MODULE 1

SESSION 2:
ENTREPRENEURSHIP AND ITS SOCIAL IMPACT

Source: https://evoma.com/business-centre/7-roles-of-entrepreneurship-in-economic-development-of-a-country/

Ma. Crestia Banares (2020). Module 1, The Entrepreneur and His Mind. Department of Entrepreneurship, Bicol University
College of Business Economics and Management
What Is This Session About?
Welcome to the second session of Module 1. I hope that the first session has tickled a
bit of your attention and perhaps even your interest in entrepreneurship. I also hope that you
have done a bit of research on your own about entrepreneurship in general and have started
reading about the interesting lives of entrepreneurs. If you haven’t, there is no better time to
begin but now. Why not take five minutes to look at – not your latest celebrity crush on Facbook
– but rather to look up entrepreneurs like Richard Branson or Elon Musk. Why don’t we go local!
Go and look up Neri Miranda!
As your search will show you, entrepreneurs lead very interesting lives. They also have a
lot of lessons to impart not just about entrepreneurship but about life in general. I hope that
throughout this course, you will continue to take interest and learn from well-known
entrepreneurs around the world. But it would be doubly great, if you could learn about those
that are not world-renown just yet.
Back to our lesson! For this session, we will begin to understand the actions taken by
entrepreneurs that set them up for success. We will also discuss how these actions affect the
society and economy. In the same vain, our discussions for this session will revolve around the
role of the entrepreneur and the impact that entrepreneurship makes.

What Will You Learn?

At the end of the session, you will learn about the various kinds of an individual
entrepreneur is. More importantly, you will also learn about the significant role that
entrepreneurship plays in our society and economy.

Ma. Crestia Banares (2020). Module 1, The Entrepreneur and His Mind. Department of Entrepreneurship, Bicol University
College of Business Economics and Management
What Do You Already Know?

Let us start the session with this photo of a

watermelon and what an entrepreneur would do
with it. Now ask yourself this:
If you were an entrepreneur, what other
product would you come up with to sell other than a
watermelon shake? (Thought of something else?
Then you might just be on your way to becoming an
entrepreneur!)

Let’s Reflect:
Now that we’ve had a glimpse of how the concept of entrepreneurship came to be, we
can now start to distinguish the difference between businessmen and entrepreneurs. This
illustration clearly represents that difference. As shown on the photo, entrepreneurs tend to
take it a step further. However, what makes an entrepreneur take that step further?
For this session, we look into what kind of an individual an entrepreneur is, what drives
him to succeed and how that inadvertently impacts the society.

Let’s Study:

THE ENTREPRENEUR AS THE INDIVIDUAL THAT STEERS

Entrepreneurs identify opportunities in the market.

Entrepreneurial ventures are created because opportunities are identified, pursued and
exploited. Economies would not run without entrepreneurial ventures. Without individuals
identifying and exploiting opportunities economic activities would be limited and would not
thrive. Entrepreneurs actively seek our opportunities to pursue and exploit. It is one of the more
important skills that entrepreneurs must have.

Ma. Crestia Banares (2020). Module 1, The Entrepreneur and His Mind. Department of Entrepreneurship, Bicol University
College of Business Economics and Management
Entrepreneurs process market information.

Entrepreneurs identify opportunities by processing market information. At times, it could

be a very technical process using scientifically backed data, but more often that not, most
successful entrepreneurs identify opportunities by merely observing and having and enthusiastic
willingness to learn and understand. Often, they ask themselves questions like: “How can
something be made better?” or “How can the customers’ experience happier?”.

Take the case of Airbnb founders Brian Chesky and Joe Gebbia who have just moved from
New York to San Francisco. Jobless, they were having trouble paying their rent and were looking
for a way to earn some extra cash. They noticed that all hotel rooms in the city were booked, as
the local Industrial Design conference attracted a lot of visitors.

The youngsters saw an opportunity. They bought a few airbeds and quickly put up a site
called “Air Bed and Breakfast.” The idea was to offer visitors a place to sleep and breakfast in the
morning. They charged $80 each a night. The idea succeeded and the first Airbnb guests were
born: a 30-year-old Indian man, a 35-year-old woman from Boston and a 45-year-old father of
four from Utah sleeping on their floor. While the company has had its own share of ups and
downs before it finally gained traction, it can safely be said that the rest is history.

The most recent statistics show that Airbnb now has over 2 million listings in over 190
countries and 34,000 cities. They do not own a chain of hotels but, Airbnb hosts have hosted over
40 million guests. The company is worth an estimated 25.5 billion, based on the latest round of
funding of 1.5 billion.

