PART I
Entrepreneurship in the Twenty-First Century
Chapter 1 - The Revolutionary Impact of Entrepreneurship
Chapter 2 - The Evolutionary Development of Entrepreneurship
Chapter 3 - The Entrepreneurial Mindset in Organizations: Corporate
Entrepreneurship
Ó 2007 South-Western. All rights reserved. 1
, CHAPTER 1
THE ENTREPRENEURIAL REVOLUTION
CHAPTER OUTLINE
I. Entrepreneurs—Challenging the Unknown
II. Entrepreneurs/Small Business Owners: A Distinction
III. Entrepreneurship: A Perspective
IV. Our Entrepreneurial Economy—The Environment of Entrepreneurship
A. Predominance of new ventures in the economy
B. Entrepreneurial firms’ impact
C. Trends in research and education
V. The Age of the Gazelles
A. Innovation
B. Growth
C. Survival
VI. The Emerging Trends: The Internet and E-Commerce
A. The E-Commerce Challenge
B. E-Names: The Web Address
C. Developing a Web Site
D. Sticking to Your Web Site
E. Emerging E-Commerce Strategies
VII. Entrepreneurial Opportunities
VIII. Summary
CHAPTER OBJECTIVES
l. To explain the importance of entrepreneurs for economic growth.
2. To introduce the concept of an entrepreneurial perspective within individuals.
3. To examine the entrepreneurial revolution taking place today.
4. To illustrate the entrepreneurial environment.
5. To highlight some of the latest trends in entrepreneurial research.
6. To examine the emerging trends of e-commerce and the Internet in relation to
entrepreneurship.
2 Ó 2007 South-Western. All rights reserved.
,CHAPTER SUMMARY
This opening chapter attempts to provide a broad perspective of the entrepreneurial
revolution occurring throughout the U.S. and the World. Beginning with a discussion of
entrepreneurs challenging the unknown like Olympic athletes, symphony conductors, or top gun
pilots, the chapter presents the perspective of entrepreneurship as a force that has revolutionized
business.
The environment of entrepreneurship reflects a predominance of small firms and new
ventures. Over the last few years, there has been a tremendous increase in new-venture activity.
There are many statistics that illustrate this fact. For example, during the past ten years, new
business incorporations averaged 600,000 per year. While many of these incorporations may
have been sole proprietorships or partnerships previously, it still demonstrates venture activity,
whether it was through start-ups, expansion, or development. More specifically, let’s examine
some of the latest tabulated numbers.
Approximately one new firm with employees is established every year for every 300
adults in the United States. As the typical new firm has at least two owners-managers, one of
every 150 adults participates in the founding a new firm each year. Substantially more—one in
12—are involved in trying to launch a new firm.
The net result, then, is that the United States has a very robust level of firm creation.
Among the 6 million establishments (single- and multi-site firms) with employees,
approximately 600,000 to 800,000 are added each year. That translates into an annual birth rate
of 14 to 16 per 100 existing establishments. More specifically, in the new millennium the number
of businesses in the US has soared to over 25 million and is still growing at a rate of 2%.
Collectively, US businesses posted over $20 trillion in annual revenues.
Entrepreneurial firms are the essential mechanism by which millions enter the economic
and social mainstream of American society. Small businesses enable millions of people
including women, minorities, and immigrants, to access the American Dream. The greatest
source of U.S. strength has always been the American Dream of economic growth, equal
opportunity, and upward mobility. In this evolutionary process, entrepreneurship plays the
crucial and indispensable role of providing the “social glue” that binds together both high-tech
and “Main Street” activities.
The US outranks the rest of the world in important entrepreneurial support such as
entrepreneurship education training, financial support and favorable social norms. The
entrepreneurial sector is poised to be an even more important factor in the US’s future economic
growth due to its adaptability to changing conditions and continued significant job creation. The
chapter discusses ten specific developments that have occurred in the last few years. Many
institutions have created programs for entrepreneurship research. The research focuses mainly on
three areas: entrepreneurship education, outreach activities with entrepreneurs, and
entrepreneurship research.
The Internet is having tremendous impact on the global marketplace. The statistics appear
to support this claim of profound change from the “Internet explosion.”
