THE NATURE AND DEVELOPMENT OF ENTREPRENEURSHIP.

CHAPTER 01.

1.0. THE NATURE AND DEVELOPMENT OF ENTREPRENEURSHIP.                    

 1.1.0. Definition of words entrepreneur and entrepreneurship.                                                                                                                          

1. An entrepreneur is a person who organizes and operates a business taking on financial risk to do business. Is a person who organizes and manages a business undertaking, assuming the risk for the sake of profit.

 To an economist, an entrepreneur is one who brings resources, labor, materials, and other assets into combinations that make their value greater than before, and one who introduces changes, innovations, and a new order. To a psychologist, certain forces- typically drive such a person the need to obtain something, to experiment, to accomplish or perhaps to escape the authority of others.

For the person who actually starts his or her own business there is a high failure rate due to poor sales, intense competition, lack of capital or lack of managerial ability

2. Entrepreneurship is a process of creating together a unique package of resources to exploit an opportunity.

In almost all definitions of entrepreneurship, there is agreement that we are talking about a kind of behavior that includes:

1)      Initiative taking.

2)      The organizing and reorganizing or social/economic mechanisms to turn resources and situations to practical account.

3)      The acceptance of risk or failure.

Entrepreneurship is the dynamic process of creating incremental wealth. The definition of entrepreneurship involves four aspects:

     1. Entrepreneurship involves the creation process.

     2. It requires the devotion of the necessary time and effort.

     3. It involves assuming the necessary risks.

     4. The rewards of being an entrepreneur are independence, personal satisfaction, and monetary reward.

1.2.0. The history of the word entrepreneur and entrepreneurship.

 1.2.1. In its origin and Phases.

The term entrepreneur comes from the French and translates "between-taker" or "go-between."

Earliest Period. In this period, the money person (forerunner of the capitalist) entered into a contract with the go-between to sell his goods. While the capitalist was a passive risk bearer, the merchant bore all the physical and emotional risks.

Middle Ages. In this age, the term entrepreneur was used to describe both an actor and a person who managed large production projects. In such large production projects, this person did not take any risks, managing the project with the resources provided. A typical entrepreneur was the cleric who managed architectural projects.

In the 17th century, the entrepreneur was a person who entered into a contract with the government to perform a service. Richard Cantillon, a noted economist of the 1700s, developed theories of the entrepreneur and is regarded as the founder of the term. He viewed the entrepreneur as a risk taker who "buy[s] at certain price and sell[s] at an uncertain price, therefore operating at a risk."

In the 18th century, the person with capital was differentiated from the one who needed capital. In other words, entrepreneur was distinguished from the capital provider. Many of the inventions developed during this time, as was the case with the inventions of Eli Whitney and Thomas Edison were unable to finance invention themselves. Both were capital users (entrepreneurs), not capital providers (venture capitalists.) Whitney used expropriated crown property. Edison raised capital from private sources. A venture capitalist is a professional money manager who makes risk investments from a pool of equity capital to obtain a high rate of return on investments.

In the late 19th and early 20th centuries, entrepreneurs were viewed mostly from an economic

Perspective. The entrepreneur "contributes his own initiative, skill and ingenuity in planning, organizing and administering the enterprise, assuming the chance of loss and gain." Andrew Carnegie is one of the best examples of this definition, building the American steel industry on the wonders of industrial world, primarily through his competitiveness rather than creativity.

In the middle of the 20th century, the notion of an entrepreneur as an innovator was established.

1.2.2. In its uses and applicability.                                                                                                             The first written use of term intrapreneur, entrapreneurship date from paper written in 1978 by Gifford and Elizabeth Pinchot. Later the term was credited to, Gifford Pinchot III by Norman Macramé in the April 17, 1982 issues of the economist. The first formal academic case study of corporate entrepreneurship or intrapreneurship was published in June 1982, as a master’s in management thesis by Howard Edward Haller, on the intrapreneurial creation of PR1ME Leasing within PR1ME computer Inc. (from 1977 to 1981). VDM Verlag as Intrapreneurship success later published this academic research as a case study.

