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KOMAL

DEPARTMENT OF MANAGEMENT (USMS)


EIBM

UNIT- 1

Meaning an Entrepreneur

Before the concept of entrepreneurship is explored, it is important to, first, understand the
meaning of ‘entrepreneur’ & also know who can be an entrepreneur. An entrepreneur is
someone who exercises initiative by organizing a venture to take benefit of an opportunity
and, as the decision maker, decides what, how, and how much of a good or service will be
produced. An entrepreneur supplies risk capital as a risk taker, and monitors and controls the
business activities. The entrepreneur is usually a sole proprietor, a partner, or the one who
owns the majority of shares in an incorporated venture. If one desires to be an entrepreneur,
the given equation is what describes, what an entrepreneur actually is

Entrepreneur + Capital = Products + Customers = Business.

Definitions

Let us now consider some definitions to understand who an entrepreneur is:

(i) According to Oxford Dictionary an entrepreneur is “A person who sets up a business


or businesses, taking on financial risks in the hope of profit”.

(ii) According to the International Encyclopaedia, an entrepreneur is “An individual who


bears the risk of operating a business in the face of uncertainty about the future conditions”.

(iii) Schumpeter’s Definition – The entrepreneur, in an advanced economy is an individual


who introduces something new in the economy – a method of production not yet tested by
experience in the branch of manufacturing, a product with which consumers are not yet
familiar, a new source of raw material or of new markets and the like”.

(iv) Adam Smith’s definition – “The entrepreneur is an individual, who forms an


organization for commercial purpose. She/he is proprietary capitalist, a supplier of capital and
at the same time a manager who intervenes between the labour and the
consumer. “Entrepreneur is an employer, master, merchant but explicitly considered as
a capitalist”.

(v) Peter F. Drucker’s Views on Entrepreneur – “An entrepreneur is the one who always
searches for change, responds to it and exploits it as an opportunity. Innovation is the specific
tool of entrepreneurs, the means by which they exploit changes as an opportunity for a
different business or different service”.

(vi) In the 20th century the theorist Arthur H. Cole defined an entrepreneur as
an ‘organization builder’.
History of the term ‘Entrepreneur’

The term entrepreneur is a French word, and is derived from the French word
“enterprendre”. It means “to undertake”. It is commonly used to describe an individual
who organizes and operates a business or businesses, taking on financial risk to do so.

Around 1700 A.D. the term was used for architects and contractor of public works. In
many countries, the term entrepreneur is often associated with a person who starts his/her
own new business.

Characteristics/Qualities of an Entrepreneur

Entrepreneurs have many of the same character traits as leaders, similar to the Great Man
Theory of Leadership. Entrepreneurs possess several qualities, which according to
Napoleon are 90 attributes. Some of those have been listed below.

Believer in
Independent Opportunity Systematic
Information seeker quality and
& achiever grabber planner
efficiency

Optimistic Keen learners Urge to build Initiative Persistent

Aggressive Dynamic and


Risk taker Goal setter Hard working
catalyst visionary

Well versed in
Persuasive Independent High IQ, EQ Go – getter &
managerial skill
and and self- and SQ Never say die
and strong team
networker confident levels* spirit
builder

*IQ- Intelligence Quotient, EQ -Emotional Quotient, SQ – Spiritual Quotient

An entrepreneur must possess a combination of all the three, in order to be successful.

However, there are some negative characteristics as well, some of which have also been
listed below :

Cunning Opportunistic Unsentimental Ruthless Selfish


If you identify some of or all of these traits in your SWOT analysis, consider yourself
to be an entrepreneur in making

Types of Entrepreneurs

Depending upon the level of willingness to create innovative ideas, there can be the following
types of entrepreneurs:

(i) Innovative Entrepreneurs – These entrepreneurs have the ability to think newer, better
and more economical ideas of business organisation and management. They are the business
leaders and contributors to the economic development of a country. Inventions like the
introduction of a small car ‘Nano’ by Ratan Tata, organised retailing by Kishore Biyani,
making mobile phones available to the common man by Anil Ambani are the works of
innovative entrepreneurs.

