ALL ABOUT ENTREPRENEURSHIP

UNIT-1

INDEX

1 Entrepreneurship – the Concept

1.1 Introduction to Entrepreneurship

1.2 Entrepreneurship and its Relevance
1.3 How Do We Define an Entrepreneur
1.4 The Entrepreneurship Process
1.5 The Current State of Entrepreneurship in India

2 The Entrepreneur

2.1. Entrepreneurial Persons

2.2. Personality Traits of an Entrepreneur
2.3. Entrepreneur vs. Manager
2.4 Questions an entrepreneur needs to answer
2.5 Entrepreneurship as Lifelong Learning

3 The Entrepreneur’s Role

3.1. Types of Entrepreneur

3.2. What does the Entrepreneur do
3.3. Productivity
3.4. Job Creation
3.5. Transfer of Technology
3.6. Entrepreneurial Firms and their advantage

4 Entrepreneur’s Environment

4.1. Entrepreneurship and the Environment

4.2. Social Factors
 4.3. Education Policies
4.4. Government Policies
4.5. Economic Infrastructure and Social Overheads
4.6. Changes Taking Place

5. Startup Ecosystem in India

5.1. Introduction to Startup Entrepreneurship

5.2. Definition of Startup
5.3. Key stakeholders of the Startup ecosystem
5.4. Startup - Growth drivers
5.5. Government schemes to promote Startups
5.6. Startup Registration process
5.7. Startup Success Story – Paytm
5.8. List of top 10 Indian Startups, 2020

6 Manifestation of Entrepreneurship

6.1. Inclusivity in Entrepreneurship

6.2 Rural Entrepreneurship
6.3. Social Entrepreneurship
 UNIT
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Contents

Chapter I

Entrepreneurship – the Concept

1. Introduction to Entrepreneurship
2. Entrepreneurship and its Relevance
3. How Do We Define an Entrepreneur
4. The Entrepreneurship Process
5. The Current State of Entrepreneurship in India

This chapter aims to:

 familiarize students/learners with the concept of entrepreneurship and its

developmental framework
 elucidate the interchangeability and symmetry between entrepreneurship and
startup
 enable students/learners to identify an entrepreneurial effort
 acquaint students/learners with a broader understanding of being entrepreneurial
and the rewards associated with the discipline.

Learning outcome:

On completion of this Chapter, the student/participant will be able to:

 appreciate the concept of entrepreneurship and understand how it functions

 understand the significance of entrepreneurship and the role of an entrepreneur
in the socio-economic system
 grasp the current entrepreneurial scenario in India
 1.1 Introduction to Entrepreneurship

Most of you may already know that an entrepreneur is someone who starts
his/her business or own venture. But, in the present time, entrepreneurship is not
just about starting your new venture; instead, it is all about how you innovate to
solve problems, focus on the future, learn to add value, and bring in a local as
well as global perspective. The concept of entrepreneurship has more serious
significance as it is a potent economic force in the world. The word
‘entrepreneurship’ that captured our attention during the 1990s has now filled
almost every aspect of business thinking and business planning.

Entrepreneurship is described as a unified process of creativity, risk-taking, and

planning. The term 'Entrepreneur' was first coined by the French economist Jean-
Baptiste around 1800. Oxford Business and Management (5 ed.) defines
entrepreneurship as "An individual who undertakes to supply a good or service to
the market for profit; usually invests capital in the business and takes on the risks
associated with the investment; in a modern capitalist economy his initiatives are
regarded as an important element in creating a society's wealth; governments are
therefore led to establishing conditions in which they will thrive."

Unlike a few decades ago in India, in the present time, being a successful
entrepreneur is the most brilliant career option anyone can dream of. However,
different people have defined and explained entrepreneurship in various
manners. Some writers argue that setting up a new business or simply owning a
small firm can be termed entrepreneurship. At the same time, others disagree
with this classification. They feel that if a firm is not innovative in its products or
processes, we cannot call it entrepreneurship. Again, other groups of writers
identify entrepreneurship through seeking opportunistic and innovative pathways
while transforming an existing firm or organization instead of newly setting it up.
This course uses the term 'entrepreneur' to describe men and women who freshly
set up a business and manage everything, from product design to everyday
operations innovatively. To sum up, 'entrepreneurship' is defined as combining all
business-relevant activities that an entrepreneur has to perform to set up and
nurture the firm.

1.2 Entrepreneurship and its Relevance

One of the most apparent reasons why entrepreneurship is needed in every

country is for economic as well as social development and growth.
Entrepreneurship opens up multiple new roads to explore novel opportunities,
keeping pace and promptness with innovations. Modern technology and
globalization have strengthened our understanding of entrepreneurship in
contemporary business. Empowering people through entrepreneurship to see
opportunities instead of challenges can help any nation-state become an
impactful member of the global economy. Any entrepreneurial action begins with
the highest quality of persistence, orientation toward achievement,
entrepreneurial intelligence, and hard work that help individuals make the best
use of vital resources for the available opportunities. Entrepreneurs change
national or international views on markets, industries, and economies by
inventing and innovating new technologies, products, delivery systems, and
creating new organizations. For example, it is the entrepreneurial zeal among a
large number of youths in Silicon Valley, California, during the last few decades
of the twentieth century that has changed the history of communications and
connectivity that we all live and enjoy these days.

It can be said that entrepreneurship is important because it accelerates and

fosters: -
 Economic development
Entrepreneurship strengthens the economy of a country by bringing in
innovation in commercial terms and by fostering new markets to be developed
by introducing new products or services
 Regional development
By nurturing local businesses and ideas, generating jobs and income,
entrepreneurs bring in an improvement through innovation, human capital,
welfare systems, and infrastructure.
 Change and inclusive development
As entrepreneurs are constantly trying to adapt to the changing situation,
engaging advanced technology, altering environments, and accepting
differences in society, inclusivity and improvement occur faster.
 Problem solving and innovation
Entrepreneurship brings new ideas, new technologies, new products, new
markets, and through that, solve the genuine problems of customers.
 Employment generation
Entrepreneurs are job creators and create many new job opportunities by
recruiting people to support their enterprises.
 Social Benefit
Entrepreneurs nurture a better quality of life and social growth through
innovation, problem-solving, and employment generation.

EXAMPLES

1. The story of Sanjeev Bikhchandani, founder of Naukri.com, depicts how he

has observed the behaviours of professionals and identified an opportunity for
entrepreneurship. Sanjeev Bikhchandani, who pursued an MBA from IIM
Ahmedabad and started working at Hindustan Milkfood Manufacturers (HMM),
observed the behavior of working professionals at all levels. While working at
HMM, he often saw his colleagues skim through magazines and newspapers
that contained job listings. Although they were already employed, they were still
curious to know the options available out there. Many of his colleagues also
received calls from head-hunters at least twice or thrice a week for jobs that
were not advertised anywhere. After keenly observing this pattern and talking to
some people in the office, Sanjeev thought he must figure out how to market
these jobs. For this, he realized that he would have to create a database of
jobs.

Soon, he quit his job and started two companies in partnership with his friend,
'Info Edge' and 'Indmark.' Ultimately, the two partners split up, and Sanjeev took
info Edge.
The next step for him was learning and deeply understanding technology and
the World Wide Web. With this, he launched Naukri.com, the first India-based
job portal. By the third year of its operations, Naukri.com earned a turnover of
INR 3.6 million.

2. The story of Mansukhbhai Prajapati depicts innovation in entrepreneurship,

where he identified an opportunity for viable business by solving the problems of
rural India. He transformed his family's struggling pottery business to produce
the Mitticool range of new earthenware, including a fridge that works without
electricity. The Mitticool refrigerator is made of mud/clay, works without
electricity, and is easily affordable. Rigorous experimentation went into his work
on the Mitticool refrigerator. The special terracotta clay used is baked at 1,200
degrees Celsius to harden it. Like any clay pot used to cool water, the fridge
works by keeping the inside temperature 10 degrees lower than the outside. The
fridge costs between Rs. 3,000 to Rs. 3,500. As it works without electricity, it is
advantageous in villages that experience frequent power cuts.

3. The venture of Aditi Gupta, Co-Founder of Menstrupedia, shows how interest

in improving society can be an entrepreneurial idea. Aditi started her journey
with the intention to bring social change against misconceptions, social biases,
and prejudices related to female menstrual health and hygiene. In 2014, she
was on the Forbes India 'Under 30' list for her determination to remove the
social taboo. Today, Menstrupedia is used in more than 6,000 schools in around
14 languages. Aditi is a social entrepreneur working towards raising awareness
and removing misinformation about female health and hygiene.

4. Entrepreneur Sachin Bansal undertook the journey of a bold risk-taker. He

started as a co-founder of Flipkart and then exited following the Walmart deal. In
2018, Bansal founded BACQ Acquisitions Private Limited, a venture that is
focused on building and acquiring technology-driven businesses across different
business verticles.
 5. The grocery store owner, the vegetable vendor, the newspaper distributor, the
laundry service, the tea shop, etc., around you, are also successful businesses
that happen. They may not be exhibiting innovation in their product, services, or
business model, but they are risk-takers to a large extent. They take risks up to
their own potential and level.

1.3 How Do We Define an Entrepreneur

How Do We Define an Entrepreneur? To answer this question, you need to

understand the growing phases of entrepreneurship theories. In general, an
entrepreneur is a person who develops, owns, and is responsible for setting up a
business or enterprise, or venture.
Entrepreneurs are described as follows:
Joseph Schumpeter, an Austrian political economist, describes entrepreneurs as
innovators: “Entrepreneurs are innovators, who use the process of entrepreneurship
to shatter the status quo of the existing products and services, to set new products,
new services.”

French economist Richard Cantillon emphasises the risk-taking behaviour of an

entrepreneur: “As a person, who pays a certain price to a product to resell it at an
uncertain price, thereby making decisions about obtaining and using the resources
while consequently admitting the risk of the enterprise.”

Peter F. Drucker, an Austrian-American management consultant, and educator, says

that a professional who mobilises resources and allocates them to make a
commercial gain is also called an entrepreneur: “An entrepreneur is one who always
searches for changes, responds to it and exploits it as an opportunity. He believes in
increasing value and consumer satisfaction.”

A look into the history of entrepreneurship can help you to identify an entrepreneur
through multiple views. Broadly, you can see them through three different lenses.
The first defines entrepreneurs by their role or function in the economy. Next, you
can identify entrepreneurs by the kind of behavior they perform to remain worthwhile
in the mission. And thirdly, the description of entrepreneurs is done by the
personality traits they possess. However, all these classifications are not separate
from each other and so overlap to a great extent. Let us explain entrepreneur,
entrepreneurship, and entrepreneurial perspectives through these three broad views.

