syllabus

Concept of entrepreneurship- nature and historical

evolution, entrepreneurship and economic development. Characteristics of an entrepreneur, entrepreneur Vs manager, types of entrepreneur, entrepreneurial development-role of training facilities, incentives,protection. Effects of culture on entrepreneurship; Theories of entrepreneurship; sociological and psychological.

syllabus
Unit-I Nature and development of entrepreneurship :

role, importance and characteristics of an entrepreneur ; creativity and business opportunity; Unit-II Business Plan- resources requirement and legal aspects, enterprise startup, government schemes and support for starting new business opportunity. Unit-III Buying a franchising, buying out an existing business; intrapreneurship

Objectives
Inculcate the Desire to take up Entrepreneurship as a Career. Differentiate between entrepreneur and businessman. Define and know the Meaning of the terms Entrepreneur and Entrepreneurship.

ENTREPRENEURSHIP AS A CAREER OPTION

You can choose your career from two broad categories

of options Wage Employment or Entrepreneurship. The term career' signifies a continuous, ever evolving, ever expanding opportunity for personal as well as business growth and development. We may define entrepreneurship as a career in your own business [YOB] rather than wage employment [JOB] . If you opt for a job then you will work for others. In case you opt for entrepreneurship you will be your own boss.

Difference between Wage Employment and Entrepreneurship

Wage Employment

Entrepreneurship

Work for Others Follow Instructions Routine Job Earning is fixed, never negative Does not create wealth Can choose fromGovernment service Public Sector Private Sector

Own Boss Make own plans Creative activity Can be negative sometimes, generally surplus Creates Wealth, contributes to GDP Can choose fromIndustry Trade or Service Enterprise

Employment generation
In the context of employment generation the three

terms Income generation, Self-employment and Entrepreneurship are often used interchangeably.

Income Generation
Income generation is the initial stage in the

entrepreneurial process in which one tries to generate surplus or profit. They are often taken on part- time or casual basis to supplement income. e.g. a man with some surplus money might put his money in a fixed deposit account in a bank or a chit fund to earn some interest.

Self employment
Self-employment is the second stage in the

entrepreneurial process and refers to an individuals fulltime involvement in his own occupation. e.g. a person who starts a tea shop and remains happy and satisfied and has no plans to add on any other items like samosas, buns, soft drinks etc. or to grow in any other manner[e.g. supplying tea/coffee/sandwiches to others in the vicinity].

Entrepreneurship are often used interchangeably

Entrepreneurship is the terminal stage of the

entrepreneurial process wherein after setting up a venture one looks for diversification and growth. An entrepreneur is always in search of new challenges. An entrepreneur is not a routine businessman he might not have resources but he will have ideas. He is innovative and creative. He can convert a threat into an opportunity. Small businessmen might shut-down or change his business if he anticipates losses but an entrepreneur will try again after analyzing the situation. And the other hand an entrepreneur can leave a perfectly running business to start another venture if he so desires

Cont
Income generating person
Entrepreneurship Self employment income generation (entrepreneurship) initial stage middle stage (self- employment) final stage

Difference Between an Entrepreneur and Business Man

An entrepreneur is being called so when he initiates,

conceptualize and materialize a business process which is entirely unique. In other words an entrepreneur is someone who starts a business from a fresh idea and make it work. A business man is some one who start a business on an existing market platform laid by the entrepreneurs.

Difference Between an Entrepreneur and Business Man

Entrepreneurs weigh more than a business man.
Being an entrepreneur is a difficult task. One will have to cut his own way through to find his

market and get his brand or the product established. Outgoing attitude and a will to succeed in any difficult circumstances are the common traits one find in an entrepreneur.

Difference Between an Entrepreneur and Business Man

Business man
Imitative or adoptive Low risk taking ability Not work for new concept Fear to face uncertainty Satisfy with whatever he has

Entrepreneur
Innovator High risk taking ability Work for new concept Dealing with uncertainty Look for high achievement.

achieve.