(ii) Imitating Entrepreneurs – These entrepreneurs are people who follow the path shown
by innovative entrepreneurs. They imitate innovative entrepreneurs because the environment
in which they operate is such that it does not permit them to have creative and innovative
ideas on their own. In our country also, a large number of such entrepreneurs are found in
every field of business activity. Development of small shopping complexes is the work of
imitating entrepreneurs. All the small car manufacturers now are the imitating entrepreneurs.

(iii) Fabian Entrepreneurs – Fabian entrepreneurs are those individuals who do not show
initiative in visualising and implementing new ideas and innovations. On the contrary, they
like to wait for some development, which would motivate them to initiate unless there is an
imminent threat to their very existence.

Meaning of ‘Fabian’- He/she is ‘a person seeking victory by delay rather


than by a decisive battle’ & ‘Drone’ is ‘a person who lives on the labour of
others’

(iv) Drone Entrepreneurs – Drone entrepreneurs are those individuals who are satisfied with
the existing mode and speed of business activity and show no inclination in gaining market
leadership. In other words, drone entrepreneurs are ‘die-hard conservatives’ and even ready
to suffer the loss of business.

(v) Social Entrepreneurs – Social entrepreneurs drive social innovation and transformation
in various fields including education, health, human rights, workers’ rights, environment
and enterprise development. Dr. Mohammed Yunus of Bangladesh who started Gramin
Bank is a case of social entrepreneur.
(vi) Agricultural Entrepreneur – The entrepreneurs who undertake agricultural pursuits are
called Agricultural Entrepreneurs. They cover a wide spectrum of agricultural activities like
cultivation, marketing of agricultural produce, irrigation, mechanization and technology.

(vii) Trading Entrepreneur – As the name itself suggests, the trading entrepreneur
undertakes the trading activities. He/she procures the finished products from the
manufacturers and sells these to the customers directly or through a retailer. These serve as
the middlemen as wholesalers, dealers, and retailers between the manufacturers and
customers.

(viii) Manufacturing Entrepreneur – The manufacturing entrepreneurs manufacture


products. They identify the needs of the customers and, then, explore the resources and
technology to be used to manufacture the products to satisfy the customers’ needs.

(ix) Women Entrepreneurs – Women entrepreneurship is defined as the enterprises owned


and controlled by a woman/women having a minimum financial stake of 51 per cent of the
capital and giving at least 51 per cent of employment generated in the enterprises to
women.

(x) Inventors & Challenger Entrepreneurs – Inventor entrepreneurs with their competence
and inventiveness invent new products. Their basic interest lies in research and innovative
activities & Challenger entrepreneurs plunge into industry because of the challenges it
presents. When one challenge seems to be met, they begin to look for new challenges.

(xi) Life-Timer Entrepreneurs – These entrepreneurs take business as an integral part to


their life. Usually, the family enterprise and businesses which mainly depend on exercise of
personal skill fall in this type/category of entrepreneurs.

Skills of an entrepreneur

1. Business Management Skills

Business management skills are essential for entrepreneurs to effectively plan, organize,
direct, and control the resources of an organization. These skills can build credibility,
improve efficiency, manage risks, implement effective strategies, create a positive company
culture, and grow a business.

Business management skills include:

 Leadership
 Strategic thinking
 Budget management
 Business acumen
 Communication
2. Communication and Listening

Communication skills allow individuals to express thoughts, ideas, and feelings clearly
through speaking, writing, and other forms of expression. Listening skills provide the ability
to understand and retain information and respond appropriately. Both communication and
listening are essential entrepreneurship skills that can make a difference in how you run your
business as they help you to build trust, maintain relationships, resolve conflicts, understand
needs and perspectives, and make informed decisions.

