University of Dar es Salaam

Department of Mechanical and Industrial

Engineering

IE 445: Entrepreneurship for Engineers

 Assessment
• CA= 40% ( 1 class test + Quizzes– 20%, Business
Plan – 20%)

• UE = 60% - closed book - 3hrs

• Submit draft marketing plan, operations plan, Org &

Mgt plan and Financial Plan in due course

• Submit finally a packaged business plan

• Course Units: 3.0 Course Credits: 12

 Course Objectives
• To introduce the students to the framework of
techno-entrepreneurship
• To ensure that students become conversant
with the systematic methods for generating
business ideas
• as well as the overall product and services
innovation processes such that they become
job creators rather than job seekers upon
graduation.
 Text Book
1. Techno-entrepreneurship by Kundi, Victor
and Chungu. We have soft copies. Can get a
hard copy from the printing unit of COET.
2. Management, by Schermerhorn, J. (2002)
3. Production and Operation management:
principles and techniques by Ray Wild
4. Dynamics of Entrepreneurial Development
and Management by Vasant Desai (1992, 1995, 1996,
1997, 1998, 2000, 2001, 2003, 2004)
 Technology and science
• “Technology is a game for the rich, a dream for the
poor, but a key for the wise. It is the master key for
economic development.” (M. Nawaz Sharif)

• Science: the quest for objective laws governing

natural phenomena free of any concern about
possible economic applications.

• In this sense, science is simply the pursuit of truth

itself.
 Technology and science
• On the other hand, technology has the practical
goal of directly applying scientific principles and
laws to human life or the process of production.

• Thus, technology may be said to be concerned

with “know-how” while science focuses on
“know-why”.

• Science generates knowledge while technology

facilitates the production of material wealth.
 Techno-Entrepreneurship
• Techno-entrepreneurship is broadly defined as the
entrepreneurial and intrapreneurial activities of both existing and
nascent companies operating in technology-intensive
environments.

• Definition of entrepreneurial: having to do with the creation and

development of economic ventures: of, relating to, characteristic of,
or suited to an entrepreneur

• Pinchot (1985) defined intrapreneurs as "dreamers who do. Those

who take responsibility for creating innovation of any kind within an
organization.”

• In 1992, The American Heritage Dictionary define an intrapreneur,

as "A person within a large corporation who takes direct
responsibility for turning an idea into a profitable finished product
through assertive risk-taking and innovation".
 Techno-Entrepreneurship
Entrepreneur vs Intrapreneur
Own boss Organization Employed in an
organization
More freedom Autonomy Less freedom (works within
(complete control) an existing system)
More execution Risk Less execution risks
risks
No resources Resources Company’s resources
market know how Main challenge Company’s culture
and credibility
Game changer Changes Value creator
Full Ownership None
 Faces of Technology

• The Good
• The Bad
• The Ugly
 Management of Technology (MOT)

• Is a field of knowledge concerned with the setting

and implementation of policies to deal with
technological development and utilization, and
the impact of technology on society,
organizations, individuals and nature.

• It aims to stimulate innovation, create

economic growth, and to foster responsible
use of technology for the benefit of
humankind (Khalil, 1993)
 MOT Examines:

• How technology is created;

• How it can be exploited to create business
opportunities;
• How to integrate technology strategy with
business strategy;
• How to use technology to gain competitive
advantage;
• How technology can improve the flexibility of
manufacturing and service systems;
• How to structure organizations that embrace
technological change; and
• When to enter and when to abandon technology
 THE INTERDISCIPLINARY NATURE of MOT

• MOT is an interdisciplinary field

• It integrates science, engineering, and
management knowledge and practice.