Entrepreneurs bring innovation.

More important that identifying opportunities is what entrepreneurs actually do about

them. This is when innovation comes in, and this is generally what sets them apart from
businessmen and managers. Entrepreneurs don’t stop at simply creating a product but instead
innovate and create more value for customers.

Entrepreneurs take and accept risks.

Ma. Crestia Banares (2020). Module 1, The Entrepreneur and His Mind. Department of Entrepreneurship, Bicol University
College of Business Economics and Management
 There will always be risks involved in starting anything new. As it often is with novel
things, acceptance is hard to come by. People, generally reject new ideas and do not instantly
accept what is being introduced. That is why not a lot of people go on and start a new business.
The risks, aside from the risk of the product not being accepted is numerous! However,
entrepreneurs, willingly take and accept those risks. It is believed that they’d rather fail trying
than have someone else try it before them.

Entrepreneurs establish new venture and improve existing ones.

With innovations, entrepreneurs establish new ventures. They usually don’t stop at one.
The most successful entrepreneurs are often known to be serial entrepreneurs, pursuing and
exploiting opportunities and starting new entrepreneurial ventures, one after the other.

At the age of 24, Elon Musk launched his first company Zip2 Corporation. It was an online
city guide which was later in purchased by a division of Compaq Computer Corporation at $307
million in cash and $34 million in stock options. Using that money, he goes on to establish X.com,
which is now known as PayPal. It was later purchased by Amazon for a whopping amount of $1.5
Billion! Being the serial entrepreneur, that he is, he goes on to establish his third company, Space
Exploration Technologies Corporation or Space.X with the intention of building spacecraft for
commercial space travel. By 2008, SpaceX was well established, and NASA awarded the company
the contract to handle cargo transport for the International Space Station—with plans for
astronaut transport in the future—in a move to replace NASA’s own space shuttle missions.

His more down to earth entrepreneurial venture is Tesla Motors, makers of affordable,
mass-market electric cars as well as battery products and solar roofs. Musk oversees all product
development, engineering and design of the company's products. In April 2017, Tesla announced
that it surpassed General Motors to become the most valuable U.S. car maker. Big car makers
such as GM, Volkswagen and Nissan have shifted gears in planning bigger production of plug-in
cars. There is no doubt that Tesla Motors has disrupted the automobile industry.

Ma. Crestia Banares (2020). Module 1, The Entrepreneur and His Mind. Department of Entrepreneurship, Bicol University
College of Business Economics and Management
Entrepreneurs are managers as well as leaders.

Entrepreneurs are known to know even the tiniest details of their ventures. A prime
example of this is Sir Richard Branson. An article by Business Insider reports that Sir Richard
Branson wakes up at 5 a.m. every day. "Getting up and at it early gives me time to get on top of
things, and chart my day effectively," as written in a 2014 blog post, by the Billionaire founder of
Virgin Group. The article goes on to describe the rest of his day saying he carves out plenty of time
to spend with his family and eat breakfast. "Not only does this help them know how important they
are to me, but it also grounds me before I start my day," he wrote. Once he's up, he's ready to move.
Some of his favorite activities include kite-surfing, swimming, cycling, and tennis. Virgin's website
says the founder has a "mean tennis serve." In 2010, he ran a marathon in London while dressed as
a butterfly. In 2009, he kite-surfed with a naked model on his back. In February, he hit the waves to
compete against former US President Barack Obama.
Getting an early start to the day isn't only about exercising. Branson lives on Necker Island
in the British Virgin Islands, which he bought for about $320,000 in 1979. "Living in the BVI, I like to
be online early, so that I am accessible and available to our offices in other time zones," he wrote.,
saying he can work through his emails before most of the world logs on. He spends his workdays
staying on top of business, checking his various social media platforms, reading the news, and
keeping in touch with his employees, divulging that his biggest life hack is carrying a notebook to
keep him on track.
"Being a modern business leader is all about having your finger on the pulse and knowing what
you're talking about. I'm always checking in with our Virgin teams," Branson wrote on his blog.
He, ladies and gentlemen is 70 years old and has been an entrepreneur on top, in, out and
through his vast entrepreneurial ventures since he was 16 years old.

Let’s Think About This:

What a life these entrepreneurs lead, right? I hope that you are inspired with the kind of
life they lead and the impact they are making. With this in mind, let’s motivate ourselves a little
bit more with these questions:

Ma. Crestia Banares (2020). Module 1, The Entrepreneur and His Mind. Department of Entrepreneurship, Bicol University
College of Business Economics and Management
1. Do you think that entrepreneurs are born with these characters?

