Chapter 1

Question 1

three key components of a good definition of entrepreneurship

Answer 1

risk and uncertainty, the entrepreneur, and entrepreneurial contexts.

Question 2

risk and uncertainty (components of a good definition)

Answer 2

Making decisions under uncertainty is the first element of a good definition of entrepreneurship (we calculate risks based on experience (Frank knight)

Question 3

the entrepreneur (components of a good definition)

Answer 3

The characteristics of the entrepreneur are important.

Question 4

entrepreneurial contexts (components of a good definition)

Answer 4

Context is important because entrepreneurship is not solely the expression of an individual personality

Question 5

What difference uncertainty and risk?

Answer 5

You cannot manage uncertainty, but you can manage risk. (Entrepreneurship is a process of transforming ‘unknowns’ into quantifiable risks).

Question 6

Innovator

Answer 6

Someone who marketilize a product and makes it a company. Not inventing just getting things done.

Question 7

Five ways of introducing innovations

Answer 7

1. Introduction of a new method of production (lopende band etc.)
2. Opening up of a new market (amazon)
3. The conquest of a new source of supply of raw materials or half-manufactured goods
4. The creation of a new type of industrial organisation (social enterprise)
5. Introduction of a new good or significant improvement (self-driving cars)

Question 8

How did Schumpeter characterized entrepreneurs

Answer 8

supernormal qualities of intellect and will, innovator: not inventing just getting things done, arbitrage, entrepreneurial alertness.

Question 9

why did Schumpster saw creativity as destruction

Answer 9

by changing the environment you also destroy the old ones. (from gas to electric cars creative but destroy industries (and jobs etc.))

Question 10

Arbitrage

Answer 10

An individual realizes there is a difference in price for a product or service between one market and another and exploits the opportunity for profit (buying matchsticks in bulk from the Swedish capital Stockholm, breaking them down to smaller batches and selling them at a higher price in his local village.)

Question 11

Entrepreneurial alertness

Answer 11

ability to recombine existing information into something profitable, be aware to oppurtunities that exist because ‘errors’ like poor sevice of one company or to high prices. (bring markets back into equilibrium)

Question 12

opportunities

Answer 12

socially constructed by people working together to give meaning to the identification and realisation of opportunities

Question 13

Kirzner’s contribution

Answer 13

to point out how individuals could act entrepreneurially

Question 14

Input of Gartner

Answer 14

instead of examining ‘who’ the entrepreneur was, it is better to work out ‘what’ they do in particular situations. (‘unit of analysis’ should focus on entrepreneurial behaviours rather than the dispositions of the entrepreneur) becaus

Question 15

Difference Schumpeter and Kirzner & Gartner

Answer 15

Schumpeter and Kirzner focused on the economic role of the entrepreneur rather than whether they owned a business –> Gartner concluded that ‘Entrepreneurship is the creation of organizations’; ‘it is a role that individuals undertake to create organizations’.

Question 16

very few start-ups are radical Schumpeterian innovators

Answer 16

Most start-ups are incremental ‘order-of-magnitude improvements in price/performance that build on existing know-how within product classes (Margaret Thatcher ice cream)

Question 17

venture creation

Answer 17

the process of turning a new idea or technology into a business (that can succeed and will attract investors)

Question 18

strategic entrepreneurship

Answer 18

renew an existing business by developing new innovative ways of meeting customer needs.

Question 19

Social entrepreneurship:

Answer 19

‘individuals who are starting or currently leading any kind of activity, organisation or initiative that has a particularly social, environmental or community objective’

Question 20

corporate venturing

Answer 20

Individuals or groups of individuals, acting independently or as part of a corporate system, who create new organizations or instigate renewal or innovation within an existing organization. (Corporate entrepreneurs might decide to set up a start-up from within their large business or independently.)

Question 21

Why is Keeping score important?

Answer 21

Entrepreneurs: to get benefits, policymakers and research to rank entrepreneurial activity per country/region

Question 22

Why is self-employment a measure of entrepreneurship (proxy measure of activity)?

Answer 22

Self-employment is a measure of entrepreneurship because it involves organising resources, identifying and exploiting opportunities and making decisions in dynamic and uncertain settings. (one of the few standardised ways of comparing entrepreneurial activity across countries and regions)

Question 23

Why is self-employment a bad quality measure?

Answer 23

necessity entrepreneurs (people semi forced and not motivated to grow business or stay in business for long) & Statistics on self-employment only count those formally registered (many people don’t formally register)

Question 24

Five consistent features of entrepreneurial activity

Answer 24

Entrepreneurial activity varies markedly in richer countries, Entrepreneurial patterns vary over time in richer countries, Men are more likely to be entrepreneurially active than women, Entrepreneurial activity is higher in poorer countries, and Many self-employed people operate in hyper-competitive markets.

Question 25

Small and Medium-sized Enterprises (SMEs)

Answer 25

SMEs are classified into three broad size groupings: micro-businesses (0–9 employees), small businesses (10–49 employees) and medium-sized businesses (50–249).

Question 26

why is scall also considerable factor for entrepreneur activity

Answer 26

Since limited companies rather than the self-employed – are more likely to create jobs and economic growth.