NATURAL
SCIENCE

ENGINEERING SOCIAL
SCIENCE
MOT

BUSINESS INDUSTRIAL
THEORY PRACTICE
 Science and Business
Engineering MOT Administration
Disciplines Disciplines

Strategic/Long-Term Issues
Discipline-based Relating to Technology Discipline-based
Knowledge -Science and Technology Policy
-Science -Process of Technological Innovations Knowledge
Disciplines -R&D Management -Accounting
-R&D Infrastructure and
-Material Technological change -Finance
Technology -Technological Entrepreneurship -Management
-Product and New Ventures
Technology -Product/Process Life Cycles -Marketing
-Production/ -Technological Forecasting &Planning -Economics
Process -Technological Innovation & Planning
-Intra-national Technology Transfer -Business Law
Technology
-Information
-International Technology Transfer -Political
and the Role of Multinational Corp.
Technology -Technological Risk analysis & Ass. -Sociological studies
-Environmental -Technology & Economic Analysis -Humanities
Technology -Technology & Human, Social &
Cultural Issues
 Why MOT Now
• The pace of change of technology
continues to increase because of;

– New technologies emerge and the

dynamics of trade shifts;

– Management systems must also shift

to cope with the change;

– Both shifts create a totally new

paradigm for business – a challenge
for entrepreneurs
 TECHNOLOGY
• Technoware: Object-embodied form of technology-
machinery, tools, capital goods, physical objects,
etc.;

People embodied form of technology-

• Humanware:
human capabilities, skills, specialized ideas, etc.;

• Inforware: Document-embodied form of technology

- technical information, specifications, standards,
forms of organized knowledge, etc.;

• Orgaware:Institution of form of technology- day-

to-day operations, social arrangements, etc.
 TECHNOWARE HUMANWARE

TECHNOLOGY

INFORWARE ORGAWARE
TECHNOLOGY CLIMATE
(Community,
Government, Private,
and International
Organizations etc.)
Appropriate Technology: Concept and Applications

Objectives Values Surroundings

➢ Population aspects;
➢ Resource aspects
➢ Economic aspects
➢ Technological aspects
➢ Environmental aspects
➢ Socio-cultural aspects
➢ Politico-legal aspects
 Techno Entrepreneurship: Industry
4.0 perspective
• Digitisation

• Digitalisation

• Digital transformation
 Techno Entrepreneurship: I4.0 perspective
• Industry 4.0 (i4.0) can unleash new business models or develop essential insights for a
better decision-making process. It includes technologies like the Internet of Things
(IoT), AI, cloud computing, machine learning, robotics, 5G, and Big Data Analytics
(BDA).

• The imperative of i4.0 can enhance value creation and value capture at the same time
with unmatched efficiency.

• It is important to explore how entrepreneurs can balance entrepreneurial exploration

and exploitation in i4.0.

• The analytics world is moving beyond the descriptive to predictive, and in the future,
it will be more prescriptive enabled by AI, machine learning, expert systems, and 5G.

• Thus, the future of entrepreneurial exploration and exploitation depends on how

information is used to develop insights and to make intelligent, smart, and fact-based
decisions to take actions that may have real-time correction mechanisms and a new
wave of quality, productivity, and customer intimacy.

• As such, i4.0 has implications for entrepreneurs, intrapreneurs, students, managers,

researchers, policymakers, and politicians alike.

Source: Bhandari (2021) “Entrepreneurship and Industry 4.0: Balancing Entrepreneurial Exploration and Exploitation”, Cambridge
Scholars Publishing Lady Stephenson Library, Newcastle upon Tyne, UK
 Techno Entrepreneurship: I4.0 perspective
• What does Industry 4.0 mean for techno
entrepreneurship and business?
• What are the dimensions of Industry 4.0
entrepreneurship?
• What is Industry 4.0 and its benefits?
• Why Industry 4.0 is important for
entrepreneurship and business?
• How will Industry 4.0 affect entrepreneurship
and business?
 Industry 4.0 adoption can present certain challenges
and risks for many businesses
• According to recent research, five common barriers
to digital transformation include:

1. Lack of skills or talent to manage complex industry

4.0 structures
2. Concerns regarding cyber security
3. Other priorities for capital expenditure
4. Lack of appropriate digital infrastructure
5. Lack of knowledge of digitalisation and how it can
help the business

Source: BDO digital transformation report

 Technology Assessment
• Reactive Assessment is a reaction to currently
recognized problems. The objective is to alter the
technology, if possible, to prevent further damage

• Corrective Assessment involves tracing problems to

their causes and initiating research and development
before it becomes severe.