Entrepreneurship and Economy: This theme can be shown by an earliest day’s

example. You know about Marco Polo, who had attempted to find trade routes to the
Far East. In his model, Marco Polo would connect the capital provider with the
merchant–adventurer by signing a common contract (loan with high interest and
insurance) where the 3:1 profit-sharing formula was applied. Here, the most
significant economic function an entrepreneur has to play is taking a calculated risk.
In 1755, i.e., about a quarter of a millennium ago, an eminent French economist
Richard Cantillon observed the differences between supply and demand that an
entrepreneur as merchant or farmer realizes by talking about the risk of buying at a
specific price and selling at a certain an uncertain price. During the post-middle-age
period, generally, a person who bore the uncertainty and the operational risk by
initiating a venture was termed as an entrepreneur.

The economic identity of an entrepreneur got clearer during the nineteenth century.
The emergence of large organizations and inventions across the world gave
entrepreneurs a new character where they took individual risks by paying for
material, land, and personnel.

In the twentieth century, the entrepreneur’s role became more detailed, from
identifying risky opportunities to accomplishing them tactfully while improving the
efficiency of the economy. Entrepreneurs began to be considered as the forerunner
of national economic development. Economists brought different viewpoints, and
among them, Joseph A. Schumpeter’s contribution by connecting entrepreneurial
innovation with economic growth is at the forefront. In summary, broader
segmentation across economic functions can be:

1. Entrepreneur: Who takes risks

2. Entrepreneur: Who allocate resources
3. Entrepreneur: Who innovates

Entrepreneurship and Behavior: The behavioral theory challenges the personality

aspect of entrepreneurship. Here entrepreneurs are defined by their actions rather
than personality traits. More specifically, an entrepreneur is recognized through
entrepreneurial activities and primarily by entrepreneurship itself. It is more about
what they do rather than who they are.

This view of entrepreneurship begins with a persistent pursuit of opportunity

identification, which ends through achieving his or her entrepreneurial goals,
accompanied by rewards. One cannot outline entrepreneurial behavior through a
single behavior. Instead, an entrepreneur has to perform a range of behavior,
including managerial, administerial, strategic, to utilize different resources needed for
the venture’s success.

According to Peter Drucker (1986), changes are expected as our society is ever-
evolving, and new opportunities are ceaseless. Hence, you can learn
entrepreneurship because it emerges primarily by nurturing life lessons and
experiences. Therefore, any part of the society or economy can be entrepreneurial.
Entrepreneurship and Personality: There is yet another way to understand an
entrepreneur. Over the years, many entrepreneurship scholars tried to link person
and personality traits to entrepreneurship. To do that, the authors make an effort to
explain entrepreneurs with specific unique human characteristics. Samuel Smiles’
book “Self Help” (1859) was the first and most celebrated book discussing specific
key entrepreneurial attributes. Although this book was based on storytelling, it
upholds certain human-psychological traits such as conscientiousness, courage,
perseverance, patience, self-discipline, self-learning, integrity, and self-respect as
entrepreneurial. In recent times, focused and elaborate research has concentrated
on why only a few people in any society start firms. In contrast, many others don’t
even act on opportunities under similar circumstances. It is frequently noted that
entrepreneurs have high achievement orientation, which requires calculated risk-
taking ability. Achievement orientation further results in an affirmative approach that
helps control the working environment where an entrepreneur can function in detail.
The over or under-representation of certain personality traits among entrepreneurs
can be manifested through his or her ability to develop a network of social
relationships. Subsequently, it helps in understanding how individual entrepreneur
responds in different circumstances. So alongside many other factors to describe the
success of entrepreneurial behavior, the influence of the personality dimension
cannot be ignored.

1.4 The Entrepreneurship Process

We just have explained various activities, functions, and behaviors that, in general,
any entrepreneur has to perform to keep his or her venture thriving. So the rightful
question comes here, “what are the major stages involved in the entrepreneurship
process?" Although businesses are different in terms of industry, requirements,
scale, etc., the setting up of the business follows a similar process. The flowchart
below will give you a detailed understanding of the various stages involved in the
entrepreneurial process.

Stage 1
Self-Discovery: Understanding your own strength and weakness and identifying
your own passion will enable an entrepreneur to look for the correct opportunity.
Stage 2
Problem Identification and Idea Exploration: Once you have an idea, look for
how that solves the problem or caters to the need of people. Your idea will be a
proposed solution to that problem.
Stage 3
Market Research: Sufficient research, observation, and interaction with potential
customers will help you understand what people need and enable you to
conceptualize the right business idea. Use your research and experience to define
the problem or need you are solving
Stage 4
 Viable Product Development: Once you gain insight from your market research,
you start developing your product/service. This may be different from what initially
you had thought as your inferences of market research, and other internal and
external analysis will guide you to develop your product.
Stage 5
Market Testing: Market tests start after the final prototype of the product/service
has been designed. This phase is most effective once you have a minimum viable
product.
Stage 6
Business Planning: Your business plan is a written document that consists of
market analysis, business description, product or service, marketing and sales,
operations and team, financial statements, funding, and development. The plan
will help you to chalk out the path of action smoothly.
Stage 7
Financing: There are various sources of funding that you may look into. You may
start with your own savings or approach family and friends. Or you may go for
partnership or take a loan from banks or financers, or go for crowdfunding. Also,
you may approach different Govt. schemes for grants.

Launch: After fulfilling your business plan and financing, you launch your business
and start your day-to-day functioning.
Stage 8
Growth: In this phase, you grow, expand, scale up or diversify your business. An
entrepreneur always looks forward to an exciting future, full of growth and
development, or at least a continuation.
Stage 9
Harvest: This is an optional stage. In this stage, much later in your business, you
may want to exit or be acquired by some other company. This gives you a chance
to pursue other venture opportunities and start a new entrepreneurial journey.

1.5 The Current State of Entrepreneurship in India

You need to understand entrepreneurship with respect to the Indian scenario.

Entrepreneurship is the process of starting, establishing, and enlarging an enterprise
that produces and markets goods and/or services. It is a creative act. Its success
also depends on how facilitating and encouraging (pro-entrepreneurial) environment
exists in the country. Moreover, its significant impact is very crucial for developing a
sustainable and growing economy. While achieving personal career goals such as
financial attainment, self-fulfillment, and social identification, entrepreneurship
involves Govt., and its institutions like education, planning, commerce, etc.,
corporate bodies, and society at large. In recent times, India sees a growth in the
government’s effort to promote entrepreneurship development both in sustenance
and transformational contexts. While sustenance can add up mass, transformational
(innovative entrepreneurship) shall happen through attitude change that attempts to
find unique opportunities and then derive benefits from them. Young entrepreneurs
with knowledge-intensive venturing offer new hopes with a rising number of startups.
Through comparatively easy access to financial supports and other institutional help,
todays’ budding entrepreneurs (especially ‘technopreneurs) have proven the
courage to sustain themselves in the Indian entrepreneurial climate and across the
globe. This also underlines the importance of the Indian Institute of Technology (IITs)
as the 4th prominent entrepreneurial university in the world, according to Unicorn
League (2016).

In today’s India, you will see youths with relevant talents. They do not shy away from
converting their acquired knowledge into smart products and services. Moreover,
these vibrant and dynamic youths aspire to be world leaders in the respective goods
and services they have identified, discovered, evaluated, and marketed. Unlike the
past, expectations no longer limit youngsters to only own successful small ventures
(MSME); instead, they aspire to lead with their dream startups and Unicorns (It is a
privately held startup company valued at over $1 billion). By attracting allies who can
share funds and technology through venture capital management firms, a significant
number of Indian Unicorns have become global players.

In recent times, with comprehensive government efforts to enhance India’s

entrepreneurship quotient, be it new-age Unicorns or traditional MSME, the
enthusiasm is visible. With reports like “States’ Startup Ranking 2019” and “MSME
Annual Report 2019-20,” it is seen that the Government is focused on developing a
sustainable entrepreneurial society at large. To advance a healthy competitive
entrepreneurial ecosystem, recently GOI’s state-wise startup and MSME ranking can
be interesting to understand typical MSME-entrepreneurship and startup-
entrepreneurship. However, they have many similarities, demand a deeper
understanding of the subject of entrepreneur and entrepreneurship.

Case Study

OYO: Deal for clean but budget Room

Oyo Rooms (stylized as OYO), also known as Oyo Hotels & Homes, is an Indian hotel
chain. It is one of the largest and fastest-growing hospitality chains of leased and
franchised hotels, homes, and living spaces. Founded in 2013 by Ritesh Agarwal,
OYO initially consisted mainly of budget hotels. The startup expanded globally with
thousands of hotels, vacation homes, and millions of rooms in hundreds of cities in
India.
History
In 2012, Ritesh Agarwal launched Oravel Stays to enable the listing and booking of
budget accommodations. After undertaking months of research and staying in various
bed and breakfast homes, guest houses, and small hotels across India, he pivoted
Oravel to OYO in 2013.

OYO partners with hotels to give similar guest experiences across cities. Shortly after
launching Oravel Stays, Ritesh Agarwal received a grant of $100,000 as part of the
Thiel Fellowship from Peter Thiel. OYO currently has over 17,000 employees globally,
of which approximately 8000 are in India and South Asia. OYO Hotels & Homes now
identify as a full-fledged hotel chain that leases and franchises assets.

OYO has also set up 26 training institutes for hospitality enthusiasts across India.

Valuation

– The company is currently valued at $10 billion as per the last round of funding.
– September 2018 – raised $1 billion, of which the RoC filing for the amount of $100
million raised from Star Virtue Investment Ltd. was made on 13 February 2019.
– October 2019 – Series F funding of $1.5 billion led by SoftBank Group, Lightspeed
Venture Partners, and Sequoia India.
– Founder & CEO, Ritesh Agarwal, through RA Hospitality Holdings (Cayman), in
2019, signed a $2 billion primary and secondary management investment round,
supported by global institutional banks and his financial partners, subject to regulatory
and shareholder approvals. Lightspeed Venture Partners and Sequoia India, OYO’s
early supporters, are selling part of their holdings to help the founder increase his
stake and thereby commit while remaining invested significantly in its long-term
mission.

Product & Services

Oyo Rooms have a wide product portfolio that is updated from time to time to cater to
the needs and demands of the various types of customers leading to product line
stretch. It has also co-branded with various other service providers like Airtel for Wifi
support, Ola for transport support, Biotique for in-room toiletries, Air Pegasus, PayPal,
and Mobikwik for payments to increase its service base and for the comfort of the
customers. It has multiple product lines with varying depths:

– Hotel Budget Rooms Oyo Rooms partners with hotels with the aim of providing
standardized services, including free wi-fi and breakfast, flat-screen TVs, spotless
white bed linen of a certain thread count, branded toiletries, 6-inch shower heads, a
beverage tray, etc. These services are available in around 180+ cities in India and in
Malaysia. According to their price range, budget rooms are divided into Standard,
Premium, Elite rooms leading to the product depth of 3.

– OYO Townhouse, which is promoted as the neighborhood hotel, is in the midscale

segment targeted at millennial travelers.
– OYO Home, which OYO claims is India’s maiden Home Management System that
offers private homes in different locations and is fully managed by OYO.
– OYO Vacation Homes identifies itself as the world’s 3rd largest vacation home
brand with vacation rental management brands Belvilla, Danland, and DanCenter,
along with Germany-based Traum-Ferienwohnungen.
– SilverKey launched in April 2018, caters to the needs of the corporate travelers
undertaking business trips for a short or long duration.
– Capital O offers hotel booking services.
– Palette offers a perfectly curated staycation for those in search of an intuitive
experience at competitive prices, an upper-end leisure resort category.
– Collection O offers to book and renting services to business travelers.
– OYO LIFE, targeted at millennials and young professionals in search of fully
managed homes on long-term rentals at affordable prices.

