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Classification of business
Ideally speaking, anyone who has the capacity to start a venture and
undertake risks can become an entrepreneur. But not all
entrepreneurs are successful. There are certain characteristics of
entrepreneurship that make for a successful venture. So let us talk a
little about these traits that an entrepreneur must possess in order to
be successful.
Characteristics of Entrepreneurship
While there can be as many characteristics of entrepreneurship as
there are people in this world with opinions, there are some
characteristics that are considered indispensable or necessary in an
entrepreneur. These are listed here as follows.
Innovation
In a world, where almost everything has been done, innovation is a
priceless gift to have. Innovation basically means generating a new
idea with which you can start a business and achieve a substantial
amount of profits. Innovation can be in the form of a product, i.e.,
launching a product that no one is selling in the market. It can also be
in the form of process, i.e., doing the same work in a more efficient
and economical way.
Another type of innovation can be the one concerned with usage. For
examples, cell phones are now used for various functions such as
viewing, creating and editing various files and documents, thus,
eliminating the need for computers to a large extent.
Visionary
Every entrepreneur needs to be a visionary. Without a vision for the
future of his venture, he or she would just be working aimlessly
without reaching any point of success.
Leadership
An entrepreneur has a vision. However, it takes a lot of resources to
turn that vision into reality. One of these resources are the people that
the entrepreneur hires to perform various functions like production,
supplying, accounting, etc.
Open Minded
A good entrepreneur realizes that every situation can be a business
opportunity. Thus can be utilized for the benefit of the organization.
For example, Paytm realized the significance of demonetization and
recognized that the need for online transactions was more than ever
during this time and so it utilized and grew massively during this
period.
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Promotion of a Venture
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Opportunity Analysis Notes of
Entrepreneurship
PROMOTION OF A VENTURE
“Promotion of a venture” means initiating all necessary efforts required to
form a business or any other enterprise. Promotion starts from the stage of
‘conceiving an idea of forming an enterprise and ends with its actually
being established, and if necessary or desirable then being registered as
per law.’
According to C. W. Grestenbeg : “Promotion may be defined as the
discovery of business opportunities and the subsequent organization of
funds, property, and managerial ability into a business concern for the
purpose of making profit there form Entrepreneur identifies the
opportunities and investigates which of them are profit yielding from
economic point of views. If he finds the venture profit yielding then he
takes the second step, that is of collecting the important resources. iz., land
resources, human resources, natural resources and labour etc.
Meaning OF OPPORTUNITY
Opportunity is a positive trend in external environment. It is an attractive
project idea whicn an entrepreneur accepts as a basis for his investment
decision. Finding out the possibilities of a business is generally regarded as
identification of business opportunity. A mere “possibility” is to be
distinguished from business “opportunity”. Good business ideas must be
capable Of being converted into feasible projects. Entrepreneurs
generally have different possibilities and select only highest reward
paying possibly for execution. Thus, a business possibility may take
the shape business opportunity fit proves as commercially viable.
OBJECTIVES OF IDENTIFICATION OF BUSINESS OPPORTUNITIES
An entrepreneur desirous of investing on a project has to look for suitable
opportunities. This is not simple, since he has a very wide choice, and the
dimensions of the choice are . product/service, technology, equipment,
scale of production, market, time-phasing and location. The vast range of
opportunities makes the task Of identification very difficult. The main
objectives of identification of business opportunities may be summarised
as follows :
(i) To evaluate the possibilities of utilising physical resources of a
particular region from the technical angle.
(ii) To identify those industries which are not based on local resources
(iii) To identify the industrial potentialities in particular region and country
as a whole.
(iv) To estimate the capital, labour, transport, power, fuel, raw material for
feasible industries.
(v) To estimate the capital, labour, transport, power, fuel, raw material for
feasible industries.
(vi) To explore the development possibilities of the region with regard to
agriculture, minerals, labour, irrigation etc.
(vii) To identify those areas and directions which are necessary for the
balanced growth of region.