A PR1ME example by Howard Edward Haller, Ph.D. The American Heritage Dictionary of the English language included the term ‘intrapreneur’ in its 3^rd 1992 Edition, and created Gifford Pinchot III as the originator of the concept. The term ‘intrapreneurship’ was used in the popular media first in February 1985 by TIM E magazine article. “Here come the ‘intrapreneurs’ and then the same year in another major popular publication was in quote by Steve Job, Apple computer’s chairman in on interview in the September 1985 News week article, when he shared, “The Macintosh team was what is common known as  intrapreneurship; only a few years before the term was coined a group of people going, but in a large company.”

The word ‘entrepreneur’ is more than 150 years old, having come into English from French in 1828. Nevertheless, it is not until very recently that we find its intracorporate meaning a person within a large corporation who take direct responsibility for turning an idea into profitable finished products through assertive risk-taking and innovation

1.3.0. Innovation.

Innovation, the act of introducing something new, is one of the most difficult tasks for the entrepreneur. This ability to innovate is an instinct that distinguishes human beings from other creatures and can be observed throughout history.

1.4.0. Foundations of Entrepreneurship.                                                                                                           

In the final analysis, there are three (3) foundations of entrepreneurship:

1. Innovation: The ability to see things in novel ways.

2.  Calculate risk-taking: The ability to take calculated chances and to embrace failure as a   learning experience.

3. Creativity: The ability to conceive of multiple possible futures and to proactively create the one you most desire.

1.5.0. Fundamental Blocks to Creativity.                                                                                               There are three (3) fundamental blocks to creativity:

1. Believing you already have ‘the right answer’. This prevents you from understanding possible alternative futures, and choosing to create the one you most desire. The more familiar not-invented-here syndrome-in which people, believing they know more than others in their field, reject new ideas that are “Not invented here” is viewed as inefficient, arrogant, and ultimately fatal to innovation (Hargadon 2000).

2. Taking life too seriously. If you take life too seriously, you will never feel free enough to ask the seemingly ridiculous questions, which spark inspiration.

3. Believing you are not creative. Before you can be creative, you have to choose and create a future in which you are creative.

Source: Dr. Prem’s entrepreneurship training.com

                         

