Fundamentals of Entrepreneurship · Ch 4 — Developing Entrepreneurial Competencies
Need for Developing Entrepreneurial Competencies
Need for Developing Entrepreneurial Competencies
3. Need for Developing Entrepreneurial Competencies
If entrepreneurial competencies can be developed, the next question is why bother developing them deliberately — why not simply leave people to pick them up on their own? The answer is that deliberate development benefits both the individual entrepreneur and the nation as a whole, and that competencies rarely develop adequately if left to chance.
Why competencies must be developed deliberately. Left to themselves, most people never fully develop these abilities. Many potential entrepreneurs have the desire to start a business but lack the confidence, the planning skill or the information-seeking habit to succeed. Deliberate development — through education, training and practice — brings these hidden abilities to the surface, strengthens the weak ones, and gives the person the confidence to actually take the plunge.
Need from the point of view of the entrepreneur.
- Higher chance of success and survival. A very large number of new small businesses fail in their early years, often not because the idea was bad but because the founder lacked competencies such as systematic planning, problem solving or efficiency orientation. Developing these competencies directly raises the venture's chance of surviving and growing.
- Ability to identify and grasp opportunities. Opportunity-seeking is a competency; sharpening it helps a person spot genuine business opportunities that others miss.
- Better use of resources. Competencies such as planning, information seeking and efficiency orientation help the entrepreneur use scarce money, material and manpower more productively.
- Confidence to take calculated risks. Self-confidence and problem-solving ability turn a hesitant person into someone willing to take calculated (not reckless) risks — the essence of entrepreneurship.
- Ability to lead and grow. Power-cluster competencies (persuasion, assertiveness, influence) help the entrepreneur build a team, deal with customers and financiers, and expand the enterprise over time.
Need from the point of view of the economy / society.
- Employment generation. Every successful new enterprise creates jobs — both for the entrepreneur (self-employment) and for others — which is vital in a country with a large, young workforce.
- Balanced regional development. Competent entrepreneurs set up units even in backward and rural areas, helping industry and incomes spread beyond a few big cities.
- Use of local resources and reduction of concentration. New entrepreneurs put idle local savings, raw materials and skills to productive use and help spread economic power among many owners rather than a few.
- Industrial growth and national income. More successful enterprises mean more production of goods and services, higher national income and faster economic growth.
- Removal of poverty and better standard of living. Self-employment and jobs created by competent entrepreneurs raise incomes and living standards, especially among weaker sections. …
The reasons why entrepreneurial competencies should be built deliberately — because doing so raises the individual venture's chance of success and, at the national level, generates employment …
A moderate, well-considered risk taken after weighing the chances of success and failure — the kind competent entrepreneurs take, as distinct from reckless …
The spreading of industry and incomes to backward and rural areas, an economy-wide benefit that follows when competent entrepreneurs set up enterprise …