Entrepreneur An Overview
The word entrepreneur originates from the French

word, entreprendre, which means "to undertake." In a business context, it means to start a business. The Merriam-Webster Dictionary presents the definition of an entrepreneur as one who organizes, manages, and assumes the risks of a business or enterprise.

Entrepreneur-An Overview
An Entrepreneur (ahntra pra nur) is a person who

organizes and manages a business undertaking, assuming the risk for the sake of profit. Any person (any age) who starts and operates a business is an entrepreneur.

Entrepreneur An Overview
An entrepreneur is the combination of two skill- an

ideal person and a manager. There must be persons who have vision, initiative and drive to utilize the resources. These qualities and abilities are combined only in entrepreneurs.

Entrepreneur-An Overview
Cattle rearer
Settled Farmer Trader

Industrial Leader

Who is an entrepreneur?
Entrepreneur is the person responsible for setting up a business

or an enterprise. achievements.

He takes the initiative, is innovative, and looks for high He is a change agent who puts up new projects that create

wealth, open up employment opportunities and leads to the growth of the sector. uncertainty for the purpose of achieving profit and growth by identifying opportunities and assembling the necessary resources to capitalize on them.

One who creates a new business in the face of risk and

Definitions
The entrepreneur is an individual who introduces something new in

the economy- a new production method, a new product, a new source of raw material, a new market etc. - Joseph Schumpeter. to it and exploits it as an opportunity. Innovation is a specific tool by which he exploits change as an opportunity, for a business or service. - Peter Drucker

An entrepreneur is the one who always searches for change, responds

A true entrepreneur is the one who is endowed with more than average

capacity in the task of organising and coordinating the various other factors of production. -Francis Walker

Entrepreneur who changed the face of industrial enterprise

Late.Cowasjee Nanabhai Davar (1814-1873)
Late J.N.Tata(1839-1904) Late Rai Bahadur Mohan Singh Oberoi (1898-2002)

Late Dhirubhai Hirachand Ambani (1932-2002)

Late Aditya Vikram Birla (1943-1995)

Characteristics/Attributes of Entrepreneur
Risk Bearer Organizer of Resources Innovator High Achiever Trust in Self Work as Satisfaction Opportunity - Focused

Cont..
Backbone of the Capitalist System
Visionary Leader Ingredient of Modern Production System

Protector of Societys Interest

Kingpin of Entrepreneurial Society Catalytic Agent

Importance of Entrepreneur
Job Creation
Create Achievers First Movers Reinventing Organizations Economic Prosperity

Higher Productivity
Enterprising Man

Importance of Entrepreneur
Job Creation
Create Achievers First Movers Reinventing Organizations Economic Prosperity

Higher Productivity
Enterprising Man

Three Aspects of Entrepreneurship

1. The identification/recognition of market

opportunity and the generation of a business idea (product or service) to address the opportunity

Three Aspects of Entrepreneurship

2. The marshalling and commitment of resources in

the face of risk to pursue the opportunity

Three Aspects of Entrepreneurship

3. The creation of an operating business organization

to implement the opportunity-motivated business idea

What is an Entrepreneurship ?
It is the propensity of mind to take calculated risks

with confidence to achieve a pre determined business or industrial objective

It is the process of identifying opportunities in the

market place, arranging resources required to exploit the opportunities for long term gains.
It refers to a process of action an entrepreneur

undertakes to establish an enterprise.

Definitions oriented definition Risk and uncertainty

Setting-up new venture definition Innovation and leadership oriented definition. Composite skill oriented definition.

Risk and Uncertainty Oriented Definition

Frank Knight :

It involves a specialized growth of persons who bears risk and meet the uncertainty.

Setting-up New Venture oriented Definition

Pareek and Nadkarni:

Entrepreneurship refers to the general trends of setting up new enterprises in a society.

Innovation and Leadership Oriented Definition

Richman and Copen:

Entrepreneurship implies more creatives,external or open system orientation. It involves innovation, risk- bearing and relatively dynamic leadership.

