1 Entrepreneurship and Innovation as a Tool to Promote SMEs ADFIMI – Oman Development Bank Joint Regional Seminar on “SME DEVELOPMENT” Crown Plaza Hotel, Muscat, Oman, February Dr. Shahid Qureshi, Director, AMAN Centre for Entrepreneurship Development, IBA, Karachi

2 Utilitarianism is a modern form of the Hedonistic ethical theory which states that the end of human conduct is happiness and what distinguishes conduct into right and wrong is pleasure and pain. John Stuart Mill describes this as follows: “Utility or the greatest happiness principle, holds that actions are right in proportion as they tend to promote happiness, wrong as they tend to produce the reverse of happiness. By happiness is intended pleasure and the absence of pain; by unhappiness, pain and the privation of pleasure” (Utilitarianism, ii, 1863). Utilitarianism Justifies human actions in terms of pursuit of happiness and avoidance of pain. Selfishness Assumptions: Human Beings are selfish. Welfare depends on consumption Societies benefit by increasing wealth.

3 Cut Throat CompetitionCorporate Model Competition Barriers to Entry Cut Throat Competition Assumptions: Darwin’s theory Theory of evolution Survival of the fittest Resources Scarce Ownership Utilitarianism Justifies human actions in terms of pursuit of happiness and avoidance of pain. Selfishness Assumptions: Human Beings are selfish. Welfare depends on consumption Societies benefit by increasing wealth. Tool Kit: Strategic Thinking, Networks, Understanding of corporate culture, politics, adroit talk, connections, and self-promotion

4 Idea is important Utilitarianism + ServiceComparison between Small Entrepreurial firms and Corporations Entrepreneurship Corporations Resources Parsimony Creativity, Bootstrapping, Sharing, Control without owning Resources Scarce Ownership Spend a lot Cooperation Treat others as you like to be treated. Share wealth Return back to community Competition Barriers to Entry Cut Throat Competition Idea is important Utilitarianism + Service Utilitarianism Justifies human actions in terms of pursuit of happiness and avoidance of pain. Selfishness Tool Kit: Creative use of resources, Resource parsimony, proactiveness, ability, talent and hard work, Tool Kit: Strategic Thinking, Networks, Understanding of corporate culture, politics, adroit talk, connections, and self-promotion

5 E+ Plus versus Entrepreneurship and CorporationsResource Barakat Unlimited resources More from Less Multiplier Effect Limitation: Yaqeen Resource Parsimony & creativity Bootstrapping & sharing Limitation: creativity and thoughts (Brain) Resources Scarce Ownership Limitation: the scarce resources of the world Cooperation & Service Treat others as you like to be treated. Share the wealth Return Back to society Cooperation Treat as you like to be treated. Competition Barriers to Entry Cut Throat Competition Pursuit of Happiness by Pleasing God (SQ) Idea is important Utilatiarianism + Service Utilitarianism Selfishness Pursuit of Happiness Tool Kit: Faith, Charity, Fear of God, Humbleness, Prayers, Kindness to others Tool Kit: Strategic Thinking, Networks, Understanding of corporate culture

6 Values Meaningful Peaceful life Spiritual Hayat Tayyiba OrientationGrave yard exercise Galaxies Scale of the Universe Small things exercise Bath room cleaning Plantation exercise Fasting Praying Henry Mintzberg: Confidence – competence = Arrogance Self awareness, self esteem, perseverance, Humility, gratitude, respect of humanity, parsimony Faith in the unseen, Life after Intrinsic strength Sense of Direction Imortance and place of human beings in the universe Values Peaceful life Hayat Tayyiba Spiritual Orientation Meaningful Life Effectual Life Skills Stories from Quran Prophet Ibrahim, Musa, Eesa, Sulaiman, Dawood and Muhammad PBU them all Universal truths from Quran The creation of humans (embryology) Entrepreneurs feel closer to God Rope as a time line A life of purpose Clean life (free from unneccassory thinkging and actions) Nobility Service How will you measure your life: Clayton Vison exercise Who you are, what you know, whom you know Affordable loss (how much willing to loose) Action (Pilot in the plane) Leveraging surprises Collaborative mindset Creativity Courage Roxanne Quimby Ice Hotel Stallion Deliveries Beaver Story Honey Bee story

7 Effectuation Evolving Means New and Different GoalsEffectuation evokes creative and transformative tactics heuristics (rule of thumb, intuitive, common sense) used by expert entrepreneurs in new venture creation.

8 Bird in Hand Principle – Start with your meansBird in Hand Principle – Start with your means. Don’t wait for the perfect opportunity. Start taking action, based on what you have readily available: who you are, what you know, and who you know. Affordable Loss Principle – Set affordable loss Evaluate opportunities based on whether the downside is acceptable, rather than on the attractiveness of the predicted upside. Lemonade Principle – Leverage contingencies Embrace surprises that arise from uncertain situations, remaining flexible rather than tethered to existing goals. Crazy-Quilt Principle – Form partnerships Form partnerships with people and organizations willing to make a real commitment to jointly creating the future—product, firm, market—with you. Don’t worry so much about competitive analyses and strategic planning.

