Unit I

2 Marks

1. Who is an entrepreneur?

The people who create these businesses are called entrepreneurs. Entrepreneurship has been
described as the "capacity and willingness to develop, organize and manage a business venture
along with any of its risks in order to make a profit".

2. Define ENTREPRENEURSHIP.

‘A systematic innovation, which consists in the purposeful and organized searchfor changes,
and it is the systematic analysis of the opportunities such changes mightoffer for economic and
social innovation.’

-- Peter Drucker

3. Who is Fabian entrepreneur?

Fabian Entrepreneurs: They are the second generation Entrepreneur and they are very
skeptic about taking a step unless and until they are definite, it would be a loss, if not steps are
not taken in time. They only imitate if they see fit and have a clear and broad picture of things

4. Define Venture Capital.

Definition:

Startup companies with a potential to grow need a certain amount of investment. Wealthy
investors like to invest their capital in such businesses with a long-term growth perspective. This
capital is known as venture capital and the investors are called venture capitalists.

5. Who is international entrepreneur?

Global entrepreneurship is a trait or characteristic in our definition of a global leader.

Global entrepreneurs are professionals who use their global understanding and connections to
identify transnational and cross-cultural opportunities and turn them into new value-creating
initiative.

8 Marks

1. Explain on the growth of Entrepreneurship in India.

GROWTH OF ENTREPRENEURSHIP IN INDIA
The proper understanding of the growth of entrepreneurship of any country would evolve within the
context of the economic history of the particular country becomes the subject matter of this section. The
growth of entrepreneurship in India is, therefore, presented into two sections viz.
 • Entrepreneurship during Pre-Independence
• Entrepreneurship during Post-Independence
ENTREPRENEURSHIP DURING PRE-INDEPENDENCE
The evolution of the Indian entrepreneurship can be traced back to even as early as Rig-Veda, when metal
handicrafts existed in the society. This would bring the point home that handicrafts entrepreneurship in
India was as old as the human civilization itself, and was nurtured by the craftsman as a part of their duty
towards the society. Before India came into contact with west, people were organized in a particular type
of economic and social system of the village community. Then, the village community featured the
economic scene in India. The Indian towns were mostly religious and aloof from the general life of
country. The elaborated cast based diversion of workers consisted of farmers, artisans and religious
priests. The majority of the artisans were treated as village servants. Such compact system of village
community effectively protecting village artisans from the onslaughts of external competition was one of
the important contributing factors to the absence of localization of industry in ancient India.
ENTERPRENEURSHIP DURING POST- INDEPENDENCE
After taking a long sign of political relief in 1947, the Government of India tried to spell out the priorities
to devise a scheme for achieving balanced growth. For this purpose, the Government came forward with
the first Industrial Policy, 1948 which was revised from time to time." The Government in her various
industrial policy statements identified the responsibility of the State to promote, assist and develop
industries in the national interest. It also explicitly recognized the vital role of the private sector in
accelerating industrial development and, for this, enough field was reserved for the private sector. The
Government took three important measures in her industrial resolutions:-
(i) to maintain a proper distribution of economic power between private and public sector;
(ii) to encourage the tempo of industrialization by spreading entrepreneurship from the existing centers to
other cities, towns and villages, and
(iii) to disseminate the entrepreneurship acumen concentrated in a few dominant communities to a large
number of industrially potential people of varied social strata. To achieve these adumbrated objectives,
the Government accorded emphasis on the development of small-scale industries in the country.
Particularly since the Third Five Year Plan, the Government started to provide various incentives and
concessions in the form of capital, technical know-how, markets and land to the potential entrepreneurs to
establish industries in the industrially potential areas to remove the regional imbalances in development.
This was, indeed, a major step taken by the Government to initiate interested people of varied social strata
to enter the small-scale manufacturing field. Several institutions like Directorate of Industries, Financial
Corporations, Small-Scale Industries Corporations and Small Industries Service Institute were also
established by the Government to facilitate the new entrepreneurs in setting up their enterprises
 2. Explain the role of Entrepreneur in Economic development.

1. Wealth Creation and Sharing: By establishing the business entity, entrepreneurs invest their own resources and
attract capital (in the form of debt, equity, etc.) from investors, lenders and the public. This mobilizes public wealth
and allows people to benefit from the success of entrepreneurs and growing businesses. This kind of pooled capital
that results in wealth creation and distribution is one of the basic imperatives and goals of economic development.

2. Create Jobs: Entrepreneurs are by nature and definition job creators, as opposed to job seekers. The simple
translation is that when you become an entrepreneur, there is one less job seeker in the economy, and then you
provide employment for multiple other job seekers. This kind of job creation by new and existing businesses is again
is one of the basic goals of economic development. This is why the Govt. of India has launched initiatives such
as StartupIndia to promote and support new startups, and also others like the Make in India initiative to attract
foreign companies and their FDI into the Indian economy. All this in turn creates a lot of job opportunities, and is
helping in augmenting our standards to a global level.

3. Balanced Regional Development: Entrepreneurs setting up new businesses and industrial units help with
regional development by locating in less developed and backward areas. The growth of industries and business in
these areas leads to infrastructure improvements like better roads and rail links, airports, stable electricity and water
supply, schools, hospitals, shopping malls and other public and private services that would not otherwise be
available.

Every new business that locates in a less developed area will create both direct and indirect jobs, helping lift
regional economies in many different ways. The combined spending by all the new employees of the new businesses
and the supporting jobs in other businesses adds to the local and regional economic output. Both central and state
governments promote this kind of regional development by providing registered MSME businesses various benefits
and concessions.

