I would describe an entrepreneur like a person who sees an additional color. Everybody sees chaos. An entrepreneur sees patterns.
- Andreas Widmer
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Peter Heslam on Mindset of the Entrepreneur
In my work on what actually creates wealth, I stress the virtue of thrift, and thrift, at its core, is about the delay of gratification. It’s saying no to consuming things today for the sake of a better tomorrow. So it’s forward thinking and that kind of mindset is the mindset of an entrepreneur.More from Peter Heslam
Peter Heslam on God as the Great Entrepreneur
Perhaps we find in the Creation story a picture of God as the Great Entrepreneur, when He starts His start-up company, the world, and He sets Adam and Eve in it and He says, “Get to work as stewards of My enterprise.”More from Peter Heslam
Andreas Widmer on Entrepreneurs
I would describe an entrepreneur like a person who sees an additional color. Everybody sees chaos; they look out, they see chaos. An entrepreneur sees patterns. That’s why often people think that entrepreneurs are crazy because they say I can’t believe that they are doing this, but they see something to perceive a pattern. Often people say, “Oh, everybody can be an entrepreneur.” That’s not true. I think one in a thousand is an entrepreneur because they have that talent of seeing something, seeing patterns where others see chaos.More from Andreas Widmer
Andreas Widmer on Entrepreneurial Culture
It’s a culture of looking at something and saying, I’m going to take responsibility and solve this problem or solve this issue, or even, not from a negative perspective, from the positive perspective, to say, I have confidence so I’m going to realize this dream of mine. I believe that I can realize my vision and create a company and do it. That is, a forward looking positive attitude that comes out of your culture, and that is something that needs to be supported locally.More from Andreas Widmer
George Ayittey on Hippos vs. Cheetahs
If you look at the post-colonial [African] history, you can divide it into two classes of people. There is the Hippo Generation; the Hippo Generation are the ruling elites. They are those who have monopolized political power and they are those who are stuck in their muddy, pedagogical patch. They are ornery, pudgy, and stodgy in the sense that they can’t explain why Africa is in such a mess. They blame everybody else instead of themselves. It is always colonialism! Imperialism! And they believe that the only way you can solve the problems in Africa is by giving the state more power and more foreign aid. That’s the Hippo Generation. It’s what has dragged Africa into this particular swamp. Africa is not going to move forward with the Hippo Generation, and it is on the back of this Hippo Generation which the United Nations, the World Bank, and the IMF have been trying to hitch a ride with this same old aid driven boondoggle. And that’s why we’re not getting anywhere in Africa. By contrast we have the Cheetah Generation. The Cheetah Generation is the new and angry generation of Africans who can see that their leadership have failed them. And the Cheetah Generation are those young Africans, you may call them the restless generation. They’re not going to sit there and wait for governments to come and do things for them. As a matter of fact, they’re not going to sit there and beg for foreign aid, because they can see that every social need in Africa is a business opportunity. The Cheetah Generation is entrepreneurial. So they are going to get off and take their own initiative to solve problems in Africa. Africa’s salvation and Africa’s future rests on the backs of this Cheetah Generation. They are the young and the agile and they’re fast, and you can see a lot of them. Many, many, many African countries who are not just sitting there and waiting for governments to come and do things for them. In fact, their outlook is refreshingly different. Asia has its Tigers; Africa will have its Cheetahs.More from George Ayittey
Who is an Entrepreneur?
The entrepreneur is the creative element indispensible to economic growth, the risk-taking “e variable” who pursues a vision to create value and serve customers in a new way. Technically defined, an entrepreneur is someone who connects capital, labor and material factors to produce a good or service, either in a for-profit or non-profit context. Most often applied to business enterprise, the term describes an individual who notices some inadequately met want or need in the market and fills the gap through a new product or service, an improvement in quality, or by providing a more efficient way of delivering an existing good or service. Becoming a successful entrepreneur usually requires insight, courage, energy, persistence and the quality of other-directedness. This is the ability to imagine, and the desire to fill, a want or need in other people.
Table of Contents
- Who is an Entrepreneur?
- Entrepreneurship for the Developing World
- Entrepreneurship, Economic Growth and Human Flourishing
- Entrepreneurship and Culture
- Entrepreneurship, Microfinance and SMEs
Entrepreneurship for the Developing World
Development economists emphasize the need to nurture the legal and cultural structures that encourage and enable entrepreneurship so that poor regions can meet their wants and needs through enterprise and grow their way out of poverty.