(viii) To evaluate the impact of financial resources,
production, employment in industrial development process.
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--------------------------------Documentation for Venture
Capital Firms
and Funding Sources
Focus on the Financial
Many business plans fail to raise money because of the orientation of the
business plan, i.e., the plan focuses on the product or service, not the
financials. When we assisted with the review of over 150 business plans for
a three day Venture Capital Conference for 23 venture capital companies,
only 25 of the 150 plans asked for specific funding. Only 12 had specific
uses of funds and exit strategies for investors!
While we cannot promise your business will be funded, we can assure you
that with our business plan review program , your entire presentation
package will be developed so that your chances of being funded will be
significantly increased.
Stages of Documentation
There are several stages of documentation required by most funding
sources during the venture capital process . They are usually tailored
specifically to both the funding source being approached, and the stage of
your business. The primary documents are outlined below:
2. Executive Summary:
An outline of the complete business plan, usually only 4-8 pages long. It
includes and describes principal markets, personnel, financial highlights,
and the proposed deal structure . The Executive Summary is developed
from the completed business plan, and summarizes the project.
3. Business Plan:
The business plan contains the complete plan for your business, including
extensive market and industry analysis, sales and marketing strategy,
operational plans and timetables, management organization structure and
key personnel, risk analysis (including competitors and comparable
industry numbers), and complete historical and pro forma financial
analysis (including income and expenses, cash flow, balance sheet and ratio
analysis) for three to five years. The business plan financials should include
low, medium and optimum projections for various market conditions.
This is extremely important when you are trying to raise money for a
business that will be a candidate for a merger/acquisition, or an Initial
Public Offering (IPO) at a later date. It is also required for funding by
professional investors so that adequate returns on investment are shown.
5. Investment Plan:
Document outlining in further detail the timetable of required equity and
debt financing, as well as the payback, or liquidation, of the investors'
position under various scenarios. This is where the "Deal" is structured to
make your business attractive to investors and lending institutions.
7. Presentation Package:
Your marketing package is used to present your program to others. It may
be a short series of color slides or overheads, or a Power Point
presentation, used when talking with investors or banks. Your marketing
package is developed along with your business plan and can enhance
chances of funding.
Your completed Business and Investment Plan is a blueprint for the success
of your business. It should be a living document that is revised and updated
periodically as conditions change, or when new markets and products are
developed, additional funding is obtained, or economic conditions change .
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--------------------------------------------INNOVATION IN
ENTREPRENEURSHIP DEFINED
Innovation and entrepreneurship are essential ingredients in building a
successful commercial venture. The ways in which these two concepts fuel
enterprise are something our faculty never stop exploring.
This is especially true of Fredrik Hacklin, professor and lead faculty of the
Entrepreneurship course, and Walter Van Dyck, professor and lead faculty
of the Innovation course.
We explore their unique perspectives on innovation and entrepreneurship,
and how our Online MBA helps to cultivate a pioneering business spirit that
makes full use of both.
WHAT IS INNOVATION?
“It’s the introduction of novelty in a given market or industry, such as new
products, services, methods, sources of supply or organisation,” says
Fredrik. “At the same time, there’s a strong emphasis on successful
commercialisation - that is, an innovation is more than an idea or an
invention, it’s the result of taking it to market.”
Fredrik recalls the 20th century economist Joseph Schumpeter, who said,
“necessity may be the mother of invention, but it does not automatically
produce innovation,” - hinting at a need for a third element.
“Schumpeter suggested the entrepreneur represents the missing link
between invention and innovation”, he explains. “Indeed, an entrepreneur is
someone who is willing and able to transform an invention into an
innovation.”
The ability to innovate in this sense isn’t just a vital component of a thriving
business, but can be seen as an essential aspect of entrepreneurship itself.
Walter observes that today’s advancing tech, such as big data, IoT and
machine learning, is now empowering whole networks of entrepreneurs to
develop interconnected ideas.
