Technology-based entrepreneurship, also known as technological entrepreneurship, is the creation of new businesses by people or organizations in order to take advantage of technological innovation. It can also be referred to as the commercialization of novel technology advancements.
What is High Technology Entrepreneurship?
Technological entrepreneurship is characterized as a form of corporate leadership that entails the identification of high-potential, technology-intensive commercial prospects, the pooling of resources like people and finance, and the management of major risk and quick growth employing morally sound decision-making abilities.
The method by which entrepreneurs construct organizational resources and technical systems, as well as the techniques employed by entrepreneurial enterprises to seek opportunities, are further definitions of the term.
According to Aderemi, technical entrepreneurship is necessary to fully use the scientific and technological knowledge that is now available to suit market needs, making the country in question more productive and competitive on the global stage.
This implies that in order to increase productivity and competitiveness, a process of industrial innovation must be involved in the nation’s area of strength and endowment. Their statement that “technological entrepreneurship is initiated and culminated in the design, development, production, engineering, and commercialization of innovative new products and processes”
The authors acknowledged the difficulty of accelerating technical innovation across all of the country’s economic sectors, but they also pointed out that if more and more entrepreneurs created businesses to commercialize sectoral advances, it may boost productivity and growth.
What Are Some Features of Technological Entrepreneurship?
There are certain attributes that characterize technological entrepreneurship. These attributes are elaborated below:
1. High Potential Opportunity
A new technology-based venture is described as having a high potential opportunity if it is capable of creating new value for its customers, it has a significant level of technology understanding that is difficult to replicate and can often be protected (patented), it has a significant first mover advantage, it has a level of scalability, it creates a barrier to entry, and it also has a high level of initial risk which can be translated into high levels of return.
2. Technology-Intensive Opportunity
Technological entrepreneurship is described as a technology-intensive opportunity involving a process of problem-solving, raising and safeguarding the quality of life, needing technical skills and applications, identifying potential markets, improvement in quality of products in order to improve the competitiveness of the firm with the expectation of saving in process cost. Furthermore, the sufficient reason for embarking on technological entrepreneurship in borne out of the need to commercialize significant innovations that are expected to guarantee suppliers of materials, long-term stability of firms and increase output.
3. Unique Technology Capable of Driving a New Business
Firms can be viewed as bidding and competing for customers’ purchases, and markets can be evaluated based on the extent to which the profitability of a firm hinges on meeting consumers’ demands if possible, better than its rivals. Consequently, aside from having more share of the market through aesthetic changes, price reduction, better performance, and so on, technological entrepreneurship has the characteristic of being able to advance new technologies that can institutionalize new ventures that adequately meet consumers’ needs.
4. High Risk of Failure
One of the true measures of success for technological entrepreneurs is the extent to which they are able to develop and bring to market radically innovative new products. Developing new products is especially a risky business endeavor, because a technically feasible innovation might not be economically profitable, and the product may not survive the commercialization process. Literature reported that success rates for new inventions ranged from 1% to 85%. From their observations, less than 2% of potential technology-based venture ideas (technology innovations) end up being registered as patents or intellectual property.
Also, less than 1% of business plans received by venture capital get funded. In fact, many innovations that should have been commercialized into a technology-based venture end up on shelves. For instance, it was found that there is a lack of faith in the Patent Law, which in turn provided little protection for local innovations. Innovators consider this a major problem in the commercialization of their products and processes; 89% had not explored the use of the patent law, even though the law had been enforced since 1970, and 6644 patents have been registered with only 177 owned by Nigerians.
5. Longer Time to Market
This refers to the uncertainty surrounding the commercial success of an innovation because it is difficult to predict the time lag between the launching of a product in the market and the growth of sales due to unforeseen circumstances that could influence the demand for the product.
6. Demand of Infrastructure, Facilities and Resources
Technological entrepreneurs are faced with several challenges to development. Literature opined that the challenges that innovative entrepreneurs face are attributable to inadequate resources, expensive patents and unavailability of equity.
Examples of High Technology Entrepreneurship Companies?
There are countless examples of high technology entrepreneurial businesses that have been successful in transforming industries and our way of life and work. These businesses not only had outstanding financial success, but they also had a significant social influence. Here are some outstanding instances, each with a special tale of creativity and achievement:
1. Apple Inc. – Apple is a global leader in technology, renowned for its iconic products such as the iPhone, iPad, and Mac. The company was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in 1976 and has since grown into one of the most valuable companies in the world. Apple’s success lies in its ability to combine cutting-edge hardware with intuitive software and exceptional design. The company’s relentless focus on user experience and its ability to anticipate consumer needs have made its products a dominant force in the market.
2. Amazon.com – Started as an online bookstore in 1994 by Jeff Bezos, Amazon has evolved into the world’s largest online retailer and a major player in cloud computing. Amazon’s success can be attributed to its relentless focus on customer satisfaction, its vast product selection, and its commitment to innovation. The company has expanded into various industries, including e-commerce, streaming services, and smart home devices, constantly pushing the boundaries of technology and reshaping the retail landscape.
3. Tesla Inc. – Tesla is a pioneer in electric vehicles and renewable energy. Founded by Elon Musk in 2003, Tesla has revolutionized the automotive industry with its sleek electric cars, advanced battery technology, and commitment to sustainability. The company’s success stems from its ability to merge technology, design, and environmental consciousness. Tesla’s innovations have not only disrupted the automotive sector but have also accelerated the transition to a sustainable energy future.