Communication and listening skills include:

 Written communication
 Non-verbal communication
 Stress management
 Active listening
 Emotion control
3. Critical and Creative Thinking Skills

Strong critical and creative thinking skills are essential for entrepreneurs to build and expand
their businesses. Critical thinking allows you to objectively analyze information using the
evidence to make informed decisions and solve problems. Creative thinking provides a way
to look at issues from various angles, consider alternative perspectives, and come up with
original ideas.

Critical and creative thinking skills include:

 Analysis
 Brainstorming
 Visualization
 Evaluation
 Research
4. Strategic Thinking and Planning Skills

Strategic thinking and planning skills allow entrepreneurs to analyze information, adapt,
manage projects, solve problems, and make informed decisions. These entrepreneurship
skills are vital in helping leaders overcome challenges and ensure efficient allotment of
resources and achievement of goals.

Strategic thinking and planning skills include:

 Analysis
 Implementation
 Flexibility
 Attention to detail
 Assertiveness
5. Branding, Marketing, and Networking Skills

In today’s competitive business environment, branding, marketing, and networking skills are
essential for scaling the business and boosting opportunities. These skills enable
entrepreneurs to promote and sell products or services. Branding creates a unique and
memorable image of a product, service, or organization, and marketing promotes them to
target consumers. Networking builds relationships and allows individuals to connect with
potential customers, partners, suppliers, or colleagues.
Branding, marketing, and networking skills include:

 Collaboration
 Communication
 Interpersonal skills
 Creativity
 Collaboration
6. Entrepreneurial Skills in the Workplace

The skills in the workplace refer to qualities that enable individuals to effectively create and
manage their businesses, as well as drive innovation and growth within organizations.

Entrepreneurial skills in the workplace include:

 Time management
 Finance skills
 Sales
 Adaptability
 Problem-solving
7. Teamwork and Leadership Skills

Teamwork and leadership are highly critical entrepreneurship skills that foster a positive and
collaborative organizational culture, leading to increased employee satisfaction and improved
performance. These qualities can enable leaders to effectively inspire, motivate, work in
teams, and lead the company toward success.

Teamwork and leadership skills include:

 Communication
 Emotional intelligence
 Empathy
 Delegation
 Conflict resolution
8. Time Management and Organizational Skills

Great leaders should know how to delegate and prioritize tasks, manage their time and
resources, and maintain a well-structured and efficient work environment. Effective time
management and organization skills can enable you to achieve goals, manage stress, maintain
a healthy work-life balance, and improve well-being and satisfaction.

Time management and organizational skills include:

 Prioritizing
 Goal setting
 Multi-tasking
 Decision making
 Collaboration
9. Sales Skills

Sales skills are vital for salespeople and valuable for entrepreneurs, as they need to know how
to sell their businesses to potential customers and investors. Developing sales skills can help
entrepreneurs make sales, pitch ideas, negotiate, and create great relationships with their
customers, investors, and stakeholders to build a strong business.

Sales skills include:

 Business acumen
 Negotiation
 Relationship-building
 Data analysis
 Social selling
10. Stress Management Skills

Leading a business can take a toll on an entrepreneur’s well-being. They need to know how
to efficiently manage and cope with stress for themselves, their employees, and their
business. Stress management skills allow leaders to maintain good physical and mental
health, enhance personal and professional relationships, and improve the overall quality of
life.