“Novel technology is and has always been a major source of innovation for
entrepreneurs,” he says. “The distinguishing feature of new technology is
that it enables open innovation in innovation ecosystems. Philips IoT-
enabled light bulbs are now part of a platform that, next to giving light,
provides opportunities for others to create software that controls it.”
And what about the influence of digital channels? “It’s difficult to think of a
business idea without any digital presence nowadays,” says Fredrik.
“However, a digital strategy should always be based on solving a real job
for the customer, not just used for its own sake.”
“The Online MBA equips the entrepreneurs of tomorrow with the essential
mindset, the critical skills and knowledge in action that it takes to
successfully lead for change in a world of ever-increasing pace,” explains
Fredrik.
“The tools and mindset necessary to lead an innovative growth and
renewal-oriented company,” agrees Walter.
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Entrepreneurial Behavior
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(1) Intitiative Behaviour : It is the entrepreneur who takes or imitate the first move towards
setting up of an enterprise. Entrepreneur basically is an innovator who carries out new
combinations to initiate and accelerate the process of economic development.
(2) Challenge accepting behaviour : Entrepreneurs take problem as a challenge and put in their
best for finding out the most appropriate solution for the same. They will first of all understand the
problem and then evolve appropriate strategy for overcoming the problem.
(3) Assertive Behaviour : An assertive person knows what to say, when to say, how to say and
whom to say. He believes in his abilities and ensures that others fall in line with his thinking,
aimed at promoting the interests ofthe organisation.
(4) Persuasive Behaviour : A successful entrepreneur through his sound arguments and logical
reasoning is in a position to convince others to do the works the way he wants them to do. It is
not physical but intellectual force he will use for convincing others.
(5) Effective Monitoring : Entrepreneurs ensure that everything is carried out in their
organisations as per their wishes. They ensure regular monitoring of the working so that the goals of
the organisation are achieved in best possible manner.
(6) Looking for Opportunity : An entrepreneur is always on the look out or searching for
opportunity and is ready to exploit it in the best interests of the organisation.
(7) Persistence : An entrepreneur is never disheartened by failures. He believes in the Japanese
proverb ‘Falls even times, stand up eight’. He follows Try-Try Again for overcoming the obstacles
that come in the way of achieving goals.
(8) Information Seeker : A successful entrepreneur always keep his eyes and ear open and is
receiptive to new ideas which can help him in realising his goals.
(9) Quality Consciousness : Successful entrepreneurs do not believe in moderate or average
performance. They set high quality standards for themselves and then put in their best for
achieving these standards. They believe in excellence, which is reflected in everything they do.
(10) Recognizing the importance of Business Relationships : Entrepreneur acts to build repport
or friendly relationships with customers. He sees interpersonal relationships as a fundamental
business resource. He places long-term goodwill over short-term gain.
(11) Commitment to Work : Successful entrepreneures arc prepared to make all sacrifices for
honouring the commitments they have made. Whatever they commit, they take it as a moral
binding for honouring their commitments, irrespective of the costs innolved.
(12) Independent Behaviour : Entrepreneurial behaviour posseyses strong need for independence
and due to this desire they are motivated to start a business. They always concentrate to achieve
their goals.
Describe Entrepreneurial Behaviour. Explain the
psychological factors to effect the entrepreneurial behaviour.
The behaviour of an entrepreneur is dependent largely on his psychology and motives which are the
main determinants of be. haviour. These motives are based on needs for survival and growth. The
movements of an entrepreneur are affected by the psychological background. Many theorists Akouri,
McClelland, Javillionar & Winter have given views related to psychological factors as follows :
(1) Achievement Motive : Achievement motive is most important for an entrepreneur. It is this
motive which motivates people to do something different and extraordinary so that one may feel
that he has achieved or created something which others are not able to do..lt motivates an
entrepreneur to take an initiative for innovation. It also makes one personally responsible for his
actions and performances. It helps to develop self-reliance and develops the spirit of risk-taking
which is very -essential part of entrepreneurial behaviour, one will not establish a unit unless he is
prepared to take risk.