Setting-up New Venture oriented Definition

Pareek and Nadkarni:

Entrepreneurship refers to the general trends of setting up new enterprises in a society.

Composite Skill Oriented Definition

Haward W Johnson:

Entrepreneurship is a composite of these basic elements invention, innovation and adaptation.

Entrepreneur, Entrepreneurship and Enterprise

Entrepreneur

Entrepreneurship

Enterprise

Person

Process of Action

Object

Three views of Entrepreneurship

Classical View: Cantillon,Frank,

Adam,J.B.Say,David etc.

Neo-Classical View: Walter, Marshall,

Joseph.

Modern View :This view applies to new

developing economies.

Classical View
Ability to bear risk and uncertainties of business.
Ability to organize and co-ordinate productive

resources. Ability to convert productive resources into a productive entity through super- intendence and control.

Neo-Classical View
Ability of direction and control.
Ability to bring new changes.

Modern View
To create change to exploit them.
To maximize opportunities to obtain results. To create unique./ to create tomorrow.

To earn economic results only by results.

To create effectiveness. To allocate resources to opportunities rather than

problem.

Schumpeter's View of Entrepreneurship

Austrian economist Joseph Schumpeter 's definition of

entrepreneurship placed an emphasis on innovation, such as: new products new production methods new markets new forms of organization

Schumpeter's View of Entrepreneurship

Wealth is created when such innovation results in new

demand. From this viewpoint, one can define the function of the entrepreneur as one of combining various input factors in an innovative manner to generate value to the customer with the hope that this value will exceed the cost of the input factors, thus generating superior returns that result in the creation of wealth.

Concept of Entrepreneurship
Risk Enterprise

Innovative Leadership

Entrepreneurship

Building Productive Unit

Creating Economic Values

Various concept about Entrepreneurship

Risk bearing capacity
A function of co-ordination of productive resources. Managerial Skill

Introduction of innovations
Group level Reactiveness Institutional Building Leadership Ability of high achievement Composite Skill

Nature and Characteristics of Entrepreneurship

Economic Activity Creative Activity Purposeful Activity Risk-bearing Activity Ability to Innovate Business-Oriented Tendency Organizing Function Gap-filling Function

Nature and Characteristics of Entrepreneurship

Dynamic Function Managerial and Leadership Function Knowledge-based Practice Not a Personality Trait, but a Behavior Based on Principle, not on Intuition Result of Changes Essential in Every Activity Low Risk

Nature and Characteristics of Entrepreneurship

Environment-Oriented Activity
Creation of Resources Management is the Vehicle of Entrepreneurship

It is not a Natural but an Achieved Work

Process of identity Transformation Result-Oriented Behaviour

Nature and Characteristics of Entrepreneurship Professional Activity

A Life Style
Systematic Work Not a New Concept

Entrepreneurship Versus Management

Role, Function and Significance of Entrepreneurship

Dealing with Uncertainty
Innovation Job Creation

Number of New Start-Ups

Managing Resources Capital Formation Productivity

Role, Function and Significance of Entrepreneurship

Dealing with Uncertainty
Innovation Job Creation

Number of New Start-Ups

Managing Resources Capital Formation Productivity

Entrepreneurship vs. Small Business

Many people use the terms "entrepreneur" and "small

business owner" synonymously. While they may have much in common, there are significant differences between the entrepreneurial venture and the small business. Entrepreneurial ventures differ from small businesses in these ways:

Entrepreneurship vs. Small Business

Amount of wealth creation - rather than simply

generating an income stream that replaces traditional employment, a successful entrepreneurial venture creates substantial wealth, typically in excess of several million dollars of profit. Speed of wealth creation - while a successful small business can generate several million dollars of profit over a lifetime, entrepreneurial wealth creation often is rapid; for example, within 5 years.