Stress management skills include:

 Meditation
 Positive thinking
 Mindfulness
 Sleep hygiene
 Exercise
How to Develop Entrepreneurial Skills

Here are some ways to develop your entrepreneurship skills:

Define goals: Establish your business objectives, strengths, weaknesses, and what
you want to achieve
 Learn: Podcasts, books, and seminars can be great sources of information to enhance
your skills
 Take online courses: Online courses are an excellent way to boost the skills you
want to develop
 Look for a mentor: Mentorship can make a significant impact on your life and
career; seek mentorship from successful leaders to enhance your skills
 Work hard: Develop a strong work ethic and be consistent in your efforts to grow
 Be adaptable: Stay open to change and embrace new ideas and opportunities as they
arise
 Foster a growth mindset: Focus on continuous learning and seek out new
opportunities to develop your skills
Examples of Entrepreneurial Skills

Here are a few examples of entrepreneurial skills:


 Mentorship
 Reliability
 Responsibility
 Strategic thinking
 Delegation
 Risk-taking
 Empathy
 Networking
 Creativity
 Innovation
 Problem-solving
 Flexibility
 Conflict resolution
 Financial skills
 Customer service

Function of an entrepreneur
1.Innovation: Innovation is one of the most important functions of an entrepreneur according
to Schumpeter. An entrepreneur uses information, knowledge and intuition to come up with
new products, new methods of reducing costs of a product, improvement in design or
function of a product, discovering new markets or new ways of organization of industry.
Through innovation, an entrepreneur converts a material into a resource or combines existing
resources into new and more productive configurations. It is the creativity of an entrepreneur
that results in invention [creation of new knowledge] and innovation [application of
knowledge to create new products, services or processes. Systematic innovation means
monitoring the following for innovative opportunity:

i. The unexpected success or failure or any unexpected outside event, (e.g. when the IT
bubble burst the ITES sector started growing.)

ii. Innovation based on process need [e.g. plate based cameras, film based cameras, digital
cameras]

iii. Changes in industry and market structure [e.g. video cassette VCD, DVD, Blue ray disc]

iv. Demographics changes (e.g. increasing number of working women and nuclear families in
most metropolitan cities)

v. New knowledge (e.g. Pentium chip)

2. Risk and uncertainty bearing: According to Hozelist an entrepreneur performs the


function of risk and uncertainty bearing. Every decision pertaining to development of new
products, adapting new technologies, opening up new markets involves risk. Decision-
making in an environment of uncertainty requires anticipation of risk. Profit is said to be the
reward for anticipating and taking such risks. However, itis pertinent to mention that the
entrepreneur is not a gambler, he only takes calculated risks. An entrepreneur develops the art
of decision-making under conditions of uncertainty as a matter of survival. and products

3. Organization building: An entrepreneur has to organize men, material and other


resources. He has to perform the functions of planning, co-ordination and control. He has to
use his leadership qualities to build a team, generate resources and solve problems. With his
organizational skills an entrepreneur builds an enterprise from scratch, nurtures it and makes
it grow. His vision sows the seeds for a sound and vibrant organization and synergies are
built in the enterprise.

According to Kilby in a developing country even the imitator entrepreneurs are very
important and the entrepreneurial role encompasses the following:

i. Perception of market opportunities

ii. Gaining command over scarce resources

iii. Purchasing inputs

iv. Marketing the products

v. Dealing with bureaucrats

vi. Managing human relations within the firm

vii. Managing customer and supplier relations

viii. Managing finance

ix. Managing production

x. Acquiring and overseeing assembly of thefactory

xi. Industrial engineering

xii. Upgrading process and product

xiii. Introducing new production techniques

In brief

1. Perceive opportunity of going for a profitableinvestment.


2. Project Planning.
3. Explores prospects of starting such a venture.
4. Obtain various required licenses.
5. Arranges for initial capital.
6. Promises to meet shortfall in capital if any.
7. Provides personal guaranty to financialinstitutions.8. Supplies technical know how.

Entrepreneurship
Entrepreneurship is the ability and readiness to develop, organize and run a business
enterprise, along with any of its uncertainties in order to make a profit. The most prominent
example of entrepreneurship is the starting of new businesses.

In economics, entrepreneurship connected with land, labour, natural resources and capital can
generate a profit. The entrepreneurial vision is defined by discovery and risk-taking and is an
indispensable part of a nation’s capacity to succeed in an ever-changing and more
competitive global marketplace.