(2) Desire to Influence Others : Strong desire of the need for power, helps a person to become a
successful institution builder, Thus, it is necessary that an entrepreneur must have the ability of self-
management with a strong will power. Thus, they possess a strong desire towards the need of
influencing others.
(3) Desire for Independence : Entrepreneur possesses strong desire for independence and it is
only due to this desire that they are motivated to start a new business. According to psychologists,
the feeling of independence is acquired by them through the family atmosphere. Due to this they do
not want to work under anyone rather they like to work independently.
(4) Innovation : This is an important psychological factor Of entrepreneurs. Generally, an
entrepreneur does those acts which are not taken up by other persons. They transform the creative
ideas into useful applications. Accordmg to Schumpeter, a person is an entrepreneur only when he is
an innovator, engaging himself in an innovative behaviour. Thus, innovative behaviour is an
entrepreneurial behaviour,
(5) Hope for Success : Entrepreneurs are always hopeful for future success. They work for being
successful which enlightens them with the confidence, positive attitude and high energy level. Hope
for success makes their behaviour strong and stable.
(6) Calculated Risk Taking : Entrepreneur is a person who is always in a position to accept
challenging job, He works on those projects only, which are risky but have a probability of
success through their efforts. He does not rely on those ventures, which totally depends on chance.
In other words, the entrepreneur belives in calculated risk-taking.
(7) Immediate feed back : Entrepreneur wants immediate feedback of the progress of his
entrepreneurial targets so that he can improve the way of achieving the targets and his behaviour
changes according to the situations.
(8) Self-Efficacy : An entrepreneur has a drive for self-efficacy. They want to become the problem
solver, instead of problem avoiders. They do not want to copy others but they want others to copy
them. Further they feel proud of their achievements and live in the present.
(9) Self-Expression : The desire for self-expression appears to be a common thread and may help
explain why so many men and women prefer to work for themselves than for someone else.
(10) Self Confidence : Entrepreneurs believe in themselves. They have confidence that they can
outdo anyone in their field. They tend not to accept the status quo, believing instead that they
can change the facts. Often, they insist the odds are better than the facts would justify. They have
winning habits. On the basis of self-confidence, they become overachievers.
(11) Different Way : Although all people are different, entrepreneur is different from all others.
They judge the world in terms of their own beliefs, values and expectations. A good entrepreneur
behaves like human being rather than rational machine. They sce their work world differently. They
differ in their psycho-personalities, needs, time periods, social surroundings and perception.
CHARACTERISTICS OF INNOVATION
On the basis of above discussion, it can be concluded that :
(1) Achievement Theory of McClelland : This theory was propounded by David Mc-Clelland in his
book, ‘The Achieving Society’. He states that people who persued entrepreneur like careers were
high in need achievement. The n-achievement is called a desire to do well, not so much for the sake
of social recognition or prestige but for the sake of an inner feeling of personal accomplishment. It is
this motive of n-achievement that guide the action of entrepreneur. People with high nachievement
behave in an entrepreneurial way. They do things in a new and better way. They make decisions
under uncertainty. Entrepreneurs with a high-need to achieve feel that their success or failure is due
to their own actions. McClelland indicates that there are five major component to the need
achievement trait. (i) responsibility for problem solving, (ii) setting goals, (iii) reaching goals
through one’s own effort, (iv) the need for and use of feedback, and (v) a preference for moderate
levels ofrisk-taking. Thus people with high need for achievement are motivated to be an
entrepreneur.
(2) Self-Monitoring Theory : Self-monitoring is a personality trait that measures an individual’s
ability to adjust his behaviour to external situational factors. This theory states that high
monitor entrepreneurs can be more successful in entrepreneurial jobs and managerial positions
where they are required to play multiple roles, They tend to display their true dispositions and
attitudes in every situation. The high self-monitor entrepreneur is capable of putting on different
faces for different audiences.
