Lecture 3 Flashcards
Entrepreneurship definition
The examination of how, by whom and with what effects, opportunities to create future goods and services are discovered, evaluated and exploited.
Stepps in opportunities
Existence -> Discovery -> Exploitation
Existence of opportunities
Why, when & how opportunities for the creation of goods and services come into existence.
Discovery of opportunities
Why, when & how some people and not others discover and exploit these opportunities
Exploitation of opportunities
Why, when & how different modes of action are used to exploit entreperneurial opportunities.
Opportunities definition
Situations in which new goods, services, raw materials and organizing methods can be introduced and sold greater than their cost of production.
Opportunities are objective, the process of identifying is subjective and can be split up into:
1) Beliefs = people differ in believes due to intuition and private info. Also heuristics vary.
2) Information asymmetries = People have limited attention, different info at different times.
Entrepreneurial opportunities
Situations in which new goods, services, raw materials and organizing methods can be introduced and sold at greater than their cost of production.
Profit opportunities
Enhancing the efficiency of existing goods and services
The duration of an opportunity depends on:
- Monopoly rights
- Speed of information diffusion and learning
- Imitation abilities
Determinants of the exploitation of opportunities
- Demand
- Industry profits (e.g. scale of economics)
- Technology life cycle
- Cost of capital
- Individual characteristics
Individual characteristics that determine the exploitation of opportunities
- Social ties
- Experience
- Perceptions
- Optimism
- Locus of control??
- Ambiguity
Who can be entrepreneurs:
All agents who seek to exploit opportunities are entrepreneurs. Agents can be:
- Individuals
- Small/Big firms
- Old/new firms
- Family firms etc.
What is innovation all about?
Having the right resources in the right place to create a stream of products and services.
Corporate venture capital (CVC)
Minority equity investment by established corporations in privately held entrepreneurial ventures.
