Abhi On Entrepreneurship

By: [A] [K] [I]

Readings in the “Concept of Entrepreneurship & the Emergence of the Entrepreneurial Class”

The Concept of Entrepreneurship over the years: Throughout the theoretical history of entrepreneurship, scholars from multiple disciplines in the social sciences have grappled with a diverse set of interpretations and definitions to conceptualize this abstract idea. Over time, "some writers have identified entrepreneurship with the function of uncertainty-bearing, others with the coordination of productive resources, others with the introduction of innovation, and still others with the provision of capital" (Hoselitz, 1952). Even though certain themes continually resurface throughout the history of entrepreneurship theory, presently there is no single definition of entrepreneurship that is accepted by all economists or that is applicable in every economy. Although there is only limited consensus about the defining characteristics of entrepreneurship, the concept is almost as old as the formal discipline of economics itself. The term "entrepreneur" was first introduced by the early 18th century French economist Richard Cantillon. In his writings, he formally defines the entrepreneur as the "agent who buys means of production at certain prices in order to combine them" into a new product (Schumpeter, 1951). Shortly thereafter, the French economist J.B. Say added to Cantillon's definition by including the idea that entrepreneurs had to be leaders. Say claims that an entrepreneur is one who brings other people together in order to build a single productive organism (Schumpeter, 1951). Over the next century, British economists such as Adam Smith, David Ricardo, and John Stuart Mill briefly touched on the concept of entrepreneurship, though they referred to it under the broad English term of "business management." While the writings of Smith and Ricardo suggest that they likely undervalued the importance of entrepreneurship, Mill goes out of his way to stress the significance of entrepreneurship for economic growth. In his writings, Mill claims that entrepreneurship requires "no ordinary skill," and he laments the fact that there is no good English equivalent word to encompass the specific meaning of the French term entrepreneur (Schumpeter, 1951). The necessity of entrepreneurship for production was first formally recognized by Alfred Marshall in 1890. In his famous treatise Principles of Economics, Marshall asserts that there are four factors of production: land, labor, capital, and organization. Organization is the coordinating factor, which brings the other factors together, and Marshall believed that entrepreneurship is the driving element behind organization. By creatively organizing, entrepreneurs create new commodities or improve "the plan of producing an old commodity" (Marshall, 1994). In order to do this, Marshall believed that entrepreneurs must have a thorough understanding about their industries, and they must

By: [A] [K] [I] be natural leaders. Additionally, Marshall's entrepreneurs must have the ability to foresee changes in supply and demand and be willing to act on such risky forecasts in the absence of complete information (Marshall, 1994). Like Mill, Marshall suggests that the skills associated with entrepreneurship are rare and limited in supply. He claims that the abilities of the entrepreneur are "so great and so numerous that very few people can exhibit them all in a very high degree" (1994). Marshall, however, implies that people can be taught to acquire the abilities that are necessary to be an entrepreneur. Unfortunately, the opportunities for entrepreneurs are often limited by the economic environment, which surrounds them. Additionally, although entrepreneurs share some common abilities, all entrepreneurs are different, and their successes depend on the economic situations in which they attempt their endeavors (Marshall, 1994). Since the time of Marshall, the concept of entrepreneurship has continued to undergo theoretical evolution. For example, Marshall believed entrepreneurship was simply the driving force behind organization, many economists today, but certainly not all, believe that entrepreneurship is by itself the fourth factor of production that coordinates the other three (Arnold, 1996). Unfortunately, although many economists agree that entrepreneurship is necessary for economic growth, they continue to debate over the actual role that entrepreneurs play in generating economic growth. One school of thought on entrepreneurship suggests that the role of the entrepreneur is that of a risk-bearer in the face of uncertainty and imperfect information. Knight claims that an entrepreneur will be willing to bear the risk of a new venture if he believes that there is a significant chance for profit (Swoboda, 1983). Although many current theories on entrepreneurship agree that there is an inherent component of risk, the risk-bearer theory alone cannot explain why some individuals become entrepreneurs while others do not. For example, following from Knight, Mises claims any person who bears the risk of losses or any type of uncertainty could be called an entrepreneur under this narrow-definition of the entrepreneur as the risk-bearer (Swoboda, 1983). Thus, in order to build a development model of entrepreneurship it is necessary to look at some of the other characteristics that help explain why some people are entrepreneurs; risk may be a factor, but it is not the only one. Another modern school of thought claims that the role of the entrepreneur is that of an innovator; however, the definition of innovation is still widely debatable. Kirzner suggests that the process of innovation is actually that of spontaneous "undeliberate learning" (Kirzner, 1985, 10). Thus, the necessary characteristic of the entrepreneur is alertness, and no intrinsic skills-other than that of recognizing opportunities-are necessary. Other economists in the innovation school side more with Mill and Marshall than with Kirzner; they claim that entrepreneurs have special skills that enable them to participate in the process of innovation. Along this line, Leibenstein claims that the dominant, necessary characteristic of entrepreneurs is that they are gap-fillers: they have the ability to perceive where the market fails and to develop new goods or processes that the market demands but which are not currently being supplied. Thus, Leibenstein posits that entrepreneurs have the special ability to connect different markets and make up for

