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Sunday, 8 January 2006    
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Entrepreneurs usher economic prosperity

by L. S. A. Wedaarachchi

People become entrepreneurs because there are profits to be made, and they are rewarded for their entrepreneurial undertakings in terms of income and wealth said M. Adik Khattak, a well-known scholar on management and business studies.

He was addressing a regional conference on 'Open minds-creating Global competitive advantage for Sri Lanka' in Colombo recently. Khattak said that the booming entrepreneurial sector is responsible for much of today's economic prosperity all over the world.

"Entrepreneurs take advantage of new wealth creating opportunities that arise daily from constant change. This phenomenon creating opportunity from change has been part of the business culture since the 19th Century industrial revolution.

Today, an entrepreneurial renaissance is transforming business and society and its very success creates new challenges and opportunities for policy makers," he said.

He said the spill over benefits of these activities are profound, because by their innovation, entrepreneurs help lift the economic in all parts of the country.

"The changes leading to new opportunities for entrepreneurs include the shrinking globe, the technology explosion, the mixing of cultures, demographic changes and the building of new and powerful communications networks," he said.

Khattak who has extensive experience in engineering, project management and marketing and is the present CEO of Attock Refinery Limited in Pakistan said that entrepreneurs create or discover an innovation to exploit the opportunities.

Entrepreneurs build and grow companies to bring their innovation to market. "The words "entrepreneur" and "inventor" do not mean the same thing; entrepreneurs put together all the resources needed the capital, management, people and the business strategy to transform the invention into a product, process, or service innovation that finds a market thereby affecting the economy.

In other words they build companies on their innovations. Because their innovations are born of big ideas about how to build on global, technological or social change, they intend to grow their businesses into very big companies. Henry Ford and his Model I became the international automobile manufacturer, Sam Walton and Wal-Mart became America's number one employer, Thomas Watson and his adding machines became IBM, he said.

Khattak said that entrepreneurs take significant calculated and personal risk in building their companies. "Typically they put at risk their financial security, their professional reputation, and sometimes their personal relationships to pursue their visions.

The chances of failure are high, and it takes an extraordinary culture and climate to encourage entrepreneurs to take these risks. The Sillicon Valley provides one example of such a culture and climate "that encourages people to strike out on their own. Failure is not welcome, but is tolerated. In fact, venture capitalists seem more willing to invest in someone who already has failed than in first-time entrepreneurs," he said.

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