1.6.0. The entrepreneurial decision process (Deciding to become an entrepreneur by leaving present activity) Many individuals have difficulty bringing their ideas to the market and creating new venture. Yet entrepreneurship and the actual entrepreneurial decisions have resulted in several million new businesses being started throughout the world. Although no one knows the exact number in any country. Indeed, millions of ventures are formed despite recession, inflation, high interest rates, and lack of infrastructure, economic uncertainty and the high probability of failure. The entrepreneurial decision process entails a movement from something to something, a movement from a present life style to forming a new enterprise. To leave a present live-style to create something new comes from a negative force--disruption. Many companies are formed by people who have retired, moved, or been fired. Another cause of disruption is completing an educational degree. The decision to start a new company occurs when an individual perceives that forming a new enterprise is both desirable and possible. 1.7.0. Desirability of New Venture Formation (Aspects of a situation that make it desirable to start a new company or business) The perception that starting a new company or a business is desirable results from an individual's culture, subculture, family, teachers and peers. There some culture places a high value on being somebody a boss, being a success and making money, therefore, it is not surprising to find a high rate of company formation in the United States because the culture of the country influence natives. On the other hand, in some countries, making money is not as valued and failure may be a disgrace. The rate of business formation in these countries is not as high. Many subcultures that shape value systems operate within a cultural framework. Studies indicate that a high percentage of founders of companies had fathers and/or mothers who valued independence. Encouragement to form a company is also gained from teachers, who can significantly influence individuals. An area having a strong educational base is also a requirement for entrepreneurial activity. Peers are important, also, as is an area with an entrepreneurial pool and peer-meeting place. 1.8.0. Possibility of New Venture Formation (Factors making it possible to create a new venture) Although the desire of new venture formation derived from the individual's culture, subculture, family, teachers and peers needs to be present before any action is taken, the second feature necessary centers around this question "What makes it possible to form a new company?" Formal education and previous business experience give a potential entrepreneur the skills needed to form and manage a new enterprise. Although educational systems are important in providing the needed business knowledge, individual will tend to be more successful in forming in fields in which they have worked. The government also contributes by providing the infrastructure to help a new venture. 1.9.0. The Entrepreneur And Entrepreneurial Mind. 1.9.1. Entrepreneurial process The entrepreneurial process involves finding, evaluating, and developing an opportunity by overcoming the strong forces that resist the creation of something new.  Phase 1: Identifying and Evaluating the Opportunity. Most good business opportunities result from an entrepreneur being alert to possibilities. Some sources are often fruitful, including consumers and business associates. Channel members of the distribution system-retailers, wholesalers or manufacturer's reps-are also helpful. Technically-oriented individuals often identify business opportunities when working on other projects. Each opportunity must be carefully screened and evaluated-this is the most critical element of the entrepreneurial process. The evaluation process involves looking at:         i.            The creation and length of the opportunity       ii.            Its real and perceived value     iii.            Its risks and return.     iv.            It's fit with the skills and goals of the entrepreneur       v.            Its differential advantage in its competitive environment     vi.            It is important to understand the cause of the opportunity, as the resulting opportunity may have a different market size and time dimension. The market size and the length of the window of opportunity are the primarily bases for determining risks and rewards.  The risks reflect the market, competition, technology, and amount of capital involved. The amount of capital forms the basis for the return and rewards. The return and reward of the present opportunity needs to be viewed in light of any possible subsequent opportunities as well. The opportunity must fit the personal skills and goals of the entrepreneur. The entrepreneur must be able to put forth the necessary time and effort required for the venture to succeed. One must believe in the opportunity enough to make the necessary sacrifices. Opportunity analysis, or an opportunity assessment plan, should focus on the opportunity and provide the basis to make the decision, including: 1.      A description of the product or service 2.      An assessment of the opportunity 3.      Assessment of the entrepreneur and the team 4.      Specifications of all the activities and resources needed 5.      