Growth

OYO clocked a revenue of Rs 32.86 crore in its first year of operations and a steep
loss of Rs 496.31 crore. By the end of FY 2018, its top line had scaled to Rs 415
crore, while losses stood at Rs 360 crore. OYO saw its revenues climb 245 percent
year on year while losses widened marginally from Rs 355 crore to Rs 360 crore. In
its short life, OYO Hotels and Homes have been variously described as a hotel
aggregator, an online travel agency (OTA), and even a Ponzi scheme with an
unsustainable business model, but never a hotel chain. Today, OYO is India’s largest
hotel chain, with 173,000 rooms under management. It is also the world’s third-
largest, with over half a million rooms over the 18,000 properties that it currently
franchises and leases in 500 cities across ten countries.

Source: (The Indian Preneur)

Questions:

1. Did Ritesh solve any problem with the idea of OYO Rooms? What are your
thoughts?

Summary of the chapter

The entrepreneur plays an essential role in shaping a nation’s economic and

`innovation stature to deal with changes, risks, and uncertainties. This chapter
discussed details about how differently we can see entrepreneurship through a
variety of lenses. Here, we discussed three broad overlapping perspectives such as
economic, behaviourial, and personality viewpoints. Aspects of these will be
considered for discussion in detail in other units through diverse perspectives.
 Subsequently, a quick observation of the current scenario of entrepreneurship in
India is presented by citing some published reports.

SAQ 1.1

Please write down how you read entrepreneur and entrepreneurship broadly through
various dynamics.

According to my understanding, entrepreneur and entrepreneurship are:


 UNIT
1
Contents

Chapter II
The Entrepreneur

1. Entrepreneurial Persons
2. Personality Traits of an
Entrepreneur
3. Entrepreneur vs. Manager
4. Questions an Entrepreneur Needs
to Answer
5. Entrepreneurship as Lifelong Learning

This chapter aims to:

 inform students/learners about the key personality traits and related attributes an
entrepreneur must possess or should acquire
 alert students/learners about entrepreneurship and community linkages
 make students/learners cognizant of various stages of the entrepreneurial
process and the rewards

Learning outcome:

On completion of the study of this Chapter, the student/learner will be able to

 detect an entrepreneurial person

 understand the invention vs. innovation dilemma
 know more about entrepreneur as well as manager
 be able to appreciate stages of the entrepreneurial process
 2.1 Entrepreneurial Persons

The question that may often come to your mind is — how to recognize an
entrepreneur. You can identify a person with his or her personality traits and
attributes. Now, let us first understand how both personality traits and personal
attributes differ from each other. Traits are highly deep-rooted personal
characteristics that most people are born and die with. Although it is not true that
they are unchangeable, but learning and unlearning your personality trait is
extremely difficult and often fails. It’s quite impossible to alter an ‘exceedingly shy’
girl to a ‘super bubbly’ girl. An attribute can be directly linked to a particular behavior.
We identify certain behaviour through its attributes, i.e., how someone will respond in
a given situation or how specific behavior expects someone to respond. Unlike traits,
attributes are not ingrained. Hence, attributes are learnable as well as unlearnable
over time. For example, motivation or being innovative can be a great example of
entrepreneurial attributes, and they can be learned.

2.2 Personality Traits of an Entrepreneur

Over the years, scholarly inputs from generations of authors and researchers have
helped us identify the personality traits most specific to an entrepreneurial person.
They can be listed as Optimism, Achievement Orientation, Risk Tolerance,
Innovativeness, Self-efficacy, Passion, Creativity, and Locus of control. Some
different characteristics such as Narcissism, Machiavellianism are also found to be
associated with entrepreneurs.

Optimism

Opportunity search is the first step towards entrepreneurship. When someone meets
a feasible opportunity, it is his/her sense of optimism, that either infuses or defuses
the decision regarding whether to use or let the particular opportunity go. Here
optimism works through a goal-directed mechanism that encourages the individual
entrepreneur to persist in continuous efforts in attaining certain career goals. An
optimistic person may see positivity in a mundane situation, whereas any individual
lacking this characteristic will frequently complain against the odds. Realistic
optimism instigates individuals with psychological well-being, higher levels of
adaptability, and personal accomplishments through optimal functioning.

Achievement Orientation

This particular trait continuously activates new challenges to conquer successfully.

Achievement orientation encourages entrepreneurs to perform in a challenging and
competitive environment while consistently improving their performances to
overcome obstacles. In order to sketch the psychographic profile of an entrepreneur,
it is undoubtedly agreed that achievement orientation is a commonly found
characteristic. Achievement orientation as an entrepreneurial trait drives strong
motivation that subsequently helps individuals to overcome interferences. Need for
success from his/her entrepreneurial efforts incite individuals with higher-order
achievement orientation.

Risk Tolerance

While choosing an entrepreneurial career, an individual’s risk tolerance capability or

ability to take responsibility for any kind of loss inclines him/her toward
entrepreneurship. You can reflect one’s risk tolerance level through his/her tendency
to preserve an effort where returns could be highly uncertain or inexact. Having
higher risk tolerance will make you feel more assertive about a preferred task. It is
the probability function or an individual’s disposition towards risks, including personal
and financial risk. Further, as an entrepreneur has to take excessive risk unfailingly,
individuals with high risk-taking tendencies would feel more comfortable in uncertain
situations. He/she will be successfully able to split a potential risk into opportunity,
financial, family and social cost, etc.

Innovativeness

Innovation is one of the core concepts of entrepreneurial spirit. Schumpeter (1934)

recognized its strong existence for entrepreneurial success. Although this
association between innovation and entrepreneurship is undeniable,
invention/innovation does not always result in economic success. Instead, it is the
market-oriented innovation that defines entrepreneurs. For an entrepreneur,
innovation is introducing new ways of production, a new market for a product, new
product/s, or new sources of raw material. As a personality trait, innovativeness
accompanies any entrepreneurial effort right from searching opportunity and idea
generation to implementation.

Self-efficacy

Self-efficacy defines individual level efficiency or accuracy while performing tasks,

especially stressful ones. Entrepreneurial self-efficacy is an individual’s belief in
his/her capability to perform tasks. The interaction between self-efficacy and
entrepreneurship is always found to be strongly positive. Any individual with a low
key in efficacy quotient may find it hard to be entrepreneurial. As the journey of being
an entrepreneur is turbulent, individual-level efficacy in various entrepreneurial tasks
ignites his/her sense of coping behavior and sustenance despite difficult and
uncertain situations.

Passion

Other than usual feelings, passion reflects a distinct type of intense feelings. When it
comes to entrepreneurship, being highly passionate about the chosen career path is
utmost desirable. Being passionate about the product or services you are offering to
your customer can take you to a whole new world of love for the tasks associated
with it. Detecting passion may likely result through optimizing enthusiasm and
motivation towards entrepreneurship. As an entrepreneur, the joy of designing and
creating something new (a new product or service) can drive you with a strong
disposition to become a passionate individual for a particular entrepreneurial goal.

Creativity

An entrepreneur is always an artist inside. He/she can dream big. It is not always
strictly rational, rather typically crazy thoughts for many. For any new product or
service design, one’s creativity helps him/her combine and expand disconnected
pieces of information from the surrounding environment to generate novel ideas. In a
broader entrepreneurial context, conceptualizing and visualizing an entire ecosystem
truly needs an entrepreneur’s creative exposure. Creativity, perhaps, is the essential
attribute for an entrepreneur. Creativity leads to innovation and establishes new
viewpoints and solutions to old problems.

Locus of control

There are two types of locus of control, i.e., internal locus of control and external
locus of control. Thus, we can put people in either of these two categories. It is the
internal locus of control that helps an entrepreneur to exercise a higher level of self-
efficacy. Those with a high internal locus of control try to accomplish more through
the manifestation of his/her abilities while coping and persisting in any unintended
situation. Whereas, for an individual with an external locus of control, it is more about
accepting externalities such as unpredictable state of affairs, God, fate, powerful
people as his/her destiny maker. People with an internal locus of control believe that
their own choices enable them to create their own destiny, and such beliefs make
people entrepreneurial.

Apart from the personality traits, the following are a few entrepreneurial attributes
that will tell you how being motivated, taking risks, and innovating empower you to
be an entrepreneur.

Motivation

In the context of Entrepreneurship, success depends on an individual’s eagerness in

the pursuit of becoming an entrepreneur. From opportunity search to using the
opportunity for a viable business is a long and evolutionary process. So from the
decisions made after discovering an opportunity to evaluate the opportunity
positively, pursuing resources, and designing the usage mechanisms, all of it
depends on people's willingness to ‘‘play’’ the game. Hence, the influence of
motivational factors is very significant and differs across the population, resulting in
variance among intention and ability to entrepreneurial opportunity search,
assembled resources, and the entrepreneurial process.

The word “Motivation” comes from the word' `motive' (or goal). It means the urge in a
person to achieve a particular goal. In other words, it is the ‘strong need to achieve’
that motivates a person to carry out certain actions or behave in a particular manner.
You may find many people who have all the necessary financial resources and
family support, yet they may not be interested in starting their independent business
ventures. Why is it so? Because they are comfortable doing routine jobs and have no
higher goals in life. They lack `motivation'.

Entrepreneurs are generally highly active individuals. They constantly struggle to

achieve something better than what they already have accomplished. They want to
be identified as distinct categories of individuals who are ready to work hard and take
risks while reaching their pre-determined goals. Meanwhile, they don’t underestimate
their strengths and weaknesses. They don’t shy away from seeking external helps to
gain resources whenever they feel necessary for their startups.

Taking Risk

Entrepreneurs are well-versed in calculating the possibilities of success and failure

under conditions with justifiable probabilistic measures. With the confidence to be
successful in their entrepreneurial effort, they take full responsibility for the outcomes
of their decision. To take the calculated risks, they spend considerable time in
studying and analysing the technological state of affairs, market, demand and supply
equations, pricing mechanism, man and machinery requirements, process
identification, financial regulations, and access points. And finally, they keep in mind
the opportunity cost of not planning other business lines. And all successful
entrepreneurs spend considerable time going through every detail of enterprise
planning. Why do you think they go through all these rigorous processes? It is
because of their intent to minimize uncertainties and calculate the best success and
failure equation. They are not afraid of failures; they surely want to optimize positive
outcomes through systematic planning.

Imagine that you are a qualified pharmacist and that you have received a large
amount of money from your parents. Which of the following options would you
choose?

a. Invest in a bank deposit with 8 percent annual interest

b. Invest in a company with a possible return of 15 percent

c. Start a medical shop in your area (because people there have to travel a long
distance to get medicines) with a fairly good chance of making an immediate
 return of around 10 percent. (The business is sustainable and can bring in
more returns (20, 30, or 50%) in the future if you put in your time and effort)

d. Try your luck in the share market.

