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