The source of capital to finance the initial venture Phase 2: Develop a Business Plan. A good business plan must be developed in order to exploit the opportunity defined. A good business plan is important in developing the opportunity and in determining, the resources required, obtaining those resources and successfully managing the venture. Phase 3: Determine the Resources Required. Assessing the resources needed starts with an appraisal of the entrepreneur's present resources. Any resources that are critical must be distinguished from those that are just helpful. Care must be taken not to underestimate the amount and variety of resources needed. Acquiring needed resources, while giving up as little control as possible, is difficult. The entrepreneur should try to maintain as large an ownership position as possible, particularly in the start-up stage. As the business develops, more funds will probably be needed, requiring more ownership be relinquished. Alternative resource suppliers should be identified, along with their needs and desires, in order to structure a deal with the lowest cost and loss of control. Phase 4: Manage the Enterprise. The entrepreneur must employ these resources through implementation of the business plan. This involves implementing a management structure, as well as identifying a control system. 1.9.2.0. Corporate versus entrepreneurial culture Smaller, aggressive, entrepreneurial firms are developing more products that are new and becoming dominant in certain markets. Many companies are attempting to create the same spirit, culture, and rewards of entrepreneurship in their organizations. The typical corporate culture has a climate and reward system that favors conservative decision-making. Emphasis is on gathering large amounts of data as the basis for a rational decision. Risky decisions are often postponed until hard facts are gathered or a consultant is hired. Often there are so many approvals required that no individual feels personally responsible for the project. The guiding principles in a traditional corporate culture are: 1)      Follow instructions given 2)      Do not make mistakes 3)      Do not fail 4)      Do not take initiative 5)      Stay within your turf and protect your backside 6)      This restrictive environment is not conducive to creativity, flexibility, and risk taking The guiding principles of Entrepreneurial culture Aspects of an Entrepreneurial culture are quite different: 1.      Develop visions, goals, and action plans 2.      Be rewarded for actions taken 3.      Suggest, try, and experiment 4.      Create and develop 5.      Take responsibility and ownership There are differences in the norms of the two cultures. The traditional culture is hierarchical in nature, with established procedures, lines of authority, and control mechanisms. These support the present corporate culture, and do not encourage new venture creation. The culture of an entrepreneurial firm has a flat organizational structure with networking, teamwork, sponsors, and mentors. Close working relationships help establish an atmosphere or trust that facilitates accomplishment of visions. Individuals make suggestions across functional areas, resulting in cross-fertilization of ideas. The two cultures produce different types of individuals and management styles.  Motivation. Traditional managers are motivated primarily by promotion and typical corporate rewards. Entrepreneurs thrive on independence and the ability to create. Entrepreneurs expect their performance to be suitably rewarded. 2.0. 0. Leadership characteristics There are certain individual characteristics needed for a person to be successful Entrepreneurs, including:   1. Understanding the environment   2. Being visionary and flexible   3. Creating management options   4. Encourage teamwork while employing a multi-disciplined approach   5. Encouraging open discussion   6. Building a coalition of supporters, and persisting An Entrepreneur needs to understand all aspects of the environment. Part of this ability is reflected in individual's level of creativity. Creativity tends to decrease with age and education. The individual must be creative and have a broad understanding of the internal and external environments of the corporation The Entrepreneurial person must be a visionary leader-a person who dreams great dreams. Leadership is the ability to dream great things and communicate them in a way that people say yes to being a part of the dream. To establish a successful new venture, the Entrepreneurial leader must have a dream and overcome all obstacles to achieve it. The third necessary characteristic is that the Entrepreneur must be flexible and create management options. An Entrepreneur is open to and encourages change. By challenging the beliefs and assumptions of the corporation, an Entrepreneur can create something new in the organization structure. He or she must possess the ability to encourage teamwork and use a multi-disciplined approach. Every new company formation requires a broad range of business skills. The Entrepreneur must be a good diplomat to minimize disruption. Open discussion must be encouraged to develop a good team for creating something new. Many corporate managers have forgotten that frank, open discussion is part of the learning process. A successful venture can be formed only when the team feels the freedom to disagree and to critique an idea. The degree of openness among the team depends on the degree of openness of the Entrepreneur. Openness leads to a strong coalition of supporters and encouragers. The Entrepreneur must encourage each team member, particularly during hard times. A good Entrepreneur makes everyone a hero. Only through persistence will a new venture be created and successful commercialization result. 