Option 'c' calls for an entrepreneurial quality. Remember, successful entrepreneurs

usually choose the moderate or middle path. They are not ‘gamblers.’ At the same
time, they are not afraid of deciding if there is a reasonable chance of success.
Hence, it can be said that entrepreneurs are moderate risk-takers.

Look back on your own life/career. Describe a difficult decision that you have taken
on any important matter.

Innovation

No entrepreneurship can evolve and sustain for long without continuous innovation.
Whether it is about the product, service, or any other aspects of business, such as
technology, production methods, market, sources of raw material, management
practices, organizational structure, information methods, forms of organization, or
identifying a new business line, etc., innovation is the key to sustainability and
growth. Entrepreneurs always try to come up with new and different value
propositions and derive satisfaction by doing so. The idea of “change” exists at the
heart of any entrepreneur and entrepreneurial innovation that distinguishes a regular
orthodox business from future-oriented entrepreneurship. While innovativeness is
the personality dimension, innovation, innovating, or being innovative is the
functional aspect of an entrepreneur, and it is called an attribute. Without this key
ingredient, the entrepreneurial function may turn out to be void. So entrepreneurs
always try to convert a material into a useful resource or combine the existing and
fresh resources to generate a new value proposition through a more productive
method. Innovation is not always about doing new things, but it is often about doing
the same regular things in a new manner. Here, the interruption is innovation, which
improves resource quality, with a more capacity to create wealth.

Examples are everywhere. Did ‘Apple’ invent or create a smartphone? It may be the
world’s most successful smartphone for more than the last ten years but ‘Apple’ at
best innovated how a true smartphone should work. They revolutionized
smartphone’s best ergonomic and artistic design, supply chain, marketing, selling,
and servicing (product and software). It may always be the topmost priority for an
entrepreneur to create and develop novel products and services. An innovative
entrepreneur never ceases to use any opportunity he or she gets, be it something
big or small, considering its significance in the total firm’s wellbeing.

National Innovation Foundation (NIF), an autonomous body of the Department of

Science and Technology, Govt. of India, is a national initiative to promote and
strengthen technological innovation at the grassroots level. Value addition through
research, scouting, documentation, offering funds for the micro ventures,
establishing intellectual property management rights, and spreading awareness,
knowledge, and social diffusion are various activities of the NIF. While we indicate
the need for innovation at the grassroots level, it will be relevant to mention Indian
scholar Padma Shri, Anil Kumar Gupta, who retired as a professor from the Indian
Institute of Management, Ahmedabad, and has served as the executive vice-chair of
NIF. While on the one hand, Dr. Gupta relentlessly worked through his master
classes, research, and advocacy to seamlessly promote and facilitate innovation
among grassroots levels and the youth. On the other, he also drew attention to the
various innovations that are already rampant among the marginalized sections and
need to be noticed.

By now, you must have understood that contextually, creating something

scientifically unique from scratch is called invention. Developing any useful products
or services using that invention and marketing those successfully is called innovation
(the functional attributes of any entrepreneur). And finally, innovativeness is the
human facet of innovation, i.e., the human quality necessary for innovating.
 2.3 Entrepreneur vs. if you are a Manager

The most exciting part of entrepreneurship is that you are your own master, i.e., you
can project and accomplish your job, work plan, schedule, etc., as you desire. It is
everything that you can design according to the need of your dream venture. On the
other hand, you are about to follow your superior’s plans, advice, and instructions as
an employee. Unlike regular employment, in entrepreneurship, you set your own
goals and hire others to execute your plan of action. It is you who reap the significant
part of rewards and, subsequently, the satisfaction of attaining the set goals.

The example of Kris Gopalakrishnan, the co-founder of Infosys, can serve as an

example here. Kris Gopalakrishnan is an illustration of how an entrepreneur steps
into the shoes of a manager and a leader, bringing forth a difference for the
organisation.

Gopalakrishnan served the organization in the vice-chairman, CEO, and Managing

Director capacities. He is recognised as a global business and technology thought
leader. The Government of India awarded Kris the Padma Bhushan, the country’s
third highest civilian honor He is often called “Senapathy,” rightly indicating his
driving force and management skills that are utilized to steer Infosys. His parents
wanted him to pursue medicine as a career because they didn’t have a doctor in the
family, said Gopalakrishnan in an interview with Forbes. But as his marks were
insufficient to get into an MBBS course, he was left with few options and decided to
enroll for a BSc in physics at University College, Thiruvananthapuram.
Gopalakrishnan mentions this failure as the pillar of all his successes. He soon faced
another hurdle: His grasp over mathematics wasn’t strong enough. However,
Gopalakrishnan graduated with a high score and got admitted to the Indian Institute
of Technology, Madras, which opened up a whole universe of opportunities.

“I never thought of entrepreneurship then. When Mr. Murthy said he would start a
company and requested me to join him, I agreed. It was easy to take that decision. I
didn’t have much to lose. I was only 25 years old,” he says in his interview. The rest,
as they say, is history.

Infosys co-founder and friend SD Shibulal sums Gopalakrishnan up quite briefly,

describing him as one who handles crisis and challenging situations with poise. One
who is a lateral thinker and has in-depth knowledge of current trends and
technology. One who is a gentleman and a kind, considerate, and trustworthy leader.
Gopalakrishnan truly is the one leader who creates and inspires hope among many.

To start with, let us list the appeals of being an entrepreneur. Why should you think
of an entrepreneurial career?

1. You become your own boss. You need not adhere to frequent superior-
authority orders. You can make an independent decision.
2. You work for yourself.
 3. You don’t need to worry about a frequent job change. You don’t search for
jobs; rather, you create and offer jobs for others.
4. You feel more satisfied with your career over the fact that you are applying
your talent, skills, and knowledge for something you own at heart.
5. Your work benefits you and the nation directly from your end.
6. You don’t live for a month-end salary; you earn limitless opportunities that
may offer you unlimited returns.
7. In monetary terms, you can earn a hefty income. On emotional earning, you
attain unmatched joy.
8. Your entrepreneurial achievements are noted forever because you seek
nothing less than excellence.
9. You live your life to the fullest, knowing that for generations to come, your
footprints will be followed.
10. You serve not only yourself but the society.

A common query that may arise in the minds of young entrepreneurship students is
that “Are the top-managers entrepreneurs too? If not, Why? What is the difference
between an entrepreneur and a manager?" Some of you might think that
entrepreneurship is another form of management. But they are not the same exactly;
they complement each other to attain organizational success. You can say both
entrepreneurs and managers share entrepreneurial as well as managerial qualities
to a varying degree. (The entrepreneur thinks of a new idea and tries to `make it
happen' by arranging resources (money, material, machinery, and manpower). It has
been observed that entrepreneurs often use their own money, seek family finance,
borrow from relatives and friends, or even take a personal loan from banks. With a
higher level of risk tolerance, he/she may have to adapt to insurmountable financial
threats for the sake of the new venture. And a successful entrepreneur always has
been the epitome of positivity — when it comes to the enterprise’s future and
success. But like any other individual, an entrepreneur is not specialized in
everything; e.g., he/she could be less efficient in handling the firm’s marketing when
the venture goes big. At times, it may be difficult for the entrepreneur to look after
every aspect of firm operations. Then it comes down to ‘management,’ as the
importance of coordinating and organizing becomes paramount to meet the firm’s
everyday functioning. Here, either the entrepreneur has to put his/her managerial hat
or must have to hire trained individuals who can manage things for him. A manager’s
work is generally confined to managing given resources and utilizes that optimally to
complete some pre-defined works. But a manager doesn’t bear the risk as an
entrepreneur does through his entrepreneurial effort. If you observe carefully, among
all the above-mentioned entrepreneurial personality traits and attributes, it would be
the ‘risk factor’ that perhaps most strikingly makes an entrepreneur stand apart from
a highly efficient manager. An entrepreneur draws ultimate motivation from his/her
firm’s success, while for a manager, it is primarily financials such as salary, perks,
benefits, etc., that inspire him or her. In summary, the readiness to create something
new, taking risks, and having total accountability for the job done epitomizes
entrepreneurs that even the most competent manager does not have to show. Below
we enlist various identifiers of entrepreneurial and managerial approaches:

The distinctions between an Entrepreneur and a Manager’s outlook

Points Entrepreneur Manager

Motive The main motive of an The main motive of a

entrepreneur is to start a manager is to render his or
venture by setting up an her services in an
enterprise. He or she enterprise already set up
encapsulates the venture by some entrepreneur
as a reflection of self- earlier. Managers also
image. contribute to the setting up
of a firm.

Status An entrepreneur is the A manager is an employee

major shareholder of the in an enterprise owned by
enterprise. some entrepreneur.

Risk Bearing Being the major A manager does not bear

shareholder of the any major risk involved in
enterprise, an the running and failure of
entrepreneur assumes all the enterprise.
vital risks and uncertainties
involved in the running and
failure of the enterprise.

Rewards The reward an A manager mostly gets a

entrepreneur gets for fixed salary as a reward for
bearing risks involved in the services rendered by
the enterprise is profit him in the enterprise. The
which is highly uncertain salary of a manager is
but could be huge in certain and fixed, with few
amount. adjustments based on
performance.

Innovation The entrepreneur himself A manager primarily

thinks over what and how executes the plans
to produce goods to meet prepared by the
the changing demands of entrepreneur and
the customers. Hence, he promoters. Thus, a
acts as an innovator, also manager translates the
called a ‘change agent.' sponsor’s idea into
practice.
Qualification An entrepreneur needs to A manager also needs all
possess qualities and these qualities to operate a
qualifications such as firm successfully but to a
optimism, achievement different grade. His
orientation, risk tolerance, foremost criteria for the job
innovativeness, self- remain sound knowledge
efficacy, passion, in management theory and
creativity, locus of control, practice.
etc.

Involvement Full-time involvement. In most cases, it is a

limited-time job. You are
paid for few specific works
to be completed—so less
uncertainty.

Stake Everything could be at To some extent, their time

stake, e.g., capital, time, and career.
career, emotion, family,
status, and to a larger
extent entrepreneur’s
personal life.

Let us discuss another perspective related to an entrepreneur and a manager over

here. It is interesting to note that a manager of an organization can always be
entrepreneurial in his/her orientation. Being entrepreneurial in mindset and approach
will enable the manager to develop ownership in work and ensure his/her success
and leadership in the job. These managers are called intrapreneurs.

Intrapreneur

Other than the natural entrepreneur, who creates new firms mostly from scratch,
intrapreneurs function as entrepreneurs within an existing business. Preferably, they
are managers of certain organizations. This group of managers is rare in any
organization. Although they are a simple salaried employee of the organization, they
are highly proactive, self-motivated, innovative, and action-oriented. Even being
within an organizational bureaucracy, they shine by taking initiatives for developing
novel products or services—Intrapreneurs exhibit innovativeness in their work
related to problem-solving and decision making.
 SAQ 2.1
Are You Entrepreneurial?

