Entrepreneurship : Definition

 The capacity and willingness to develop, organize and

manage a business venture along with any of its risks
in order to make a profit. The most obvious example
of entrepreneurship is the starting of new businesses.
In economics, entrepreneurship combined with land,
labor, natural resources and capital can produce
profit. Entrepreneurial spirit is characterized by
innovation and risk-taking, and is an essential part of a
nation's ability to succeed in an ever changing and
increasingly competitive global marketplace.
Role and Importance of Entrepreneurship in Economic Development

 The entrepreneur who is a business leader looks for ideas

and puts them into effect in fostering economic growth
and development. Entrepreneurship is one of the most
important input in the economic development of a
country. The entrepreneur acts as a trigger head to give
spark to economic activities by his entrepreneurial
decisions. He plays a pivotal role not only in the
development of industrial sector of a country but also in
the development of farm and service sector. The major
roles played by an entrepreneur in the economic
development of an economy is discussed in a systematic
and orderly manner as follows
Role and Importance of Entrepreneurship in Economic Development

 Promotes Capital Formation: Entrepreneurs promote

capital formation by mobilizing the idle savings of
public. They employ their own as well as borrowed
resources for setting up their enterprises. Such type
of entrepreneurial activities lead to value addition and
creation of wealth, which is very essential for the
industrial and economic development of the country.
Role and Importance of Entrepreneurship in Economic Development

 Creates Large-Scale Employment Opportunities:

Entrepreneurs provide immediate large-scale employment
to the unemployed which is a chronic problem of
underdeveloped nations. With the setting up. Of more and
more units by entrepreneurs, both on small and large-scale
numerous job opportunities are created for others. As time
passes, these enterprises grow, providing direct and
indirect employment opportunities to many more. In this
way, entrepreneurs play an effective role in reducing the
problem of unemployment in the country which in turn
clears the path towards economic development of the
nation.
Role and Importance of Entrepreneurship in Economic Development

 Promotes Balanced Regional Development:

Entrepreneurs help to remove regional disparities
through setting up of industries in less developed and
backward areas. The growth of industries and
business in these areas lead to a large number of
public benefits like road transport, health, education,
entertainment, etc. Setting up of more industries lead
to more development of backward regions and
thereby promotes balanced regional development
Role and Importance of Entrepreneurship in Economic Development

 Reduces Concentration of Economic Power:

Economic power is the natural outcome of industrial
and business activity. Industrial development
normally lead to concentration of economic power in
the hands of a few individuals which results in the
growth of monopolies. In order to redress this
problem a large number of entrepreneurs need to be
developed, which will help reduce the concentration
of economic power amongst the population.
Role and Importance of Entrepreneurship in Economic Development

 Wealth Creation and Distribution: It stimulates

equitable redistribution of wealth and income in the
interest of the country to more people and
geographic areas, thus giving benefit to larger
sections of the society. Entrepreneurial activities also
generate more activities and give a multiplier effect in
the economy.
Role and Importance of Entrepreneurship in Economic Development

 Increasing Gross National Product and Per Capita Income:

Entrepreneurs are always on the look out for
opportunities. They explore and exploit opportunities,,
encourage effective resource mobilization of capital and
skill, bring in new products and services and develops
markets for growth of the economy. In this way, they help
increasing gross national product as well as per capita
income of the people in a country. Increase in gross
national product and per capita income of the people in a
country, is a sign of economic growth.
Role and Importance of Entrepreneurship in Economic Development

 Promotes Country's Export Trade: Entrepreneurs

help in promoting a country's export- trade, which is
an important ingredient of economic development.
They produce goods and services in large scale for the
purpose earning huge amount of foreign exchange
from export in order to combat the import dues
requirement. Hence import substitution and export
promotion ensure economic independence and
development.
Role and Importance of Entrepreneurship in Economic Development

 Induces Backward and Forward Linkages:

Entrepreneurs like to work in an environment of
change and try to maximize profits by innovation.
When an enterprise is established in accordance with
the changing technology, it induces backward and
forward linkages which stimulate the process of
economic development in the country
Role and Importance of Entrepreneurship in Economic Development

