Rwigema, Urban, and Venter (2012:6) define entrepreneurship as the process of conceptualizing, organizing, launching and, through innovation, nurturing a business opportunity into a high growth venture in a complex and unstable environment. Similar to Rwigema et al., Drucker (1985) earlier defined entrepreneurship as a "systematic innovation, which consists in the purposeful and organised search for changes, and it is the systematic analysis of the opportunities such changes might offer for economic and social innovation". These two definitions both emphasize the role of innovation in the entrepreneurial process. A critical analysis of the definition by Rwigema et al. (2012) shows that it is based on the whole entrepreneurial process. The role small businesses play in the entrepreneurial process is not mentioned in either of these two definitions. Although a distinction is made between entrepreneurial ventures and small business, it can be argued that much of what we refer to as entrepreneurial ventures started as small businesses and developed into what they are today. For example Mark Shuttleworth’s
Dimension Data started as a small business in his garage and evolved to become a global
entrepreneurial venture.
Shane and Ventakaraman (2000) express the view that entrepreneurship involves the study of the sources of opportunities; the process of discovery, evaluation, and exploitation of opportunities; and the set of individuals who discover, evaluate, and exploit them. Kao, Kao and Kao (2002:396) refer to entrepreneurship as the whole process of incubating, creating a new venture, and managing it. A further point to be made has to do with corporate entrepreneurship (corporate spin off) as part of entrepreneurship. Klapper, Amit and Guillen (2010:131) define entrepreneurship as the activities of an individual or a group aimed at initiating economic activities in the formal sector as a legal form of
business. Shane and Ventakaraman (2006) and Kao et al. (2002) define the entrepreneurship process, from opportunity identification to establishing and managing a venture successfully. Klapper, Amit and Guillen (2010) shift the focus away from the economic processes to the participants and the form of ownership in the economic sphere. The role of innovation and the processes in entrepreneurship are not emphasised by Klapper et al. (2010) but these are important in entrepreneurship.
Kuemmerle (2009:312) defines entrepreneurship as any opportunity-driven behaviour in which the person/s are cognizant of the resources required to pursue the opportunity. The role of innovation again is not mentioned here but entrepreneurial ventures normally involve some kind of innovation. This definition is limited in scope as it mainly focuses on the identification of opportunity and the mobilisation of resources that are needed to pursue the opportunity. The risks involved and the legality of the opportunity are not discussed. Entrepreneurship according to Kuratko and Hodgetts (2007:729) is the process of organizing and managing a business, including taking risks. They identify four main areas of importance namely, the individual, the organization, the environment and the process itself. Identification of opportunity and the rewards that are associated with entrepreneurship are not mentioned in this definition.
Timmons and Spiineelli (2007:79) describe entrepreneurship as a way of thinking, reasoning and acting that is opportunity aware, holistic, and concerned with enhancement or realisation and renewal of value, not only for the owners, but for all participants and stakeholders. Innovation, creativity and the recognition of opportunities are at the core of this definition. There is the tendency for people to use the terms self-employment and entrepreneurship interchangeably. However, the terms are not necessarily the same. Solomon (1986:110) argues that small businesses are "bounded with family needs" whereas entrepreneurship has more to do with innovation and focuses on "profit and growth". Entrepreneurship is characterised by such behaviour as alertness to opportunity,
innovation, and "creative destruction". The assumption in the definition that a small business cannot grow to be an entrepreneurial venture is far from the truth. Ladzani (2012:42) points out that many small businesses are started every day in South Africa with some growing to become entrepreneurial firms. He notes how Raymond Ackerman started Pick n Pay and Anton Rupert the Rembrandt Group as small businesses in South Africa; they are now international companies. This makes it a bit difficult to demarcate the lines between entrepreneurial firms and small business at times.
