ideas that includes: market segmentation and target customers’ identification. It is important to consider the source of raw materials, labor, technology and market while contemplating where to locate an organization. Working with people is a complex act of management. However, success can be achieved by crafting a lean organizational structure that recognizes that the human capital is the most important element in any establishment. Best approach is to make organizational and human resources needs accomplishment mutually re- enforcing. Risk management entails making sure decisions are made in a pragmatic and water-tight manner - specially keeping an eagle eye on the flip side of finances.

While a lot of stuffs have been written that try to shade some lights towards the perceived problems and obstacles that mystifies entrepreneurship. However, more needs to be done towards providing solutions to the entrepreneurship issues as the society changes and as the operating environment becomes more complicated.

It is important to always bear in mind that entrepreneurship is not a sprint but more like a marathon. As marathon requires consistency in terms of refurbishing of energy, vigor and tenacity so also entrepreneurship require consistency of strong passion in sourcing and re – engineering of new and vibrant initiatives. Entrepreneurs who a pro change, are entrepreneurs who will always be ahead of the pack.

By way of conclusion, it might be prudent to state that entrepreneurship as a character that can be found in or developed by any individual and thus transcend, race or colour, gender and geographical location.