It is classified into the following types:

1. Small Business Entrepreneurship-

These businesses are a hairdresser, grocery store, travel agent, consultant, carpenter, plumber,
electrician, etc. These people run or own their own business and hire family members or local
employee. For them, the profit would be able to feed their family and not making 100 million
business or taking over an industry. They fund their business by taking small business loans
or loans from friends and family.

2. Scalable Startup Entrepreneurship-

This start-up entrepreneur starts a business knowing that their vision can change the world.
They attract investors who think and encourage people who think out of the box. The
research focuses on a scalable business and experimental models, so, they hire the best and
the brightest employees. They require more venture capital to fuel and back their project or
business.

3. Large Company Entrepreneurship-

These huge companies have defined life-cycle. Most of these companies grow and sustain by
offering new and innovative products that revolve around their main products. The change in
technology, customer preferences, new competition, etc., build pressure for large companies
to create an innovative product and sell it to the new set of customers in the new market. To
cope with the rapid technological changes, the existing organisations either buy innovation
enterprises or attempt to construct the product internally.

4. Social Entrepreneurship-

This type of entrepreneurship focuses on producing product and services that resolve social
needs and problems. Their only motto and goal is to work for society and not make any
profits.
Characteristics of Entrepreneurship:
Not all entrepreneurs are successful; there are definite characteristics that make
entrepreneurship successful. A few of them are mentioned below:

 Ability to take a risk- Starting any new venture involves a considerable amount of
failure risk. Therefore, an entrepreneur needs to be courageous and able to evaluate
and take risks, which is an essential part of being an entrepreneur.
 Innovation- It should be highly innovative to generate new ideas, start a company
and earn profits out of it. Change can be the launching of a new product that is new to
the market or a process that does the same thing but in a more efficient and
economical way.
 Visionary and Leadership quality- To be successful, the entrepreneur should have a
clear vision of his new venture. However, to turn the idea into reality, a lot of
resources and employees are required. Here, leadership quality is paramount because
leaders impart and guide their employees towards the right path of success.
 Open-Minded- In a business, every circumstance can be an opportunity and used for
the benefit of a company. For example, Paytm recognised the gravity of
demonetization and acknowledged the need for online transactions would be more, so
it utilised the situation and expanded massively during this time.
 Flexible- An entrepreneur should be flexible and open to change according to the
situation. To be on the top, a businessperson should be equipped to embrace change in
a product and service, as and when needed.
 Know your Product-A company owner should know the product offerings and also
be aware of the latest trend in the market. It is essential to know if the available
product or service meets the demands of the current market, or whether it is time to
tweak it a little. Being able to be accountable and then alter as needed is a vital part of
entrepreneurship.

Importance of Entrepreneurship:

 Creation of Employment- Entrepreneurship generates employment. It provides an


entry-level job, required for gaining experience and training for unskilled workers.
 Innovation- It is the hub of innovation that provides new product ventures, market,
technology and quality of goods, etc., and increase the standard of living of people.
 Impact on Society and Community Development- A society becomes greater if the
employment base is large and diversified. It brings about changes in society and
promotes facilities like higher expenditure on education, better sanitation, fewer
slums, a higher level of homeownership. Therefore, entrepreneurship assists the
organisation towards a more stable and high quality of community life.
 Increase Standard of Living- Entrepreneurship helps to improve the standard of
living of a person by increasing the income. The standard of living means, increase in
the consumption of various goods and services by a household for a particular period.
 Supports research and development- New products and services need to be
researched and tested before launching in the market. Therefore, an entrepreneur also
dispenses finance for research and development with research institutions and
universities. This promotes research, general construction, and development in the
economy.

Difference between Management and Entrepreneurship

Parameters Management Entrepreneurship

Meaning Management makes the entire Entrepreneurship is defined as someone who has
ecosystem of a business organized the ability and desires to establish, administer, and
and structured succeed

Process The method includes surveys, The process includes surveys, planning, and
planning, and operating the business. operating the business.