By: [A] [K] [I] market failures and deficiencies. Additionally, drawing from the early theories of Say and Cantillon, Leibenstein suggests that entrepreneurs have the ability to combine various inputs into new innovations in order to satisfy unfulfilled market demand (Leibenstein, 1995). Although many economists accept the idea that entrepreneurs are innovators, it can be difficult to apply this theory of entrepreneurship to less developed countries (LDCs). Often in LDCs, entrepreneurs are not truly innovators in the traditional sense of the word. For example, entrepreneurs in LDCs rarely produce brand new products; rather, they imitate the products and production processes that have been invented elsewhere in the world (typically in developed countries). This process, which occurs in developed countries as well, is called "creative imitation" (Drucker, 1985) The term appears initially paradoxical; however, it is quite descriptive of the process of innovation that actually occurs in LDCs. Creative imitation takes place when the imitators better understand how an innovation can be applied, used, or sold in their particular market niche (namely their own countries) than do the people who actually created or discovered the original innovation. Thus, the innovation process in LDCs is often that of imitating and adapting, instead of the traditional notion of new product or process discovery and development. As the above discussion demonstrates, throughout the evolution of entrepreneurship theory, different scholars have posited different characteristics that they believe are common among most entrepreneurs. By combining the above disparate theories, a generalized set of entrepreneurship qualities can be developed. In general, entrepreneurs are risk-bearers, coordinators and organizers, gap-fillers, leaders, and innovators or creative imitators. Although this list of characteristics is by no means fully comprehensive, it can help explain why some people become entrepreneurs while others do not. Thus, by encouraging these qualities and abilities, governments can theoretically alter their country's supply of domestic entrepreneurship. Although economists have posed many theoretical interpretations of entrepreneurship, there has been very little empirical research conducted on this phenomenon, especially compared to the amount of research conducted on the other three factors of production. In particular, growth and development economics has "suffered rather seriously from the neglect of the entrepreneurial role" (Kirzner, 1985, 69). This neglect has occurred for two main reasons. First, entrepreneurship is difficult to measure empirically. Since few economists can even agree about how to define entrepreneurship, developing the tools to measure it has been especially problematic. Second, as explained in the theories above, entrepreneurship is characterized by uncertainty and typically occurs in the presence of imperfect information, unknown production functions, and market failure. As Leibenstein claims, entrepreneurship arises "to make up for a market deficiency" (1995). However, the majority of mainstream economic models assume perfect information and clearly defined production functions. Thus, entrepreneurs typically fall outside of these models (Leibenstein, 1995). Like Leibenstein, Kilby suggests that entrepreneurship has been largely overlooked in economics. Kilby claims that entrepreneurship exists "only in the lower realms, where

By: [A] [K] [I] imperfect knowledge and market failure are granted an untidy presence;" as a result, many economists disregard this phenomenon, particularly in economic models dealing with developed countries (Kilby, 1983). However, many models that focus on the underdeveloped economies of LDCs relax their assumptions about perfect information. This more realistic view of economic markets allows entrepreneurship to stand out as one of the leading sources of market transformation and economic growth and development. Leibenstein maintains that there are two simultaneous steps in the process of economic development for LDCs: economic growth and market transformation. In order for a country to increase its per capita income, it must have a "shift from less productive to more productive techniques per worker" (Leibenstein, 1995). This shift is the process of market transformation, and it can be manifested in the creation of new goods, new skills, and new markets. Entrepreneurship is the driving force behind both growth and transformation. Without entrepreneurs there would be no new innovation or creative imitation in the marketplace; hence, the transformation to new production methods and goods in the country would not take place. As entrepreneurs transform the market, not only do they provide new goods and services to the domestic market, they also provide a new source of employment to the economy (Praag, 1995). As a result, entrepreneurship is a necessary ingredient in the process of economic development; it both serves as the catalyst for market transformation and provides new opportunities for economic growth, employment, and increased per capita income. Although entrepreneurship can directly affect the rate of an economy's transformation and development, few countries have actively pursued entrepreneurship encouragement programs. Additionally, many LDCs have focused more on encouraging entrepreneurship in the form of multi-national corporations (MNCs) rather than domestic and indigenous entrepreneurship. MNCs can certainly increase a country's income, provide market innovations, and serve as the catalyst for market transformations; thus, MNCs can be used as a source of entrepreneurship-led development. However, Saeed suggests that it is preferred for governments to promote domestic and indigenous entrepreneurship because domestic entrepreneurs are more aware of the market gaps that need to be filled domestically (Saeed, 1998). Thus, instead of producing goods that might not be consumed within the country, domestic market forces encourage domestic entrepreneurs to create innovations and creative imitations that fulfill a real market deficiency domestically. Hence, MNCs can be used for entrepreneurship-led development, but domestic entrepreneurship is thought to be more effective. Theorists disagree, however, about whether or not informal sector self-employment is beneficial for entrepreneurship-led development. Saeed suggests that many of the small family enterprises and shop-houses that make up the informal sector are indeed entrepreneurial ventures. He asserts that the close-knit structure of the small-family enterprise is conducive for the incubation of ideas that are tested in the informal sector and later used to transform market products and processes. Additionally, Saeed claims that women and young people are traditionally excluded from the formal sector; thus, their entrepreneurial ideas are locked out of the formal market. However, since smallfamily enterprises in the informal sector typically involve women and youth participation,

