1.

UNIT NAME: ENTREPRENUERSHIP SKILLS

UNIT CODE :CED 0217
Topic 2
Group 1
EVOLUTION
OF
ENTREPRENUERSHIP

1. History of entrepreneurship.
2. Importance of entrepreneurship.
3. Theories of entrepreneurship.
4. Factors affecting entrepreneurship development.
5. Myths associated with entrepreneurship.

Brian Gachanja -Sct121-0615/2022

Joyce Ngethe -Sct121-0391/2022
Denver Ochieng -Sct121-0370/2022
Savannah Wambui - Sct121-0508/2022
Brian Mburu- Sct121- 0878 /2021
Roy Kimani - Sct121-0916/2021

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 2. History Of Entrepreneurship
Eruption of entrepreneurship is a complex and multifaceted phenomenon influenced by a
combination of historical events, economic shift, technological advancements and changes in
societal attitudes.
Global rupture of entrepreneurship
Medieval Guide (12th-16th century)
During the medieval period there were emergence of guilds which were craftsmen and merchants
associations.
The guilds played a crucial role in shaping early entrepreneurial activities providing a
collaborating platform
Exploration Age (15th-17th Century)
It marked a period of increased global trade and entrepreneurship. The European
explorers ventured new territories which led to the emergence of trade routes along Africa and
exchanges of goods and ideas among st them.
Post World war II (20th Century)
Entrepreneurship commenced after the World War II in the middle 20th Century after there was
an environment of trading. Steve jobs and the likes of Bill gates the iconic entrepreneurs founded
companies of business which contributed towards growth and expansion of business. These
founded companies and many others which followed became a huge backbone of the technology
industry.
Industrial Revolution (18th -19th Century)
It brought about significant technological advancement which maximized expansion of trade
contributing towards the rise of factories which manufactured goods, created employment and
played a major role of encouraging growth stability creating wealth

Globalization (Late 20th Century-present)

It has increased international trade and connectivity, entrepreneurs through globalization has
enhanced maximized business opportunities, innovations in communications and transportation
have made it easier to generate wealth to operate internationally
Kenya
During the precolonial era, entrepreneurship activities were largely localized and centered
around trade and there were skilled artisans and traders who contributed to the growth and
expansion of businesses.
In the Kenya the concept of entrepreneurs was embraced at the end of the 1980’s and the
1990’s in the result of an organization of ILO in conjunction working with the
governments and private sector institutions.

Education was seen as an important element to develop entrepreneurial attitudes ,however

no specific training s were available .To close this gap , funds were provided by ILO
Geneva 1996 to develop a training package for TVET and educational schemes
Entrepreneurship history started as a pioneered project born out of collaboration through the
university of Unios , organization labor ,ILO and Kenya technical training college in the
1990’s offered at masters and phd levels by the University of Unios and Kenya technical
training college provided the premises of learning conditions

In 1992 the program was transferred to Jomo Kenyatta University of Technology while in
Kenya training technical college it started their first higher class in 1993 .The first program
was sponsored by ILO and since 1995 students have been doing it on their own without
sponsorship
Kenya was part of the British East African protectorate and which its economy was largely
controlled by colonial powers and indigenous entrepreneurship faced limitations. After Kenya
gained independence in the year 1963, it witnessed the emergence change of local entrepreneurs
who played a major crucial role I n building the economies establishment of co-operate and
small enterprise.
In the 1990s, Kenya adapted economic reforms and liberation policies which encouraged the
private sector growth that led to the rupture of technology, finance, agriculture and rise of
various economic sectors.
In the 21st Century, Kenya became known its innovations in technology particularly in sectors
such as M-pesa (Mobile banking) hence entrepreneurs playing a significant role in forward
gearing these innovations.
Entrepreneurship ecosystem in Kenya has undergone development with the advanced technology
of establishing incubators, accelerators and funding opportunities. Entrepreneurship locally in
Kenya was shaped with networking factor of European exploration and trade of our own
goods which led to the rapid growth of economy and entrepreneurship at large

3. Importance of Entrepreneurship.
Creation of Job opportunities.
Entrepreneurship provides entry level jobs necessary for training and gaining experience for
unskilled workers
Innovation.
Process of creating, changing, experimenting, transforming and revolutionizing.

Improve living standards.