Features Includes team management and international entrepreneurship, social


flexible organizations. entrepreneurship, business growth, and
entrepreneurial cognition, etc.

Discipline Management has a vast spectrum and Entrepreneurship is a single part of the
includes all business functions. management.

Difference between Entrepreneur and Intrapreneur

Parameters Entrepreneur Intrapreneur

Meaning Entrepreneur refers to a person who Intrapreneur refers to an employee of the


set up his own business with a new organization who is in charge of undertaking
idea or concept. innovations in product, service, process etc.

Approach Intuitive Restorative

Resources Uses own resources. Use resources provided by the company.


Capital Raised by him. Financed by the company.

Dependency Independent Dependent

Risk Borne by the entrepreneur himself. Taken by the company.

Works for Creating a leading position in the Change and renew the existing organizational
market. system and culture.

Difference between Entrepreneur and Entrepreneurship

Basis Entrepreneur Entrepreneurship

Entrepreneurship refers to the


An entrepreneur is someone process of creating and managing a
Meaning who takes the initiative to new business venture to achieve
create a new business venture. financial success and make a positive
impact on society.

Entrepreneurship involves the


Entrepreneurs make critical
process of making informed
decisions about their
Decision- decisions throughout the life of the
businesses. The decisions are
making business. It is mostly ongoing
focused on the initial creation
decision-making to ensure the long-
and growth of their business.
term success of the business.

Entrepreneurship has an impact on


Entrepreneurs have an impact
the economy by creating jobs,
on the market by creating new
generating wealth, and driving
products or services. Its impact
Impact innovation. It includes the broader
is focused on the creation of
impact of creating and managing a
their specific product or
successful business on the economy
service.
and society.

Entrepreneurs focus on Entrepreneurship involves creating a


growing their businesses business that can sustain growth over
through innovation and the long term. It includes the ongoing
Growth
expansion. Their main focus is management and maintenance
on the initial growth of their necessary to ensure that growth is
business. sustainable.

Ownership Entrepreneurs own and manage Entrepreneurship involves the


their businesses. They have a process of starting and managing a
Basis Entrepreneur Entrepreneurship

business, regardless of who owns it.


personal stake in the success of It is focused on the processes
their business. necessary to make a business
successful, regardless of who owns it.

Entrepreneurs take calculated Entrepreneurship involves assessing


risks to achieve their goals. and managing those risks throughout
There is a willingness to take the process of creating and managing
Risk-taking
risks. Risk-taking is an a business. It requires ongoing risk
essential element of creating a management to ensure the business’s
successful business. long-term success.

Entrepreneurs are known for


Entrepreneurship is focused on
their ability to innovate and
creating a business that can sustain
develop new products or
Innovation that innovation. It includes the
services. Their primary focus is
processes necessary to support
on developing new ideas and
innovation over the long term.
bringing them to market.

Entrepreneurs bear the Entrepreneurship involves various


responsibility for the success processes and activities involved in
or failure of their businesses. creating and managing a business. It
Responsibility
So, they have the ultimate includes broader responsibilities such
responsibility for their as financial management, marketing,
business. strategic planning, and leadership.

Entrepreneurs focus on
Entrepreneurship is focused on
identifying business
creating and managing a successful
opportunities and turning them
Focus business. It includes the long-term
into profitable ventures. They
management and growth of that
have a narrower focus on the
business.
initial creation of a business.

Entrepreneurs initiate and sustain the process of economic development


in the following ways:

1. Capital Formation:
Entrepreneurs mobilize the idle savings of the public through the issues of industrial
securities. Investment of public savings in industry results in productive utilization of
national resources. Rate of capital formation increases which is essential for rapid
economic growth. Thus, an entrepreneur is the creator of wealth.
2. Improvement in Per Capita Income:
Entrepreneurs locate and exploit opportunities. They convert the latent and idle resources
like land, labour and capital into national income and wealth in the form of goods and
services. They help to increase net national product and per capita income in the country,
which are important yardsticks for measuring economic growth.

