Entrepreneur &

Entrepreneurial
development

Prepared by,
Kushal Agarwal,
Amit Kumar,
Gaurav Seth
“Who is an Entrepreneur?”
An entrepreneur is a person who starts an
enterprise.
Peter Drucker defines an entrepreneur as one
who always searches for a change responds
to it and exploits it as an opportunity. An
entrepreneur innovates. Innovation is a
specific instrument of success available to
entrepreneur.
According to Schumpeter entrepreneurs are
innovators who use a process of shattering
the status quo of the existing products and
services, to set up new products, new
So we can say that an ENTREPRENEUR…..
Is a person who develops and owns his own
enterprise
Is a moderate risk taker and works under
uncertainty for achieving the goal.
Is innovative
Reflects strong urge to be independent.
Persistently tries to do something better.
Dissatisfied with routine activities.

So we can say that an ENTREPRENEUR Cont..
Prepared to withstand the hard life.
Determined but patient
Exhibits sense of leadership
Also exhibits sense of competitiveness
Takes personals responsibility
Is Oriented towards the future.
Tends to persist in the face to adversity
Converts a situation into opportunity.
 “What Makes Someone an
Entrepreneur?”
Creativity
Dedication
Determination
Flexibility
Leadership
Passion
Self-confidence
Smartness
Views on making of an Entrepreneur
Economists’ view
Sociologists’ view
Psychologists’ view
Managers’ view
Economists’ view
The economists view him as a fourth factor of
production along with land labor and capital. 
 1. Land.
 2. Labor.
 3. Capital.
 4. Entrepreneurship.


Economic incentives are the main motivators for

entrepreneurial activities.


Economic incentives include taxation policy,

industrial policy, sources of finance and raw
material, infrastructure availability, investment
and marketing opportunities.
Economists’ view Cont…..
Entrepreneurship and economic growth take place
when the economic conditions are favorable.


Mainstream economists view the supply of

entrepreneurship as highly elastic.

J.B. Say has stated that it is function of the
entrepreneur to rationally combined the forces of
production into a new producing organization


Kirzener viewed the entrepreneur as a

disequilibrating force. It is the alertness to
unnoticed opportunities which creates a tendency
of the ever-circular flow of equilibrium.
Economists’ view Cont…..
SCHUMPETER’S entrepreneur possess three
qualities:
An intuitional capacity to see things in a way
which afterwards proves to be true;
A kind of effort of will and mind to overcome
fixed habits of thinking; and
The capacity to overcome social opposition
against doing something new.
Sociologists’ view
The sociologists feel that certain communities and
cultures promote entrepreneurship like for
example in India we say that Gujaratis and
Sindhis are very enterprising.
Sociologists focused on theories that considered
the role of social norms and legitimacy as well as
social mobility in understanding the supply of
entrepreneurship in a society.
According to Peter Marris, to assemble or
reassemble from what is available, very concrete
kind of imagination, to see what others have
missed , sensitivity to business and social
environment, zest in industrial development and
entrepreneurial courage are the factors that
make an entrepreneur.
Sociologists’ view Cont…..
 According to the sociologists the presence
or absence of certain social baits motivate or
de-motivate individuals from taking up
entrepreneurial ventures. some of the
important ones are:
Family background
Religious background
The age of entry to entrepreneurship
Occupational background
Psychologists’ view
 The entrepreneur…
…wants to prove himself/herself more than
others
…has the pressure to reach something
…wants to be in control
…is convinced he/she can do it better
…is not afraid of taking risks
Psychologists’ view Cont …..
Psychologists focused on such factors as the
achievement-orientation and status-orientation of
individuals within a population to consider their
likelihood of engaging in entrepreneurial behavior.
Psychologists emphasize that entrepreneurship is not
likely to emerge or develop when a society has a
sufficient supply of individuals possessing certain
psychological characteristics such as adventures
nature, ability to take calculated risk, communication
skills, leadership qualities, hardworking by nature, etc.
The supply of entrepreneurs depends on individuals’
psychic needs for achievement rather than on the
desire for money (but monetary rewards may still
constitute a symbol of achievement for
entrepreneurs).
Psychologists’ view Cont …..
Entrepreneurship gets a boost when society
has sufficient supply of individuals with
necessary psychological characteristics
The psychological characteristics include need
for high achievement, a vision or foresight,
ability to face opposition
These characteristics are formed during the
individual’s upbringing which stress on
standards of excellence, self reliance and low
father dominance
Psychologists’ view Cont …..
According to McClelland it is high need for
achievement which drives people towards
entrepreneurial activities.
Among psychologists, Frank Young describes
an entrepreneur as a change-agent.
K. L. Sharma maintains that entrepreneurs are
men with qualities of leadership in solving
persistent professional problems; but those
persons likewise demonstrate eagerness to
seize unusual opportunities.
Managers’ view
 Managers feel entrepreneurs are innovators who come up
with new ideas for products, markets or techniques.
 According to Peter Kilby an Entrepreneur is one who performs
the following functions:
 Perception of market opportunities
 Gaining command over scarce resources
 Purchasing inputs
 Marketing of product & responding to competition
 Dealing with public bureaucracy (concessions, licenses, taxes)
 Management of human relations within the firm
 Management of customer & supplier relations
 Financial management
 Production management
 Upgrading processes and product quality
 Introduction of new products