Entrepreneurship vs. Small Business

Risk - the risk of an entrepreneurial venture must be

high; otherwise, with the incentive of sure profits many entrepreneurs would be pursuing the idea and the opportunity no longer would exist. Innovation - entrepreneurship often involves substantial innovation beyond what a small business might exhibit. This innovation gives the venture the competitive advantage that results in wealth creation. The innovation may be in the product or service itself, or in the business processes used to deliver it.

KEY words
Identify six key words used in this section -----------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Check your progress

Give two examples each of Government Service---------------------------------------------------------------------------------------------------------------------------------------------------------------------------Public Sector------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Private Sector-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Industry------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Trade and Service enterprises-----------------------------------------------------------------------------------------------------------------------------------------------------------------

CONTENT
INTRODUCTION HISTORY OF INTRAPRENEURSHIP

NATURE AND CHARACTERISTICS

FEATURES IMPORTANCE BARRIERS DIFFERENCE B/W INTRAPRENEURSHIP AND ENTREPRENEURSHIP CONCLUSION

INTRODUCTION
DEFINITION
Intrapreneurship or Intrapreneuring is the process by which other new ventures are born within the confines of an existing corporation. An intrapreneur is a person who is semi-dependent on the promoters/owners of corporation.

INTRAPRENEURSHIP

Providing a company with the ability to:

Adapt quickly to change in the macro environment. Diversify from the core business.

Conduct market experiment.

Train new managers and leaders.

Establish new channels of distributions.

Invest and profit from new venture creation.

HISTORY OF INTRAPRENEURSHIP
Intrapreneur is a term coined [imagination] by
Macrae [1982] and develop by Pinchot [1985]. According to Pinchot intrapreneurs are dreamers who do, those who takes hands-on responsibility for creating innovation of any kind within an organisation. The intrapreneurs is essential ingredient in every innovation [ Dr.william souder ]

HISTORY OF INTRAPRENEURSHIP
Intrapreneur is a term coined [imagination] by
Macrae [1982] and develop by Pinchot [1985]. According to Pinchot intrapreneurs are dreamers who do, those who takes hands-on responsibility for creating innovation of any kind within an organisation. The intrapreneurs is essential ingredient in every innovation [ Dr.william souder ]

FEATURES involves innovation, the ability to 1. Intrepreneurship

take creativity.
2. Intrapreneurship is a novel way of making organizations more profitable where imaginative employees entertain entrepreneurial thoughts. 3. Intrapreneurship is a significant method for companies to reinvent themselves and improve performance.

INTRAPRENEURIAL ACTIVITY
1. Save time, money and make life easier. 2. Enhancing the quality. 3. Reducing the time it takes to do something. 4. Understanding how a job could be done smarter. 5. The quality of a service or product should be enhanced.

IMPORTANCE OF INTRAPRENEURSHIP TO ECONOMIC GROWTH

Allowing employees to introduce and implement innovation within an organization is a means of fostering economic growth. Few innovations have been derived from a flash of genius, most are the result of a conscious, purposeful search for innovation opportunities. Drucker (1998) has identified four areas of opportunity which exist within a company and three that exist outside a company:

What is Intrapreneurship?
It means entrepreneurship within an existing

business. The development within a corporation of internal markets, that produce products, services, or technologies in a unique way An opportunity for corporate managers to take initiative & try new ideas.

What is Intrapreneurship?
It means entrepreneurship within an existing

business. The development within a corporation of internal markets, that produce products, services, or technologies in a unique way An opportunity for corporate managers to take initiative & try new ideas.

WHO IS INTRAPRENEUR?
Intrapreneur means" a person within a large corporation

who takes direct responsibility for turning an idea into a profitable finished product through assertive risk-taking and innovation". An intrapreneur thinks like an entrepreneur looking out for opportunities, which profit the organization. Intrapreneurs share the same traits as entrepreneurs such as conviction, zeal and insight. As the intrapreneur continues to expresses his ideas vigorously, it will reveal the gap between the philosophy of the organization and the employee.