4. GDP and Per Capita Income: India’s MSME sector, comprised of 36 million units that provide employment for
more than 80 million people, now accounts for over 37% of the country’s GDP. Each new addition to these 36
million units makes use of even more resources like land, labor and capital to develop products and services that add
to the national income, national product and per capita income of the country. This growth in GDP and per capita
income is again one of the essential goals of economic development.
 5. Standard of Living: Increase in the standard of living of people in a community is yet another key goal of
economic development. Entrepreneurs again play a key role in increasing the standard of living in a community.
They do this not just by creating jobs, but also by developing and adopting innovations that lead to improvements in
the quality of life of their employees, customers, and other stakeholders in the community. For example, automation
that reduces production costs and enables faster production will make a business unit more productive, while also
providing its customers with the same goods at lower prices.

6. Exports: Any growing business will eventually want to get started with exports to expand their business to
foreign markets. This is an important ingredient of economic development since it provides access to bigger
markets, and leads to currency inflows and access to the latest cutting-edge technologies and processes being used in
more developed foreign markets. Another key benefit is that this expansion that leads to more stable business
revenue during economic downturns in the local economy.

7. Community Development: Economic development doesn’t always translate into community development.
Community development requires infrastructure for education and training, healthcare, and other public services.
For example, you need highly educated and skilled workers in a community to attract new businesses. If there are
educational institutions, technical training schools and internship opportunities, that will help build the pool of
educated and skilled workers.

Explain the concept of entrepreneurship.

Concept of Entrepreneur
Basically an entrepreneur is a person responsible for setting up a business or an enterprise. He
has the initiative , skill for innovation and who looks for high achievements. He is a catalytic
agent of change and works for the good of people . He puts up new green field projects that
create wealth, open up many employment opportunities and leads to growth of other sectors .
Discuss the qualities of an entrepreneur.
 Disciplined. These individuals are focused on making their businesses work, and
eliminate any hindrances or distractions to their goals. ...
 Confidence. ...
 Open Minded. ...
 Self Starter. ...
 Competitive. ...
 Creativity. ...
 Determination. ...
 Strong people skills.

Determine the differences between Entrepreneur and manager.

Explain the nature of Entrepreneur.

Nature & Characteristics of Entrepreneurship:

(1) Innovation: A businessman, who simply behaves in traditional ways, cannot be an entrepreneur. Innovation
involves problem solving and the entrepreneur is a problem solver. According to Schumpeter entrepreneurship is a
creative activity. An entrepreneur is basically an innovator who introduces something new in the economy.

(2) High Achievement: People having high need for achievement are more likely to succeed as entrepreneurs. The
achievement motive is, by assumption a relatively stable enduring characteristic of an individual. Achievement
motive can be increased by deliberate efforts. Various studies on psychological roots of entrepreneurship reveal the
presence of high achievement among successful entrepreneurs.

(3) Managerial Skill and Leadership: According to B.F. Hoselitz, managerial skills and leadership are the most
important facets of entrepreneurship. Financial skills are only of secondary importance. A person who is to become
an industrial entrepreneur must have more than the drive to earn profit. He must have the ability to lead and manage.
(4) Group Level Pattern: Entrepreneurial characteristics are found in clusters which may qualify themselves as
entrepreneurial groups. Entrepreneurial activity is generated by the particular family background, experience as a
member of certain groups and as a reflection of general values.

(5) Organisation Building: According to Harbison entrepreneurship implies the skill to build an organisation.
Organisation building ability is the most critical skill required for industrial development. This skill means the
ability to ‘multiply one self’ by effectively delegating responsibility to others.

(6) Gap Filling Function: The most significant feature of entrepreneurship is gap filling. It is the job of the
entrepreneur to fill the gap or to makeup the deficiencies which always exist in the knowledge above the production
function. Some inputs like motivation and leadership are vague and their output is indeterminate. An entrepreneur
has to Marshall all the inputs to realise the final product.

(7) Status Withdrawal: According to Hagen ‘creative innovation’ or change is the fundamental feature of
economic growth. An entrepreneur is a creative problem solver interested in things in practical and technological
realm. He feels a sense of increased pleasure when facing a problem and tolerates disorder without discomfort. In
traditional societies, position of authority was granted on the basis of status, rather than individual ability. Hagen
visualized an “innovative personality” in contrast to such authoritarian personality.

(8) A Function of Social, Political and Economic Structure: Entrepreneurs are not equally distributed in the
population. Minorities have provided most of the entrepreneurial talent but all the minorities are not important
sources of entrepreneurship. Entrepreneurial supply depends upon the four structure viz. limitation structure,
Demand structure, opportunity structure and labour structure. However entrepreneurship depends on rather specific
combinations of circumstances which are difficult to create and easy to destroy.

“Entrepreneurship is a process of giving birth to an enterprise”. - Discuss

Entrepreneurship refers to the functions performed by an entrepreneur in establishing an
enterprise. Just as management is regarded as what managers do, Entrepreneurship may be
regarded as what Entrepreneurs do. Thus, we can say that entrepreneurship is a process of
involving various actions to be undertaken to establish an enterprise. Entrepreneur's Who Built
Enterprise…
 Reliance Industries “For those who dare to dream, there is a whole World to Win” -
Dhirubhai Ambani
 Microsoft Corporation “Success is a lousy teacher. It seduces smart people into thinking
they can't lose.” - Bill Gates
 INFOSYS “Progress is often equal to the difference between mind and mindset.” Murthy
N. R. Narayana
 Biocon “I really believe that entrepreneurship is about being able to face failure,
manage failure and succeed after failing.” Shaw Kiran Mazumdar
 Berkshire Hathaway INC. “Someone's sitting in the shade today because someone
planted a tree a long time ago.” - Warren Buffett
 Apple INC. “Innovation distinguishes between a leader and a follower.” - Steve Jobs