Assess yourself

Tick mark what you think is applicable

1. I always look on the bright side of things, even in uncertain times, I usually
expect the best. (Optimism) Yes/No
2. My persistence doesn’t let me be calm and satisfied unless I have reached
the desired level of results that are ways to achieve my life goals.
(Achievement Orientation) Yes/No
3. As I genuinely follow the motto, ‘nothing ventured, nothing gained’, I never
fear moving into a new undertaking and handle big losses and
disappointments with little difficulty. (Risk Tolerance) Yes/No
4. While others see nothing unusual and new in the surroundings, I am with
the strokes of ingenuity and resourcefulness able to get around difficulties
while perceiving novel opportunities for business. (Innovativeness)
Yes/No
5. I can hold on belief in my ability to do well and persevere, in the face of
adversity indicating failure is imminent. (Self-efficacy) Yes/No
6. Nurturing a new business, establishing a new company, and owning it
highly excites me and its emerging success drives me. (Passion) Yes/No
7. Anytime given the opportunity, I exhibit new and practical ideas useful for
new technologies, processes, techniques, and product conceptualization.
(Creativity) Yes/No
8. As I believe, it is my own action that determines my life hence, other than
wait and watches things happen, I prefer working hard to make things
really happen. (Locus of Control) Yes/No
9. I like to be in charge and accept responsibility, even if there are chances
of failure. (taking responsibility) Yes/No
10. I am willing to work for long hours with hardly any immediate and
observable rewards. (commitment to work) Yes/No
11. When I face complicated problems, I don’t give up but tackle the problems
and continue without getting a sense of frustration. (perseverance)
Yes/No
12. I am unaffected by personal likes and dislikes while approaching
problems. (objectivity) Yes/No
13. While on a task, I feel it is important to know how you are performing.
(receiving feedback) Yes/No
14. I dislike working for others. (drive for independence) Yes/No
15. I avoid or evade problems or solve them. (problem-solving) Yes/No
16. I plan my future actions (systematic planning) Yes/No
17. I am comfortable communicating with people. (communication) Yes/No
 18. I can influence others and get them around to my way of thinking or
acting. (Leadership) Yes/No
19. I am flexible enough to review your activities and decisions (learning from
experiences) Yes/No

By now, you would be able to distinguish between entrepreneur and manager. The
sections above categorically outline what an entrepreneurial person looks like. What
are the important personal characteristics of any successful entrepreneur? The
questions we put above in the table reflect a situation where you will identify or judge
your personality and recognize how much pro or anti-entrepreneurial you are. If your
answers are mostly `Yes,' you can consider yourself an entrepreneurial person.
Again, don’t shy away if you find that maximum answers are strict ‘No.’ Think twice
and discuss in detail with family members before actually moving into a career.
Alongside, it is highly impossible to expect all the entrepreneurial qualities in a single
individual. So, you may find that some of your answers are moderate ‘No.’ Again,
here, this lacking should not stop your endeavor from marking a proposed
entrepreneurial journey. This lacking also helps you to secure a pro-learner attitude
in you. And with each passing day, your voyage through turbulent time (initial days)
will cultivate many of the qualities in you, subject to your determination and the will to
win. We believe after completion of this full course: (1) you will be able to ascertain
the levels of the entrepreneurial gene you inherently got; (2) you may rediscover
many mysteries about your own (submissive) entrepreneurial traits; and finally (3)
you will be one step ahead of your peers in understanding entrepreneur, and
entrepreneurship.

2.4 Questions an Entrepreneur Needs to Answer

Identifying and evaluating an opportunity is a difficult task. Opportunities do not

appear from anywhere. You have to be watchful for the opportunities. Ideas can
come from friends, relatives, magazines, work experience, technical people, other
businessmen, etc. (How to identify a business opportunity will be explained in detail
in the later chapters). Right now, it will suffice for you to know that once you have
identified an opportunity or opportunities, they should be carefully evaluated. Three
factors are important here: (a) how big the market is, (b) what the life of the
opportunity is, and (c) how skilled and motivated you are in order to use it. After you
identified the opportunity, you have to start developing a plan for your venture. In
doing so, you must know:

What is the market size?

How to segment the market?

What are the vital resources needed?

Where to get the resources from?

How big are the finance, raw material, man, and machinery requirements?

How and where to get the finance from?

How and where to get the raw material from?

How and where to get the man and machinery from?

How to organize the total business?

How to operationalize each organizational arm?

How to calculate the break-even?

What is the roadmap to get into profit?

A further step in the process is to assess the resource position. You may begin with
your own resources. But the sooner, the better, you try and find out other possible
sources. Once the enterprise is set up, you have to deal with the operational
problems of running a business. It is here that your managerial skills would be put to
the test.

The steps mentioned above are not `sequential.' It is not like climbing a staircase.
The stages can or usually overlap. Or you may have to get back into the stages that
are already wrapped up for modification.

2.5 Entrepreneurship as Lifelong Learning

A crucial feature of entrepreneurial life is `change.' The more an entrepreneur can

adapt to change and learn from it, the better it is for his/her business sustainability
and learning. The entrepreneur always looks back into the past to learn the basics of
success or failure. He/she is also particularly conscious of what the competitors are
doing, or have just done or are planning, what he/she would do tomorrow, next
month, or later. He/she is always concerned with the policies of the government,
trade associations, etc. For an entrepreneur, life is a constant flow.

A few decades back, it was not easy to be a successful entrepreneur. It needed a lot
of grit and determination. The uncertainty in the process has now been considerably
reduced due to the development of the support network. These days, it is easy to get
funding if you can come up with some great ideas. Be it government support,
community support, institutional support, angel investor, venture capitalist, banks,
etc., all are well-networked with proposed entrepreneurs who have incredible
business plans. Additionally, these days, access to consultants and training
institutions are just a click away. They are eagerly waiting to help you with
recommendations (mostly free) that can fill the gaps in your business plan and make
it crispier. Now you also have specialized public institutions that will voice your
concerns and offer access to better infrastructure, technology, information, quality
workforce, etc. It is not as difficult or complex as some decades ago, say, in the pre-
internet world. As an entrepreneur, you need to learn from the past, gather
knowledge and wisdom from the present, and visualize the future trend and predict.
The very process of entrepreneurship for you is lifelong learning.

Summary of the chapter

This chapter discussed details about how an entrepreneurial person can be

identified. It explained how various personality traits can be linked with the
entrepreneur. It also elaborated how the discourse on entrepreneur vs. manager can
be clarified while explaining the role of an entrepreneur and a manager in any firm.
The entrepreneurial process, which essentially is the first step to understand where
and how to begin, and subsequently, adopting how to keep the venture going, was
presented through flowcharting and quizzing relevant enquiries. Finally, a short note
was discussed on how ‘change’ is relevant for entrepreneurship and how the current
generation is lucky.

SAQ 2.2

Would you regard entrepreneurship as launching and successfully managing a

business enterprise? Yes/No. Write down your opinion in two or three sentences.

In my opinion

Q: Evaluate between an Entrepreneur and a Manager. Elaborate with examples.

 UNIT
1
Contents

Chapter III

The Entrepreneur’s Role

1. Types of Entrepreneur
2. What does the Entrepreneur do?
3. Productivity
4. Job Creation
5. Transfer of Technology
6. Entrepreneurial Firms and their advantage

This chapter aims to:

 inform the student/learner about different kinds of entrepreneurship and

entrepreneurs
 enhance the student/ learner’s understanding of what entrepreneurs accomplish
through entrepreneurship

Learning Outcome:

On completion of the study of this chapter, the student/learner will be able to

 be familiar with the diversity and charms of being an entrepreneur

 know in detail about entrepreneurship and its deliverables
 3.1 Types of Entrepreneur

There are numerous ways to classify an entrepreneur. These classifications can be

based on types of business, types of industrial sectors, forms of motivation, use of
technology, stages of business development, capital ownership, orientation,
innovation, gender, age, personality types, etc. Knowing a few of these
classifications may enable you to identify your own strength and weakness as an
entrepreneur. Author Clarence Danhof has classified the entrepreneurs into four
categories:- 1. Innovative Entrepreneurs 2. Imitative Entrepreneurs 3. Fabian
Entrepreneurs 4. Drone Entrepreneurs. Let us know more about them.

Innovating entrepreneurs

In some sense, they are the ones who should be called entrepreneurs. They bring
novel product services or production methods into the earth for the first time.
Innovating entrepreneurs can change the face of a nation by ensuring socio-
economic development. But it has due compensations too. With financial stress and
uncertainty, the developed countries’ institutional setups can afford to encourage
taking such risks involved in innovating entrepreneurship. Ritesh Agarwal’s ‘OYO
rooms’ or Shradha Sharma’s ‘YourStory’ can be considered as ventures by
Innovating entrepreneurs.

Imitative entrepreneurs

As the name suggests, this kind of entrepreneur follows innovating entrepreneurs. A

large number of them usually are from developing or underdeveloped nations where
copyright laws are little subservient. In this form of entrepreneurship, you can avoid
the huge cost of developing new technologies necessary for any novel product and
service. Here, effective imitative entrepreneurs get the luxury to copy the innovating
entrepreneur’s innovation eloquently. Bhavish Agarwal’s ‘Ola’ that took on US taxi
Uber and Flipkart that came as the Indian answer to US e-commerce Amazon are
examples of such entrepreneurs.

Fabian entrepreneurs

This group of entrepreneurs is a one-time risk-taker in life. And throughout their

lifetime, they remain highly risk-averse in their entrepreneurial journey. They greatly
avoid adopting anything new in their production, supply chain, or even product line.
Their sluggishness is transformed into embracing newness in business only when it
threatens their enterprise as a whole. Often the name of ‘Kodak’ company is
mentioned under this type. Fabian is more applicable in the Indian rural agriculture
environment, where traditionally acquired land is passed down to the successors and
is run with old bookkeeping methods.
Drone entrepreneurs

This sort of entrepreneur is very rigid about making any change in the production
line, even when it is categorically established, the application of new technologies
and methods can be a highly profitable business proposition. Although they know
that they are earning reduced returns or incurring significant losses compared to
other businessmen, they stick to conventional production methods to existing without
any growth. A tobacco-making industry is still making tobacco entirely by hand, and
they are not willing to use the machines. This example will explain to you who the
Drone entrepreneurs are.

3.2 What Does the Entrepreneur Do?

The entrepreneur combines the available resources like infrastructure labor, finance,
manpower, knowledge, etc., and produces goods or services and puts invaluable
inputs in the form of his/her time, knowledge, and efforts to organize these factors.
This is the basic quality of entrepreneurship which spreads in societies through a
`chain reaction. Each action leads to another, and entrepreneurial opportunities are
continuously created. They result in active markets and intense competition.

Look at the computer industry, for instance. The emergence of computers has
opened up a large market for computer software. Young men and women have
developed software packages and sold them in the market. But can the activity end
there? Obviously not. The computer users need training, computers need
maintenance and repairs, etc., and the activities go on. Many fields like banking,
education, and even astrology have come to depend on computers in a big way. All
these have created a lot of opportunities in this area. Thus the computer industry all
over the world is growing very fast.