By: [A] [K] [I] the informal sector can often serve as the outlet for their entrepreneurial ideas (Saeed, 1998). Unlike Saeed, Carree et. al. suggest that self-employment in the informal sector can actually thwart entrepreneurship-led growth. They assert that an economy will suffer from lower growth rates both when it has too little and too much domestic business ownership. Since many enterprises in the informal sector sell goods or services that are already available in the formal sector market, informal sector enterprises are often redundant and fail to provide market transformations. According to Carree et. al., business ownership in the informal sector rarely transforms the structure of the economy or produces new market innovations or creative imitations. Thus the presence of business ownership in the informal sector of a country does not ensure entrepreneurship-led growth because simple business ownership is not necessarily market transforming. Hence, business ownership is not synonymous with entrepreneurship (Carree, 2000). Since entrepreneurship can serve as a positive source of economic growth and development, governments should attempt to increase their supplies of markettransforming entrepreneurship. Although it is debatable as to whether the informal sector is truly a source of entrepreneurs, governments can insulate themselves from this debate by focusing on the encouragement of market-transforming entrepreneurship, and not simply business ownership in both the formal and informal sectors.1 Socio-psychological factors influencing Entrepreneurship development Before policy makers can increase the supply of entrepreneurship, it is necessary for them to understand what factors affect the supply of entrepreneurs. At its most basic level, the supply of entrepreneurship is determined by two factors: opportunity and willingness to become an entrepreneur. According to Praag (1995), opportunity is "the possibility to become self- employed if one wants to." The primary factors affecting opportunity include one's intrinsic entrepreneurial ability, starting capital, ease of entry into the market, and the general macroeconomic environment. Alternatively, willingness is the relative valuation of work in self-employment compared to one's other options for employment. In terms of opportunity cost, an individual's willingness is positive whenever self-employment is perceived as the best available career option. Thus, willingness is inherently affected by the anticipated market incentives that are available for would-be entrepreneurs, namely profit and economic benefits (Praag, 1995). The supply of entrepreneurship is thus dependent on both individual level factors and general economic factors. Policymakers can improve the economic factors that face potential entrepreneurs by initiating market reforms that both increase the market incentives and the availability of capital that is available to entrepreneurs (Wilken, 1979).2 In terms of the non-economic factors that affect entrepreneurship, policymakers are more limited in what they can achieve. Many economists such as Marshall and Mill suggest that not just anyone can be an entrepreneur. Nonetheless Marshall implies that the skills of an entrepreneur can be taught (1994).3 Thus, policymakers can affect the

By: [A] [K] [I] level of entrepreneurship in their countries by crafting policies that reform the market in order to encourage entrepreneurship both economically and educationally. Not surprisingly, regional variations have been found in the levels of entrepreneurship between countries. In their cross-national study of entrepreneurship, Davidsson and Wiklund (1995) suggest that regional variations in the levels of entrepreneurship are influenced by the cultural values of the people. They claim that "cultural and economicstructural determinants of the new firm formation rate were positively correlated," thus suggesting that cultural differences in both values and beliefs help explain regional variances in the supply of entrepreneurship. Despite this relationship, other studies on migrant and ethnic entrepreneurs have found that cultural beliefs and values rarely suppress aspiring entrepreneurs. Although cultural hostility towards entrepreneurship may stifle it in a particular region, migrant entrepreneurs frequently move to new areas in order to start their enterprises. Thus, cultural hostility may prevent entrepreneurship in a particular region, but some other region will, in part, benefit from the migration of the ethnic entrepreneurs (nDoen, 1998). Basic economics teaches that supply is only a one-sided story of market phenomena. Thus, for countries to benefit from increasing their supplies of entrepreneurship, traditional economics suggests that those countries' would also need to promote the demand for entrepreneurship. However, little has been written about the demand side of entrepreneurship because it a calculation of demand is intrinsically built into entrepreneurship. As Leibenstein suggests, entrepreneurs are gap-fillers who perceive and correct for market deficiencies. Thus, so long as there are market deficiencies, there will naturally be demand for entrepreneurs to correct them. As a result, when governments promote the supply of entrepreneurship, they are essentially encouraging entrepreneurs to seek out what parts of the market demand them.4 Role Governments can play: The supply of entrepreneurship is affected by many factors, not all of which can easily be controlled or changed. Nonetheless, policymakers can implement certain policies in order to encourage entrepreneurship. Based on the above characteristics of entrepreneurs and the factors that affect the supply entrepreneurship, the following policy prescriptions may serve as a general guide for implementing policies that foster economic development through increased levels of entrepreneurship (the recommendations are in no particular order): 1. Increase the market incentives for entrepreneurs: As stated earlier, one of the primary determinants of the supply of entrepreneurship is the willingness of an individual to become an entrepreneur. Willingness is largely determined by the anticipated economic benefits that will accrue to an entrepreneur if his enterprise is profitable. In many countries market regulations limit the incentives that could encourage would-be entrepreneurs to start their own enterprises. For example, price ceilings that are set below market equilibrium lower the amount of revenue that an entrepreneur could earn in a certain industry. If the anticipated economics benefits are lower than the opportunity cost, than the would-be entrepreneur will not start his own enterprise. Thus, in many

By: [A] [K] [I] countries policies should be implemented to increase and improve the incentives for entrepreneurs. Additional policy possibilities include tax incentives for entrepreneurs.

2. Improve the availability of credit and capital: The second major determinant of the supply of entrepreneurship is opportunity. In order for an individual to start his own enterprise, it is necessary for him to have the credit or capital to finance the initial start-up costs. One of the primary problems facing would-be entrepreneurs in LDCs is a lack of such capital. Without initial capital, many entrepreneurs do not have the funds to start enterprises of their own. Governments could attempt to correct for this problem by encouraging the development of venture capital companies and by implementing microcredit programs. The specific type of capital programs that are implemented would need to be crafted specifically for each country, depending on where the country is along its course of development. In the poorest of LDCs, the focus would most likely be on microcredit programs, like the Grameen Bank in Bangladesh. However, in countries with higher levels of human capital, entrepreneurial firms would derive greater use from venture capital.