(3) Risk-Propensity Theory : Risk-propensity is the to which an individual is willing to take
chances and make risky decisions. An entrepreneur with a high risk propensity might be villing to
experiment with new ideas and gamble on new products He might also lead the venture in new and
different directions Thus, risk taking-whether financial, social or psychological is an impatantpart
ofthe entrepreneurial behaviour. (4) Motivation Theory : People differ not only in their ability to do,
but also in their will to do or motivation. Motives are the mainsprings of action. Entrepreneurial
motivation may be defined as a set ofmotives, needs, urges or desires such as need for power, to
earn money or to be one’s own boss, to dominate and influence others by earning industrial power
etc. These behavioural dimensions motivate the people to start a new venture.
(5) Role Models and Support Systems Theory : Every entrepreneur has a choice of a role model.
He follows and learns for the behaviour of his role model. Many new entrepreneurs need guidance
and moral support. In addition to moral encouragement, the entrepreneur needs advice and counsel
throughout his entrepreneurial behaviour. Each entrepreneur needs to establish both a moral and
a professional support network. These contacts provide confidence, support, advice, and
information. As one entrepreneur stated, “In your own business, you are all alone. There is a
definite.need to establish support groups to share problems with and gain overall support for the
new venture. ”
What is the difference between Innovation and Invention ?
Innovation is not similar to invention. Main points of difference between invention and innovation
may be summarised as follows :
(1) Nature of Activity : Invention is the creation of something new, whereas innovation is the
economic exloitation of the new idea or resource; in other, words, innovation is the transformation
of an idea or resource into useful commercial applications.
(2) Results : Invention results in new knowledge Whereas, innovation results in the products,
services, or processes.
(3) Position : All inventors are not innovators, while all innovators are inventors.
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Social Responsibility of
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--------------------------Role of Entrepreneur Notes
Role of Entrepreneur Notes :- Hello friends in this post we are provided the materials of the b.com
second part its name is fundamental of Business Entrepreneurship notes and its the first chapter of this
subject and in this article you learn many more knowledge of Entrepreneurship like as Role of an
entrepreneur in economic development, generation of employment opportunities, role of
entrepreneur in complementing and supplementing the economic growth, bringing about social
stability, balanced regional development of industries, role of entrepreneur in export promotion and
import substitution, import substitution
Role of Entrepreneur
Entrepreneurs play a vital role in economic growth of a country. Economic growth is a process by
which the per capita income and total income of a country increases during a given
period. Entrepreneurs serve as the catalysts in the process of rapid industrialisation and economic
growth. In the process of economic growth of a country, the entrepreneur plays a motivator role.
The process of economic growth cannot proceed onwards without the active support of the
entrepreneur. It is the entrepreneur who collects the natural, economic, human and technical
resources of a county and exploits them in the economic growth of a country. An entrepreneur is
more a true leader of economic progress. He is by nature a visionary. He has innovative attitude. He
loves risk-taking behaviour. He contributes to economic development in many ways, viz., capital
formation, technological breakthrough, innovating skill, market expansion and organisation of
productive resources. He scents new market opportunities and takes the
creative decisions to exploit them. The major role of an entrepreneur in the economic growth may be
summarised as under :
(1) Role of an Entrepreneur in Economic Development : One of the most important and basic role of
an entrepreneur is to innovate. India would not have been discovered to western world if Vasco
Diagama would not have sailed to India. The natural resources of Africa would not have been
exploited if Britishers, French and Portugese would not have ventured there. Most of discoveries
would not have been translated and implemented if entrepreneurs were not willing to establish
units for setting up industries. The development of railways, telecommunications, agriculture and
industry has been possible due to innovations. Entrepreneurship essentially means doing things
that are not
generally done in ordinary course of business. An entrepreneur discovers and develops new ideas,
new product, new methods of production, opening new markets, new sources of supply of raw-
material, new type of industry, new enterprises, new methods of solving business problems, new
organisations, new combinations, and new opportunities. Innovation is the process of putting new
ideas into action. The higher the rate of innovation, the higher will be the rate of economic growth.