SAQ 3.1

Observe your surroundings keenly for similar examples of different types of

entrepreneurs. Write a brief paragraph about your observations below:

My observations
Let us now see how entrepreneurship leads to the growth and prosperity of a
country.

The following are some of the major areas where entrepreneurship has made
important contributions.

3.3 Productivity

Investment and innovation are the two major influences on raising productivity (work
is done per hour) and the per capita output (total output divided by the total number
of employees). You can well imagine how inventions such as the steam engine,
steamship, the telegraph, the telephone, the automobile, the airplane, the computer,
etc., have affected the growth and welfare of people and countries all over the world.
With the help of innovation, the entrepreneur manages to produce goods and
services at a lower cost. He/she reaps profit from this entrepreneurial activity. But
this `happy' situation cannot last very long. Soon, imitators appear, affecting the
market supply and the price of goods. They compete with the original entrepreneur
for raw materials, workers, etc. As a result, the production cost goes up. This forces
the entrepreneur to introduce innovation again and again, and the process
continues.

3.4 Job Creation

An entrepreneur generates profit for himself or herself and creates employment for
many people through enterprise creation. Let us go back to our example of the
computer industry. In the beginning, there was a demand only for a few software
professionals and programmers.

Slowly, the need for instructors, maintenance and service engineers, sales
personnel, etc., increased with the industry's momentum. This sector is now
becoming a major employment creator. Moreover, a large number of computer
professionals are setting up their enterprises. Instead of working for big companies,
they provide jobs for others in their small and medium units.

3.5 Transfer of Technology

Entrepreneurs, especially in developing countries, may not always be `innovative.'

Most of these countries do not have properly developed infrastructure
(communication and transport facilities), information sources, etc. Hence `innovating'
becomes difficult for entrepreneurs. They very often borrow innovative ideas from
others or imitate the innovations made elsewhere and imaginatively apply those.
This leads to the transfer of technology across countries and ultimately to the
economic growth of the imitating country.
Notice what is happening in the field of communications. Television was once
considered a major technological invention. But soon came video recorders and
players. You could watch films and other programmes at your own convenience. You
could even record the programmes of your choice on the TV and watch them later.
Now, even this has become outdated. Commercial channels within and outside India
are entertaining and educating people throughout the day! How did this happen?
Some entrepreneurs had the vision to think ahead and were ready to take risks.

3.6 Entrepreneurial Firms and their advantage

The growth of small-scale industries in the past few years has brought to light the
importance of entrepreneurship in this sector. Perhaps you are aware that the
enterprises in this sector are mostly owned and managed by a single individual
(owner-manager). From the stage of spotting the business idea to establishing and
consolidating the enterprise, the entrepreneur's complete involvement is evident in
these industries. This is why small units are commonly called 'entrepreneurial firms.'

It has been often observed that the large ones are rigid and slow in responding to
changes around them compared to small entrepreneurial firms. Moreover, the small
entrepreneurial firms are alert and are constantly looking for gaps in the market,
which they can fill. Thus, they make the best use of available opportunities and
resources.

Summary of the chapter

This chapter begins with bringing discussion on entrepreneurs as individual human

beings. We also discussed types of entrepreneurship. In great detail, the chapter
elucidated all known variations among entrepreneurs. Broadly, six categories and
their sub-categories were defined and presented with relevant examples. Next, an
entrepreneur’s contribution to society in terms of productivity, job creation, transfer of
technology is crisply presented. Finally, the significance of entrepreneurial firms in
any society or nation-state is included.

Look around you. Read journal articles, stories on news media, books. Identify different types
of entrepreneurs. Make a list of them elucidating How many types of entrepreneurs in India you
have noticed.

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 UNIT
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Contents

Chapter IV

Entrepreneur’s Environment

1. Entrepreneurship and the Environment

2. Social Factors
3. Education Policies
4. Government Policies
5. Economic Infrastructure and Social Overheads
6. Changes Taking Place

This chapter aims to:

 acquaint the student/learner with how the social, religious, political, economic,
and educational factors influence the emergence and growth of entrepreneurship

Learning Outcome:

On completion of this Chapter, the student/participant will be able to

 assess the influences of major socio-cultural factors on entrepreneurship and on

him/her as an entrepreneur
 design ways and means to overcome the negative environmental forces
 4.1 Entrepreneurship and the Environment

What does the term ‘environment' mean? In any society, the environment includes
life's religious, educational, political, and social aspects. An economic opportunity
indeed is one of the primary requirements for entrepreneurship to flourish. But its rise
and expansion depend on certain environmental forces that promote or discourage
entrepreneurial thinking, behavior, and efforts.

In this chapter, you will look at some such factors that tend to influence
entrepreneurship.
4.2 Social Factors

Every society has certain cultural practices and values, which influence the actions
of individuals. These practices and values have evolved over the centuries. Society
was divided on diverse parameters such as caste, religion, gender, etc. Degrees of
social flexibility, mobility, etc., vary from society to society and from region to region.
It should be fair to presume that where social flexibility and mobility are relatively
easier, the prospects of entrepreneurship would be better.

A related aspect is the attitude of society towards entrepreneurship. Certain societies

encourage innovations and new ideas and thus approve of entrepreneurs' actions
and rewards like profits. Certain others do not tolerate changes, and in such
circumstances, entrepreneurship cannot take root and grow. Similarly, some
societies have an inherent dislike for any money-making activity. It is said that in
nineteenth-century Russia, the upper classes did not like entrepreneurs. For them,
cultivating the land meant a good life. They believed that land belongs to God, and
the land's produce was nothing but God's blessing. During this period, Russian folk-
tales, proverbs, and songs carried the message that making wealth through the
business was not `right'.

McClelland maintained that the presence of a specific motivational structure, the

desire to achieve for the sake of achievement -- i.e., the `achievement motivation' --
is of critical importance for successful entrepreneurship. He said that Indian artisans
lacked entrepreneurial values and motives, a conclusion he based on his experience
with handloom weavers in Orissa and artisans in Kakinada in south India
(McClelland and Winter, 1969).

In a country like India, social (value system) and cultural issues hold their
importance, besides issues related to infrastructure. Any innovation to succeed in
our society needs to be accepted by our value system and culture. It will be right to
say that ‘Internet of Things (or any innovation) may fall short of its aim unless a high
level of awareness is created and the idea is taken to the common people
irrespective of gender, caste, creed, and color. An acceptance by the masses in itself
 is a kind of social innovation. Further, in our country, where the population is more
concerned about making both ends meet, the entrepreneurial activity will achieve
sustainability only when support is provided through the institutional, social, and
governmental networks.

SAQ 4.

Which, in your opinion, are the social influences on you? How are you going to deal
with them?

I have been influenced by

I will deal with them by

4.3 Education Policies

Education enables you to understand the outside world and equips you with the
basic knowledge and skills to deal with day-to-day problems. In any society, the
system of education has a significant role to play in inculcating entrepreneurial
values.

In India, the system of education before the 19th century was rigid, often governed
by religion and the social caste system. It promoted the idea that business is not a
respectable occupation. Later, when the British came to our country, they introduced
an education system just to produce clerks and accountants for the East India
Company. The unfortunate result of it is that young men and women in our country
have developed a taste only for `service. Their talents and capabilities have been
majorly used for routine, conventional jobs. Our educational methods are changing in
today’s era, but the emphasis is still on preparing students for regular jobs rather
than on making them capable enough to begin something new and stand on their
feet. But the recently announced ‘National Education Policy 2020’ is expected to
bring significant changes to the present system. The interventions are strongly trying
to bring the necessary changes to sensitise the younger generation about
entrepreneurship, nurturing innovation and creativity amongst students.

4.4 Government Policies

A football player might possess exceptional talent. But, his contribution to the nation
and the world of sports would remain negligible if his performance is restricted to the
courtyard of his own house. He needs a football ground to practice on and resources
to buy the equipment required. He also requires encouragement and support from
those in authority to enable him to freely play with others and prove his talent. In the
same way, however creative he/she may be, an entrepreneur cannot function
without the supportive actions of the Government. It is for the Government/society to
ensure the availability of required resources for the entrepreneurs and also the
accessibility to them. This is because the successful entrepreneur contributes to the
well-being of society. Policies relating to various aspects like prices, the availability of
capital, labor, and other inputs, demand structure, taxation, income distribution, etc.,
affect the growth of entrepreneurship to a large extent. Promotional Government
activities such as incentives and subsidies contribute substantially to entrepreneurial
performance. At the same time, Government policies like licenses, regulations,
monopolies, etc., affect the growth of business enterprises. Above all, a politically
stable and united Government can influence entrepreneurial activities in a significant
manner.

SAQ 4.1

Is there any entrepreneur in your neighborhood? Try to gather information on his/her

views on various Government policies like taxation, finance, labor, etc. Also, ask
him/her about a business unit's opportunities and growth prospects in the current
scenario.

My observations are.
 4.5 Economic Infrastructure and Social Overheads

The expansion of entrepreneurship pre-supposes properly developed

communication and transport facilities. This not only helps to enlarge the market but
expands the horizons of business too. Take, for instance, the establishment of the
post and telegraph system and the construction of roads and highways in India. It
helped considerable entrepreneurial activities to take place in the 1850s. Apart from
the above factors, institutions like trade/business associations, business schools,
libraries, etc., also make valuable contributions towards promoting and sustaining
entrepreneurship. The advancement of technology and digitalization have given a
positive boost to entrepreneurship. You can gather all the information you want from
these bodies. They also act as a forum for communication and joint action. Of late,
the importance of business and industry associations has increased tremendously.
In the fast-changing world of business, entrepreneurs have to move collectively to be
more effective and more efficient. They need to check and influence the
Government's thinking and decision-making constantly.

4.6 Changes Taking Place

In present-day India, all the above-mentioned environmental forces are found to be

working in favor of enterprising men and women. There is a visible change for the
better in the entrepreneurial field of the country. Dogmas (settled opinions) and
superstitions have lost the hold they earlier had. It is encouraging for the `non-
commercial' classes to consider economic opportunities more sympathetically. As a
result, occupational divisions based on the caste or any other rigid system have
undergone tremendous changes, and traditional activities, social approval, etc., have
become less important. More important now are the economic factors such as
access to capital as well as possession of entrepreneurial traits and characteristics
and business knowledge.

The development of government policies in favour of business and industry and, of

course, a rise in the demand for products manufactured by small-scale industries are
some of the key factors that have led Indian entrepreneurs to look for new business
opportunities.

Summary of the chapter

This chapter discussed how the interaction between entrepreneurship and the
environment has emerged through various social factors. Here, we made a thorough
presentation on how religious, political, economic, and educational factors impact the
entrepreneurial actions of individuals. A discussion over changes in governmental
policies through the lenses of education, economic infrastructure was included.
Broadly, this chapter conveyed to you that entrepreneurship is not something that
you only can inherit. It is not limited to certain classes, communities, castes, or
gender. Anybody who is determined to achieve a brighter and higher goal in life can
develop entrepreneurial aptitude with appropriate training.