3. Develop entrepreneurship encouragement programs: By passing legislation that is friendly towards entrepreneurs, countries can make it more culturally acceptable and less risky to be an entrepreneur. Additionally, entrepreneurship encouragement programs, like the Technopreneurship 21 Initiative in Singapore5, can assist entrepreneurs in finding capital, setting up a business plan, and complying with the various business and tax regulations.

4. Initiate entrepreneurship educational programs: New education initiatives should be created to teach entrepreneurship. By equipping more people with the skills to become entrepreneurs, a country can effectively increase its supply of competent entrepreneurs. Economists disagree as to whether entrepreneurial skills can be taught or whether they are intrinsic. Nonetheless, there have been successful results from such educational programs. One example of such a policy is the Malaysian Entrepreneurship Development Centers in the rural, indigenous areas of Malaysia. These centers teach the indigenous people entrepreneurial skills and assist aspiring entrepreneurs with the development of their business plans.

5. Reform market regulations to facilitate entry into the market: Countries can increase their supply of entrepreneurship by improving the ease of entry into the formal sector. Many LDCs use licenses and permits to regulate who can participate in the formal sector. Although these policies may earn government revenue or protect state-owned enterprises, they effectively make the markets inefficient (by limiting competition) and prevent would-be entrepreneurs from starting their enterprises. By reforming their marketentry laws, some countries will be able to increase their supplies of entrepreneurs. As an example, Nigeria's abolition of its marketing boards provided new opening for a large number of small entrepreneurs to enter the market with creative imitations.6

6. Increase entrepreneurial opportunities available to women and young persons: As Saeed suggests, many women and young persons are excluded from the formal sector in LDCs because of cultural values or legal restrictions. By preventing these groups from participating in the formal market, these countries are essentially limiting the size of their pool of would-be entrepreneurs. By eliminating discriminatory employment and licensing policies, countries could create an influx of possible entrepreneurs. Unfortunately, such polices may not be culturally popular in some countries (Saeed, 1998).

All of the above recommendations are general policy suggestions that governments can pursue. The specific policies that a country implements, however, must be made

By: [A] [K] [I] appropriate for the specific circumstances that the country faces. For example, in a country where the majority of entrepreneurship takes the form of small family-owned enterprises, there is initially little need for venture capitalists; instead it would be more appropriate for this country to implement micro-credit programs to assist potential entrepreneurs. Thus, the policies that an LDC implements to increase its supply of entrepreneurship must be crafted individually for the country's specific case and stage of development. Additionally, like most development policies, many of the above recommendations require government expenditure. However, since entrepreneurship is necessary for economic development, expenditure on encouragement policies is as justified as much as expenditure on any other development policy.

The above article is not fully original its picked up from www.technopreneurial.com/articles/supply.asp It is important that I mention that the article is one of the best I found on the above topic. Please do not duplicate and/ or circulate it. Use it as reference to get your answers ready. Other suggested alternate readings http://www.econlib.org/library/Enc/Entrepreneurship.html http://growthconf.ec.unipi.it/sessions/acceptedAbstractsPDF/RimaAbs.pdf http://www.me.psu.edu/lamancusa/Entrepn/Module1/Lecture/Entre.doc

Q. What does the term ‘Entrepreneur’ mean? (än´´tr pr nûr´) (KEY) [Fr.,=one who undertakes], person who assumes the organization, management, and risks of a business enterprise. It was first used as a technical economic term by the 18th-century economist Richard Cantillon. To the classical economist of the late 18th century the term meant an employer in the character of one who assumes the risk and management of business; an undertaker of economic enterprises, in contrast to the ordinary capitalist, who, strictly speaking, merely owns an enterprise and may choose to take no part in its day-to-day operation. In practice, entrepreneurs were not differentiated from regular capitalists until the 19th cent., when their function developed into that of coordinators of processes necessary to large-scale industry and trade. Joseph Schumpeter and other 20th-century economists considered the entrepreneur’s competitive drive for innovation and improvement to have been the motive force behind capitalist development. The emergence of the entrepreneurial class

By: [A] [K] [I] Richard Arkwright in England and William Cockerill on the Continent (of Europe) were prominent examples of the rising class of entrepreneurial manufacturers during the Industrial Revolution. Henry Ford was a 20th-century American example. The entrepreneur’s functions and importance have declined with the growth of the corporation. Richard Arkwright the youngest of thirteen children was born in Preston in 1732. Richard's parents were very poor and could not afford to send him to school and instead arranged for him to be taught to read and write by his cousin Ellen. Richard became a barber's apprentice. However, he was an ambitious young man and had a strong desire to run his own company. In 1762 Arkwright started a wig-making business. This involved him traveling the country collecting people's discarded hair. While on his travels, Arkwright heard about the attempts being made to produce new machines for the textile industry. Arkwright also met John Kay, a clockmaker from Warrington, who had been busy for some time trying to produce a new spinning-machine with another man, Thomas Highs of Leigh. Kay and Highs had run out of money and had been forced to abandon the project. Arkwright was impressed by Kay and offered to employ him to make this new machine. Arkwright also recruited other local craftsman to help, and it was not long before the team produced the Spinning-Frame. Arkwright's machine involved three sets of paired rollers that turned at different speeds. While these rollers produced yarn of the correct thickness, a set of spindles twisted the fibres firmly together. The machine was able to produce a thread that was far stronger than that made by the Spinning-Jenny produced by James Hargreaves. In 1769 Arkwright went to Ichabod Wright, a banker from Nottingham, in search of funds to expand his business. Wright introduced Arkwright to Jedediah Strutt and Samuel Need. Strutt and Need were impressed with Arkwright's water-frame and agreed to form a partnership. Arkwright's Spinning-Frame was too large to be operated by hand and so the men had to find another method of working the machine. After experimenting with horses, it was decided to employ the power of the water-wheel. In 1771 the three men set up a large factory next to the River Derwent in Cromford, Derbyshire. Arkwright's machine now became known as the Water-Frame. The invention of the Spinning Jenny and the Spinning Frame caused an increase in demand for cardings and rovings. Lewis Paul had invented a machine for carding in 1748. Richard Arkwright made improvements in this machine and in 1775 took out a patent for a new Carding Engine.

