Entrepreneurship and Innovation

Course outline

Definition of entrepreneur

Classification of entrepreneurship

Barriers of entrepreneurship

Entrepreneurship in Nigeria or overdue of entrepreneurship in Nigeria

Theories of entrepreneurship in Nigeria

JOSEPH SCHUMPETER

Youth entrepreneurship and it's significance

Institutions support system to entrepreneur

Role of government and private individual on entrepreneur

SCHUMPETER THEORIES

Enterprise formation

Business ownership

E-commerce

Advantages of it in business or application of it in modern business

Innovation

Dimensions of Innovation

Roles of knowledge in innovation

Source of innovation

Advantages of innovation to your business

Challenges of innovation to your business

Concepts of ENTREPRENEURSHIP

Definition of entrepreneurship

What is entrepreneurship?

One First thing to take out from entrepreneurship is identifying opportunities

The process of identifying or creating opportunities , organising resources to

pursue those opportunities and commuting actions and resources to exploit
those opportunities for long term personal gain

The second one is to organise resources...to pursue those opportunities you

have identified

Physical, human, capital resources

You commit actions and resources to express the opportunity for your long
term personal gain (Implementation)

Processes and activities involved in establishing, nurturing and sustaining a

business entreprise

Classifications of Entrepreneurship

Demographic characteristics: characteristics of an individual or the

entrepreneur
It could be their age, status,sex

Youth entrepreneurship by young entrepreneurs

Female entrepreneurship: by females

Senior entrepreneurship: owned by seniors of the society

Rural entrepreneurship: socially disadvantaged group entrepreneurship

Owned by people who are marginalized within the community, could be

disabled

FUNCTIONAL CLASSIFICATION: Based on the nature of the business or it's

operations

Small scale entrepreneurshup: these are small businesses with limited

capital and few employees

Like nano entrepreneurship: one man business

Large scale entrepreneurship: big businesses with significant investment

Nature of business like:

Agricultural Entrepreneurship: based on farming or food processes

Trading entrepreneurship: buying and selling

Manufacturing entrepreneurship: distribution of goods

MOTIVATIONAL CLASSIFICATION

Driving force behind operations

Necessity entrepreneurshup: entrepreneurs who start businesses to escape

poverty, unemployment and they don’t have other options

Opportunity entrepreneurship: those who see or identify opportunities and

they grab them within the market, maybe through franchises
Lifestyle entrepreneurshup: everyone is involved, business aligned with your
desired will

GOAL-BASED CLASSIFICATION

Focusing on the objectives of an individual

Social entrepreneurship: those who are into venture to meet the societal or
environmental needs or issues

Profit driven entrepreneurshup: focusing on generating financial gain

Green entrepreneurship: focusing on sustainability and environmental

practices

TECHNOLIGICAL CLASSIFICATION

Tech entrepreneurship: those who venture into tech to make new technology
and process and bring about new products

Digital entrepreneurship: business operating online including e-commerce,

apps and platforms

INDUSTRY-BASED CLASSIFICATIONS

Healthcare entrepreneurship:

Tourism entrepreneurshup:

Retail entrepreneurship

INNOVATIVE CLASSIFICATION

Focus on creativity of a particular venture

Innovative entrepreneurship: focuses on creating or developing of new

services or method
Imitative entrepreneurship: those who are copying innovative entrepreneurs

GEOGRAPHIC CLASSIFICATION

National entrepreneurship

ENTREPRENEURAL CLASSIFICATION

Serial entrepreneurship: those who start growth and exit multiple businesses

Corporate entrepreneurship: these are entrepreneurs who carry out

entrepreneural activities within a company

Franchise entrepreneurship: the are entrepreneurs who operate a business

under a franchise model using an established brand or processes

Joint-venture entrepreneurship: collaborating ventures between two or more

people...sharing risks together

CAPITAL BASED

Funds being made used of

Self funded entrepreneurship: these are entrepreneurship that started and

grow their business outside their.

Angel funded entrepreneurshup: these are business funded by individual

investors at the early stages of that business. They enjoy the support of
institutions

Venture entrepreneurship: they are institutions who are group of individuals

Crowd funded entrepreneurship: venture raised through crowd funding

platforms
CULTURAL OR CREATIVE CLASSIFICATION

Cultural entrepreneurship :focus on art, gallery festivals

Creative entrepreneurship: business

Risk based classification

High risk: high level of uncertainty

Low risk : low level of uncertainty

Time based classification

Traditional: starting and operating businesses beginning from scratch

Start up: focuses on scalability/upgrading the business, bringing in

innovation through an existing industry

Seasonal: gets engaged in seasonal products

Social and ethical classification

Socially responsible entrepreneurshup

Non profit entrepreneurship

Business ownership classification

Solo entrepreneurshup or sole propeietorhsip

Partnership entrepreneurship

Family: business operated by family members

Life cycle classification

Start up stage:

Mature:
Exit stage:

Innovative classification

Disruptive:

Inplemental entrepreneurship

GOVERNMENT BASED CLASSIFICATION

Public sector:

Policy driven:

Educational and knowledge based classification

Student entrepreneurship:

Academic:

Knowledge based

Concepts of entrepreneur

Entrepreneur is referred to as someone who takes risks into a venture to

secure profits

Types of Entrepreneur

Innovative entrepreneurs: they have the ability to think deeper, better and
more economic ideas within a business organisation

Imitating entrepreneurs
Fabian entrepreneurship: a person seeking victory by delay rather than by
exciting battle

They are very careful and Cautious in adopting any change. They are lazy
and shy away from any innovation.