• Anticipatory Assessment (technology forecasting)

is concerned with anticipating the future problems,
which would be posed by proposed technology.
 Technology Choice
• It involves a problem of choosing from among a
set of feasible technological alternatives, whereas,
technology assessment provides the feasible
alternatives where a choice can be made.
 Technology Transfer
• Implies the movement of technology from one
entity to another, and if the transfer is
successful, a proper understanding and effective
use of the technology by the receiving entity.
 Greater
Environment

Transferee Environment

TECHNOLOGY
TRANSFEROR TRANSFEREE
FEEDBACK

Transferor
Environment

Schematic representation of the technology transfer

process for rural areas (Adapted: SCHLIE et al., 1987)

Transferor is a person who makes a transfer or conveyance of property.

TRANSFEREE is a person to whom a conveyance is made.
A chain of technology transfer between
transferors and transferees

Transferor Transferee
Te T r Te Tr
(Tr) (Te)
IE 445: Techno-Entrepreneurship for Engineers
 Imperatives of Today's Society
• Quality driven society;
• Cost effectiveness society;
• Efficiency driven society;
• Information and Knowledge based
society;
• Skills based society;
• Relevance driven society;
• Innovative oriented society;
• Benchmarking society;
 Cont.. Imperatives of Today's Society

• We now live in a globalized world:

– Technology and education have brought the
world closer than ever before;
– Knowledge has no visa even other aspects
have no barriers e.g. work, business, trade,
education, staff recruitment, media, it is
indeed competence and competitiveness that
matters in today's world;
– Essentially we are living now transcends
national borders
 What Can Entrepreneurship Do
• Wealth creation to the entrepreneurs and
society:
• Income increases;
• Job opportunities arises and addresses
unemployment;
• Living standards improves;
• Investments opportunities occurs;
• Wealth creation to the nation:
• Tax based enlarged for government by greater of
new firms or growth of existing firms;
• Economic growth occurs;
• Technological development occurs.
 Who is this
Entrepreneurship?

Different people define

differently entrepreneurship
and entrepreneur!
• The entrepreneur in an advanced economy is
an individual who introduces something new
into the economy, a new method of production,
a new product with which the consumers are
not familiar, a new source of raw-material or
new market and the alike. (Joseph A.
Schumpter)

• According to French economist, J.B. Say, an

entrepreneur is a person who shifts economic
resources out of an area of lower into an
area of higher productivity and greater
yield.
 Entrepreneurship
➢In a broader sense can be described as a
process of action an entrepreneur (person)
undertakes to establish his/her enterprise.
➢It is a creative and innovative response to
the environment.
Entrepreneur Entrepreneurship Enterprise

Person Process of Action Object

Concept of Entrepreneurship
 Concept of Entrepreneurship
• Entrepreneurship is the inclination (attitude) of
mind to take calculated risk with confidence
to achieve a predetermined business or
individual objective.

• The capacity to take risk independently and

individually with a view to make profits and
grasping an opportunity to make more
earning in the market oriented economy is
the dominating characteristic of modern
entrepreneurship.
 Thus, an Entrepreneurship is:
• Is a process whereby a person is able to
change a nerve center of business
through seeing an opportunity, has to
be dynamic, a risk-taker, creative,
gathers resources, and growth-
oriented.
Key Elements of Entrepreneurship
 Types of Entrepreneurship
1. Replicative vs innovative
2. Opportunity-based vs necessity-based
3. Corporate Venturing
4. Social Venturing

37
 Types of Entrepreneurship
• 1. Replicative versus innovative
Entrepreneurship
• Replicative entrepreneurs function as
efficient coordinators of resources
– start and maintain businesses that mimic
predecessors
– provide more of existing goods and services

• Innovative entrepreneurship reshapes

industries and has the potential to add
huge value to economies
– e.g., Google, Intel, Facebook, and e-Bay
 2. Necessity-based vs. Opportunity-
based Entrepreneurship
• Necessity-based entrepreneurs start businesses
due to a lack of alternatives
– small, low-capital ventures
– almost always replicative
– common in emerging economies

• Opportunity-based entrepreneurs are motivated

by the idea
– accounts for virtually all innovative entrepreneurship
– most frequently found in developed economies

39
 Types of Entrepreneurship cont’d
• Necessity Oriented Entrepreneurship
– The Push factors include:
• Unemployment;
• Disagreement with management;
• Does not ‘fit in’ with the organization;
• No other alternative.