2.1.0. Establishing entrepreneurship in the organization To establish an Entrepreneurial environment, the organization must implement a procedure. This can be done internally, but it is easier to use an outsider to facilitate the process. This is particularly true when the environment is very traditional. There are some steps involved in it. Step 1: The first step is to secure a commitment to entrepreneurship in the organization by top, upper, and middle management. Without top management commitment, the organization will never be able to make the necessary changes. Once top management has committed to entrepreneurship for a sufficient length of time, the concept is introduced throughout the organization. This is effectively accomplished through seminars. General guidelines need to be established for Entrepreneurial venture development. Next, Entrepreneurial leaders need to be identified, selected, and trained. Step 2: Ideas and general interest areas should be identified, along with the amount of risk money that is available. The overall expectations and target results should be established, specifying time frame, profitability requirements, and impact of the organization. A mentor/sponsor system needs to be established. Step 3: A company needs to use technology to make itself faster and more flexible. Technology has allowed small companies to act like they are big ones. Large companies can use technology to make them responsive and flexible. Step 4: The organization can use a group of managers to train and share their experiences with other members. These sessions should be conducted one day per month for a specified period of time. Information about entrepreneurship and about the company's specific activities should be well publicized. Step 5: The organization needs to develop ways to get closer to its customers by tapping the database, hiring from smaller rivals, and helping the retailer. Step 6: An organization must learn to be more productive with fewer resources. With middle management cutbacks, more control has been given to lower levels of the organization. The span of control should be increased. Step 7: The organization needs to establish a strong support structure. Because they do not immediately affect the bottom line, Entrepreneurial activities can be overlooked and receive little funding. These ventures require flexible, innovative behavior, with the Entrepreneurs having total authority over expenditures and access to funds. Step 8: The support must involve tying the rewards to the performance of the Entrepreneurial unit. This encourages team members to work harder and compete more effectively. The equity portion of the compensation is particularly difficult to handle. Step 9: The organization needs to implement an evaluation system that allows successful units to expand and unsuccessful ones to be eliminated. 2.2.0. Problems and successful efforts Entrepreneurship, also called corporate venturing, is not without problems. One study found that new ventures started within a corporation performed worse than those started independently. Independent start-ups tend to outperform corporate start-ups. There are many examples of companies that have successfully implemented entrepreneurship. 3millions allows employees to devote 15 percent of their time to independent projects. After failing to recognize the Potential of Wozniak's personal computer, Hewlett-Packard has taken steps to take advantage of future opportunities. Even IBM has developed the independent business unit concept. The problems of entrepreneurship are not insurmountable, and the concept can lead to new products, growth and the development of an entirely new corporate environment and culture . 2.3.0. Entrepreneurial feelings There is no "true entrepreneurial profile"- entrepreneurs come from many educational backgrounds, family situations, and work experiences. A potential entrepreneur may presently be a nurse, secretary, assembly line worker, sales person, mechanic, homemaker, manager or engineer. A potential entrepreneur can be male or female and of any race or nationality. 2.3.1.0. Locus of Control One concern people have when forming is whether they will be able to sustain the drive and energy required to form something new and to manage the new enterprise and make it grow. While research results are inconsistent, internal control seems to be a characteristic of entrepreneurs. Internal beliefs appear to differentiate entrepreneurs from the general public, but not from managers. Managers and entrepreneurs both have an internality tendency. 2.3.2.0. Feelings about Independence and Need for Achievement. The entrepreneur also has the need for independence, to do things in his or her own way and time. Another controversial characteristic is the entrepreneur's need for achievement. McClelland specified three attributes as characteristics of entrepreneurs:   1. Individual responsibility for solving problems, setting, and achieving goals.   2. Moderate risk taking as a function of skill.   3. Knowledge of results of decision/task accomplishment. McClelland concluded that a high need for achievement leads individuals to engage in entrepreneurial behavior, although other studies have been inconsistent. 2.3.3.0. Risk Taking Risk taking seems a part of the entrepreneurial process. However, it has not yet been empirically established whether risk-taking is a distinguishing characteristics of entrepreneurs. 2.4.0. Entrepreneurial background and characteristics Only a few background characteristics have differentiated the entrepreneur from the general populace or managers. 2.4.1.0. Childhood Family Environment The impact of birth order and social status has had conflicting research results. There is strong evidence that entrepreneurs, both male and female, tend to have self-employed or entrepreneurial fathers. Having a father who is self-employed provides a strong inspiration in the example of independence and flexibility of self-employment. This feeling of independence is often further enforced by an entrepreneurial mother. The overall parental relationship may be the most important aspect of the childhood environment in establishing the desirability of entrepreneurial activity. Parents of entrepreneurs need to be supportive and encourage independence, achievement, and responsibility. This supportive relationship appears to be most important for females. Female entrepreneurs tend to grow up in middle- to upper-class environments, where families are child-centered, and are similar to their fathers in personality. 2.4.2.0. Education Education appears important in the upbringing of the entrepreneur, in the level of education obtained and in playing a major role in coping with problems. Although formal education is not necessary for starting a new business, it does provide a good background. In education, female entrepreneurs previously experienced some disadvantage, with few having degrees in engineering, science, or math. The ability to deal with people and communicate clearly in written and spoken work is also important. 