Question:

1. Write a brief note on your understanding of Entrepreneurship and the

Environment.
 UNIT
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Contents
Chapter V
Startup Ecosystem in India

1. Startup Ecosystem in India

2. How do we define a startup?
3. Key stakeholders of the Startup
ecosystem
4. Startup - Growth drivers
5. Government schemes to promote Startups
6. Startup Registration process
7. Startup Success Story – Paytm
8. List of top 10 Indian Startups, 2020

This chapter aims to:

 familiarize the student/learners with the concept of Startup and the prevailing
startup ecosystem in the country
 educate the student/learners about the important stakeholders and major growth
drivers of the Indian Startup ecosystem
 highlight the initiatives/schemes by the Government of India to promote Startups
 offer the student/learners a broader understanding of the prevailing Startup
ecosystem in the country

Learning Outcome:

On completion of this chapter, the student/participant will be able to:

 understand the concept of Startup

 have a fair understanding of the current Startup ecosystem in India
 identify the various Government of India’s schemes to promote Startups
 learn the steps to register an entity as a Startup in India
 5.1 Introduction to Startup Entrepreneurship

You must have heard the term ‘startup’ many times and may have a fair idea about it
by now. Let us look into it in detail. India is the second-largest populous country in
the world with a 1.35 billion population strength. Since the job market could reach
saturation, the inventory of available jobs may be exhausted soon and remain
inadequate to provide employment opportunities to 1 million people joining the
workforce in India every month. According to the latest Asia Pacific Human
Development Report, the unemployment crisis in India will last for almost 35 years.
Hence, creating entrepreneurs would go a long way towards the development of the
economy as well as job creation. The Government of India has announced
campaigns like “Start-Up India, Stand-Up India” to empower the Startups (especially
for the disadvantaged communities) and facilitate them in credit linkages by availing
bank loans for their ventures; thereby giving a boost to entrepreneurship and job
creation.

Currently, India is in the third position in the global Startup ecosystem ranking, and
the country’s Startup base is expected to grow YoY between 12-15 %
(www.startupindia.gov.in/accessed on 28.12.2020). Favorable government
initiatives, an increase in the number of academic incubators, a rise in the funding
received by Startups, and growth in the digital economy will further drive the Startup
landscape in India. Student start-ups, experienced professionals starting their own
business, and marginal rise in women entrepreneurs are the positive trends
witnessing the Indian start-up ecosystem. All this has contributed significantly
towards placing the Indian Startup landscape on the growth trajectory.
5.2 Definition of Startup

Of the various initiatives undertaken by the Government of India (GoI) to promote

entrepreneurship and Startups, the most impressive one is the launch of the “Startup
India” program in January 2016. It is a flagship initiative of the GoI that intends to
build a strong entrepreneurial ecosystem in the country for nurturing innovation and
Startups, leading to economic growth and generation of employment opportunities
on a larger scale.

According to the government notification released by the Ministry of Commerce and

Industry (Department for Promotion of Industry and Internal Trade), an entity shall be
considered as a startup in India as per G.S.R. 364(E) guidelines when it fulfills:

◊ If it is incorporated as a private limited company (as

Startup defined in the Companies Act, 2013) or registered as a
partnership firm (registered under section 59 of the
Partnership Act, 1932) or a limited liability partnership
 (under the Limited Liability Partnership Act, 2008) in
India
◊ Up to seven years from the date of its incorporation/
registration; however, in the case of Startups in the
biotechnology sector, the period shall be up to ten years
from the date of its incorporation/registration
◊ If its turnover for any of the financial years since
incorporation/ registration has not exceeded Rupees 25
crores
◊ If it is working towards innovation, development, or
improvement of products or processes or services, or if
it is a scalable business model with a high potential of
employment generation or wealth creation
Source: https://www.startupindia.gov.in/

5.3 Key stakeholders of the Startup ecosystem in India

The fast-growing startup ecosystem of India is also complimenting the economic

growth of the country. With over 39,114 Startups being registered with DPIIT, one of
the main reasons for this growth is a collaborative approach of innovation between
academia, industry, and governments to foster economic and social development.

Apart from universities, industry, and government, the following are the key
stakeholders of the Startup ecosystem in India:

1. Funding organizations: Banks, Angel Investors, Venture Capitalists, and other

financial institutions play an important role and help Startups and entrepreneurs
establish credit linkages and raise finance.
2. Academic and Research Institutions: These institutions contribute significantly
to innovation and human capital development and play a central role in the
success and sustainability of the knowledge economy. They also create an
opportunity for knowledge and technology transfer from academic/research
organizations to the commercial market.
3. Incubators and Accelerators: These are organisations that seek to help
startups attain success. These tend to focus on providing startups with
mentorship, advice, and resources to help the startups succeed. They accelerate
the development of new ventures, influence entrepreneurial talent in society, and
speed technology usage by linking technology, capital, and know-how in the
ecosystem.
4. Corporates and other Support Organizations: These organizations can
support Startups by providing guidance on new business opportunities and
expansion. They also offer mentoring support, solutions to business problems,
supplying technology, financial support, expert assistance, building distribution
channels for the Startups, etc.
5. Supportive Government: Government initiatives and programs like Start-up
India, Make in India, Digital India, Stand up India, etc., are encouraging the
culture of innovation in the country and also inspiring youth and women to take
up entrepreneurship as a career.
6. Country’s Creative Youth: Millions of young Indians are giving up secure jobs
and opting to start their own ventures. The median age of Startup founders in
India is 31 years. They have begun to pursue entrepreneurship as a career
option under the Government’s favorable schemes and policies that support
entrepreneurship.
7. Experienced Entrepreneurs: They are willing to share their knowledge,
expertise, and experience with the new-age Startups. Business collaborations,
equity funding in Startups are emerging as a trend in India’s Start-up ecosystem.

For the growth and sustainability of a Start-up ecosystem, all the major
stakeholders have to collaborate to create a culture of raising a proactive mindset
that embraces opportunities, takes up risks, and develops innovative solutions to
society's problems. By working towards pushing innovation forward, all the
players contribute significantly towards creating a sustainable ecosystem that can
lead to the country's economic development.

Startup Incubation Centres in India

As mentioned above, startup incubators hold a significant role in boosting India's

startup ecosystem. Following are a few important incubation centres in India:

 Under the umbrella of the Department of Science & Technology,

Government of India, ISBA - Indian Science And Technology
Entrepreneurs Parks And Business Incubator Association was established
to promote the business incubation activities of the country.
[https:www.//isba.in/; http://www.step-iit.org/]
 Innovation and Entrepreneurship (SINE), IIT Mumbai
[http://www.sineiitb.org/]
 Technopark Technology Business Incubator (T-TBI) [
http://www.technoparktbi.org/]
 CrAdLE [https://cradle-edii.in/]
 Centre for Innovation, Incubation, and Entrepreneurship (CIIE)
[https://ciie.co/ ]
 Nadathur S Raghavan Centre for Entrepreneurial Learning (NSRCEL)
[https://www.nsrcel.org/ ]
 Seedfarm, Seedfund [http://seedfund.in/]
 Venture Center [http://www.venturecenter.co.in/]
 Foundation for Innovation and Technology Transfer, IIT Delhi [https://fitt-
iitd.in/]
  NASSCOM 10K Warehouse Vizag [http://10000startups.com/startup-
warehouse/]
 Agri Business Incubator [http://www.aipicrisat.org/]
 Bihar Industries Association [http://www.biabihar.com/]
 IITG-Technology Incubation Centre (IITGTIC) [http://www.iitg.ac.in]

In this context, it is important to mention the National Science & Technology

Entrepreneurship Development Board (NSTEDB), a board that was founded in 1982
by the Govt. of India, under the guidance of the Department of Science &
Technology. The board aims to promote entrepreneurship by encouraging the youth
to be job generators than job seekers.

The role of DST, while discussing the promotion and strength of entrepreneurship in
India, is indisputable. The Department of Science & Technology (DST) plays an
essential part in the advancement of science & technology in the country.
Empowerment of the youth and disadvantaged sections through entrepreneurship
has been an important mandate of DST.

5.4 Startup - Growth drivers in India

The Indian Startup ecosystem has been thriving, with tech-enabled Startups getting
the highest funding followed by online businesses/e-commerce. Some of the critical
reasons for the growth of the Indian Startup landscape are given below:

Favorable demographics: Around Market size: Growing internet and

65% of the Indian population is below smartphone penetration, increasing
the age of 35. The median age of consumption of social media,
Indian Startup founders is 31 years, increasing disposable income leading
which is lesser than major Startup hubs to improved purchasing power – all
globally, including Silicon Valley’s (36.2 these factors are contributing
years). Young Indians are willing to immensely to boost the country’s
take business risks, overcome economic activity.
challenges and also influence
policymaking in the country.

Availability of cheap labor: With an Talented and Skilled labor: The

increasing number of Startups, India is availability of capable and qualified
emerging as a leader in providing human capital has made India a
skilled work labor worldwide. ‘Make in knowledge-based economy. While the
India’ initiative has also given Skill India campaign focuses on skill
momentum to the labor market by development of the youth, Make-in-
increasing the demand for skilled labor India is working towards creating
in the country. Indian Startups hire a lot entrepreneurial capabilities &
of workforce from the gig economy generating more employment facilities,
(freelancers) and save on their jobs, etc. All these are contributing
operating costs. significantly to the progress of India as
a Startup hub.

Attractive investment destination: Science and Technology focused

As per the latest Doing Business report academic education: Top academic
published by the World Bank in 2020, institutions like IITs and IIMs have
India stands at 63rd position in the list of incorporated incubation programs to
190 countries as compared to last mentor student Startups and budding
year’s 77th rank. Being among the top entrepreneurs. A large number of
10 FDI destinations globally, India can engineering and technical graduates
attract massive investments in the also make India a home for a pool of
Startup ecosystem. talent for Startup development.

Women-led Startups: As per the 6th Economic Census by the National Sample
Survey Organization (NSSO), only fourteen percentages of businesses in India
are run by women. Most of these women in business belong to the elite class;
the middle and lower class are yet to join the league. To boost the participation of
women in running their own businesses, GoI has rolled out initiatives like ATAL
Innovation Scheme and MUDRA. As the government continues to boost women
entrepreneurship in India, the country might see an influx of more Startups
created or run by women entrepreneurs in the years to come.