• Opportunity Oriented Entrepreneurship

– The Pull factors include:
• Independence;
• Achievement;
• Recognition;
• Personal Development;
• Personal Wealth.
 3. Corporate Venturing
• Corporate venturing is common for projects
requiring
– large and complex research teams
– generic testing equipment
– lengthy development times

• Incentives to encourage entrepreneurship are

difficult to implement in large organizations
– motivating people to work on the right projects
– rewarding success
– perceived inequities

41
 4. Social Venturing
• Primary objective of the venture’s product or
service is to address a social issue

• Financial returns are traded off against social

objectives

• Includes efforts by non-profit entities to create

for-profit subsidiaries, e.g., museum shops

• Recent trend in “green-tech” or “clean-tech”

42
 Entrepreneur and Businessperson
An Entrepreneur Businessperson
a) Thrives for Innovation
a) Involved in delivering
b) Thrives for growth an established
c) Sets strategic product or service
b) Operates its
objectives in relation
to: enterprise in an
❑ Market targets established industry
and operates within
❑ Market position; a given market
❑ Market share; c) Seldom goes beyond
❑ Market development. survival, sales and
profit targets
Entrepreneurship Operating Environments
Entrepreneurship Operating
Environments
✓Entrepreneurial Orientation Environment

✓Supportive Environment

✓Cooperative Environment
 1. Entrepreneurial Orientation
Environment
▪ Culture and Value system;
▪ Family and role models;
▪ Education;
▪ Work experience;
▪ Personal orientation (PECs).
 2. Supportive Environment
✓Possibility of financing;
✓Availability and accessibility of the
infrastructure;
✓Legal and fiscal restrictions;
✓Training and development of
entrepreneur’s possibilities;
✓Positive attitude of the entrepreneur’s
family.
 Types of Financing
Grants Loans/Debt Investment/Eq Revenue
uity
Sources Federal & state Banks Angel investors Customer Sales
agencies Credit cards Venture capital
Foundations Friends & family State programs
Friends & family

Pros No payback Non-dilutive Shared risk Nothing better

Non-dilutive Keep control “Smart” money
Keep control

Cons Lengthy process Payback with Dilutive None

Highly competitive interest Give up some
Usually, technology Security required control
based

An angel investor is a wealthy individual who provides funding for a startup, often
in exchange for an ownership stake in the company. Typically, angels, as they are
known, will invest somewhere between $25,000-500,000 to help a company get
started.
 3. Cooperative Environment
✓Universities, colleges, and other
educational institutions play an
important role here;

✓Build capacity through formal

programmes e.g. training and
research;
Personal Entrepreneurship Characteristics (PECs)
1. Goal setting/goal-oriented;
2. Information seeking;
3. Systematic planning and monitoring
4. Opportunity seeking;
5. Persistence;
6. Commitment to work contract;
7. Demand for quality and efficiency;
8. Risk taking;
9. Persuasion and networking;
10. Self-confidence.
11. Creative and Responsible
12. Inquisitive and Flexible
13. Independent and Coachable
 Similarities Between Entrepreneurs and
Researchers/Scientists
1) Innovative Thinking
Innovative thinking is key as for both entrepreneurs and researchers. They need to look out
for new opportunities, technologies, and methods to grow.

2) Doing for Innovation

Both entrepreneurs and researchers have to have the confidence of achieving success and
the willingness to fail. They take the leap and act on the ideas in their head.

3) Always Learning
To be ahead of the game entrepreneurs and researchers need to continuously pick up new
information and new skills. Those skills may be business-related, product/service related, or
skills like creative thinking or marketing.

4) Flexibility
Things just don’t always go the way as expected or planned. If entrepreneurs and
researchers who are not flexible with workload or schedules, their ventures/research may
fail even before it gets off the ground. They need to think on their feet and go with the flow.

5) No giving up
Both will face more failures than successes. In order to achieve success entrepreneurs and
researchers need to be persistent. 51
Skills Needed by Successful Entrepreneurs

•Communication skills
•Human relations skills
•Problem-solving & Decision-making skills
•Technical skills: tools and machines on which you
work and get proficiency after a certain time.