IMPORTANCE OF INTRAPRENEURSHIP TO ECONOMIC GROWTH

Allowing employees to introduce and implement innovation within an organization is a means of fostering economic growth. Few innovations have been derived from a flash of genius, most are the result of a conscious, purposeful search for innovation opportunities. Drucker (1998) has identified four areas of opportunity which exist within a company and three that exist outside a company:

Continue
Areas of opportunity within a company or industry:

Unexpected occurrences. Process needs. Industry and market changes.

Additional sources of opportunity, which exist outside a company in its social and intellectual environment: Demographic change. Changes in perception. New knowledge.

Characteristics of Intrapreneurs
Results driven Ambitious Creative Original

Self Confident
Risk Tolerant

Contd.
Persistent Influencing

High Energy
Action oriented Interpersonal

Innovative

Difference between Intrapreneurship & entrepreneurship

An entrepreneur is an An intrapreneur is

independent person. An entrepreneur himself raise the necessary funds from various sources & guarantees return to investors/creditors An entrepreneur bears full risk of his business An entrepreneur operates from outside

semi-dependent on the promoter/owner An intrapreneur neither raises the capital nor guarantees any return to suppliers of capital
An intrapreneur does

not fully risk of the business he develops & operates An intrapreneur is an organization man operating from within the

Advantage & Reason of intrapreneurship

Adapt quickly to changes in the macro environment
Diversity from the core business Conduct market experiments

Train new managers & leaders

Establish new channels of distribution Invest & profit from new venture creation Recognition Promotion Bonuses Leadership roles

BARRIERS OF INTRAPRENEURSHIP
Corporate bureaucracy [govt. through officials] Resistance [opposition] to change. Absence of internal venture capitalists. No employee ownership less commitment

INDIA AND INTRAPRENEURSHIP

In the present century, Indian corporate have entered the global market on the large scale. The IT industry took the lead in this exercise. This industry has exhibited entrepreneurship to the point that it is a role model for the other industries mostly run on management style.

Innovation at every level and of every kind can be seen in IT industry. Traditionally, Indian economy supported entrepreneurship. The Indian mindset has cultural advantage, which is evident from the following. Artisans system was a well known practice in India. Generation after generation ,the artisans developed their profession and made it richer in skills and knowledge by continuously innovating, experimenting and expanding.

DIFFRENCE B/W ENTREPRENEURSHIP & INTRAPRENEURSHIP

An entrepreneur is an independent businessman.

An entrepreneur bear the fully risk of his business.

An intrapreneur is semi dependent on the promoters/owners of the corporation. An intrapreneurs does not fully bear the risk of the business, he develops and operate.

An entrepreneur operates from outside.

An intrapreneur is an organisation man operating form within organisation. An intrapreneur neither raises the capital nor guarantees any returns to the suppliers of capital

An entrepreneur himself raises the necessary capital from various sources & guarantees the return to investors and creditors.

INTRAPRENEURSHIP ENVIORNMENT
New ideas encouraged. Trial and error encouraged. Resources available and accessible.

Long time horizon [experience].

Appropriate reward system.

Sponsors [surety] and champions available.

Support to top management.

CONCLUSION
Intrapreneurship is important for the economic development of an organisation because it:

i. Increases employee productivity and motivation.

ii. Increases the speed and cost effectiveness of operations and business services. iii. Promotes effective teamwork.

Continue
iv. Organizations employing intrapreneurial strategies have a competitive edge, which also boosts economic development.
v. Intrapreneurial behaviors is most likely to occur in organizations that encourage it.

vi. The key to intrapreneurism is organizational flexibility.

Continue
The costs of failure too high, and the rewards of
success are too low. Inertia caused by established systems that no-one is willing to change. Organizational hierarchies are what create the need to ask for permission the deeper the hierarchy, that harder it is to get permission for anything new.