Entrepreneurial start-ups can help poor regions in several ways, most directly by meeting the wants and needs of a market that has been overlooked or underserved thus far. For instance, since the mid-1990s, Kenyans have enjoyed greater variety and reliability in the foods available at local supermarkets. This improvement is at least partly a result of the success of Nakumatt, a domestic supermarket chain whose story is told by June Arunga and Scott Beaulier in Lessons from the Poor. Nakumatt has grown in two decades from a small blanket and mattress store to a regional giant with 3,000 employees. The company fostered human capital through extensive employee training and developed profitable networks through innovative tactics such as subletting space within its stores to other businesses.
Entrepreneurship in the developing world also can encourage traits such as thrift and perseverance, while business success stimulates a sense of capacity and self-worth in environments previously marked by dependency and a sense of fatalism.
Successful entrepreneurial activity also tends to generate new wealth. This wealth supports entrepreneurs and their families, much of which gets channeled back into other regional businesses, creating additional jobs and profit (what economist refer to as the multiplier effect). In Peru, for instance, Aguilino Flores, struggling to make ends meet by washing cars, began selling t-shirts. Flores noticed opportunity by understanding his customers’ needs and the culture of the local workers. His business grew into a textile and clothing multinational that now provides jobs for 5,000 people and enriches the local economy through the local goods and services these workers can now afford, as well as by annually exporting goods worth tens of millions of dollars.
Entrepreneurship, Economic Growth and Human Flourishing
Without entrepreneurs, economies tend to stagnate. French economist J.B. Say described the role of the entrepreneur in technical terms in 1800: “The entrepreneur shifts economic resources out of lower and into higher productivity and greater yield.” In other words, entrepreneurs find ever more efficient and effective ways of meeting people’s wants and needs, thereby freeing up resources to be applied to additional wants and needs. Entrepreneurs are, thus, key drivers of economic growth.
Of course, entrepreneurs can fill wants that are damaging to the human person. Entrepreneurship is not a magic bullet for achieving a thriving society. Enterprise must exist with a moral framework if the creativity of the entrepreneur is going to be channeled, more often than not, into enterprises that enhance human dignity and freedom for excellence. This means that institutions essential to a rich moral culture need to be cultivated alongside market freedom if the goal is to encourage sustainable human flourishing.
Entrepreneurship and Culture
At the level of culture, religious and other social institutions can inculcate positive or negative attitudes toward entrepreneurship. For example, in Christian thought there is a long history of skepticism toward business activity on the part of theologians and clergy. At the same time, there is a strong tradition of Christian thought that sees ethical business enterprise as a legitimate and worthy fulfillment of humanity’s role as steward’s of creation. Rev. Robert Sirico articulates this positive vision in The Entrepreneurial Vocation. “An entrepreneur is a kind of impresario,” he writes, “one who organizes numerous factors and brings things into connection so as to produce. This creative aspect of the entrepreneur is akin to God’s creative activity as we read it in the book of Genesis.”
In the political sphere, protecting economic freedom creates a climate within which entrepreneurship can flourish. Corruption, excessive and byzantine regulation, and weak enforcement of laws and contracts discourage people from devoting time and energy to starting and growing business enterprises, especially poor people who lack the material resources to navigate a complex system rigged in favor of established insiders.
Countries with a political climate more favorable to entrepreneurship tend to enjoy stronger economies. Two indicators of business environment are number of days necessary to start a business (to complete paperwork) and the percentage of average per capita income required to start a business (to pay licensing and permit fees). According to figures from the World Bank’s annual report, World Development Indicators, wealthy nations such as Australia (2 days, 0.7%) and Singapore (3 days, 0.7%) top the list, while less developed nations such as Zimbabwe (90 days, 183%) and Haiti (105 days, 212%) lag behind.
Entrepreneurship, Microfinance and SMEs
One practical method of stimulating entrepreneurship is microfinance. The microfinance movement itself is an example of entrepreneurship in the charitable, a product of fresh thinking by non-profit workers who recognized the ineffectiveness of conventional models of aid and charity in bringing about sustained material improvement among the poor. With due attention to the dangers and potential abuses, the provision of credit to individuals in marginalized communities can be a fruitful way to draw the poor into commerce and set them on the path to development. Churches, charities and other institutions sometimes organize and administer these kinds of micro-loans, or partner with organizations that specialize in this work. Other non-profits or low-profit organizations focus on capitalizing promising small and medium-sized enterprises (SMEs) in the developing world, spurred by data that shows that such a focus has the potential to multiple regional wealth by more than ten-fold.