By: [A] [K] [I] In Cromford there were not enough local people to supply Arkwright with the workers he needed. After building a large number of cottages close to the factory, he imported workers from all over Derbyshire. Arkwright preferred weavers with large families. While the women and children worked in his spinning-factory, the weavers worked at home turning the yarn into cloth. When Samuel Need died on 14th April, 1781. Arkwright and Jedediah Strutt decided to dissolve their partnership. Strutt was disturbed by Arkwright's plans to build mills in Manchester, Winkworth, Matlock Bath and Bakewell. Strutt believed that Arkwright was expanding too fast and without the support of Need, his longtime partner, he was unwilling to take the risk of further investments. Arkwright'stextile factories were very profitable. He now built factories in Lancashire, Staffordshire and Scotland. In these factories he used the new steam-engine that had recently been developed by James Watt and Matthew Boulton. When businessmen heard about Arkwright's success, they sent spies to find out what was going on in his factories. In exchange for money, some of Arkwright's employees were willing to explain how the factory was organised. Businessmen then used this information to build their own water-powered textile factories. Richard Arkwright's employees worked from six in the morning to seven at night. Although some of the factory owners employed children as young as five, Arkwright's policy was to wait until they reached the age of six. Two-thirds of Arkwright's 1,900 workers were children. Like most factory owners, Arkwright was unwilling to employ people over the age of forty. Richard Arkwright died in 1792. The Gentleman's Magazine claimed that on his death, Arkwright was worth over £500,000. Cockerill, William (1759-1832) English engineer who is generally regarded as the founder of the European textile-machinery industry. He was mainly active in Russia and Belgium. Cockerill was born in Lancashire. His working career began with the building of spinning jennies and flying shuttles. In 1794 he went to St Petersburg, Russia, and enjoyed the patronage of Catherine II. Her successor, however, imprisoned Cockerill for failing to complete a contract within the given time. Eventually he escaped via Sweden to Belgium 1799, where he established himself as a manufacturer of textile machinery, first in Verviers and from 1807 in nearby Liège. There, together with his three sons William, Charles, and John, he made rotary carding machines, spinning frames, and looms for the French woollen industry. As most of his work is done in Belgium, it is difficult to find stuff on him in English. However a reading of the following sites will help: http://www.sjsu.edu/faculty/watkins/belgium.htm

By: [A] [K] [I] http://stabi.hs-bremerhaven.de/whkmla/region/lowcountries/belgnap.html http://www.ekh.lu.se/ekhmdr/papers/eapbelg.rtf The PageWise, Inc. Encyclopedia further adds COCKERILL, WILLIAM (1759—1832), Anglo-French inventor and machinist, was born in England in 1759. He went to Belgium as a simple mechanic, and in 1799 constructed at Verviers the first wool-carding and wool-spinning machines on the continent. In 1807 he established a large machine workshop at Liege. Orders soon poured in on him from all over Europe, and he amassed a large fortune. In 1810 he was granted the rights of naturalization by Napoleon I., and in 1812 handed over the management of his business to his youngest son, JoHN COCKERILL (1790—1840). Thanks to his o~n energy and ability, aided by the influence of King William I. of the Netherlands, John Cockerill largely extended his father’s business. King William secured him a site at Seraing, where he built large works, including an iron-foundry and blast furnace. The construction of the Belgian railways in 1834 gave a great impetus to these works, branches of which had already been opened in France, Germany and Poland. In 1838 Cockerill met with a carriage accident which nearly proved fatal, and the prospect of his loss resulted in the credit of the firm being so badly shaken that in 1839 it was compelled to go into liquidation, the liabilities being estimated at 26 millions of francs, the assets at 18 millions. This reverse, however, was only temporary. John Cockerill had practically concluded negotiations to construct the Russian government railways, when his constitution, undermined by overwork, broke down. He died at Warsaw on the I9th of June 1840. The iron works, among the largest in Europe, are still carried on under the name of La Société Cockerill at Seraing (q.v.).

Henry Ford, the son of farmer, was born in Greenfield, Michigan on 30th July, 1863. He left school at 15 to work on his father's farm but in 1879 he moved to Detroit where he became an apprentice in a machine shop. To help him survive on his low wages he spent his evenings repairing clocks and watches. Ford returned to Greenfield after his father gave him 40 acres to start his own farm. He disliked farming and spent much of the time trying to build a steam road carriage and a farm locomotive. Unable to settle at Greenfield, Ford returned to Detroit to work as an engineer for the Edison Illuminating Company. During this period Ford read an article in the World of Science about how the German engineer, Nicholas Otto, had built a internal combustion engine. Ford now spent his spare time trying to build a petrol-driven motor car. His first car, finished in 1896, was built in a little brick shed in his garden. Driven by a twocylinder, four-cycle motor, it was mounted on bicycle wheels. Named the Thin Lizzie, the car had no reverse gear or brakes.