Entrepreneurship helps in production of organizations that provide a variety of goods and
services available in the society.
Political and economic integration of outsiders.
Entrepreneurship is the most effective way of integrating those who feel disposed of & alienated
into the economy.
Leads to increased productivity.
It enables competition which improves business efficiency and productivity
Contributes to social welfare.
Brings about social integration and reforms by connecting and helping people.

4. Theories Of Entrepreneurship
Entrepreneurship in the field of information technology (IT) involves the identification, creation,
and exploitation of opportunities in the technology sector. Several theories help explain the
dynamics of entrepreneurship in IT, particularly in relation to the development of
entrepreneurship skills.
The theories that explain entrepreneurship include:
a) Psychological Theory
b) Motivational Theory
c) Sociological Theory
d) Economic Theory
e) The Resource Based Theory
f) Competence Based Theory
Psychological theory
a) The focus is that entrepreneurs have unique values, attitudes and need which drive them.
b) People’s behavior results from their attempts to satisfy their unique needs and values.
c) The psychological school focuses on personality factors believing that entrepreneurs have
unique values and attitudes towards work and life.
 d) Among the most frequent traits of entrepreneurs include the Need for achievement, Locus
of Control and Risk-taking propensity.
Motivational Theory
Motivation is that which causes you to behave in the way you behave i.e. the why of behavior
 Entrepreneurial motivation is those factors and forces or events that energizes an
individual, his desires and the needs to go into and sustain a business venture.
 Types of motivation; i) Internal Motivation Factors
ii) External Motivation Factors

i) Internal Motivations and Drives

Refers to those personal traits and desires that induce a person to become an entrepreneur.
Such motivations are;
1. Employment Creation Need.
2. Need for independence or self-Reliance:
3. Need for Power:
4. Need for Recognition:
5. Need for Security:
6. Self-actualization need:

External motivations and drives

1. Infrastructure
Infrastructure refers to the basic physical and organizational structures and facilities needed for
the operation of a business. This includes transportation, communication, energy, and other
essential facilities. Availability and quality of infrastructure can significantly impact business
operations and success.

2. Credit Facilities
Credit facilities involve the availability of financial resources provided by external sources, such
as banks or financial institutions. Access to credit can influence a business's ability to invest,
expand, or manage cash flow effectively.

3. Information Support
Information support involves access to relevant and timely data and knowledge that can aid
decision-making and strategic planning. Businesses benefit from accurate and up-to-date
information to stay competitive and make informed choices.
4. Pricing Policy
Pricing policy refers to the strategy a business adopts when setting the prices for its products
or services. External factors such as market conditions, competition, and consumer behavior can
influence a company's pricing decisions.

5. Tax Policy
Tax policy refers to the set of rules and regulations governing taxation. Changes in tax policies
can impact a business's financial health, affecting profitability and investment decisions.

6. Legal Control
Legal control involves adherence to laws and regulations governing business operations.
Compliance with legal requirements is crucial for avoiding legal issues, maintaining a good
reputation, and ensuring the sustainability of the business.

7. Political Climate
The political climate encompasses the prevailing political conditions and stability in a region.
Political stability or instability can affect business operations, investment confidence, and the
overall economic environment.

8. Technical Technology Assistance

Technical technology assistance involves external support for adopting and implementing new
technologies. This assistance can come from government initiatives, industry associations, or
technology partners to enhance a business's technological capabilities.

9. Training Consultancy Assistance

Training consultancy assistance refers to external support in providing training and
consultancy services to enhance the skills and knowledge of employees. This can contribute to
improved performance, productivity, and innovation within the organization.

10.Friends Motivation
Friends motivation refers to the influence and support from personal and professional
networks. Positive encouragement and motivation from friends or colleagues can play a
significant role in boosting morale, fostering collaboration, and promoting a positive work
environment.
Mas low's Need Theory
Theory of human needs is identified with the psychologist Abraham Mas low. This theory is
based on three specific assumptions:
1. The human beings are never satisfied. Their wants are determined by what they have.
When people are hungry or thirsty, the quest for food or water influences how they
behave. However, if food and water is acquired, the same person will want something
else, perhaps a safe place to live in or a social status.
2. A satisfied need does not cause behavior. Once people satisfy their need for safety, they
are motivated by yet unsatisfied needs, not the ones – that are satisfied,
3. Human needs are arranged in hierarchy of importance. These needs range from low level
biological (physiological) needs to such high-level needs as self-actualization.
Sociological Theory:
This theory emphasizes the influence of social factors on entrepreneurship.
Key Ideas: It suggests that societal structures, cultural norms, and social networks play a crucial
role in shaping entrepreneurial behavior. Social capital, relationships, and cultural context are
considered significant in understanding entrepreneurial activities.