 ROLE OF ENTREPRENEURS IN SOCIO-ECONOMIC
DEVELOPMENT OF A COUNTRY
Entrepreneurship promotes capital formation by mobilizing
the idle saving of the public.
It provides immediate large-scale employment. Thus, it
helps reduce the unemployment problem in the country,
i.e., the root of all socio-economic problems.
It promotes balanced regional development.
It helps reduce the concentration of economic power.
It stimulates the equitable redistribution of wealth, income
and even political power in the interest of the country.
 ROLE OF ENTREPRENEURS IN SOCIO-ECONOMIC
DEVELOPMENT OF A COUNTRY Cont..
It encourages effective resource mobilization of capital and skill
which might otherwise remain unutilized and idle.
It also induces backward and forward linkages which stimulate
the process of economic development in the country.
Last but no means the least, it also promotes country's export
trade i.e., an important ingredient to economic development.
Thus it is dear that entrepreneurship serves as a catalyst of
economic development. On the whole, the role of entrepreneur
ship in economic development of a country can best be put as
"an economy is the effect for which entrepreneurship is the
cause".
 Growth of Entrepreneurship
In India
 The growth of entrepreneurship in India can be
presented into two sections viz…..


Entrepreneurship during Pre-Independence

Entrepreneurship during Post-Independence
 Entrepreneurship during Pre-
Independence
üBefore India came into contact with west, Indian
towns were mostly religious and aloof from the
general life of country.
üOrganized industrial activity was observable among
the India artisans in a few recognizable
products in the cities of Banaras, Allahabad,
Gaya, Puri & Mirzapur.
üMuch prestigious Indian handicraft industry, which
was basically a cottage and small sector,
declined at the end of the 18th century for
various reasons.
üSome scholars hold the view that manufacturing
entrepreneurship in India emerged as the latent
and manifest consequence of east India company
advent in India.
 .Entrepreneurship during Pre-
üIndependence
The actual ..
emergence of manufacturing
entrepreneurship can be noticed in the second
half of the 19th century. Prior to 1850, some stay
failure attempts were, indeed , made by the
Europeans to setup factories in India.
üThe second wave of entrepreneurial growth in India
began after the First World War. Government
agreed to 'discriminating' protection to certain
industries, even requiring that companies
receiving its benefits should be registered in
India with rupee capital and have a proportion of
their directors as Indians.
üThe relative importance of Parsis declined and
Gujaratis and Marwari Vaishyas gained that
pendulum in India's entrepreneurial scene.
..Entrepreneurship during Pre-
Independence…
Reasons for slow growth of entrepreneurship in


During British period in India :..