He is a catalyst ofchanée. According to W.T. Esterbook, “Entrepreneur is an innovating giant who
encourages production of new products in the industry, new techniques of production, new
machinery, use of new raw- material, use of new technology and establishment of netv industries. ”
According to Edmunds Bark, “Entrepreneur, in the true sense, is a greedy for new things. ” According
to Peter F. Drucker,
“Innovator is always in search of changes and exploits it as and when the opportunity arises.
“Innovation is the creative endeavour that creates wealth. Entrepreneurs develop new ideas and,
from their ideas, establish new enterprises that add value to society. In fact, entrepreneurs create
wealth by creating something new or different or by searching for new opportunities as they arise to
inspire new ventures. Indian entrepreneurs have set up those industries which had opportunity.
There has been fast growth of food processing, beverages, petroleum, rubber, plastics, fertilizers,
caustic soda, steel, etc. Many sophisticated industries have also been set up but most of knowledge
based industries have not been innovated by Indian entrepreneurs because of limited interest in R &
D; they have been based largely on with foreign technical and financial collaborations.
(2) Generation of Employment Opportunities : An opportunities. An employment entrepreneur
generates
entrepreneur generates employment not only for himself and members of his family but also for
others who work with him. However, the number will depend upon the size and requirement of the
enterprise concerned.
Indirectly, by setting up large, medium and small scale sized business units they offer jobs to
millions. For example, if one hundred person become entrepreneurs, they not only create a hundred
jobs for themselves but also provide employment to an army of unemployed youth. As the time
passes, these entrepreneurs grow providing direct and indirect employment. Thus,
entrepreneurship is the best way to fight the evil of unemployment and generate employment
opportunities in the country. National Alliances of Young Entrepreneur (NAYE) is rendering
assistance to young entrepreneur in collaboration with public sector banks in the country. It helps in
identifying potential projects, conducting project feasibility report and providing financial assistance
and other logistic support to the young entrepreneurs.
(3) Role of Entrepreneur in Complementing and Supplementing the Economic Growth : In recent
decades, the
role of an entrepreneur has been to supplement and acclerate the pace of growth and economic
development in both the developed and developing countries When an entrepreneur sets up an
industrial or service unit it helps in economic growth. Similarly, when economy grows it creates
opportunities for further growth. Thus, every economic growth has a multiplier affect; one
complements the other and one supplements the other. When an entrepreneur establishes a bank it
complements other economic activities as it helps further growth. When any
engineering and electronic unit is set up it requires components from large number of
manufacturers. In most engineering, electronic and electrical industries like T. V. , refrigerators,
computer growth of one large unit gives birth to a number of ancillary units. This is true not only for
engineering and electronic industry but also for steel, textiles, chemicals, food processing and so on.
Along with complementary development there is also supplementary development. When a spinning
mill is set up it leads to development of thread units and cloth weaving units. When a computer
hardware industry is developed it leads to the growth of software industry. The development of
software industry led to its exports from India in a big way. Thus, one leads to growth of another
activity.
(4) Bringing about Social Stability : Economic power denotes the power and wealth owned by an
individual. conomic
power is the natural result of the business activities. Establishment of large enterprises leads to
concentration of econornic power in a few hands in the society. Such concentration has its own evils
in the form of monopolies and monopolistic exploitation of the consumers and the society as a
whole. Hence developing a large number of “small entrepreneur” helps in even distribution of
economic power in a wider range, ultimately bringing about social stability. Entrepreneurs bring
such stability also by generating self-employment and facilitating development of rural and
backward areas. Generally, entrepreneurship is taken to be synonymous with small scale
enterprises. Entrepreneurs have a definite social role and responsibility towards the society. They
must act in ways that enhance the community’s well-being. Socially responsible behaviour of an
entrepreneur not only helps the consumers and company but it also ensures social stability and
order.
(5) Balanced Regional Development of Industries : Industrial development has a tendency to
establish and develop industries, big or small, in metropolitan cities like Delhi, Mumbai and Chennai
and in big towns, This brings to unbalanced regional development of industries. In this context also,
entrepreneurs are required to play an important role in balanced regional development of dunes.