By: [A] [K] [I] By August, 1899, Ford had raised enough money to start his own company. His first group of investors withdrew after Ford had spent $86,000 without producing a car that could be sold. Eventually he produced a car that appeared at the Grosse Pointe Blue Ribbon track at Detroit. Its performance helped him to sell 6,000 $10 dollar shares in his new company. This also ended in failure and in June, 1903, he found twelve more people willing to invest a total of $28,000 in another motor company. Ford now began production of the Model A car. The car sold well and the company flourished and by 1907 the profits reached $1,100,000. In 1909 Ford took the decision to manufacture only one type of car, the Model T. Initially it took 14 hours to assemble a Model T car. By improving his mass production methods, Ford reduced this to 1 hour 33 minutes. This lowered the overall cost of each car and enabled Ford to undercut the price of other cars on the market. Between 1908 and 1916 the selling price of the Model T fell from $1,000 to $360. On the outbreak of the First World War in Europe, Ford soon made it clear he opposed the war and supported the decision of the Woman's Peace Party to organize a peace conference in Holland. After the conference Ford was contacted by America's three leading anti-war campaigners, Jane Addams, Oswald Garrison Villard, and Paul Kellogg. They suggested that Ford should sponsor an international conference in Stockholm to discuss ways that the conflict could be brought to an end. Ford came up with the idea of sending a boat of pacifists to Europe to see if they could negotiate an agreement that would end the war. He chartered the ship Oskar II, and it sailed from Hoboken, New Jersey on 4th December, 1915. The Ford Peace Ship reached Stockholm in January, 1916, and a conference was organized with representatives from Denmark, Holland, Norway, Sweden and the United States. However, unable to persuade representatives from the warring nations to take part, the conference was unable to negotiate an Armistice. After the war Ford became increasingly interested in politics. He joined the Democratic Party and in 1918 was narrowly defeated when he failed to win a seat in the U.S. Senate. In the 1920s the Ford Motor Company continued to grow rapidly. In 1925 Ford was producing 10,000 cars every 24 hours. This was 60 per cent of America's total output of cars. However, his decision not to bring out new models allowed other companies to challenge his dominance. By 1927 Ford had sold over 15,000,000 Model T cars. However, sales were on the decline and the General Motors's Chevrolet was the current best-selling car.

By: [A] [K] [I] In the 1930s Ford opposed Franklin D. Roosevelt and the New Deal. He refused to recognize the United Automobile Workers Union and used armed police to deal with industrial unrest. Ford had a stroke in 1938 but returned to run the company after his son, Edsel Ford, died in 1943. Although initially an opponent of the USA becoming involved in the Second World War, after Pearl Harbour, Ford turned over his vast production resources to his country. For example, the Ford plant at Willow Run produced over 8,000 Liberator bombers during the war. Henry Ford died on 7th April, 1947. Eli Whitney and his Cotton gin The third best known American inventor of the pre-atomic age, after Thomas Edison and Alexander Graham Bell, is probably Eli Whitney. Whitney certainly transformed the economies of the antebellum North and South. But among invention aficionados, his invention of the cotton gin is a matter of some dispute. Whitney was born in Westboro, Massachusetts in 1765. As a child, he showed an instinct and talent for machinery. He worked as a blacksmith, and invented a nail-making machine. Whitney's dream of attending Yale College was frustrated for some years, because no college then taught or much appreciated the "useful arts." But Whitney did attend Yale, and graduated at the age of 27, only to find that there were no jobs for engineers either. So he accepted a teaching position in South Carolina. En route, in early 1793, Whitney was befriended by Katherine Greene, the widow of a Revolutionary War general. When Whitney's teaching job later fell through, Greene invited him to stay at her plantation, Mulberry Grove, where she thought he might make himself helpful. As Whitney soon discovered, most cotton plantations were then on the brink of insolvency, because "green seed" cotton, the only strain that would grow inland, took too long to cull from its seeds. To sift out a single "point" of cotton lint from its surrounding seeds required ten hard hours of hand labor. Everyone agreed that the solution was a machine to do this work; but no one had been able to make one. According to legend, within ten days of his arrival Whitney had observed the manual process and built a machine that did the same thing much faster. It is clear that his very first model did not work. In it, the bulk cotton was pressed against a wire screen, which held back the seeds while wooden teeth jutting out from an adjacent rotating drum teased the cotton fibers out through the mesh. This model invariably jammed. The next version was a complete success, thanks to thin wire hooks replacing the wooden teeth, and a moving brush that constantly cleared away the collected fibers. By all accounts, Greene encouraged Whitney. The vexed question is whether the key element, the wire hooks, was his idea or hers. Greene supporters cite the claim of a friend of a friend of her plantation foreman, that Greene invoked "a woman's wit" and told Whitney to replace his wooden pegs with the wires of a fireplace cleaning brush.