Barrier of Intrapreneurship
Corporate bureaucracy
Internal product competition

Competing demands for resources

Resistance to change

Absence of internal venture capitalists for guidance

employees lack of ownership reduces commitment

Corporate environment not as free to creative people as

Historical Evolution
The emergence of entrepreneurial class can be studied

under two headings : Theoretical perspective for the analysis of entrepreneurial growth in different societies. Entrepreneurial scene in India.

Theoretical Perspectives
The historical development of entrepreneurship in

different communities and societies was governed by various factors. This is discussed in the following way: 1. Impact of ethical value system of Entrepreneurial growth: First founder of this though is Max Weber , he said that the spirit of rapid industrial growth depends upon a rationalization technology, acquisition of money and its rational use for productivity and multiplication of money.

Impact of ethical values.

Robert kennedy and yale also held the view that

entrepreneurship developed rapidly in those societies where ethical values provided independent capacity of decision making. This tendency also existed in other communities like Hindu ,Jain and Juda. But it is not accepted universally.

Impact of Minority group morale on entrepreneurial growth

Hagen (1962)
Park (1950)and Stonequist (1937) have indicated that

technological innovation are caused more by the culturally marginal person than others. McClelland(1971) also held that jains were more commercialized because of their consciousness of minority group and superior group which motivated high degree of need achievement in them.

Impact of need for achievement motivation on entrepreneurial growth

McClelland found high correlation between need for

achievement and successful economic activities. Weber as economic rationality Hagen as increased creativity

Impact of exposure to new ideas and opportunities on entrepreneurial growth

Acc to Tripathi not religion, but exposure to new

ideas and values was the real factor which led Paris and Hindu entrepreneurs to manufacturing activities.

Impact of regional industrial climate on the growth of entrepreneurship

Many studies have pointed out that Gujarati and

Marwari Vaisyas had dominated, after parsian businessmen, the reason for their success were seen as religious values and certain group characteristics. Pandit (1957) challenged this thesis and held that the real reason is favorable industrial climate.

Emergence of entrepreneurial class in India

A brief historical sketch: ES was found among the

artisans in the cities like Banaras, Allahabad , Gaya, Puri and Mizapur. Entrepreneur migrated to various countries such as Burma,Malaysia,Singapore and Kenya with the object of trading. Developed trade relation with china and Hong-Kong but India grow slowly due to some reason:

Emergence of entrepreneurial class in India

Lack of capital
Lack of political unity Network of custom barriers

Existence of innumerable systems of currency

Regional markets Taxation policies Low prestige of businessmen

Emergence of entrepreneurial class in India

Manufacturing entrepreneurship was emerged in India

with the arrival of East India Company. The Agency House also contributed towards Indian entrepreneurial growth in the last decade of the 18th century in Calcutta, Mumbai and Chennai. These houses entered business, trade, banking and steam shipping after east India company lost its monopoly in 1813.

Emergence of entrepreneurial class in India

These houses promoted other entrepreneurial

activities like indigo, leather manufacturing and steel making. They introduced new methods of production, new sources of raw materials and new markets and products. The Indian Agency Houses controlled the companies under them with a view to obtaining maximum profit.

Emergence of entrepreneurial class in India

Entrepreneurship was also initiated by the British

people as far as plantation of tea, coffee etc, were concerned. They were not interested in cotton textile and steel. The modern factory was introduced in India from 1850. Out of 96 mills, existing in 1915, 41 were built by Parsis, 23 by Hindus,10 by Muslims and 22 by British citizens.

Emergence of entrepreneurial class in India

Parsis took leadership not only in textile but also in

iron an steel. Brahmins also entered manufacturing activities.

Emergence of entrepreneurial class in India-Second phase

Second phase began during and after the first world

war. During this period, cement and sugar industries made fast progress. Marwaris were spread almost all over India. The innovating entrepreneurship was not properly emerged but there were three major effects of rapid industrial growth:

Three major effects:

(A) A few entrepreneurs belonging to particular social

like parsis and vaisyas dominated Indian industrial scene. (B) Industrial growth was localized in a few industrial centers like Mumbai , Ahmadabad Kolkata and Kanpur. (C) Only those industries grew fast which met the needs of the war. With the result the over all industrial growth was restricted.