2.4.3.0. Personal Values Studies have failed to indicate that entrepreneurs can be differentiated on personal valued from managers, unsuccessful entrepreneurs, or the general public. Leadership, support, aggression, benevolence, conformity, creativity, veracity, and resource seeking may also be important. A successful entrepreneur is frequently characterized as a winner; winning may be a prerequisite for his or her actually becoming one. 2.4.4.0. Age Entrepreneurial age is the age of the entrepreneur reflected in the experience. Entrepreneurial experience is one of the best predictors of success. In chronological age, most entrepreneurs start their careers between ages 22 and 55. Earlier starts in an entrepreneurial career seem to be better than later ones. Generally, male entrepreneurs start their first venture in their early 30s, while women tend to do so in their middle 30s. 2.4.5.0. Work History Dissatisfaction with one's job often motivates the launching of a new venture. Previous technical and industry experience is also important once the decision to start a business is made. Experience in the following areas is particularly important: financing; product or service development; manufacturing; development of distribution channels; and preparation of a marketing plan. As the venture becomes established, managerial experience and skills become more important. Entrepreneurial experience becomes increasingly important as the complexity of the venture increases. 2.5.0. Motivation While motivations may vary, the reason cited most often for becoming an entrepreneur independence-not wants to work for anyone else. Other motivating factors differ between male and female entrepreneurs. Money is the second reason for men's starting a venture. Job satisfaction, achievement, opportunity, and money are the second order reasons for women. . 2.6.0. Role models and support systems One of the most important factors influencing entrepreneurs in their career choice is role models. Role models can be parents, relatives, or successful entrepreneurs in the community. Role models can also serve in a supportive capacity as mentors during and after the new venture is launched. This support system is most crucial during the start-up phase. It is important that an entrepreneur establish connections to support resources early in the venture formation process. As contacts expand they form a network with density (extensiveness of ties between two individuals) and centrality (the total distance of the entrepreneur to all other individuals.) The strength of ties between the entrepreneur and any individual is dependent on the frequency, level, and reciprocity of the relationship. An informal network for moral and professional support benefits the entrepreneur. 2.6.1.0. Moral-Support Network It is important for the entrepreneur to establish a moral support network of family and friends. Most entrepreneurs indicate that their spouses are their biggest supporters. Friends can provide advice that is more honest than that received from others, plus encouragement, understanding, and assistance. Relatives can also be sources of moral support, particularly if they are also entrepreneurs. 2.6.2.0. Professional-Support Network The entrepreneur also needs advice and counsel, which can be obtained from members of a professional support network. A mentor-protégé relationship is an excellent way to secure the needed professional advice. The mentor is a coach, sounding board, and advocate. The individual selected needs to be an expert in the field. An entrepreneur can initiate the "mentor-finding process" by identifying and contacting a number of experts. The mentor should be periodically apprised of the progress of the business so that a relationship can gradually develop. Another source of advice is a network of business associates. Self-employed individuals who have experience in starting a business are good sources. Clients and buyers are also important as they provide word-of-mouth advertising. Suppliers are good components of the professional-support network-they help to establish credibility with creditors and customers, and provide good information on trends in the industry. Trade associations are good network additions, as they keep up with new developments and can provide overall industry data. Affiliations with individuals developed in hobbies, sporting events, civic involvements and school alumni groups are excellent sources of referrals, advice, and information. Each entrepreneur needs to establish both a moral- and a professional-support network to share problems with and gain overall support. 2.7.0. Male versus female entrepreneurs Women are now starting new ventures at three times the rate of men. Women form over 75 percent of all new businesses. Women now own over 8.5 million small businesses, an increase of over 45 percent since 1990. In some respects, female entrepreneurs possess very different motivations, business skills, and occupational backgrounds. Factors in the start-up process for male and female entrepreneurs are different, especially in such areas as support systems, sources of funds, and problems. Men are motivated by the drive to control their own destinies. Women tend to be more motivated by the need for achievement arising from job frustration. Departure points and reasons for starting the business are similar for both men and women. Both generally have a strong interest and experience in the area of their venture. For men, the transition to a new venture is easier when the venture is an outgrowth of a present job. Women often leave a previous occupation with a high level of frustration and enthusiasm for the new venture rather than experience. 