 Facilitates Overall Development: Entrepreneurs act as

catalytic agent for change which results in chain reaction.
Once an enterprise is established, the process of
industrialization is set in motion. This unit will generate
demand for various types of units required by it and there
will be so many other units which require the output of this
unit. This leads to overall development of an area due to
increase in demand and setting up of more and more units.
In this way, the entrepreneurs multiply their
entrepreneurial activities, thus creating an environment of
enthusiasm and conveying an impetus for overall
development of the area.
 TYPES OF ENTREPRENEURS

 ACCORDING TO THE TYPE OF BUSINESS

 i)Business entrepreneurs:-who start business units after

developing ideas for new products/services.
 ii)Trading entrepreneurs :-who undertake buying & selling of
goods, but not engage in manufacturing.
 iii)corporate entrepreneurs:-who establish and manage
corporate form of organization which have separate legal
existence.
 iv)Agricultural entrepreneurs:- who undertake activities like
raising and marketing of crops, fertilizers and other allied
activities.
 ON THE BASIS OF STAGES OF DEVELOPMENT
 i)First generation entrepreneurs:-who do not possess any
entrepreneurial background. They start industry by their
own innovative skills.
 ii)Second generation entrepreneurs:-who inherit the
family business and pass to next generation.
 iii)Classical entrepreneurs:-who aims to maximize his
economic returns at a level consistent with the survival of
the unit with or without an element of growth.
 ON THE BASIS OF MOTIVATION i)Pure entrepreneurs:-
who are basically motivated to become
entrepreneurs for their personal satisfaction, ego
etc..
 ii)Induced entrepreneurs:- who are induced to take up
entrepreneurial role by the assistance and policy of
government including incentives, subsidies etc.

 ON THE BASIS OF TECHNOLOGY
 i)Technical entrepreneurs:- who are task oriented and
‘craftsman type’. They prefer doing to thinking.
 ii)Non-technical entrepreneurs:- who are not
concerned with technical side, but rather with
marketing and promotion. iii)Professional
entrepreneurs:- who start a business unit, but later
sell the running business and start a new unit later.
 ON THE BASIS OF CAPITAL OWNERSHIP i)Private
entrepreneurs:- individual or group set up enterprise,
arrange finance, share risk etc..
 ii)State entrepreneurs:- means the trading or
industrial venture undertaken by the state or the
government itself.
 iii)Joint entrepreneurs:- the combination of private
and government entrepreneurs.
 OTHER CLASSIFICATIONS

 6)ACCORDING TO GENDER AND AGE

 i)Man entrepreneurs ii)Women entrepreneurs iii)Young
entrepreneurs iv)Old entrepreneurs v)Middle-aged
entrepreneurs
 7)ACCORDING TO AREA i)Urban entrepreneurs ii)Rural
entrepreneurs
 8)ACCORDING TO SCALE i)Large scale entrepreneurs
ii)Medium scale entrepreneurs iii)Small scale
entrepreneurs iv)Tiny scale entrepreneurs
 9)OTHERS i)Spiritual Entrepreneur ii) Social entrepreneurs
iii)Edupreneurs
 CONCLUSION

 It is often said that “economy is the effect for which

entrepreneurship is the cause". The development of
economy is usually associated with its industrial
development. An entrepreneur is a person who
organises the factors of productions-land, labour and
capital, and establish a business venture and carries
out the operations in the business in a profitable
manner.
 Skills To Be a Successful
Entrepreneur

 Time Management Skills

 Self-motivation Skills
 Administration Skills
 Financial Know-how
 Sales And Marketing Skills
 Reasons for being an entpr

 Independence
• One of the reasons for being an entrepreneur is that you get to
work for yourself rather than working for someone else
• Freedom to try new things
• You can schedule day’s proceedings according to your schedule
 Wealth
• Not tied down to fixed income
• By working hard and smart, you can reward yourself with more
money
• More money can help you in expanding your business in diverse
areas
 Relationship building
 • Helps in meeting new people and travel to new places
 • Helps to partner with other business owners
 • Helps to increase knowledge about outside world
 Control
 • You are the owner of your company
 • You have the rights to take control over decisions
 • Freedom, flexibility and social responsibility drives
people to work hard
 Satisfaction
 • Your service or product can benefit many customers
 • Knowing that your work touches the lives of many other human beings gives a
wonderful feeling at the end of the day