ü Not given proper protection
ü Discouragement by British Government
ü High railway freight charges
ü Exorbitant tariffs
ü Constantly harassed for getting licenses
ü No facilities for technical education
ü Entrepreneurs faced fierce competition from abroad
ü Lack of transportation and communication facilities
ü Not encouraged the establishment of heavy industries
ü Political turmoil
ü Multi-currency system
ENTERPRENEURSHIP DURING POST-
INDEPENDENCE
ü Government came forward with the first Industrial
Policy, 1948 which was revised from time to time.
ü 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.
ü Government accorded emphasis on the development of
small-scale industries in the country.
 .ENTERPRENEURSHIP DURING
POST- INDEPENDENCE..
ü Several institutions like Directorate of Industries,
Financial Corporations, Small-Scale Industries
Corporations and Small Industries Service Institute
were also established by the Government .
ü Small-scale units emerged very rapidly in India
witnessing a tremendous increase in their number from
121,619 in 1966 to 190,727 in 1970 registering an
increase of 17,000 units per year during the period
under reference.
ü Prior to 1850, the manufacturing entrepreneurship was
negligible lying dormant in artisans.
ü The East India Company, the Managing Agency Houses and
various socio-political movements like Swadeshi
campaign provided, one way or the other, proper
seedbed for the emergence of the manufacturing
entrepreneurship from 1850 onwards.
ü since the Third Five Year Plan, small entrepreneurs
have experienced tremendous increase in their
 ..ENTERPRENEURSHIP DURING
üPOST - INDEPENDENCE
Even the … continued
small entrepreneurship to be
dominated by business communities though at
some places new groups of entrepreneurs too
emerged.
üsome entrepreneurs grew from small to medium-
scale and from medium to large-scale
manufacturing units during the period.
üThe family entrepreneurship units like Tata,
Birla, Mafatlal, Dalmia, Kirloskar and others
grew beyond the normally expected size and
also established new frontiers in business in
this period.
ü“Liberalization was catalyst for growth of
Entrepreneurship in India”
üThe number of new companies formed during the
 …ENTERPRENEURSHIP DURING
POST- INDEPENDENCE….
ü From 1980 to 1991, the average number of companies
formed each year was 14,379, while from 1992 to 2006,
the average number of companies formed per year was
33,835.
ü According to the paper, liberalisation itself kick-
started the growth of entrepreneurship in India for
it presented businesses in the country with new
market opportunities.
ü Liberalisation also reduced entry barriers for new
ü the capital market is not a major source of finance
for enterprises, which mostly rely on internal
sources of funding or debt.
ü Government-supported and public-private partnership
ventures such as the National Science and Technology
Entrepreneurship Development Board,
TechnopreneurPromotion Programme and business
incubators in colleges and technology parks also
facilitated the growth of entrepreneurship in India.
CURRENT SCENARIO OF
ENTREPRENEURSHIP IN INDIA
ü According to the Global Entrepreneurship Monitor (2007)
report, India’s High-Growth Expectation Early-Stage
Entrepreneurship (HEA) rate is only one-fifth of that
of China.
ü According to the NSS 62nd round, in rural India, almost
50 per cent of all workers are self-employed – 57 per
cent among males and nearly 62 per cent among
females, while the corresponding figures in urban
India are 42 for males and 44 for females.
ü According to the 5th Economic Census conducted by the
Central Statistical Organisation (CSO), there are
41.83 million establishments in the country engaged
in different economic activities other than crop
production and plantation.
ü Five states viz. Tamil Nadu (10.60 per cent),
Maharashtra (10.10 per cent), West Bengal (10.05 per
cent), Uttar Pradesh (9.61 per cent) and Andhra
Pradesh (9.56 per cent) together account for about 50
Issues in the Current Framework
üFinance: Access to credit is considered to be one of
the key problems faced by entrepreneurs .
ü
ü Regulation and governance: An entrepreneur has to
register one’s business, obtain government clearances
and licenses, pay taxes and comply with labour
regulations.
 -India’s Ranking in Doing Business 2008
Starting a Business -111
Dealing with Licenses -134
Employing Workers -85
Registering Property -112
Paying Taxes -165
Trading Across Borders -79
Enforcing Contracts -177
Closing a Business -137
Issues in the Current Framework ..
üManpower : Availability of skilled manpower is
another crucial issue for entrepreneurs.
 - In the Global Competitiveness Index, India
ranks 102nd in hiring and f ring practices and
85th in employing workers in the Doing Business
2008 report.


üInfrastructure : The high transport and supply

chain costs that poor infrastructure entails can
be affect competitiveness to a great extent,
particularly for a small and medium enterprise.
 - Enterprises surveyed in the Global
Competitiveness Report 2007-08, rated inadequate
infrastructure as ‘the most problematic factor’ for
doing business in India.

SCOPE OF ENTREPRENEURSHIP
DEVELOPMENT IN INDIA
üIn India there is a dearth of quality
people in industry, which demands high
level of entrepreneurship development
programme through out the country for the
growth of Indian economy.
üThe scope of entrepreneurship development
in country like India is tremendous.
üthe current generations of youth do not
have hang-ups about the previous legacy
and are willing to experiment. These are
the people who will bring about
entrepreneurship in India.

Queries