52
Skills Needed by Successful Entrepreneurs
• What matters mostly: Soft Skills vs Technical Skills?
• In a Wall Street Journal survey of over 900 executives, 92% reported soft skills,
including communication, curiosity, and critical thinking are as important as technical
skills. However, 89% of those same executives reported they have a very difficult or
somewhat difficult time finding hires with soft skills.
• Still, we tend to put IQ (intelligence quotient) above other forms of intelligence like EQ
(emotional quotient) and CQ (curiosity quotient) when we talk about what makes for
top-performers or desirable hires.
• But EQ and CQ play major roles in great leadership.
• Individuals with high EQ are less likely to experience stress and anxiety, which allows
them to manage high-pressure situations and make consistently good decisions.
• High EQ also indicates strong interpersonal skills, which are essential to managing
teams, collaborating with peers and colleagues, and building beneficial relationships.
• In a service-based economy that is increasingly automating technical tasks but reserving
relationship-based responsibilities for humans, EQ is essential for nearly every worker. It
governs human interaction.
53
 Smart Skills You Will Need Now as an
Entrepreneur
• Marketing Skills • Managerial Skills
• Sales Skills • Financial Skills
• Communication • Self-Motivational
Skills
Skills
• Time Management
• Negotiation Skills Skills
• Networking Skills • Leadership Skills

54
 Globalization of Entrepreneurship
• Entrepreneurship now comes from all over the
world and is driven by
– increased competition for ideas and for financing
– technological advances: communications and
computers
– government policies and subsidies

55
 Idea Generation and Screening
1. Two types or ways of idea
generation
- Market pull ideas
- Technological push ideas
2. Idea screening
Criteria used for screening ideas
- Marketing criteria
- Operation criteria
- Financial criteria
 MARKETING
- Evolution of Concepts -
• The Production Concept
• The Product Concept
• The Selling Concept, and
• The Marketing Concept
 The Production Concept
• The production concept holds that
consumers will favour those products
that are widely available and low in
cost.
• Managers of production-oriented
organizations concentrate on
achieving high production efficiency
and wide distribution coverage.
 The Product Concept
• The product concept holds that
consumers will favour those products
that offer the most quality or
performance.
• Managers in those product-oriented
organizations focus their energy on
making good products and improving
them over time.
 The Selling Concept
• The selling concept holds that
consumers, if left alone, will
ordinarily not buy enough of the
organization’s products.
• The organization must therefore
undertake an aggressive selling and
promotion effort.
 The Marketing Concept
• The Marketing concept holds that
the key to achieving organizational
goals consists in determining the
needs and wants of target markets
and delivering the desired
satisfactions more effectively and
efficiency than competitors.
 Marketing Terminologies (Commonly
Used)

• Human Needs
• Wants
• Demand, and
• Product
 A Human Need
• Is a state of felt deprivation of some
basic satisfaction such as food,
clothing, shelter, safety, esteem,
belonging, and a few other things for
survival.
• Note that these needs are not
created by their society and
marketers, they are biological
requirements.
 Wants
• Are desire for specific satisfiers of
these deeper needs.
• An American needs food and wants a
hamburger, needs clothing and wants a
Pierre Cardin suit, needs esteem and
buys a Cadillac.
• In other societies, these needs are
satisfied differently.
• People’s needs are few but their
wants are many.
 Demand
• Are wants of specific products and
services that are backed up by an ability
and willingness to buy them (purchasing
power).
• Many people want a Mecedenz Benz or
Land cruiser station wagon (Shangingi) but only
a few are able and willing to buy one. Is
not only how many want your products
and services, more important, how many
would be willing and able to buy it.
 Product
• Anything that can be offered to someone
to satisfy a need or want.
• The word “product” brings to mind a physical
object such as an automobile, a television set,
a soft drink, etc.
• We normally use expression products and
services to distinguish between physical
objects and intangible ones.
• We don't buy a car to look at but it supplies
transportation services and likewise for
microwave for cooking. Physical products are
really vehicles that deliver services to us.