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ENTREPRENEUR DEVELOPMENT
1) Evolution of the concept of Entrepreneur
2) Distinction between Entrepreneur and a Manager
3) Characteristics of Entrepreneur
4) Functions of Entrepreneur
5) Types of Entrepreneur
6) Concept of Intrapreneur
7) Growth of Entrepreneurship in India
8) Role of Entrepreneurship in Economic development
INTRODUCTION : The word entrepreneur is derived from the French word ‘Enterprendre’ it means “to
undertake”
or go-between
• Entrepreneur is the person who brings together the factors of production and combines them into a
product
...

• Entrepreneur is an individual who takes risk and starts something new
...

Innovation is a specific tool of entrepreneurs, the mean by which they exploit change as an opportunity
for different
business or services, assuming the risk for the sake of profit
...
Entrepreneurship is the process of innovation in which entrepreneur takes
initiative
in an organized manner and plans successful performance
...

Entrepreneurship is concerned with vision
...
Entrepreneur is someone who undertakes an enterprise
...
Entrepreneurship most commonly manifests in
the form of
self-employment
...

Entrepreneurship is the process under which person should develop the ability, capability, and tendency
to
perform the following activities :
1
...
Manage a business effort which brings profit to the entrepreneur and the public
3
...

4
...
Manage & utilize the factors of production to bring economical development and enhance social
welfare
6
...

ENTERPRISE : A project or an activity undertaken or especially one that is important or difficult and that
require
energy or boldness to complete
...
Oxford English Dictionary ( in 1897 ) also
defined
an entrepreneur in similar words as “the director or a manager of a public musical institution, one who
‘gets-up’
entertainment, especially musical performance”
...
It was extended to cover civil engineering activities such as construction
and
fortification in the 17th century
...
In this way, the evolution of the concept of entrepreneur is considered over more
than four
centuries
...
These views are broadly
classified into
three group, namely, risk-bearer, organizer and innovator
...
Richard Cantillon, an Irish man Eesiding in France, was the first who introduced the term
‘entrepreneur’
and his unique risk-bearing function in economics in the early 18th century
...
He illustrated a farmer who pays out contractual incomes which are certain to
the
landlords and labourers and sells at prices that are ‘uncertain’
...
He, thus, draws a distinction between
ordinary risk
and uncertainty
...
On
the contrary, uncertainty is the risk which cannot be calculated
...
His definition
associates
entrepreneur with the functions of coordination, organization and supervision
...
By selling the product in the market, he pays interest on capital, rent on land and wages to
labourers and
what remains is his/her profit
...
These are:
1
...
Command over sufficient capital, and
3
...

(iii) Entrepreneur as an Innovator :
Joseph A
...
Schumpeter considered economic
development as a
discrete dynamic change brought by entrepreneur by instituting new combinations of production, i
...
,
innovations
...
The introduction of a new product in the market
...
The instituting of a new production technology which is not yet tested by experience in the branch of
manufacture
concerned
...
The opening of a new market into which the specific product has not previously entered
...
The discovery of a new source of supply of new material
...
The carrying out of the new form of organization of any industry by creating of a monopoly or
breaking up of it
...
An inventor is one who
discovers
new methods and new materials
...


Thus, an entrepreneur can be defined as a person who tries to create something new, organizes
production and
undertakes risks and handles economic uncertainty involved in enterprise
...
”
- J
...
Schumpeter
...
- Richard Cantillon
...
” - Dewing
...
Independence : Some entrepreneurs commence their own business because they do not like work
under
anyone and prefer to be their own boss
...

2
...
An entrepreneur should always be ready
to take
decisions under uncertainty but An entrepreneur is not a gambler and hence he should not assume high
risk
...

3
...

Most of
the successful entrepreneur work hard endlessly, especially in the beginning and the same become their
habit for
their whole life
...
Desire for high achievement : The achievement motivation is the most important characteristic of an
entrepreneur
...
In fact this achievement motivation helps
him to
overcome the obstacles, suppress anxieties, repair bad luck and work out plan for success
...
Highly optimistic : Successful entrepreneur is always optimistic about his future and he is never
disturbed by the
present problems he always expect a favourable situation for his business and hence he is able to run his
business
successfully in case of temporary hurdles
...


4
6
...
He
has the capacity to visualize the likely changes to take place in the market, customer, attitude,
technological
development, government policy etc
...
Good organizer : Various resources required for production are owned by different owners
...