Three measures.
After the Independence, the govt of India tried to

promote balanced growth of industries through mixed economy. To achieve this purpose, three measures were taken: To encourage a proper distribution of income among various sectors. To promote industrialization by spreading entrepreneurship. To spread entrepreneurship to a large number of people having industrial potential.

Emergence of entrepreneurial class in India

To achieve these objectives , the government promoted

the growth of SSI units in cities, towns and villages. Five years plans the government started to provided capital, technical, markets and land to potential entrepreneurs. In India the modern entrepreneurship has reached the present position after passing through the various changes of trade, commerce and industrialisaation.

Some peculiarities of Indian entrepreneurship

The entrepreneurial activity was mostly undertaken

by trading and financial classes. The beginning of the 20th century ,the two regional communities of industrialists-the marwaries and chattiars. The spirit of enterprise was found in few castes in India. Like the chattis,Hindu,Jain and Muslim.

Some peculiarities of Indian entrepreneurship

Parsis and Gujarati trading castes became the

wealthier Indian communities by the middle of the 19th century. Before independence, the state had adopted a lukewarm attitude towards Indian industrial development. The history of entrepreneurship in India is the history of a few families.

Some peculiarities of Indian entrepreneurship

In the present circumstances of increasing

unemployment a new type of forced entrepreneurship has emerged to which ambitious and educated young people were lured. Usually the entrepreneur trend is to established the concern which can be easily accommodated by available resources whether the demand exists or not.

Entrepreneurship and economic development

Increasing income and per capita
Bringing change in structure of business and society Wealth creation and distribution

New products, new services and new business

Production evolution process Knowledge and social need filling Innovation

Entrepreneurship and economic development

Generation of technologies
User of resources Act as social stimulant for growth

A moral booster
Role model

Entrepreneurship and economic development

Acc to George Barnard All progress depends upon the

entrepreneur, who creates sustainable growth for healthy society. Acc to J.B.Say the entrepreneurs function is to combine the productive factors, to bring them together. Carrying out of new combination of productive factors is called enterprise which, in fact, is fundamental phenomenon of economic development. Acc to McClelland the entrepreneurial potential is the psychological factor which engenders economic growth and decline.

Role play by an entrepreneur in economic development

Central figure of economic development
Pivot of socio-Economic change Indispensable Ingredient

From managerial to an entrepreneurial economy.

Role of entrepreneurship under various economic systems

Mixed Economy : co-existence of public & private

sectors.(Public interest is supreme) Socialism: Govt act as an entrepreneur (social Motive ) Capitalism : private entrepreneurs (profit Motive) Developing Economy Developed Economy

Role of entrepreneurship in various economic systems

ME SO
GOVT INTERFERENCE( WELFARE OF Community)

ROE

CA
MARKET MECHANISM (LAISSEZ FARE)

DE

Role of entrepreneur in economic development

Organizer of resources
Risk-taker Creator and Innovator

Optimum use of Resources

Employment creator Captain of industry Kingpin of development Agent of change

Role of entrepreneur in economic development

Business leader
Contribute to better quality of life Strategists

High achievement motivation

All round economic development Social betterment Productivity activity

Check Your Progress

Match the entrepreneur and his enterprise

from the following words, which are all jumbled up Wipro, Ambani, Patel, Azimji Premji, credit card, Reliance, Nirma, HDFC. --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Check your progress

Name two states each of India, which are highly

developed and which are poorly developed in spite of being endowed with vast natural resources. --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Check your progress

List some unexpected event/change in government

policy etc that can provide business opportunities. -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Entrepreneurs Vs Managers
Entrepreneur
An entrepreneur is involved