Economic Theory:
Focus: Economic theories of entrepreneurship concentrate on market mechanisms, incentives,
and the role of entrepreneurship in economic development.
Key Ideas: Economists often view entrepreneurship as a driver of economic growth. The theory
explores how entrepreneurs allocate resources efficiently, create value, and contribute to the
overall economic prosperity of a society.

Competence-Based Theory:
Similar to the resource-based theory, this theory looks at the entrepreneur's competencies and
capabilities. It highlights the importance of an entrepreneur's skills, knowledge, and abilities.
Competence-based theory suggests that a competitive advantage is derived from the
entrepreneur's unique set of competencies, which enable them to identify and exploit
opportunities effectively.

Resource-Based View (RBV):

Description: RBV suggests that a firm's competitive advantage comes from its unique resources
and capabilities. In the IT entrepreneurship context, this could mean having access to skilled IT
professionals, proprietary technologies, or strategic partnerships.
Skills Connection: Entrepreneurial skills would involve the ability to acquire and leverage
valuable resources, build strategic alliances, and manage intellectual property effectively.

CONCLUSION
As a conclusion, it can be said that entrepreneurship, is the outcome of a complex and varying
combinations of socioeconomic, psychological and other factors. A realistic perspective should
take them together. Each of the entrepreneurship theories discussed are inter-disciplinary and are
influenced by a multitude of factors. It is the integration of external environment, dream,
ambition, passion, achievement, motivation, commitment, integrity, zeal, honesty, sincerity,
ability and hard work which largely determine whether an individual become an entrepreneur or
not.

5. Factors affecting entrepreneurship development:

Individual Factors:

1. Education and Training:

Access to quality education and training programs in entrepreneurship enhances skills and
knowledge.

2. Entrepreneurial Skills:
Possession of skills such as critical thinking, problem-solving, communication, and adaptability
contributes to entrepreneurial success.
3. Experience:
Prior entrepreneurial experience or exposure to business environments can positively impact an
individual's ability to navigate entrepreneurial challenges.
4. Motivation and Risk-Taking Propensity:
A strong motivation to achieve, coupled with a willingness to take calculated risks, is crucial for
entrepreneurial ventures.
5. Innovation and Creativity:
The ability to innovate, think creatively, and identify opportunities for improvement is a key
entrepreneurial trait.
6. Networks and Social Capital:
Building and leveraging social networks, including mentor ship and collaboration, can provide
valuable support and resources.

Economic Factors:
1. Access to Capital:
Availability of financial resources through loans, investments, or grants is essential for starting
and scaling entrepreneurial ventures.
2. Market Conditions:
Favorable market conditions, including demand for products or services and minimal
competition, influence entrepreneurial opportunities.
3. Infrastructure:
Adequate physical and technological infrastructure supports the smooth operation of businesses.

4. Availability of Resources:
Access to essential resources, such as raw materials and supplies, influences the feasibility of
starting and operating businesses.

Social and Cultural Factors:

1. Cultural Attitudes:
Societal attitudes towards entrepreneurship, risk-taking, and failure play a role in shaping the
prevalence of entrepreneurial activities.
2. Role Models:
The presence of successful entrepreneurs as role models can inspire and influence aspiring
individuals.
3. Education
Inclusion of entrepreneurial education in formal educational curricula. - Educational emphasis on
fostering creativity, critical thinking, and problem-solving skills.

Environmental Factors:
1. Government Policies:
Supportive government policies, including tax incentives, regulatory ease, and entrepreneurship-
friendly initiatives, foster entrepreneurial development.
2. Legal and Regulatory Environment:
A favorable legal and regulatory framework simplifies processes and reduces barriers to starting
and running businesses.
3. Globalization:
Access to global markets and international business opportunities can impact entrepreneurship.
4. Economic Stability:
A stable economic environment with low inflation and unemployment rates provides a conducive
atmosphere for entrepreneurship.
5. Technology and Innovation:
Access to technology, research and development facilities, and an innovation-friendly ecosystem
stimulate entrepreneurial endeavors.
Environmental Sustainability:

1. Environmental Awareness:
Growing awareness of environmental issues has led to the emergence of environmentally
sustainable entrepreneurship.
2. Social Entrepreneurship:
The rise of social entrepreneurship, focusing on social impact alongside financial returns, reflects
changing values and priorities.