8
...
They are always looking for new change in
the working
environment o help them in getting the job done in less time
...

9
...
They do not give up their effort even if they fail
...
Instead they take failure as learning experience and make more dedicated and
serious
effort on the next time
...
become successful
10
...

Team
result in synergy
...
Bringing people
together is
beginning, keeping people together is progress, and working with people is success
...
Leadership : The ability to lead and inspire other is called leadership
...
They should be able to encourage their staff to work better and
efficiently
...
But at the same time
he should
be strict when the work is not being done properly
...
Stress takers : Entrepreneurs are people who have the capability to work under pressure
...
They do not panic
and work
calmly under pressure, giving perfect output
...
Prudence : A successful entrepreneur must be prudent in all his dealing
...

14
...

DISTINCTION BETWEEN AN ENTREPRENEUR AND A MANAGER
Manager
The main motive of a manager is to render his services
in an enterprise already set up by someone else
...

A manager as a servant does not bear any risk involved
in the enterprise
...
Salary of a manager is
certain or fixed
...
He is a mere servent and not an innovator
...
He understands the venture
for his personal gratification
...

An entrepreneur being the owner of an enterprise
assumes all risks and uncertainty involved in running
the enterprise
...

An Entrepreneur himself thinks over what and how
to produce goods to meet the changing demands
of the customers
...

Points
1
...
Status
3
...
Rewards
5
...
Broadly, it refers to the selection of a
product and
identification of project
...
Generally, market study and environmental analysis tools
are
used for idea generation
...

2) Determination of Objectives: One of the main functions of the entrepreneur is to define the
objectives of the
business
...
Most appropriately, the entrepreneur
must specify
few things in a clear manner :
i) The business nature, and ii) The business type
...
e
...
This
helps the entrepreneur to focus on the business more effectively keeping in view the objectives
...
It is the function of the entrepreneur to
arrange the
sources of funds for the business
...

Entrepreneur must be aware of formalities and guidelines to be followed for raising funds
...
There are several government
schemes
also which are provided to the entrepreneurs such as Swarnajayanti Gram Swarozgar Yojana (SGSY),
Prime
Minister’s Rozgar Yojana (PMRY), Rural Employment Generation Programme (REGP), etc
...

4) Procurement of Raw Materials: The acquisition of quality raw materials is also one of the functions of
the
entrepreneur
...
This
helps the business to reduce their production cost and increase their profit-margins against competitors
...
Before the procurement of machineries,
entrepreneur must
consider following specifications:
6
...

On the contrary, a manager needs to posses
distinct qualifications in terms of sound knowledge
in management theory and practice
...

6) Market Research: Market research refers to process of gathering relevant information about
products,

customers and target markets
...

If an entrepreneur has to manufacture a product, he must have a detailed market analysis of the
product
...

7) Determination of Ownership: There are mainly four forms of ownership, i
...
, sole proprietorship,
partnership,
joint stock company, and cooperative society
...
The legal title of assets is obtained on the basis of ownership by the
entrepreneurs
...

During the recruitment procedure, an entrepreneur has to function the following activities:
i) Manpower forecasting
...

iii) Formulating scheme of compensation
...

9) Project Implementation: Entrepreneur has to prepare a detailed plan for execution of the project
...
It is the function of the entrepreneur to execute the process from conception to
commissioning
stage based on prepared agenda so as to evade extra cost, time and competition
...
The more
developed
the country is the more innovative, enthusiastic, realistic, and dynamic an entrepreneur should be
...
Innovative Entrepreneur : An innovative entrepreneur is one who introduces new goods, inaugurates
new
methods of production, discovers new market and reorganizes the enterprise
...

2
...
Imitative entrepreneurs do not innovate the changes themselves, they
only imitate
techniques and technology innovated by others
...

3
...
They imitate only when it becomes perfectly clear that
failures to
do so would result in a loss of the relative position in the enterprise
...
Drone Entrepreneurs : These are characterized by a refusal to adopt opportunities to make changes in
production
formulae even at the cost of severely reduced returns relative to other like producers
...
Solo Operators : These are the entrepreneurs who essentially work alone and, if needed at all, employ
a few
employees
...

6
...

It is important that all of them actively participate in the operations of the business
...

7
...
Their
basic
interest lies in research and innovative activities
...
Challengers : These are the entrepreneurs who plunge into industry because of the challenges it
presents
...

9
...
Hence, in order to reduce
risk
involved in setting up a new enterprise, they like to buy the ongoing one
...
Lifetimers : These entrepreneurs take business as an integral part to their life
...