Drone entrepreneur: they live on the labour of others

Social entrepreneur: these are natural leaders, they are leaders that want to
solve societal problems

Technopreneurs:

Necessity entrepreneurs:

Opportunity entrepreneurs:

Characteristics of an entrepreneur

1. Self confidence

2. Risk assuming

3. Leadership and managerial skills

4. Future oriented

5. Originality

Entrepreneurship in Nigeria

Characteristics of Nigerian entrepreneurship

Individuals and foreign ambassadors participate

Most of the business in Nigeria are under small scale entreprises

Roles of entrepreneurship to economic development

It creates job reducing unemployment and opportunity

It increases production

To introduce new products, services, methods, and technology and it

increases efficiency

It facilitates technological adaptation

It increases wealth and job creation

It encourages you to make use of your skills and to enhance human

capability

It drives rapid economic growth and development

It develops local entrepreneurs

It provides training for indigenous managers and semi skilled workers

It contributes significantly to GDP

It reduces urban migration

Challenges

Limited access to capital

High interest rate on loan

Inadequate facilities

Problems facing entrepreneurship

Frequent policy changes

Insecurity
Historical development of entrepreneurship

Early stage

Modern stage during colonial era

Modern stage after independence

An entrepreneur must be a thinking star

Critical,

Reflective

Creative thinking

ENTREPRENEURSHIP involves identifying opportunities and creating value

through innovation and risk taking

Successful entrepreneurs possessed the ability to think critically, reflectively

and creatively

This thinking styles helps entrepreneurs to navigate challenges, make

decisions and provide innovative solutions

Critical thinking in entrepreneurship

Critical thinking in entrepreneurship is the process of objectively analyzing

situations, assessing evidences and make reasonable decisions

Entrepreneurship uses critical thinking to solve choices

Such problems can make strategic choices

IMPORTANCE OF CRITICAL THINKING IN ENTREPRENEURSHIP

1. Problem solving

2. Decision making

5. Strategic planning
Application of critical thinking in entrepreneurshup

1. In market analysis

2. Financial management

Entrepreneur uses: critical thinking to analyse data

Reflective Thinking

In entrepreneurship involves looking back on last experiences, on past

decisions and actions to gain insight and Improve future performances,
decisions

Importance

1. Enables entrepreneurs to learn from experience thereby improve future

outcome

2. Continuous improvement

3. Adaptability

Application

1. Post project analysis: after a project launch or campaign,

entrepreneurshup reflects on the wants and needs of the people . They
may reflect on customer’s feedback and make adjustment

CREATIVE THINKING

Involves generating new and innovative ideas to solve problems and meet
customer needs. It is the key to developing product, services or solution that
distinguish s business from competitors and address market demand in a
unique way

Importance

1. Innovation : Creative thinking drives the innovation that leads to new

businesses opportunity and solution that were previously on managing or
faulty

2. Competitive advantages:Entrepreneurs who think creatively can offer

unique products or services helping them stand out in crowded markets.

APPLICATION

1. Product development: entrepreneurs use creative thinking to design

new products that fulfill a specific customer’s needs in an innovative
way

Innovation refers to the creation of new products , processes, services or

business model that had value. It is the implementation of a new or
significant improved product, (goods or services) or process, a new
marketing method or a new organizational method in business practice

Market Innovation is the implementation of a new marketing method

These involve significant change in product design or packages, product

placement, product promotion or pricing

Marketing innovations are aimed at addressing customer needs

ENTREPRISE FORMATION AND BUSINESS OWNERSHIP

ENTREPRISE formation means forming a business

Business ownership means to own a business

So intertwining them means the process and steps involved in starting and
knowing a business

The process of setting up an enterprise

1. Opportunity
2. Feasibility studies
3. Forms of business
4. Registration of business
5. Start or utilisation

Forms of Business

Sole proprietorship

Partnership

Joint ventures

Forms of enterprise

There are various forms of an enterprise which can be chosen by the

entrepreneur based on the selection of the intended project

Sole proprietorship: simplest and oldest form of entreprise. It is the type of

business entity which is owned and drawn by one individual which means
100% ownership and profits stay with the owner and so the decision taking
authority.

Features of sole proprietorship

1. Single ownership
2. No desperate legal entity
3. Undivided risk
Partnership: form of organisation in which two or more persons share the
ownership and thereby profit or losses generated in the business entity

Features of partnership

1. Two or more persons enter Into the partnership agreement

2. A written or oral agreement
3. It has to be done mutually
4. Unlimited liability
5. No separate legal entity

Limited liability company: a hybrid form of organisation which contains the

features of both companies, traditional part of firm and company. It is an
alternative cooperate business form which offers benefits of limited
liability to the partners at lower compliances cost.