By: [A] [K] [I] Whitney supporters cite a letter to the editor of Southern Agriculturalist magazine, whose author heard from admittedly shadowy sources that Whitney had explicitly asked Greene for a pin to experiment with at the start of his efforts. (Note that for some time during his Massachusetts days, Whitney had been the New World's sole manufacturer of hatpins.) Whatever the comparative contributions, the cotton gin ("gin" is simply short for "engine") was a stupendous success. After Whitney gave a one-hour demonstration, in which the machine did the day's work of many men, farmers raced to sow their fields with green seed cotton. As the cotton grew, Whitney's workshop was broken into and his machine was examined in detail: soon, copies were everywhere. Whitney could not possibly have manufactured one tenth of the gins that that first crop would require; but it is nonetheless unfair that his patent (granted in 1794) guaranteed him only ten years of legal battles, which ended in penury. In 1804, Whitney left the South forever, disappointed and disgusted. In his words, "An invention can be so valuable as to be worthless to the inventor." In fact, Whitney never attempted to patent any of his later inventions (for example, a milling machine). But after settling in New Haven, Connecticut, Whitney re-invented American manufacturing as a whole, through mass production. Whitney wanted to enable unskilled laborers to make complex products. He managed this by designing products (his test case was rifles) with interchangeable parts. These were cut and shaped by machines that each performed one precise function over and over again. The workers would merely put each machine through its motions. Mass production is not a romantic notion. But it allowed for an unprecedented boom in American industry, and eventually provided employment for thousands of workers who were unwilling or unable to acquire apprenticeships in skilled crafts. And by all accounts, Eli Whitney himself treated his "manufactory" workers with appreciation and respect: the awful abuses of laborers that came about after his death in 1825 were a perversion of his system. Also read http://www.inventorsmuseum.com/whitney.htm Thomas Edison Without a doubt, the greatest inventor of the modern era has been Thomas Edison. Many of his over one thousand inventions have profoundly changed the lives of nearly everyone in the world. Thomas Alva Edison was born in Milan, Ohio on February 11, 1847. In 1854, his family moved to Port Huron, Michigan. There, "Al's" favorite hobbies were reading, and performing chemistry experiments in his basement lab. But his teachers considered young Edison a failure; and his mother soon decided to home-school him.

By: [A] [K] [I] Edison's first job (1859) was operating a newstand on the railroad that ran from Port Huron to Detroit. To make the trips more interesting, Edison installed a printing press and chemistry lab in a boxcar. In 1862, he learned to use a railroad telegraph. Edison then spent many years traveling around Canada and the US, working as a telegraph operator and doing scientific experiments in his free time. Finally, in 1869, he decided to become a full-time inventor. On June 1st of that year, Edison was granted his first patent (#90,646), for an electric voting machine. But no one wanted to use the machine, and Edison resolved never again to invent what would not sell. His next invention fared much better: an improved stock market tickertape machine (1869), which earned him an instant $40,000 [about $700,000 today]. With his friend Franklin T. Pope, Edison formed an electrical engineering firm, based in Newark, New Jersey. With Pope, and later alone, Edison eventually earned about 200 patents for telegraph systems and devices. In 1876, in Menlo Park, New Jersey, Edison founded his famous "invention factory." "The Wizard of Menlo Park" was a workaholic and a demanding employer, but he did not resent failures in the lab: "That's one more way it won't work, so we're closer to a solution." Edison's first great Menlo Park invention was the phonograph (1877), although he did not bring it to market for ten years. He was busy with his greatest project: a workable electric light system that would replace candles and gaslight forever, at home and in public. In 1878, Edison created his prototype incandescent light bulb: a thin strip of paper, attached to wires, enclosed in a vacuum inside a glass bulb. When electricity flowed into the paper "filament," it heated up, and glowed. The only problem was that the paper burnt out very quickly. After thousands of tests, an "Edison Pioneer," Lewis H. Latimer, found the optimal filament material: carbonized cotton thread (1897). Edison installed the first reliable, durable electric lights in his own labs, and later built the first public power station, in Manhattan's financial district (1882). However, Edison's DC-current system had only a three-mile range, and was later superseded by Westinghouse's and Tesla's AC-current system. By that time, Edison had built a new and much bigger research complex (now a National Monument) in West Orange, New Jersey. There his first project was to redesign his phonograph, in light of recent improvements by others. Edison soon marketed a waxcylinder phonograph as a dictation machine (1888), and later, as a musical home entertainment system (1896). These commercial efforts were, by and large, failures, but Edison continued to refine his favorite invention into the 1920s. In 1889, an associate, William Dickson, working at Edison's direction, invented the celluloid-strip motion picture camera and projector (1889) --- whose silent movies were viewed inside the machine, through a peephole. Although Edison later broke with Dickson, George Eastman and others helped Edison to establish the basis of the motion picture industry.

By: [A] [K] [I] After 1911, Edison was mainly dissatisfied in his work, feeling that many of his ideas were being ignored or worse yet, stolen. Throughout the '20s, he also had poor health. He died on October 18, 1931, at the age of 84. In total, Edison accumulated 1,093 US patents. Only a few inventors have earned half as many. Edison inventions not mentioned above include: the printing telegraph, the electric "stencil pen," a magnetic mining process, an electrical torpedo, a synthetic rubber, and improved alkaline batteries, cement mixers, and microphones. It must be said that Edison used other inventors' ideas much more freely than he shared his own. For example, the wax cylinder phonograph was first patented by Chichester A. Bell and Charles Sumner Tainter (1886), whose offer of a joint venture Edison rejected; the disc "gramophone" was first patented by Emile Berliner (1887); and even the socalled "Edison Effect," the observed emission of electrons from a hot filament, was actually discovered by an Edison engineer named William J. Hammer (1883). But nothing can gainsay the tremendous effect that Edison's career as a whole has had on our everyday lives. By the volume, variety and spectacularity of his inventions, Edison more than any other person made it seem like no miracle was beyond the reach of modern American technology. As an inspiration to aspiring engineers and inventors, then as now, Edison is peerless. Indeed, above all others, as his Congressional Medal of Honor certificate declared: "He illuminated the path of progress by his inventions." Biographies of Edison can be found on-line at: http://web.mit.edu/invent/www/inventorsA-H/edison2.html [linked above] http://learning.loc.gov/ammem/edhtml/edbiohm.html http://www.minot.k12.nd.us/mps/edison/edison/edison.html

