Theories of Entrepreneurship

• The entrepreneurial process is the sequence of activities that an individual undertakes to create, develop, and manage a new venture.
• •Contributed by Joseph Schumpeter, an Austrian Economist and political scientist.


  INNOVATION THEORY
• •regards economic development as the product of structural change or innovation.


  INNOVATION THEORY
• •strongly believed that innovation is the force that will propel the revolutionary change.


  INNOVATION THEORY
• •Developed by John Maynard Keynes, a British economist.


  KEYNESIAN THEORY
• KEYNESIAN THEORY


  •The theory put so much emphasis on the role of the government in entrepreneurial and economic development, most especially when the economy was experiencing depression.
• •Theory of Alfred Marshall, an English economist


  ALFRED MARSHAL THEORY
• •He strongly asserted that there are four factors in the production (land,labor,capital and organization) of goods and services in the economy, he considered organization as the coordinating element.


  ALFRED MARSHAL THEORY
• •regarded the entrepreneurs as the prime movers in the organization.


  ALFRED MARSHAL THEORY
• •Frank Hyneman Knight, an American economist


  RISK AND UNCERTAINTY BEARING THEORY
• •Entrepreneur as an agent of the production process where he/she connects the producers and the consumers.


  RISK AND UNCERTAINTY BEARING THEORY
• •Risk-taking as an important dimension that will differentiate an entrepreneur from a worker.


  RISK AND UNCERTAINTY BEARING THEORY
• •Max Weber


  WEBER’S SOCIOLOGICAL THEORY
• •Social cultures are the primary driving elements of entrepreneurship


  WEBER’S SOCIOLOGICAL THEORY
• •The entrepreneur is expected to perform the role of a good constituent by executing his/her entrepreneurial activities in line with good customs and traditions, religious beliefs, and morals.


  WEBER’S SOCIOLOGICAL THEORY
• •Nicholas Kaldor


  KALDOR’S TECHNOLOGICAL THEORY
• •Modern technology as an essential factor in production


  KALDOR’S TECHNOLOGICAL THEORY
• •In the absence of modern technology application in entrepreneurship, economic development would be slow and growth might not be expected.


  KALDOR’S TECHNOLOGICAL THEORY
• •Henry Leibenstein


  LEIBENSTEIN’ GAP FILLING THEORY
• •Primary role of entrepreneurship in any economic activity is to fill the existing gap.


  LEIBENSTEIN’ GAP FILLING THEORY
• •Entrepreneurship is responsible for recognizing trends in the market.


  LEIBENSTEIN’ GAP FILLING THEORY
• •ISRAEL KIRZNER


  KIRZNER’S LEARNING-ALERTNESS THEORY
• •Spontaneous learning and alertness as the two major attributes of entrepreneurship in any given economy.


  KIRZNER’S LEARNING-ALERTNESS THEORY
• •The entrepreneur must be alert in recognizing entrepreneurial opportunities and the ignorance of consumers as well.


  KIRZNER’S LEARNING-ALERTNESS THEORY