5. MYTHS ASSOCIATED WITH ENTERPRENUERSHIP.

1. All responsibility falls on the entrepreneur.

Another misconception about running a new business is that everything depends solely on the
entrepreneur. This might be true at the earliest stages, but taking this idea too seriously is also the
best way to guarantee burnout. Collaboration and the art of delegation figure strongly in the health
of a company. No one can do it all alone.

2. Businesses either flourish or fail.

Because the select few startups that skyrocket out of the gate receive the bulk of the press, it’s
easy to adopt an all-or-nothing outlook on entrepreneur-ism. The overall high failure rate for new
businesses may seem to confirm this idea. However, entrepreneurs need to understand that there’s
a lot of patience and strategy involved in getting a company off the ground and keeping it afloat.
Some companies that initially falter, or that have lackluster growth rates at the start, go on to
achieve healthy growth.

3. Only money motivates employees.

A myth related to the “get rich quick” idea is the assumption that money is the best way to
motivate employees. Recent statistics have shown that Millennials, who are quickly becoming the
majority in the workplace, would rather earn less at a job they enjoy than secure a higher wage
doing something they hate. Overcoming this misconception puts a heavy obligation on the
entrepreneur to develop not only a business model that generates revenue, but also a company
culture that engages employees.
4. Starting a new business guarantees freedom.

The appeal of breaking out of the traditional, 40-hour work week draws many to the prospect of
starting their own business. What lots of people find is that while they leave behind their old
schedule and creative limitations, they exchange them for new demands. Sure, there will be more
freedom in some respects, but entrepreneurism often requires great sacrifices. It can consume
every part of your waking life; the work doesn’t end when the clock strikes 5 p.m.

5. The only requirement is a good idea.

Many people also believe that all it takes to live the American dream is to have that one fantastic
idea for a company. While the notion isn’t entirely false, it is misleading. Even the very best ideas
— ones with the potential to disrupt an entire industry — need proper execution to become
reality. Ideas are important, but so are planning, talent, leadership, communication, and a host of
other factors.

6. Entrepreneurs are job-hoppers

This is not entirely correct because entrepreneurs and job-hoppers are different things. If you are
always moving from one job to another, that doesn’t mean you are an entrepreneur. It would be
more accurate to call yourself a restless soul that hasn’t found its place. If you want to be an
entrepreneur you have to stay in a field longer to become an expert

7. Entrepreneurs do not have a boss

This myth is half true. Technically you do not have a boss above you but entrepreneurs still have
at least three bosses they have to report to. If you borrowed money from an investor then you
have to send him reports every month related to your progress. Your creditors, bankers are going
to be your bosses. Your most important boss is your customer. You have to create a strong
relationship with them by providing valuable things.
So, if you believe in yourself and dare to start a business then don’t wait. You don’t need lots of
money and not lots of people to become successful entrepreneurs.

8. Entrepreneurs are born that way.

Many people assume that entrepreneurs are born that way — and that only people who have
certain natural talents can be entrepreneurs. However, the truth is that almost anyone can become
an entrepreneur if they can learn the necessary skills. True, some people may adjust to the
demands of the role more quickly, but there’s no rule that says only certain types of people can
found companies. Entrepreneurs may be gregarious extroverts or quiet introverts; they may be
“big picture” thinkers or more focused on the details of executing an idea. Entrepreneurism is a
learned skill, not a natural-born ability.
9. Launching a company quickly leads to wealth.

Some entrepreneurs mistakenly believe that starting a business will put them on the fast track to
earning substantial amounts of money — fast. Although some companies are immediately
successful, others take a little more time to get there. Properly timing the expansion of the
company and sustaining growth are two of the entrepreneur’s biggest tasks.

References;
Sharma Sudhir, Singh Balraj, Singhal San deep (2005), “Entrepreneurship Development”,
Wisdom
Publications, Delhi.

Badi R.V., Badi N.V. (2010), “Entrepreneurship”, Vrinda Publications (P) Ltd., Delhi
Barcelona Executive Business School (2023)