 Continuous Improvement
 • To improve your product, service you need to continuously improve on what you
know and how you do things
 • You will learn new things
 • Past business decisions can help in improving future strategy decisions
 Work from home
 • Work from home eliminates hours of commuting
 • Time saved can be utilized in doing something valuable for the company
 • Freedom to dress in whatever way one feels comfortable in
 Differences between wage
employment and self- employment
Basis of Difference Wage Employment Self Employment
Nature Self-Saturation Self-Actualization
Scope Limited Unlimited
Tendency Routine or Status- Imaginative,
Quo Creative or
Innovative
Earning Fixed Generating/Flexible
Satisfaction Through Through converting
compliance of one’s creativity to
rules/Procedures reality
Status Employee Employer
Major charms (attractiveness) of being an entrepreneur

 Opportunity to create one’s own destiny

 Owning a business provides entrepreneurs both the
independence and opportunity to do and achieve
what is important to them
 Entrepreneurs know that they are the driving forces
behind the success of their business
 They believe in Swami Vivekananda’s dictum: “You
are the creator of your own destiny”
 Opportunity to make a difference
 Entrepreneurs start their business because they see an
opportunity before them to make a dent and difference in
the cause that is important to them
 It may be providing low-cost houses to the middle- class
families or establishing a recycling programme to preserve
the earth’s limited resources
 Example: Mr. Deepak S. Parikh, CEO of Housing
Development and Financing Corporation Limited (HDFC)
 Opportunity to reach one’s full potential
 • Owning a business gives entrepreneurs a sense of empowerment
to do what they can
 • In his ‘Need Hierarchy Theory of Motivation,’ Abraham Maslow
termed it ‘Self-Actualization’
 • Doing business becomes entrepreneurs’ play. It also becomes an
instrument for entrepreneur’s self-expression and self- actualization
 • Example: N. R. Narayana Murthy who left the job of a System
Programmer in the prestigious Indian Institute of Management,
Ahmedabad to start his own business with three other partners,
says, “Starting my own business was a sort of spiritual awakening. I
found out what was important to me-being follow my own interests
and harness it to its fullest extent possible”
 Opportunity to reap impressive profits

 • Industrial surveys show that the entrepreneurs earn

much more income than if they work for others, say some
organization
 • Michael Dell, the owner-entrepreneur of Dell Computer
Corporation is one such example of richness reaching the
list of the wealthiest people in the United States. (Late)
Dhiru Bhai Ambani and N. R. Narayana Murthy, among
others, are such examples of rich entrepreneurs in India
 Opportunity to contribute to the society

 • Entrepreneurs by running their businesses in an honest and transparent

manner and serving the customers faithfully earn recognition and respect in
their communities
 • They contribute to the well being of the society as well by providing jobs
to unemployed, utilizing idle resources, reducing differences in the levels of
development of different regions, and producing and providing goods and
services to the people in the society
 • The well-known entrepreneur N. R. Narayana Murthy started Infosys
Foundation to render services in the area of education and health care. It’s
Chairperson, Sudha Murty, the wife of Narayana Murthy says: “We have a
responsibility to give back to the society. Wealth is only a means to an end
and we are just trustees of that wealth.”
 Opportunity to do what one enjoys
 • Entrepreneurial history is replete with the instances
that most of the entrepreneurs entered into business
because they have an interest in that line of work
 • For such entrepreneurs, Harvey McKay’s dictum
seems worth quoting: “Find a job doing what you
love, and you’ ill never has to work a day in your life.
The journey rather than the destination is the
entrepreneur’s greatest reward.”
Types of skills required for entrepreneurship:

Technical skills Business Management skills

• Writing • Planning and goal setting

• Oral communication • Decision making
• Technical business • Human relations
management • Marketing
• Interpersonal • Finance
• Technology • Accounting
• Ability to organize • Management
• Coaching • Negotiation
• Being a team player • Venture launch
• Management style • Managing growth
• Network building
 Personal Entrepreneurial Skills

• Inner Control/ disciplined

• Risk Taker
• Innovative
• Change oriented
• Persistent ( regenerate, continually referring to
mind)
• Visionary leader
• Ability to Manage change
• Pioneer • Self belief
 Some famous entrepreneurs

 Shri Dhirubhai Ambani

 Ambani’s life inspires us to dream and dare. He went
to Mumbai with Rs 15,000/- to start his yarn business
and lived with his family of seven people in a one-
room tenement in Mumbai. He created Reliance
Industries Limited, i.e. the India’s biggest private
sector organization
 Dr. Karsan Bhai Patel
 The Nirma man was an ordinary factory chemist in Gujarat
Mineral Development Corporation (GMDC). He started
conducting experiments in his kitchen to offer an
affordable detergent to rural harried housewives
struggling to balance to their monthly budgets. His efforts
finally yielded a pale, whitish-yellow detergent powder
that he named ‘Nirma’, after his then one-year old
daughter ‘Niranjana.’ Today Nirma is one of the world’s
biggest detergent brands. It sells over 8 lakh tones of
detergent product annually. It holds 40% of the Indian
market with turnover of more than Rs 2,500/- crores.
 Lakshmi Mittal
 The son of a scrap dealer today is the world’s largest
producer of steel having plants in 15 countries
including India producing 18 times more steel than
Tata Steel Co. Also his companies make two and a half
times entire steel production of India.

 Opportunities available for prospective entrepreneurs

 Pottery
 Repair of mobile phones, electronic and electrical goods
 Hair Stylist
 Entertainment industry
 Taxi Driver
 Carpenter
 Mason
 Plumber
 Armed security guard
 Vehicle cleaner and washer
 Gardener
 Tractor Operator
 Paddy Farmer
 Stitcher (Leather goods and garments)
 Hand Embroiderer
 Beautician
 Rural tourism
Entrepreneurial feelings – separate
file in ppt.
 Entrepreneur’s competencies

 Major Entrepreneurial Competencies ( the quality of being

adequately or well qualified physically and intellectually)

 Earlier there was a myth that those persons with business family
background could become successful
entrepreneur. Subsequently people started believing that
individuals need technical know-how, as a major requirement for
being successful in launching all industrial ventures. To
understand that what actually is requires to be a successful
entrepreneur, Entrepreneurship Development Institute
conducted a research and found out that following major
competencies are required to be a successful entrepreneur
 1.Initiative:
 ll entrepreneur takes action that go beyond job
requirements or the demand of the situation.

 Does things before being asked or forced by the

events.<br />Acts to extend the business into new
areas, products; or services.
 Sees and Acts on Opportunities:

 Looks for and takes action on opportunities.

 Sees and acts on opportunities (business, educational
or personal growth).
 Seizes unusual opportunities to obtain financing,
equipment, land, workspace or assistance.
 3. Persistence ( capable or efficient)

 Takes repeated action to overcome obstacle that get in the way of reaching goals.

 4 .Information Seeking:

 Takes action on own to get information to help reach objectives or clarify problems.
 Does personal research on how to provide a product or service.
 Consults experts for business or technical advice.
 Seeks information or asks questions to clarify what is wanted or needed. Personally
undertakes research, analysis, or investigation.
 Uses contacts or information networks to obtain useful information.
 Concern for High Quality of Work:

 Acts to do things that meet or beat existing standards

of excellence.
 States a desire to produce work of high quality.
 Compares own work or own company's work
favourably to that of others,
 Commitment to Work Contract:
 places the highest priority on getting a job completed.
 Makes a personal sacrifice or expends ( use or spend)
extraordinary effort to complete a job.
 Accepts full responsibility for problems in completing a job
for others.
 Pitches in with workers or works in their place to get the
job done.
 Expresses a concern for satisfying the customer.
 Efficiency Orientation:
 Finds ways to do things faster or with fewer
resources or at a lower cost.
 Looks for or finds ways to do things faster or at less
cost.
 Uses information or business tools in improve
efficiency
 Expresses concern about costs vs. benefits of some
improvement, change, or course of action.
 Systematic Planning:
 Develops and uses logical, step-by-step plans to
reach goals.
 Plans by breaking a large task down into sub-tasks.
 Develops plans that anticipate obstacles. Evaluates
alternatives.
 Takes a logical and systematic approach to activities.