4. Google – Google is synonymous with internet search engine in the world. Co-founded by Larry Page and Sergey Brin in 1998, Google has expanded its services to include email, cloud storage, mapping, and mobile operating systems. Google’s success can be attributed to its sophisticated algorithms, data-driven approach, and constant innovation. The company’s ability to anticipate user needs, deliver relevant information, and provide seamless user experiences has made it an indispensable part of our lives.
5. Facebook – Founded by Mark Zuckerberg in 2004, Facebook has transformed the way people connect and share information online. Initially a social networking platform for college students, Facebook quickly gained popularity and expanded its user base globally. Facebook’s success lies in its ability to create a user-friendly platform, provide targeted advertising opportunities, and constantly innovate to adapt to changing user preferences. The company’s acquisitions of Instagram and WhatsApp have further solidified its position as a dominant force in the social media landscape.
6. Microsoft – Founded by Bill Gates and Paul Allen in 1975, Microsoft is a technology giant known for its operating systems, productivity software, and cloud computing services. Microsoft’s success can be attributed to its ability to deliver reliable and user-friendly software solutions that cater to both consumers and businesses. The company’s acquisition of LinkedIn and its foray into AI and mixed reality technologies demonstrate its commitment to staying at the forefront of innovation.
7. Netflix – Netflix revolutionized the entertainment industry by pioneering the concept of streaming media. Founded by Reed Hastings and Marc Randolph in 1997, Netflix started as a DVD rental-by-mail service before transitioning to a streaming platform in 2007. By offering a vast library of movies and TV shows on-demand, Netflix disrupted traditional broadcast and cable television, leading to the rise of cord-cutting and binge-watching culture. Netflix’s success can be attributed to its focus on personalization, original content production, and data-driven decision-making.
These are just a few examples of successful high technology entrepreneurship companies that have transformed industries and shaped the digital landscape. Each of these companies has demonstrated the power of innovation, vision, and a deep understanding of consumer needs. Their success stories inspire aspiring entrepreneurs and serve as a testament to the potential for groundbreaking achievements in the world of technology.
High Technology Entrepreneurship Vs Traditional Entrepreneurship
High technology entrepreneurship is the process of establishing and running a company that focuses on generating and promoting cutting-edge technologies. In this type of entrepreneurship, new products, services, or solutions are introduced to the market by utilizing cutting-edge discoveries and scientific advancements. Traditional entrepreneurship, on the other hand, typically entails launching and running a company in a more traditional industry or area.
We may look at a few crucial factors to comprehend the distinctions between high technology entrepreneurship and conventional entrepreneurship:
1. Nature of the Business Idea:
High technology entrepreneurship typically revolves around disruptive or breakthrough ideas that leverage the latest scientific and technological advancements. These ideas often involve developing new software, hardware, or other technological products that can revolutionize industries or solve complex problems. In contrast, traditional entrepreneurship usually focuses on more conventional business ideas and opportunities, such as opening a restaurant, retail store, or service-based business.
2. Investment Requirements:
Due to the nature of high technology ventures, they often require significant upfront investment in research and development, intellectual property protection, and specialized expertise. The costs associated with designing and developing new technologies, conducting feasibility studies, and securing patents can be quite substantial. In contrast, traditional entrepreneurship may require less initial investment, as the business models and infrastructure are usually more established and straightforward.
3. Market Dynamics:
High technology entrepreneurship tends to operate in dynamic and rapidly evolving markets. Technological advancements, changing consumer preferences, and market disruptions can have a significant impact on the success of these ventures. Traditional entrepreneurship, on the other hand, often operates in more stable and mature markets, where the demand for products or services is relatively consistent.
4. Risk and Uncertainty:
High technology entrepreneurship involves high levels of risk and uncertainty. The development of new technologies often involves significant technical and market uncertainties, as there is no guarantee that the new product or service will be successful or find a market. In contrast, traditional entrepreneurship carries its own risks, but they are generally more predictable and manageable.
5. Intellectual Property:
Intellectual property (IP) plays a crucial role in high technology entrepreneurship. Startups in this field often rely on patents, trademarks, copyrights, and trade secrets to protect their innovations and gain a competitive advantage. IP protection is essential to attract investment, secure partnerships, and prevent competitors from copying or stealing their ideas. In contrast, traditional entrepreneurs may not require extensive IP protection, as their business models are often based on more generic products or services.
6. Skillsets and Expertise:
High technology entrepreneurship demands specialized skills and expertise, such as technical knowledge, scientific research capabilities, and understanding of emerging technologies. Entrepreneurs in this field often have strong backgrounds in engineering, computer science, or other technical disciplines. In contrast, traditional entrepreneurship may require a broader range of skills, such as marketing, finance, operations, and management.
7. Growth Potential:
High technology ventures typically have high growth potential due to their ability to disrupt industries, create new markets, or solve significant problems. These venture capitalists or angel investors. Traditional entrepreneurship, while still capable of growth, may have more limited scalability due to market saturation or slower demand growth.
High technology business is distinct from traditional business in a number of important ways. It calls for a sizable initial investment, works in dynamic markets, entails the development and commercialization of cutting-edge technology, is highly risky and uncertain, depends on intellectual property protection, necessitates specialised knowledge and skills, and has a promising future. Aspiring business owners can choose the best route for their operations by being aware of these variances.