Part A: The entrepreneur
Introduction to entrepreneurship
Key takeaways
- An entrepreneur identifies an opportunity, assembles the resources needed and takes on the risk of starting and running a new venture to exploit it; entrepreneurship is the process of identifying, evaluating and exploiting that opportunity.
- The chapter names four types of entrepreneur: innovative, imitative or adoptive, social, and the technopreneur.
- An entrepreneur differs from a small business owner by orientation, not size: the entrepreneur actively pursues growth, innovation and scale.
- Entrepreneurs commonly show risk tolerance, opportunity recognition, self-motivation and persistence, and resourcefulness.
- The common challenges are limited access to finance, market uncertainty, regulatory burden and a high risk of failure.
This paper treats entrepreneurship as a practical discipline for building an ICT-enabled venture, not an abstract theory. This opening chapter defines the field, distinguishes an entrepreneur from other business owners, and surveys where the discipline sits today, before later chapters build a real venture from idea to launch.
Entrepreneur and entrepreneurship
Types of entrepreneur
| Type | Focus |
|---|---|
| Innovative entrepreneur | Introduces genuinely new products, services or methods |
| Imitative/adoptive entrepreneur | Copies and adapts a proven business model to a new market |
| Social entrepreneur | Pursues a social or environmental mission alongside (or instead of) pure profit (see Green and social entrepreneurship, in the chapter on current issues) |
| Technopreneur | Builds a venture around technology as its core product or delivery mechanism (see Technopreneurship, in the chapter on current issues) |
An entrepreneur is distinguished from a small business owner less by size than by orientation: an entrepreneur actively pursues growth, innovation and scale, while a small business owner may deliberately run a stable, lifestyle-sized operation without seeking to expand it further.
Nature and history
Entrepreneurship has always accompanied trade and commerce, but its modern study formalised the idea of the entrepreneur as a distinct economic actor, someone who bears uncertainty and drives innovation, rather than simply supplying labour or capital. Kenya's own entrepreneurial landscape has shifted markedly with ICT: the mobile-money model pioneered by M-Pesa, and the wider ecosystem of hubs (Nairobi's iHub, Nairobi Garage, Gearbox) it helped spawn, is now a widely cited case of technology-led entrepreneurship reshaping an entire economy's informal and formal sectors alike.
Characteristics and benefits
- Benefit: independence and control over one's own work
- Benefit: unlimited income potential, unconstrained by a fixed salary
- Benefit: the ability to pursue a personally meaningful idea or mission
- Benefit: job creation for others, a wider economic contribution
Challenges, role and demographics
- Challenges: limited access to finance, market uncertainty, regulatory burden, high failure risk
- Role of an entrepreneur in business: converts an idea into a functioning enterprise, creates employment, and drives innovation and competition in a market
- Changing demographics: entrepreneurship in Kenya, as elsewhere, has grown markedly among younger, more tech-literate founders, reflected in the growth of youth-targeted government financing and tech incubation specifically
Exam tip
The distinction between an entrepreneur and a small business owner (growth-and-innovation orientation, not size) is a recurring short-answer question, answer with that orientation test directly rather than describing size or turnover.
Self-check
(a) Define entrepreneur and entrepreneurship. (4 marks)
(b) Distinguish an entrepreneur from a small business owner. (3 marks)
(c) State three characteristics commonly shared by entrepreneurs. (3 marks)
(d) State three challenges commonly faced by entrepreneurs. (3 marks)
Show worked answer
(a) An entrepreneur is an individual who identifies an opportunity, assembles the resources needed, and takes on the risk of starting and running a new venture to exploit it. Entrepreneurship is the process of identifying, evaluating and exploiting a business opportunity, combining innovation, risk-taking and resource organisation to create value.
(b) An entrepreneur actively pursues growth, innovation and scale. A small business owner may deliberately run a stable, lifestyle-sized operation without seeking to expand it further; the distinction is orientation, not size.
(c) Any three of: risk tolerance; opportunity recognition; self-motivation and persistence; resourcefulness.
(d) Any three of: limited access to finance; market uncertainty; regulatory burden; high failure risk.