Features of limited liability company

1. It is a corporate body with separate legal entity

2. There has to be minimum of two persons for it’s incorporation
3. Partners assume limited liability

Joint company

There are two types of joint company

1. Private company: to form a private company, there must be at least

two members with maximum limit of two hundred members(200). A
private company cannot invite to the public to subscribe for the shares
and debentures. Private cannot invite general to share in their
ventured
2. Public company: the formation of public company requires at least 7
members and can invite general public to subscribe for its shares and
debentures if required.
Business name

Type of business

Business mode

Market target

Product of services

Start-up capital

Strategy

Revenue model

Growth plan

Theories of Entrepreneurship

Economic based

Psychological based

Sociological based – Thomas cochran

Resourced based

Entrepreneurship support systems

Situations or systems designed to encompass

Enable business creation through ideas

Knowledge of financial inclusion

NBCI

NOTAP

NCC

NESREA

NDW

NERFUND

Principles of E-commerce

E-commerce simply means electronic commerce. It is the buying and selling

of goods, products or services using the internet as a medium whereby the
buyer gets to see the product online, order it and make payment through the
mode accepted by the seller.

Examples of online stores are: Amazon, OLS e.t.c

There are 5 models of e-commerce

1. Commerce: buying and selling

2. Collaboration : relationships among people or businesses and
individuals
3. Communication
4. Connection: e-commerce helps to connect the world together through
the internet
5. Computation: large scale sharing of resources is paramount to business
transactions.

Advantages

Helps to connect Businesses and people all over the world

Characteristics or features of e-commerce

1. Wide range of audience

2. Universal standard
3. Rich content
4. Ease of interaction
 5. Personalisation or customization : things that can be delivered to
individuals or groups
6. Authorization

Types of E-commerce
There are different types of e-commerce
1. B2B,
2. B2G
3. C2C
4. C2B
5. B2A
6. C2A

B2B is fully known as business to business where business only does

business with each other.

B2C is fully known as business to consumers when a business or an

enterprise is relating with customers( an end user or retailer).

C2C is fully known as customer to customer where there is no middle man

C2B is fully known as customer to business

B2A is fully known as business to administration

C2A is fully known as customer to administration where the receiver will be

at the other end receiving services while not being physically present.

Benefits of e-commerce in modern business

1. Cheaper costs
2. Wider reach
3. Direct interaction is not always needed
4. No geographical barrier( you can buy and sell from any part of the
world)
5. It enables sellers to lower transaction costs
6. Goods are delivered quickly and easily with little effort
7. Complaints are addressed easily
8. It saves time and energy
9. Customers get to shop anytime at anyday

Disadvantages of e-commerce
 1. Security
2. Trust
3.

Source of innovation for R & D

1. From R&D
2. From invention
3. From talent
4. From creativities

Others include: sources within the enterprise or enterprise groups

Market sources: from client, from suppliers, from competitors, conferences,

journals, institutions such as universities, poly, colleges of educations

EFFECTS OF INNOVATION

1. Improved qualities of goods and services.

2. Increased capacity of production or service production.
3. Reduced environmental impact or improved health or safety.
4. Improved flexibility of production.
5. Increased market shares.
6. Reduced labour cost per unit of output.
7. Reduced materials and energy of output.

OBSTACLES OF INNOVATION

1. Inadequate infrastructures such as electricity, lack of fund from

sources outside the enterprise, lack of fund within the enterprise.
2. Customer willingness to pay high price for better quality.
3. High cost of innovation.
4. Inadequate facilities e.g laboratory.
5. Market dominated by the foreign substitute.
6. Market dominated by established enterprise.
7. Uncertain demand for innovative goods or services.
8. Lack of information or market.
HOW CAN GOVERNMENT SUPPORT INNOVATION

1. Training and retraining

2. Infrastructural support
3. Government should provide loan or grant
4. Technical support to entrepreneurs
5. Research and development funding
6. Improved security

CHANGES IN ENTREPRENEURSHIP

Change refers to the process of adapting a new market condition ,

technologies or customers. Jn entrepreneurship, change is constant and
it’s external factors for survival and growth

Types of change

1. TECHNOLIGICAL change
2. Market change
3. Cultural change

1. Technological change: the introduction of a new technology that

can transform product, processes and businesses from the
existing one to a better one.
2. Market change: shift in customers needs e.g the rise of e-
commerce leading to the decrease in the old method of
marketing
3. Cultural change: this includes change in societal norms or value
that impacts how businesses operate or communicate with
customers

IMPORTANCE OF MANAGING CHANGE

As an entrepreneur, entrepreneur must manage change effectively to
avoid destruction in their business. These include: understanding when
to innovate, when to maintain the status quo and how to deal with
market resistance. So as an entrepreneur you may be very flexible and
willing to manage all these. The key to manage this is flexibility and
Innovation drafts change where change creates the name for
innovation.