They set up industries particularly in backward areas to avail the various concessions and subsidies
offered by the Central and the State Governments. The Government of India and the State
Governments are also trying to disperse the industries by establishing industrial estates and creating
infrastructural facilities in backward areas.
(6) Role of Entrepreneur in Export Promotion and Import Substitution : Export Promotion refers to
the policy of
the govt. designed to encourage the exporters to export more goods from the country than before.
An entrepreneur being an industrialist has a major role to play in export promotion. Export
promotion reduces unfavourable balance of trade, decreases imports and increases exports. It also
increases valuable foreign currency reserves. Various facilities, incentives and subsidies are
provided by the Central and State Governments in the field of export promotion. Increasing number
of entrepreneurs, both old and new, are taking benefits of incentives, conscessions and subsidies
offered by the Government. Entrepreneurs establish units for meeting domestic and export
demand of goods and services. He also looks opportunities for export promotion of surplus goods
and services if he can export to international markets. For promoting export, an entrepreneur has to
take many decisions and have to implement them. In short, he has to play following roles to promote
export
(1) Exploring export promotion possibilities.
(2)Decision regarding entry in international market for export.
(3) Creation of demand in international market.
(4) Decisions regarding pricing and costing.
(5) Decisions regarding distribution or middlemen.
(6) Promotional decisions.
(7) Availing of export promotion schemes.
(8) Getting institutional support.
Import Substitution: Import substitution means production of those goods which are imported from
foreign countries. Import substitution is essential for achieving self sufficiency. Import substitution
(i) reduces imports, (ii) increases self sufficiency, (iii) source of earning valuable foreign currency
like dollar, (iv) reduces imbalance in foreign trade, (v) encourages industrial development, (vi)
creates new sources of employment, (vii) reduces foreign debts, (viii) save local currency, (ix)
reduces dependence on foreign
countries, and (x) overall assistance in increasing exports. and rapid economic development of the
country.
Entrepreneurs can play a vital role in the field of import substitution by establishing, developing and
expanding industries which can take up of production of such goods which can be easily used as
import substitution. Government is also providing every possible help both financial and non-
financial to entrepreneurs who are taking interest in the production of those goods which can
be used as import substitution.
Q. 1. What is the need for equitable distribution of industries in various regions of the country ?
Ans. Regional disparities in development have been an important socio-economic and political issue
in developing countries. In our country some of the states are very developed while many others are
in very backward condition. The main objective of balanced regional development is to develop all
regions equally by making optimum utilisation of resources. Following are the aims of balanced
regional development :
1. Provide Equal Opportunities of Employment Centralisation of industries provides employment to
a specific field and maintaining the condition of unemployment in other fields. Due to this reason,
entrepreneur is unable to make the optimum use of resources. If there is balanced regional
development of industries then it will provide employment to every group reducing the employment
disparities.
2. Development of Local Resources : This is national aim that we should develop the local resources.
If there is unbalanced regional development of resources then the local resources of an area are not
fully developed. As it is world wide that every area Possess some of specialised feature whether they
are in the form of human resource, or natural resources and if these resources are fully utilised and
developed then these regions can develop fully and Can contribute in the development of nation,
3. Development of Infrastructure : The backward states may develop rapidly if there is a rapid
development in the infrastructure. If electricity, water supply and roads are developed adequately in
all the regions, then other segments of infrastructure and services sector will automatically develop.
Thus, it will help in reducing regional imbalance.
4. Development of Social Infrastructure : The social infrastructure includes investment on education,
health services under public sector etc. If the development of social infrastructure is adequate then
the people will be educated enough to contribute in the balanced regional development of the
nation.
5. Optimum Utilisation of Resources : The natural resources of every nation are limited. The country
should make their optimum use in such a way that some part of them might be kept in reserve for
future use. Balanced regional development can fulfil this aim, as excessive use of resources of a
particular area lead to the wastage of the resources of that area and further exhaust them for future
use.