2. Do you think that it is a matter of nature or nurture?

3. Are entrepreneurs born or made?

Let’s Reflect:

Before we gin the last section if Session Two, I’d like you to take a look at this infographic
that represents the impact that entrepreneurship has on our society. Discuss what your thoughts
are about this photo.

Let’s Study:

THE IMPACT OF ENTREPRENEURSHIP

The impact that entrepreneurship has made in the world as we know it today is
undeniable. In the first part of this module, we discussed how entrepreneurship has evolved
over time. Along that line, we have also seen how that development has contributed to the world
Ma. Crestia Banares (2020). Module 1, The Entrepreneur and His Mind. Department of Entrepreneurship, Bicol University
College of Business Economics and Management
we live in today. Let us discuss one by one how entrepreneurship has contributed to the
economy and our society.

Entrepreneurship Spurs Economic Growth

Entrepreneurs create new products and services and this in turn spurs on the creation of
other economic activities that would support the new business venture. These economic
activities could be job creation, the production of supplementary products and services and other
activities that would stimulate economic development.

Take for example, a few information technology companies made up the IT industry in in
different parts of the world in the ‘90s. The industry soon grew affecting various other sectors.
New businesses were also established in support of the industry such as BPOs (Business Process
Outsourcing), network service and maintenance providers, hardware and software providers,
etc. Even companies that support the lifestyles of those in the IT industries came to be.
Restaurants, food delivery services and even fitness centers started operating for 24 hours to
cater to employees who worked at different timelines. This entailed more manpower and
created more jobs.

Entrepreneurship Creates Jobs

As new businesses are made, jobs are also created. Starting an entrepreneurial venture,
no matter how small it is, requires an entrepreneur to hire people. As the business expands,
more jobs are created and would require hiring even more. Inadvertently jobs are also created
by entrepreneurs who previously had jobs before opening their business. Leaving their day jobs
creates a vacancy. Sometimes, these vacancies require more than one person to fill in the gap
left by the entrepreneurs.

Entrepreneurships Bring Innovations

Necessity is the mother of invention, as the saying goes, and so perhaps its older
sibling is innovation. We have come to learn that entrepreneurs succeed because of the
innovation they bring in. It could be innovation that come in the form of the products and service

Ma. Crestia Banares (2020). Module 1, The Entrepreneur and His Mind. Department of Entrepreneurship, Bicol University
College of Business Economics and Management
they offer, or the way they get the products and services to the market or even how the products
and services are made.

More often than not, entrepreneurs find solutions to problems and by doing so, an
entrepreneur brings in innovation in the market and inevitably creates competition. This results
to better and often more affordable products and services for customers to purchase. Steve Jobs
of Apple invented the iPhone which spurred on innovations on the mobile phone industry. The
mobile phone industry today is among the most vibrant and dynamic with us seeing innovations
on smart phone almost every day. More importantly, with the competition being so diverse, with
smart phone choices ranging to the thousands, who stand to benefit from all this? No other than
us, the buying public.

Entrepreneurship Creates Wealth

Entrepreneurial ventures help generate new wealth not only for the entrepreneur but for
the nation as well. Existing businesses may remain focused to serve their current market and
may hit the glass ceiling in terms of income. By introducing new and improved products and
services entrepreneurs are able to serve new markets and thereby creating new wealth.

As previously stated, entrepreneurship creates jobs which in turn provides earnings or

higher earnings. This in turn contributes to better national income in the form of higher tax
revenue and higher government spending. The government can then use the revenue in
struggling sectors and more importantly on human capital.

Let’s Think About This:

We now understand the different roles that entrepreneurship makes and how it impacts
the shape of the world. Let us continue to explore the other possibilities of entrepreneurship by
answering these questions:
1. How is entrepreneurship important to society and the economy?
2. How does entrepreneurship drive societal and economic change?
3. Can too much entrepreneurship be detrimental to economic development?

Ma. Crestia Banares (2020). Module 1, The Entrepreneur and His Mind. Department of Entrepreneurship, Bicol University
College of Business Economics and Management
Let’s Try This:
At this point, I think that we now have a clear understanding of who the entrepreneur is.
Do a little bit of research and find a person in your locality whom you can qualify as an
entrepreneur. Write an essay about this person explaining what traits this person possesses and
what actions he has taken that makes him/her an entrepreneur. Also include a discussion on the
impact he has made in your community. And don’t forget to include what his/her entrepreneurial
venture is as well as the kind of innovation introduced.
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Ma. Crestia Banares (2020). Module 1, The Entrepreneur and His Mind. Department of Entrepreneurship, Bicol University
College of Business Economics and Management