U.S. businesses spent $85.7 billion on building up their Internet capabilities in 1999. For
2000, total spending will reach $120 billion. Smaller ventures use the Internet for a variety of
operations, including customer-based identification, advertising, consumer sales, business-to-
business transactions, e-mail, and private internal networks for employees. Seventy-eight percent
Ó 2007 South-Western. All rights reserved. 3
, of small venture owners with Web site have declared the ability to reach new and potential
customers as their main reason for having one.
The most immediate obstacle facing companies that seek to fully implement e-commerce is
the cost. Experts estimate that a small business would need an initial investment of $10,000 to
launch an e-commerce site and approximately 20 percent of the launching funds to maintain it
annually. The technical barriers involve both personnel and data.
The opportunities during this century will be immense. Entrepreneurial opportunities will
continue to arise for individuals willing to take the risk. As we will see throughout the following
chapters, the discipline of entrepreneurship can be learned to better prepare oneself to take
advantage of such an entrepreneurial opportunity.
LECTURE NOTES
THE ENTREPRENEURIAL REVOLUTION
I. Entrepreneurs—Challenging the Unknown
A. Individuals recognize opportunities where others see chaos or confusion.
B. They are compared to Olympic athletes, symphony conductors, or top gun pilots.
II. Entrepreneurs/ Small Business Owners: A Distinction
A. The terms entrepreneur and small business owner are used interchangeably, but there
are differences.
B. Small businesses are not dominant in their field and are not innovative.
C. The objectives of entrepreneurial ventures are innovation, profitability and growth.
III. Entrepreneurship: A Perspective
A. More than mere creation of business
B. Special perspective that permeates individuals
C. Dynamic forces that has revolutionized business
IV. Our Entrepreneurial Economy—The Environment for Entrepreneurship
A. Predominance of small firms and new ventures
1. During the last ten years, there were over 600,000 new business incorporations per
year.
2. Small business employment statistics have been steadily rising.
3. Small firms constitute more than 90 percent of the entire business population.
4. Approximately seven million entrepreneurs (out of 12 million) work for themselves
without employing anyone else. Of the 5 million remaining firms, only 15,000
employ 500 or more people.
5. The smallest of our enterprises have created a steady supply of net new jobs.
6. Approximately one new firm with employees is established every year for 300
adults in the United States. Substantially more—one in 12—are involved in
trying to launch a new firm.
4 Ó 2007 South-Western. All rights reserved.
Entrepreneurship in the Twenty-First Century
Chapter 1 - The Revolutionary Impact of Entrepreneurship
Chapter 2 - The Evolutionary Development of Entrepreneurship
Chapter 3 - The Entrepreneurial Mindset in Organizations: Corporate
Entrepreneurship
Ó 2007 South-Western. All rights reserved. 1
, CHAPTER 1
THE ENTREPRENEURIAL REVOLUTION
CHAPTER OUTLINE
I. Entrepreneurs—Challenging the Unknown
II. Entrepreneurs/Small Business Owners: A Distinction
III. Entrepreneurship: A Perspective
IV. Our Entrepreneurial Economy—The Environment of Entrepreneurship
A. Predominance of new ventures in the economy
B. Entrepreneurial firms’ impact
C. Trends in research and education
V. The Age of the Gazelles
A. Innovation
B. Growth
C. Survival
VI. The Emerging Trends: The Internet and E-Commerce
A. The E-Commerce Challenge
B. E-Names: The Web Address
C. Developing a Web Site
D. Sticking to Your Web Site
E. Emerging E-Commerce Strategies
VII. Entrepreneurial Opportunities
VIII. Summary
CHAPTER OBJECTIVES
l. To explain the importance of entrepreneurs for economic growth.
2. To introduce the concept of an entrepreneurial perspective within individuals.
3. To examine the entrepreneurial revolution taking place today.
4. To illustrate the entrepreneurial environment.
5. To highlight some of the latest trends in entrepreneurial research.
6. To examine the emerging trends of e-commerce and the Internet in relation to
entrepreneurship.
2 Ó 2007 South-Western. All rights reserved.
,CHAPTER SUMMARY
This opening chapter attempts to provide a broad perspective of the entrepreneurial
revolution occurring throughout the U.S. and the World. Beginning with a discussion of
entrepreneurs challenging the unknown like Olympic athletes, symphony conductors, or top gun
pilots, the chapter presents the perspective of entrepreneurship as a force that has revolutionized
business.
The environment of entrepreneurship reflects a predominance of small firms and new
ventures. Over the last few years, there has been a tremendous increase in new-venture activity.