INTRAPRENEUR
A new breed of entrepreneurs is coming in large industrial organisations
...

They
emerge from within the confines of an existing enterprise
...
The concept of intrapreneurship has become very popular in
developed
countries like America
...
Many of such intrapreneurs have become exceedingly successful in their
ventures
...
Such intrapreneurs breed to
the
innovative entrepreneurs who inaugurate new products
...
It can be traced down to the
Harappan culture of the Pre-Vedic era
...

The period when Aryan conquerors settled down in India by defeating non-Aryans can be seen as the
initial phase
of the emergence of entrepreneurship
...
This initiated the main
conflict of ancient
Indian society
...
They also took to the
division of
labour for new handicrafts, cattle breeding and land cultivation During the conquest of Aryans, such
occupations
were not present
...

2) Period II: Entrepreneuhjp in Pre-Independence Era before 1850 A
...
: Before independence, the main
activity of Indians was agriculture
...

This category of businessmen belonged to communities like Banjas (Hindu and Jam), Gujaratis,
Chheriars,
Parsis, etc
...
For
ease of transportation, most of these units were set up either near ports or river banks
...


ii) Village Industries: Village industries were established in clusters
...


British colonialism adversely influenced the Indian handicrafts which were regarded as world’s finest
...

Industrial entrepreneurship using factory system commenced in India with the introduction of railways
in
1840
...
Prior to this, a Nagar Brahmin by the name of R
...

A biased economic policy was adopted from the start by the British IOwards Indian entrepreneurs Due
to
this, the industrial entrepreneurship in India got seriously affected
...
When the railway
was
introduced in India in 1853, the chances of industrialisation boosted quite substantially
...
Over a period of time, a very conducive
environment
for investment in both manufacturing and trading was developed due to the collaborative efforts of
British and the
Indian mercantile class
...

In eastern India, Europeans were mainly involved in entrepreneurship and were mostly dealing in the
export of coal, tea, textile, jute, etc
...
This was the result of comparatively extended political independence and the
benefits which
were enjoyed by the West Indian communities
...

There was no elimination of Indian merchants from finance and trade once the commercial and political
activities were initiated by East India Company
...
As
a result, a fresh impetus was provided to the business community by way of different changes in the
economy
and fostering the imports of fmished products and the export of raw materials
...
The relationship between the East India Company and Parsis
strengthened
during this era
...
This
movement
was quite fruitful which motivated the people of India to engage in entrepreneurship
...

iii) Managing Agency System: After the period of war, some industrial activities were stimulated as a
result of the
protection policies of the Government
...
However, still a number of problems were being faced by the Indian
entrepreneurs despite
their increasing number and success in steel and cotton textiles
...

4) Period IV: Entrepreneurship in 1947 and Onwards — Post- Independence Period: After India’s
independence, a need for high- speed industrialisation was identified by the Government of India
...
N
...
R
...
Thomash Timberg identified the development of entrepreneurship with
reference

10
Marwaris, who was the top business community of India at that time
...

A mixed economic system involving both the private and public sector enterprises was adopted by India
...

There was a new dimension offered to Indian entrepreneurship which was initiated after the
introduction of
Industrial Policy Resolution of 1956 in which the main focus was on the high speed industrial jsatjon
which would
boost the socio-economjc environment of India
...

Some of the significant policy initiatives include the subsidies, incentives and various other inputs
provided at
subsidised rates for encouraging the small scale enterprises
...
Balanced Regional Development : The growth of industry and business leads to a lot of public benefits
like

transport facilities, health, education, entertainment, etc
...
A rapid development, when the new entrepreneur grow at a
faster rate, in
view of increasing competition in and around cities, they are forced to set-up their enterprises in the
smaller towns
away from big cities
...

2
...
The goods and services produced are for consumption within the country as well as to
meet the
demand of exports
...
The export demand also increases to meet the needs of growing imports due to various reasons
...
Thus,
entrepreneurship increases the national income
...
Bringing Change in Structure of Business and Society : New enterprise and new products change the
way
Relationship of Entrepreneurship with
Economic Development
Balanced Regional Development
Bringing Change in Structure of
Business and Society
Knowledge and Social Need Filling
Production Evolution Process
Better Standards of Living
New Products, New Services, and
Nes Business
Increase in National Income
Dispersal of Economic Power
Creating Innovation
Enhancing Welfare Amenities



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