Manager
A manager with running the

with the start-up process An entrepreneur assumes financial, material and psychological risks An entrepreneur is driven by perception of opportunity

business over a long period of time A manager does not have to bear risks A manager by the resources he currently possesses

Entrepreneur Vs Manager
Entrepreneur
An entrepreneur initiates

Manager
A manager follows rules &

change An entrepreneur is his own boss An entrepreneur gets uncertain rewards

procedures A manager is a hired employee A manager gets fixed rewards and salary

Conclusion
An entrepreneur starts a venture then a manager takes

over to organize and co-ordinate continuous production. An entrepreneur is being enterprising as long as he starts something new then the routine day-to-day management of the business is passed on to the manager.

Conclusion
Peter Drucker claims that the process of

entrepreneurship is directing the use of resources to progressive activities rather than for administrative efficiencies". This really clarifies the role of an entrepreneur from that of a manager. Please note that in most small businesses the entrepreneur who starts the venture also has to perform the role of a manager in nurturing it and making it grow and managers frequently have to think of new ways to capture markets, face competition etc.

Types of entrepreneur
On the basis of stages of economic development.
1.

Clarence Danhof classifies entrepreneurs into four types: Innovative Imitative or adoptive Fabian Drone

Types of entrepreneur
On the basis of attitude and knowledge: Auther H Cole

Empirical- He hardly introduces anything revolutionary .He follows the policy of rule of thumb. Rational : He introduce changes which changes which look more revolutionary. Cognitive : He introduces changes that reflect complete break from the present situations.

Types of Entrepreneur
On the basis of type of business occupation:
Business entrepreneur Trading entrepreneur

Industrial entrepreneur
Corporate entrepreneur Agricultural entrepreneur

Types of entrepreneur
On the basis of use of technology:
Technical Non-Technical

Professional

Types of Entrepreneurship
On the basis of Capital Ownership : Private, Public or

state, Joint, Co- operative. On the basis of Location : Centralized and Decentralized. On the basis of attitudes towards changes and development : Traditional and Modern.

Types of entrepreneur
Small scale resources
Large scale - some other types of entrepreneurs:

Pure entrepreneur He is motivated by psychological

and economic rewards. Induced entrepreneur He is take up an entrepreneurial task due to the policy measures of the government.

Types of entrepreneur
Motivated entrepreneurs
Growth entrepreneurs Super- Growth entrepreneurs

First- Generation entrepreneurs

Modern entrepreneurs Copreneurs

Entrepreneurial Development
Entrepreneurial development plays an important role

in industrial production, employment generation and export.

Need and Importance of entrepreneurial development

Economic growth
Balanced regional development Eliminates poverty and unemployment

Optimum use of local resources

Solves industrial problems Defuse social tension Development of backward and tribal areas Improve standard of living Fulfillments of dreams

The process of entrepreneurial development

Entrepreneurial development process is one of the

areas of education which is not given as much importance as it deserves.

Need and importance of governments role in entrepreneurial development

To encourage entrepreneurs to undertake new

ventures. To develop their units in backward areas. To promote balanced regional development To encourage first generation entrepreneurs to work for industrial development of the country.

Need and importance of governments role in entrepreneurial development

To improve the competitive strength of entrepreneurs

to face competitive environment of the industry. To remove impediment and economic constraint in the way of entrepreneurial development. To create motivational force to improve productivity of entrepreneurs.

Need and importance of governments role in entrepreneurial development

To initiate expansion and modernization programme.
To accelerate the process of industrialization. To build infrastructural facilities for setting up units.

Government Incentives
Investment subsidy
Export/import subsidies Research and development subsidy

Tax subsidy
Subsidy relating to resources Capital subsidy scheme for technology up gradation. Excise Duty Exemption

Government schemes for infrastructural facilities

Industrial estates programme
Integrated infrastructural development scheme Small industry cluster

Role of training facilities

General principles of entrepreneurship
Motivational training Technical knowledge

Managerial skills
Project formulation Structural arrangement Market survey Support systems and procedures Factory visits and in plant training