Andrew Carnegie: The Richest Man in The World http://www.pbs.org/wgbh/amex/carnegie/ Emergence of the Entrepreneurial Class in the LCDs Entrepreneurship-led development strategies have been successful in several countries. The following case studies provide a glimpse at some of the policies that have been used to increase the supply of entrepreneurship. Entrepreneurship in Nigeria

Africa is the poorest, less-developed continent in the world. In most countries in Africa, the governments have typically played a significant role in determining the course of development. Many state-owned enterprises in Africa were created when it was believed that the fastest route to development occurred when the state took on the role of the entrepreneur. Unfortunately, in many countries, the performance of these state-owned firms, or parasatals, has been substandard. Part of the problem with the state-owned enterprises is that they are run by bureaucrats and are plagued with red-tape. Thus, these

By: [A] [K] [I] firms are typically run according to state procedures, instead of according to cost-cutting and profit-maximizing concerns. The typical result is rampant inefficiency (Elkan, 1988). Although Nigeria was at one time characterized by such inefficiencies, it has recently has pursued entrepreneurship encouragement policies, and the initial indicators suggest that the policies have been successful. In Nigeria the state-owned enterprises traditionally clogged business opportunities and state restrictions prevented entrepreneurs from entering the market. However, in the mid1980s, Nigeria abolished its marketing board, which prevented entry into certain industries, and opened up its markets to competition from domestic entrepreneurs. Additionally, lower taxes and increased price ceilings have increased the incentives to entrepreneurs. Although Nigeria is still plagued by many development problems, "preliminary evidence suggests a favorable response by the private sector to the new entrepreneurial opportunities thus created" (Elkan, 1988). Technopreneurship in South and South East Asia

Entrepreneurship in parts of South and South East Asia has recently undergone rapid revitalization. The term "technopreneur" arose from within Singaporean culture to describe an individual whose entrepreneurial endeavors focus on a technology-centered enterprise. The government of Singapore has embraced technopreneurship and has launched several initiatives to promote technopreneurship as a means of economic development. In the past three years, Singapore has restructured the focus of many of its economic policies to fully support the growth and development of domestic technopreneurial firms. Singapore is a small island city-state and has few natural resources that it can exploit in order to promote economic development. Thus, Singapore has had to largely rely on its people and human capital for the sustainment of development. Initially, the government improved the country's human capital by dedicating a large amount of the annual budget to education expenditure. However, now that the country can boast high literacy rates, traditional human capital development is no longer sufficient to sustain economic growth. Recognizing the need for a new strategy for economic growth, Singapore's government turned towards the technology sector. With the creation of the Technopreneurship 21 Initiative and Ministerial Committee, Singapore began promoting technopreneurship encouragement policies. For example, the government now sponsors university courses on technopreneurship and helps connect venture capital companies with budding technopreneurs. This greater openness has encouraged many new start-ups to form, and the country is well on its way to fully integrating itself into the New Economy. Singapore's success with technopreneurship policies has influenced other Asian countries to begin such initiatives. For example, Malaysia recently launched its Multimedia Super Corridor to encourage domestic technology development, and Hong Kong recently completed the construction of its CyberPort, a technopreneurship-friendly business district. Finally, technopreneurship encouragement has also taken place in certain cities in India.

By: [A] [K] [I] India As a whole, India is still one of the most underdeveloped countries in the world. Despite the grim situation that faces much of the country, several technology-focused cities have recently had impressive success with technology driven development. In 1991, the Indian government introduced numerous market reforms to overhaul the Indian economy. The information technology industry is probably that which has benefited most from the reforms. For the educated urban class, information technology businesses have provided a new source of income. To utilize the educated youth, who have been trained in engineering and computer programming, international IT companies began locating in India, particularly in Bangalore. The result is that Bangalore has become a powerhouse for software production. Although Indian technopreneurs were not originally at the center of Bangalore's technology development, they are now beginning to pop up throughout southern India, largely due to the government's help in creating "the right climate to encourage this sunrise industry" (Soota, 1998). The government created policies to boost technopreneurial education and to encourage the creation of domestic software parks. Additionally, domestic entrepreneurship is encouraged in Bangalore with tax incentives and a relatively advanced communications infrastructure (Soota, 1998). Bangalore's localized success is gaining great praise for its rapid development. Although Bangalore was the first major technology center in India, Hyderabad is now following its example. Although smaller in scale, the success of Hyderabad suggests that the Bangalore model of technology-led development may be applied in other parts of the country. Since much of India is still far behind Bangalore and Hyderabad in terms of human capital development, it is unreasonable to suggest that all of India should adopt policies to promote technopreneurship. Nonetheless, the rest of the country could likely benefit from the implementation of policies that encourage entrepreneurs to fill the market's deficiencies, whatever they may be in the local markets and specific regions of India.

Besides these a good amount of material for writing your answers will be available on http://ye.entreworld.org/5-2001/mentmess.cfm Also don’t forget to take the quiz on the site its helpful to understand the chapter on Entrepreneurial skills.