Transcript Part I – Entrepreneurship in the Twenty

Part I – Entrepreneurship in the
Twenty-First Century
Chapter 1 - The Entrepreneurial
Revolution
Chapter 2 - Entrepreneurship: An
Evolving Concept
Chapter 3 - Intrapreneurship:
Developing Corporate
Entrepreneurship
Copyright (c) 2004 by South-Western, a division of Thomson Learning. All rights reserved.
Chapter 1 – The Entrepreneurial
Revolution
Entrepreneurs
Challenging The Unknown
Entrepreneurship:
A Perspective
Our Entrepreneurial
Economy
The Environment for
Entrepreneurship
Predominance of New Ventures
in the Economy
• New business incorporations averaged
600,000 per year
• 807,000 new small firms were established in
1995, an all-time record
• Small business (< 500 employees) employ
53% of the private work force and account for
47% of sales and 51% of private sector gross
domestic product (GDP)
Entrepreneurial Firms’ Impact
• Entrepreneurial firms make two indispensable
contributions to the U.S. economy:
– First, they are an integral part of the
renewal process that pervades and defines
market economies.
– Second, they are the essential mechanism
by which millions enter the economic and
social mainstream of American society.
Trends in Research and Education
1. The entrepreneurial and managerial domains
are not mutually exclusive but overlap to a
certain extent.
2. Venture financing, including both venture
capital and angel capital financing as well as
other innovative financing techniques,
emerged in the 1990s with unprecedented
strength.
Trends in Research and Education
3. Intrapreneurship (that is, entrepreneurship
within large organizations) and the need for
entrepreneurial cultures have gained much
attention during the past few years.
4. Entrepreneurial entry strategies have been
identified that show some important
common denominators, issues, and tradeoffs.
Trends in Research and Education
5. More research on the psychological aspects
has emerged.
6. The risks and trade-offs of an
entrepreneurial career have been subject of
keen research interest.
7. Women and minority entrepreneurs have
emerged in unprecedented numbers.
8. The entrepreneurial spirit is universal.
Trends in Research and Education
9. The economic and social contributions of
entrepreneurs have been shown to make
immensely disproportionate contributions.
10. Entrepreneurial education has become one
of the hottest topics at U.S. business and
engineering schools.
The Age of Gazelles
• A “gazelle” is a business
establishment with at least 20%
sales growth every year (for five
years), starting with a base of at
least $100,000.
Gazelles - Innovation
• Gazelles are leaders in
innovation.
• Gazelles produce twice as many
product innovations per
employee as do larger firms.
Gazelles - Growth
• By the year 2010, demographers
estimate, 30 million firms will exist
in the United States, up significantly
from the 22.5 million firms existing
in 2000.
Gazelles - Survival
• The common myth is that 85% of all
firms fail in the first year.
• The more accurate statement is that
about half of all start-ups last
between 5 and 7 years.
Emerging Trends: Internet and
E-Commerce
• U.S. businesses spent 85.7 billion on building
up their Internet capabilities in 1999.
• Smaller ventures use the Internet for a variety
of operations, including customer-based
identification, advertising, consumer sales,
business-to-business transactions, e-mail, and
private internal networks for employees.
The E-Commerce Challenge
• Electronic commerce (e-commerce)the marketing, promoting, buying,
and selling of goods and services
electronically, particularly via the
Internet- is the new wave in
transacting business.
Advantages and Challenges of ECommerce for Entrepreneurial Firms
Advantages:
• Ability of small firms to compete with other
companies both locally and nationally.
• Convenient and easy way of doing business
transactions.
Challenges:
• Avoiding being a victim of fraudulent
activities online.
• Handling the costs required to maintain
the site.
Developing a Web Site
• Attractive and Useful
• Marketing the Website
• “Stickiness”
Use of Internet Sites
•
•
•
•
•
•
Company Information
Corporate image building
Product information
Advertising
Marketing
Customer communications
93%
89%
80%
78%
77%
76%
Most Important Factors for
Customers to do Business Online
User-friendly and easy to navigate
54%
Good previous experiences
36%
Fast response time
36%
Relevant and updated content
27%
Bargain prices
15%
Emerging E-Commerce Strategies
• 3-P Growth Model
1. Presence
2. Penetration
3. Profitability
Emerging E-Commerce Strategies
• Another Strategy
– Reach
– Richness
– Affiliation
Entrepreneurial
Opportunities
Self-Employment, 1966-2006
Thousands
14,000
11,615
Agriculture
12,000
10,490
Non-agriculture
10,000
1,518
1,447
8,127
8,000
9,327
7,428
2,136
1,646
6,000
8,971
7,881
4,000
5,991
2,000
1,519
5,783
10,096