2.7.1.0. Start-Up Financing Males often have investors, bank loans, or personal loans in addition to personal funds as sources of start-up capital. Women usually rely solely on personal assets or savings. Obtaining financing and lines of credit are major problems for women. 2.7.2.0. Occupations Both groups tend to have experience in the field of their ventures. Men more often have experience in manufacturing, finance, or technical areas. Most women usually have administrative experience, often in-service-related fields. 2.7.3.0. Personality Both men and women tend to be energetic, goal-oriented, and independent. Men are often more confident and less flexible and tolerant than women. 2.7.4.0. Backgrounds The backgrounds of male and female entrepreneurs tend to be similar. Women are little older when they embark on their careers. Men often have studied in technical- or business-related areas, while women tend to have liberal arts education. Many women business owners are empty nesters or single and need business insurance as well as personal life insurance. 2.7.5.0. Support Groups Men usually list outside advisors as most important supporters, with spouse being second. Women list their spouse first, close friends second, and business associates third. Women usually rely more heavily on a variety of sources for support and information than men. 2.7.6.0. Nature of the Venture Women are more likely to start a business in a service-related area. Men are more likely to enter manufacturing, construction, or high-technology fields. 2.8.0. Minority entrepreneurship It is difficult to research race and ethnicity as entrepreneurial factors as the differences in behavior of various groups must be understood in the context of the environment and economic opportunities available. Most literature dealing with minority entrepreneurship has focused on the characteristics of the group under study. In terms of ownership, one study found:  The lowest participation rate is for blacks. The second highest but fastest growing rate is for Hispanics. The highest rate is for Asians. Studies have also found differences in education, age, family background, and age when starting the venture. Black businesses tend to be smaller and less profitable, but there are no differences in survival rates between black- and white-owned businesses. Studies have also found differences between ethnic groups in benefiting from community resources. Entrepreneurship has increased among Asians, Africans, Hispanics, and Americans. 2.9.0. Entrepreneurs versus inventors An inventor, an individual who creates something for the first time, is a highly driven individual motivated by his or her own work and personal ideas. 29.1.0. Traits of an inventor: ·         Tends to be well educated. Has family, educational, and occupational experiences that contributes to freethinking. ·         Is a problem solver. ·         Has a high level of self-confidence. ·         Is willing to take risks. ·         Has the ability to tolerate ambiguity and uncertainty. ·         A typical inventor places a high premium on being an achiever, and is not likely to view monetary benefits as a measure of success. ·         An inventor differs from an entrepreneur. An entrepreneur falls in love with the new venture, while the inventor falls in love with the invention. The development of a new venture based on an inventor's work often requires the expertise of an entrepreneur. 30.0. Climate for entrepreneurship. In establishing an Entrepreneurial environment, certain factors and leadership characteristics need to be present. The first of these is that the organization operates on the frontiers of technology. Since research and development are key sources for new product ideas, the firm must operate on the cutting edge of technology and encourage and supporting new ideas instead of discouraging them. Second is experimentation, or trial and error, is encouraged. Successful new products usually do not appear fully developed; instead, they evolve. A company wanting to establish an Entrepreneurial spirit has to establish an environment that allows mistakes and failures. Without the opportunity to fail, few corporate Entrepreneurial ventures will be developed. Third an organization should make sure that there are no initial opportunity parameters, such as turf protection, inhibiting creativity in new product development. Fourth, the resources of the firm need to be available and easily accessible. Often, insufficient funds are allocated not to creating something new but instead to solving a problem that have an immediate effect on the bottom line. Some companies, such as Xerox, 3M, and AT&T have established separate venture capital areas for funding new internal ventures. Fifth a multidisciplinary team approach needs to be encouraged. One key to Entrepreneurial success is the existence of "skunk works" involving key people. Developing the needed teamwork for a new venture is further complicated by the fact that a team member's promotion within the corporation is related to performance in the current position, not in the new venture. The corporate environment must establish a long time horizon for evaluating the success of the overall program. Sixth the spirit of entrepreneurship cannot be forced on individuals; it must be voluntary. Most managers in a corporation are not capable of being successful Entrepreneurs. Those who do emerge from this self-selection process must be allowed the latitude to carry a project through to completion. An Entrepreneur falls in love with the new venture and will do almost anything to ensure its success. The seventh characteristic is a reward system. The Entrepreneur needs to be appropriately rewarded for the energy and effort expended on the new venture. An equity position in the new venture is one of the best motivational methods. Eight a corporate environment favorable for entrepreneurship has sponsors and champions throughout the organization that supports the creative activity and resulting failures. Finally the Entrepreneurial activity must be whole-heartedly supported by top management