 Problem Solving:
 Identifies new and potentially unique ideas to reach goals.
 Switches to an alternative strategy to reach a goal.
 Generates new ideas or innovative solutions.

 Self-Confidence:
 Has a strong belief in self and own abilities.
 Expresses confidence in own ability to complete a task or meet a
challenge.
 Sticks with own judgment in the face or opposition or early lack of
success.
 Does something that he says is risky.
 Assertiveness ( Aggressive self assurance):
 Confronts problems and issues with others directly.
 Confronts problems with others directly.
 Tells others what they have to do.
 Reprimands or disciplines those failing to perform as
expected.
 Persuasion:
 Successfully persuades others.
 Convinces someone to buy a product or service.
 Convinces' someone to provide financing.
 Convinces someone to do something else that he would
like that person to do.
 Asserts own competence, reliability, or other personal or
company qualities.
 Asserts strong confidence in own company's or
organisation's products or services.
 Use of Influence Strategies:
 Uses of variety of strategies to affect others.
 Acts to develop business contacts.
 Uses influential people as agents to accomplish own
objectives.
 Selectively limits the information given to others.
 Monitoring:
 Develops or uses procedures to ensure that work is
completed or that work gets standards or quality.
 Personally supervises all aspects of a project.
 Concern for Employee Welfare:
 Takes action to improve the welfare of employees.
 Takes positive action in response to employees'
personal concerns.
 Expresses concern about the welfare of employees.
 Meaning

 Entrepreneur (Noun) – some one who organises the

business.
 Entrepreneurship (Noun) – The quality of being an
entrepreneur.
 Entrepreneurial (Adj.) – Of or relating to an
entrepreneur. Willing to take risk in order to make a
profit.
Managerial vs Entrepreneurial
decision making.

 Entrepreneurial management is distinct from

traditional management.
 The difference between the entrepreneurial and
managerial decision making can be viewed in the
following dimensions
 Differences viewed in following dimensions

 1. COMMITMENT TO OPPORTUNITY In general the

entrepreneurial domain is revolutionary with short
duration while the managerial domain is evolutionary
with long duration The entrepreneurial domain is
pressured by the need for action and has a short time
span in terms of opportunity commitment hence it is
fast to act on worth opportunity while the managerial
domain is slow to act on opportunity and once the
action is taken the commitment is usually for a long
time span, too long in some cases.
 2. COMMITMENT TO RESOURCES An entrepreneurial
is used to having resources committed at periodic
intervals that are often based on certain tasks or
objectives being reached. The resources required are
usually difficult to obtain, thus forcing the
entrepreneur to maximize any resource used. In
managerial domain the commitment of resources is
for the total amount needed and managers normally
receive personal rewards by effectively administering
the resources under the control
 3.CONTROL OF RESOURCES The
manager/administrative is rewarded by effective
resource administration and has a drive to own or
accumulate as much resources as possible. The
pressure of power, status and financial reward cause
the manager to avoid periodic use of resources while.
The entrepreneur is under pressure of limited
resources and strives to achieve periodic use of the
resources needed.
 4. .MANAGEMENT CONTROL/SHARED VALUES AND
NORMS/MANAGERIAL STRUCTURE In managerial
domain the organization structure is formalized and
hierarchical in nature. Reflecting clearly defined lines
of authority and responsibility while the
entrepreneurial domain has a flat organization
structure with informal networks throughout due to
the desire for independence
 5. STRATEGIC ORIENTATION The
entrepreneurial strategic orientation
depends on his or her perception of the
opportunity while on managerial
domain the strategic orientation involve
the use of planning system