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10 Source www.effectuation.orgIt is a logic and process used in early startup phase. Expert entrepreneurs follow the process to gain early customers and committed partners who then create new means and new goals, as resources and viewpoints are added to the mix. Thus, instead of having a stated goal and finding means to reach it, expert entrepreneurs use the new means and new goals to drive the creation of the venture in ways they hadn’t expected, leveraging surprises as they present themselves. Effectuators use the process to lower the risk of the venture (by getting customers and income early, setting affordable loss, and spreading risk to others) and finding truly new and useful market opportunities by leveraging constraints and new information.

11 Environment University Resources Implementation OutcomeFramework for promoting Entrepreneurship leading to SME development Environment University Resources Implementation Outcome University Software Faculty Motivation ,Experiential background, Business Knowledge / Market understanding, Involvement / Cooperation Administration: Friendly and supportive, Efficient, Involvement of faculty in administrative matters Students and Alumni Knowledge, Experience, Networks and financial resources are part of the feed back loop University Policy, Vision and Systems (Internal Environment) VC, Org structure, Core steering Committee, Governance Mechanism, Culture, Financial Mgt Teaching the Entrepreneurial Mindset New Venture Creation & Spin Off Companies Teaching Programs Relevant to Problems and Opportunities of the surroundings Faculty, Staff, Students and Alumni Entrepreneurs Applied Research University Hardware Technology: Expertise of the University Infrastructure: Labs, ORIC, TTO, Incubation, Tech Parks, Equipment Financial Resources: Endowment, revenue from commercialization and other sources University, Industry, Public, Banks/Venture capitalists, Private, tenants and others. Education and training of SMEs External Conditions (Environment) Changing Social needs Government Priorities and support State level economic growth Market opportunity Industry attractiveness / R&D funding Embedding Entrepreneurship teaching in other programs Learning opportunity of the University Outreach Programs for the community

12 Entrepreneurship Field WorkValues Self Esteem Consultation Parsimony Respect Case Studies Role plays Field Visits Seminars and Exhibitions Trust Patience Anger Control Entrepreneurship Know your self (Who I am, What I Know, and Whom I Know) Opportunity Recognition Effectuation theory of Entrepreneurship Entrepreneurial Process, Entrepreneurial Method, Entrepreneurial Mindset E-Marketing E-Accounting & E-Finance E-Human Resources E-Operations, E-Law Social Entrepreneurship Humility Field Work Vision Time Management Sleep Management Purpose Gratitude Affordable Loss Principle Bird in Hand Principle Khidmat Lemonade Principle Pilot in the Plane Principle Haya Self Esteem Perseverance Self awareness Identifying a problem in the society and solving it Communication & Presentation Skills Respect of others Return to society Cleaning Tree Plantation Hygiene, Teeth cleaning Interview an Entrepreneur Return to society IT Skills Excel, SPSS Web Design Physical Fitness : Aerobics Hakeem Saeed, Chinoti Entrepreneurs, Manzil, Kashif Thala

13 “It is better for anyone of you to take a rope and cut the wood (from the forest) and carry it over his back and sell it [as a means of earning a living] rather than to ask a person for something and that person may give him or not.” (Sahih Bukhari Volume 2, Book 24, Number 549)

14 Meaningful life Nation Builder Insaniat Pakistaniat IslamiatEntrepreneurial University Science Management Engineering & Tech Social & Humanities VC. Administration Ent. Characteristics Effectuation Roxanne Quimby Nils Birgovist Golden star Pvt Zaki Mustafa at Corning ID Fresh Entrepreneurial Center Business Incubation Pakistani case studies Entrepreneurial -Mindset Lectures Experiential learning Student teacher interaction Participant Centered Learning and the case method Tools for Teaching Meaningful life Nation Builder Insaniat Pakistaniat Islamiat Social Internship Corporate Internship Final Year Projects Nafs Mutmainnah Hayat Tayyiba Interview an Entrepreneur Guest Speakers & Field Visits Case Studies Exercises & Presentations Experiential Activities Building your Vision Time Management Sleep Management Where do you want to go? Affordable Loss Principle Bird in Hand Principle Skills Training Lemonade Principle Pilot in the Plane Principle Self Esteem Consultation Parsimony Respect Perseverance Hygiene: Teeth Food: Haya Patience Anger Control Trust Humility Return to society Cleaning Tree Plantation Values Gratitude Hakeem Saeed, Chinoti Entrepreneurs, Dr. Abdul Wahab IBA, Manzil, Kaleem Siddiqui, Henry Mintzberg, Clayton Christensen