Solomon’s (1986) description of entrepreneurship above suggests that self-employment is not entrepreneurial and does not contribute to economic growth and innovation. In addition to that, entrepreneurship is viewed only from the profit perspective. This is however, not the case at all times as many entrepreneurial ventures start as small self- employed ventures and family businesses and end up becoming big and successful enterprises. Besides, not all entrepreneurial ventures are profit oriented. For example, Professor Yunus Mohammud started the Grameen Bank as a social enterprise in the 1970s in Bangladesh to help poor women escape poverty, but this has turned out to be a profitable entrepreneurial venture which is now a model across the world. Considering the numerous definitions discussed above, one cannot agree more with Rao (2004:46) that there is no consistent definition for entrepreneurship. This author adds that the definition of entrepreneurship can be likened to “a hat that has lost its shape because of overuse by people who pull it into their preferred fashion”.
However, some key issues and concepts can be noted in the above definitions of entrepreneurship. Rao (2004:48) contends that a synthesis of various perspectives in entrepreneurship shows that (1) entrepreneurship is synonymous with new ventures, and (2) the term is applicable to both small as well as large enterprises. Nieman, Hough and Nieuwenhuizen (2003) cited in Dzansi (2004:13) state that the following key concepts apply to entrepreneurship and the entrepreneur:
a) Identification of opportunity: real opportunity must exist;
b) Innovation and creativity: something new and different is required; c) Getting resources: capital, labour, and equipment must be found;
d) Creating and growing a venture: starting a new business or conversion of an existing one;
e) Risk taking: personal and financial risk involved for the entrepreneur;
f) Being rewarded: an essential element of the free market system; it can take the form of profit or an increase in the value of the business;
g) Managing the business: this means that there must be proper planning, organizing, leading, and controlling of all the functions in the business for it to prosper.
Entrepreneurship includes the activities of non-profit organizations that use innovative ways to create utilities. In addition to the above characteristics of entrepreneurship, one could add that it is:
a) A process and not an event or isolated events;
b) Purposeful and well thought out and organised sets of activities which are aimed at creativity and change;
c) Identified and conducted through scanning the environment for opportunities; d) Embarked on by individuals, government institutions, NGOs and other sectors of
an economy;
e) The combination of different resources (human, financial, technological, and natural) in certain proportions, in both large and small economic and non-economic activities;
f) The involvement of activities such as the conception, creation and running of the enterprise.
Reviewing the definitions provided in the literature allows for an operational definition of “entrepreneurship” as, "all creative and innovative human activities, for both profit and
non-profit purposes, by an individual or as part of a group, to do something new and
different for self-interest, while bearing the associated risks and enjoying the rewards that accrue from the initiative which benefits others as well".
Economies, both developed and developing, have come to need entrepreneurship as jobs and career paths of the labour force change. Innovation is valued as one of the means to stay competitive in the current fast changing business environment and in the ideological dimension, SMMEs are believed to ensure economic growth and development. So, understanding entrepreneurship can help policy makers and practitioners find ways to cultivate the phenomenon in the broader society; society's old ills of poverty and inequality, together with the 21stcentury's relatively new problem - unemployment - are
believed to be ameliorated by entrepreneurial activity as the State is less and less a Nursemaid of its citizens (Chang, 2003).
In the context of this study, ethnic entrepreneurship is seen as important and necessary for the socio-economic development of South Africa, a means to change some of the past polices of the apartheid regime which marginalized a large section of the population by preventing them from participating fully in the economy of the country.
Ethnic entrepreneurship, which is the focus of the next chapter, refers to "a set of connections and regular patterns of interaction among people sharing a common national background or migration experiences" (Waldinger et al., 1990a:3), a community of co- ethnics who start-up and manage businesses. The issue of ethnic entrepreneurship is to a large extent based on self-identification as belonging to a particular group or assigned to a group according to an ethnically identified surname (Chaganti & Greene, 2002:126). In South Africa, it has been noted by Preisendorfer and Bitz (2012) that compared to other ethnic groups, Blacks, who constitute about 80% of the population, have a low participation rate in entrepreneurial activities. Explanations that have been given for the
differences in entrepreneurship among the different ethnic groups include the Apartheid system, financial resources and shortage of human capital. In addition to that Preisendorfer and Bitz (2012:1) point out that two other explanations, mind-set and social network, deserve attention.
Chang (2008:201) argues that changes of a cultural nature take place when the underlying economic structures of a country change and new habits of thinking become culturally embedded. The concept entrepreneur is discussed in the next section.