There are many statistics that illustrate this fact. For example, during the past ten years, new
business incorporations averaged 600,000 per year. While many of these incorporations may
have been sole proprietorships or partnerships previously, it still demonstrates venture activity,
whether it was through start-ups, expansion, or development. More specifically, let’s examine
some of the latest tabulated numbers.
Approximately one new firm with employees is established every year for every 300
adults in the United States. As the typical new firm has at least two owners-managers, one of
every 150 adults participates in the founding a new firm each year. Substantially more—one in
12—are involved in trying to launch a new firm.
The net result, then, is that the United States has a very robust level of firm creation.
Among the 6 million establishments (single- and multi-site firms) with employees,
approximately 600,000 to 800,000 are added each year. That translates into an annual birth rate
of 14 to 16 per 100 existing establishments. More specifically, in the new millennium the number
of businesses in the US has soared to over 25 million and is still growing at a rate of 2%.
Collectively, US businesses posted over $20 trillion in annual revenues.
Entrepreneurial firms are the essential mechanism by which millions enter the economic
and social mainstream of American society. Small businesses enable millions of people
including women, minorities, and immigrants, to access the American Dream. The greatest
source of U.S. strength has always been the American Dream of economic growth, equal
opportunity, and upward mobility. In this evolutionary process, entrepreneurship plays the
crucial and indispensable role of providing the “social glue” that binds together both high-tech
and “Main Street” activities.
The US outranks the rest of the world in important entrepreneurial support such as
entrepreneurship education training, financial support and favorable social norms. The
entrepreneurial sector is poised to be an even more important factor in the US’s future economic
growth due to its adaptability to changing conditions and continued significant job creation. The
chapter discusses ten specific developments that have occurred in the last few years. Many
institutions have created programs for entrepreneurship research. The research focuses mainly on
three areas: entrepreneurship education, outreach activities with entrepreneurs, and
entrepreneurship research.
The Internet is having tremendous impact on the global marketplace. The statistics appear
to support this claim of profound change from the “Internet explosion.”
U.S. businesses spent $85.7 billion on building up their Internet capabilities in 1999. For
2000, total spending will reach $120 billion. Smaller ventures use the Internet for a variety of
operations, including customer-based identification, advertising, consumer sales, business-to-
business transactions, e-mail, and private internal networks for employees. Seventy-eight percent
Ó 2007 South-Western. All rights reserved. 3
, of small venture owners with Web site have declared the ability to reach new and potential
customers as their main reason for having one.
The most immediate obstacle facing companies that seek to fully implement e-commerce is
the cost. Experts estimate that a small business would need an initial investment of $10,000 to
launch an e-commerce site and approximately 20 percent of the launching funds to maintain it
annually. The technical barriers involve both personnel and data.
The opportunities during this century will be immense. Entrepreneurial opportunities will
continue to arise for individuals willing to take the risk. As we will see throughout the following
chapters, the discipline of entrepreneurship can be learned to better prepare oneself to take
advantage of such an entrepreneurial opportunity.
LECTURE NOTES
THE ENTREPRENEURIAL REVOLUTION
I. Entrepreneurs—Challenging the Unknown
A. Individuals recognize opportunities where others see chaos or confusion.
B. They are compared to Olympic athletes, symphony conductors, or top gun pilots.
II. Entrepreneurs/ Small Business Owners: A Distinction
A. The terms entrepreneur and small business owner are used interchangeably, but there
are differences.
B. Small businesses are not dominant in their field and are not innovative.
C. The objectives of entrepreneurial ventures are innovation, profitability and growth.
III. Entrepreneurship: A Perspective
A. More than mere creation of business
B. Special perspective that permeates individuals
C. Dynamic forces that has revolutionized business
IV. Our Entrepreneurial Economy—The Environment for Entrepreneurship
A. Predominance of small firms and new ventures
1. During the last ten years, there were over 600,000 new business incorporations per
year.
2. Small business employment statistics have been steadily rising.
3. Small firms constitute more than 90 percent of the entire business population.
4. Approximately seven million entrepreneurs (out of 12 million) work for themselves
without employing anyone else. Of the 5 million remaining firms, only 15,000
employ 500 or more people.
5. The smallest of our enterprises have created a steady supply of net new jobs.
6. Approximately one new firm with employees is established every year for 300
adults in the United States. Substantially more—one in 12—are involved in
trying to launch a new firm.
4 Ó 2007 South-Western. All rights reserved.