3. Generation of Employment:
Entrepreneurs generate employment both directly and indirectly. Directly, self-
employment as an entrepreneur offers the best way for independent and honorable life.
Indirectly, by setting up large and small scale business units they offer jobs to millions.
Thus, entrepreneurship helps to reduce the unemployment problem in the country.

4. Balanced Regional Development:


Entrepreneurs in the public and private sectors help to remove regional disparities in
economic development. They set up industries in backward areas to avail various
concessions and subsidies offered by the central and state governments.

Public sector steel plants and private sector industries by Modis, Tatas, Birlas and others
have put the hitherto unknown places on the international map.

5. Improvement in Living Standards:


Entrepreneurs set up industries which remove scarcity of essential commodities and
introduce new products. Production of goods on mass scale and manufacture of
handicrafts, etc., in the small scale sector help to improve the standards of life of a
common man. These offer goods at lower costs and increase variety in consumption.

6. Economic Independence:
Entrepreneurship is essential for national self-reliance. Industrialists help to manufacture
indigenous substitutes of hitherto imported products thereby reducing dependence on
foreign countries. Businessmen also export goods and services on a large scale and
thereby earn the scarce foreign exchange for the country.

Such import substitution and export promotion help to ensure the economic
independence of the country without which political independence has little meaning.

7. Backward and Forward Linkages:


An entrepreneur initiates change which has a chain reaction. Setting up of an enterprise
has several backward and forward linkages. For example- the establishment of a steel
plant generates several ancillary units and expands the demand for iron ore, coal, etc.

These are backward linkages. By increasing the supply of steel, the plant facilitates the
growth of machine building, tube making, utensil manufacturing and such other units.

Entrepreneurs create an atmosphere of enthusiasm and convey a sense of purpose. They


give an organization its momentum. Entrepreneurial behavior is critical to the long term
vitality of every economy. The practice of entrepreneurship is as important to established
firms as it is to new ones.
Role of Entrepreneurs in Economic Development of India
Economic development essentially means a process of upward change where by the per
capita income of a country increases over a long period of time.

The economic history of the presently developed countries like America, Germany, and
Japan leads to support the fact that the economy is an effect for which entrepreneurship
is the cause. The crucial role played by the entrepreneurs in the development of the
western countries has made the people of under-developed countries too much conscious
of the significance of entrepreneurship for economic development.

Now people have begun to realise that for achieving the goal of economic development,
it is necessary to increase entrepreneurship both qualitatively and quantitatively in the
country. It is only active and enthusiastic entrepreneurs who fully explore the
potentialities of the country’s available resources land, tech., capital, material etc.

The role of entrepreneurship in economic development varies from economy to economy


depending upon its material resources, industrial climate and the responsiveness of the
political system to the entrepreneurial function. The entrepreneurs contribute more in
favourable opportunity conditions.

1. In underdeveloped/developing regions, due to lack of funds and skilled labour, the


atmosphere is less conducive for innovative entrepreneurs.

2. Under the conditions of paucity of funds and the problem of imperfect market, the
entrepreneurs are bound to launch their enterprises on a small scale. Also initiator
entrepreneurs are preferred in such regions. Thus, initiation of innovations introduced in
developed regions on a massive scale bring about rapid economic-development in
underdeveloped/developing regions.

3. Further India aims at decentralized industrial structure to reduce regional imbalances


in levels of economic development.

4. Generation of employment

5. Balanced regional development

6. Improvement in standard of living

7. Backward and forward linkages

8. Creator of wealth (securities, issues etc.).

Thus, small scale entrepreneurship in such industrial structure plays an important role to
achieve balanced regional development, generation /creator of wealth etc.

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