5.5 Government’s schemes to promote Startup Entrepreneurship

Following are some of the important schemes announced by the Government

of India to create a culture of entrepreneurship in the country:

 Startup India [https://www.startupindia.gov.in/]

 ASPIRE (A scheme for promotion of innovation and rural
entrepreneurship)
[https://www.startupindia.gov.in/content/sih/en/government-
schemes/aspire-scheme-promotion-innovation-entrepreneurship-and-
agro-industry.html]
 MUDRA bank scheme [https://www.mudra.org.in/]
 Atal Innovation Mission [https://aim.gov.in/]
 eBiz Portal [https://ebiz.bpc.co.in/lpg/]
 Dairy Processing and Infrastructure Development Fund (DIDF)
[https://dahd.nic.in/didf]
 Support for International Patent Protection in Electronics & Information
Technology(SIP-EIT)
[https://www.startupindia.gov.in/content/sih/en/government-
schemes/international-patent-protection-sip-eit.html]
 Multiplier Grants Scheme (MGS)
 [https://www.meity.gov.in/content/multiplier-grants-scheme]
 Credit Guarantee Scheme for Startups (CGSS)
[https://cleartax.in/s/credit-guarantee-scheme-startups-cgss]
 Software Technology Park (STP) Scheme
[https://www.startupindia.gov.in/content/sih/en/government-
schemes/software-technology-park-scheme.html]
 The Venture Capital Assistance Scheme (VCA)
[http://sfacindia.com/VCA_Scheme.aspx]
 NewGen Innovation and Entrepreneurship Development Centre
(NewGen IEDC) [http://www.newgeniedc-edii.in/]
 Single Point Registration Scheme
[https://www.nsic.co.in/schemes/Single-Point-Registration.aspx]
 Modified Special Incentive Package Scheme (M-SIPS)
[https://www.meity.gov.in/esdm/incentive-schemes]

Note: More information about government schemes can be availed by visiting

https://www.startupindia.gov.in
 5.6 Steps to register your Startup with Startup India

Note: For further details about documents, tax exemption, conditions of self-
certification, etc. visit www.startupindia.gov.in

5.7 Start-up Success Story - Paytm

Post demonetization, ‘Paytm karo’ has been a common word for every Indian while
shopping. Paytm has contributed significantly to revolutionizing the payment
mechanism in our country. Vijay Shekhar Sharma launched Paytm in 2010 as a
mobile recharge and bill payment platform. However, by 2020, it became a one-
stop solution for any kind of transaction and payment with 39 million daily active
 users. In 2017, Paytm Payment Bank was also launched. The company has
developed a robust online payment system that is capable of handling around
5000 transactions every second. One of its unique features is that the app is very
popular even in rural areas, small towns, and villages and is considered to be a
preferred mode of payment. With each passing day, Paytm is trying its best to offer
an enhanced customer experience and the Startup now also plans to tap the loan
market and disburse small loans to 500 million people. In November 2019, it raised
$1 billion in the Series G round of funding at a towering valuation of $16 billion.
Paytm plans to launch a chat app soon that will compete directly with WhatsApp
by offering advanced features in this space.

5.8 Top 10 Indian Startups of 2020

LinkedIn has revealed a list of 10 young Startups of India that have remained
resilient during a tumultuous time of COVID-19, continuing to attract investment,
employees, and attention. The list of these Startups is as under:

No. Startup Domain of work

1 upGrad – Mumbai E-learning
2 Cred – Bengaluru IT and Services
3 Unschool – Hyderabad E-learning
4 Unacademy – Bengaluru E-learning
5 Whatfix – Bengaluru Internet
6 Razorpay – Bengaluru Computer Software
7 Zigram – Gurugram IT and Services
8 Yellow Messenger – Bengaluru Computer Software
9 Pee Safe – Gurugram Health, wellness and fitness
10 Urban Company – Gurugram IT and Services

Note: For more details, visit https://www.linkedin.com/pulse/linkedin-top-startups-

2020-10-indian-companies-rise-abhigyan-chand/ (accessed on 29.12.2020)

Summary

Indian Startups are making their presence felt at the domestic as well as
international levels. With disruptive ideas, they are marching ahead and creating an
impact. However, they do face a myriad of challenges related to government
regulations, fundraising, lack of mentoring, managing cash flow, and even finding the
right employees. India is witnessing an emergence of almost 10 Startups a fortnight;
however, 9 of them die down within the first year of their birth. Often, many Startups
shut their shops too early or fail to pivot after receiving negative feedback from
customers. However, to control the Startup Mortality Rate, there is an immediate
need to bring in strong mentors with age-old experience and wisdom who can guide
the Startup founders and support them during a crisis. Mentors' availability,
knowledge, experience, valuable connections, timely advice, occasional checks, and
regular dosage of encouragement can leapfrog the Startups to success.

Suppose India has to become a suitable land for Startups. In that case, it has to
develop into an unbeatable ecosystem for Startups by making available
entrepreneurial know-how, a congenial environment, and technical guidance to those
willing to make a difference to themselves and the country.

***

SAQ:

Identify a new startup venture from your area / state and write a description
about it.

1. What do you understand by the term ‘Startup?’ Give 2 examples of Indian

Startups whose products/services you are using/have used before.
2. Visit Startup India website (www.startupindia.gov.in) and create your individual
profile. Once this is done, go to the dashboard and list down the
details/information about the Startup ecosystem prevailing in your state/country.
 UNIT
1
Contents

Chapter VII

Manifestations of Entrepreneurship

1. Inclusivity in Entrepreneurship
2. Rural Entrepreneurship
3. Social Entrepreneurship

This chapter aims to:

 familiarize the reader with types of entrepreneurship that aim at an equal and
empowered society
 enable the reader to understand their motivations
 offer the reader a broader understanding of values created by these types of
enterprises

Learning Outcome:

On completion of this Chapter, the reader will be able to:

 appreciate the concept of inclusivity in entrepreneurship

 recognize competencies and motivations for this form of entrepreneurship
 6.1 Inclusivity in Entrepreneurship

To understand how entrepreneurship influences the growth of a society, you need to

understand the concept of inclusivity. A society that overcomes differences and
promotes equality among all groups and sections can be called an inclusive society.
Entrepreneurship can act as a robust engine for mainstreaming the marginal or
disadvantaged sections (based on gender, age, caste, physical disability, etc.) of
society through sustainable economic empowerment, which, in turn, will ensure self-
reliance, autonomy, inclusivity, and dignity. The inclusion of everyone equally by
providing entrepreneurial opportunities, access, and ease-of-doing-business will
strengthen the entrepreneurship phenomena in a country. The entrepreneurial
intention remains typically dormant amongst most marginal sections due to various
reasons, viz., social discrimination, exclusion, lack of sensitivity, lower respect, and
support. Though these marginal or disadvantaged social groups are heterogeneous,
their members typically face greater barriers to business creation than the
mainstream population. In this context, sensitising and awareness creation
programmes, capacity building interventions, Govt. schemes explicitly designed for
them, facility of loans and funding support, etc., will enable proper inclusion of all
sections of the society in the entrepreneurship agenda. Entrepreneurship will
empower the disadvantaged or the marginal sections towards human diversity and
dignity of work.

Business creation by under-represented and disadvantaged groups helps create

jobs and fight social and financial exclusion while stimulating economic growth
across the economy. Various interventions for the empowerment of the marginalised
groups by the Govt. as well as private sectors will include measures such as:

 understanding of the challenges that different social target groups face in

entrepreneurship
 addressing challenges and blocks in the process of entrepreneurship
 improving access to finance
 providing flexibility in rules to doing business
 ensuring social security
 offering business development support
 building the entrepreneurial networks
Entrepreneurship for the Scheduled Caste and the Scheduled Tribe (SC, ST)

Through policy measures and institutional networks, the Central and State
Governments and other private organisations promote entrepreneurship among the
economically backward castes, particularly scheduled castes and scheduled tribes.
The outcome of these interventions reflects in aspects like quickening
industrialisation, generating employment, promoting education, and eradication of
poverty for the economic development of the country.
The Ministry of Micro, Small & Medium Enterprises of the Govt. of India takes
conscious initiatives to support the SC/ST sections of the society in entrepreneurship
through ‘National SC/ST HUB.’ There is various backing arranged both for SC/ST
existing entrepreneurs and SC/ST budding entrepreneurs. The ‘Stand Up India’
programme of the Govt. facilitates special bank loans for women and SC/ST
entrepreneurs of India. Department of Social Justice and Empowerment has initiated
Venture Captial Fund among the Schedule Caste population in India. The Pradhan
Mantri Rozgar Yojana scheme offers several special supports to help SC/ST
entrepreneurs. Thus, Sufficient measures are taken up by various Govt. and non-
Govt. Sectors to include and facilitate SC/ST groups to become entrepreneurs.

Though there are several marginal or disadvantaged sections in our society, in this
chapter, we will discuss in detail women entrepreneurship and entrepreneurship by
the differently-abled, as these are considered two essential instruments for a
country’s socio-economic development in the future.

Dalit Indian Chamber of Commerce and Industry (DICCI)

relentlessly contributes to accomplishing Dr. Ambedkar’s
vision. DICCI aims to motivate the Dalit youth to engage
with business and industry sectors as entrepreneurs. DICCI
was established in 2005 by Dr. Milind Kamble. Dr. Kamble
is currently the Chairman of DICCI. Under his guidance, the
organization has grown to 29 State chapters and 7
International Chapters. The activities of DICCI are
diversified. Members of DICCI are also from varied fields
ranging from manufacturing to construction and services.
Dr. Milind Kamble
DICCI has empowered the Dalit, enabling them to become
entrepreneurs, thereby strengthening the social and
economic growth.

Women Entrepreneurship

The next major social issue is women's entrepreneurship. The participation of

women in economic and entrepreneurial activities varies from region to region,
society to society, and community to community for a host of historical and social
reasons. In the 21st century India, women must participate in all activities along with
men with self-confidence fairly and equitably. The Govt. of India (and the State
Govts) have formulated various schemes to encourage women to participate in all
economic and entrepreneurial activities. These are intended to break the inhibitions
and disinterest of women and harness their powers towards nation-building and
economic growth.
Entrepreneurship is a key to the economic development of a country. History is full of
instances of individual entrepreneurs whose creativity had led to the industrialization
of many nations. Small-Scale Industries (SSI) play a key role in the industrialization
of a country. It is considered an important means for checking the concentration of
economic power in a few hands and bringing about economic dispersal and more
equitable distribution of national income. The nature and character of the MSME are
suitable for women to become entrepreneurs.

For India, the growth depends on the empowerment of women, who constitute
48.45% of the Indian population (2011 census), and entrepreneurship remains a key
contributor to women's empowerment. India is soon going to be one of the largest
working-age populations, and this demography can act as a dividend only when the
women are the equal partners.

The efforts of the government and its different agencies are ably supplemented by
non-government organizations that are playing an equally important role in
facilitating women's empowerment. Despite the concerted efforts of the governments
and NGOs, there still exist certain gaps. Of course, we have come a long way in
empowering women, yet the future journey is difficult and demanding. Some new-
age women's entrepreneurship schemes are listed below.

 Iccha Shakti represents motivating aspiring entrepreneurs to start their

business
 Gyaan Shakti represents providing knowledge and ecosystem support to
women entrepreneurs to help them foster entrepreneurship
 Karma Shakti represents providing hands-on support to entrepreneurs in
setting up and scaling up businesses
 Annapurna Scheme: Women can avail of loans up to ₹50,000 to begin their
food catering business
 Stree Shakti Package for Women Entrepreneurs: Women operating small
businesses having majority ownership (over 50 percent) can avail of an
interest concession of 0.05 percent for loans above Rs 2 lakh.
 Bhartiya Mahila Business Bank Loan: A loan amount of up to Rs 20 crore can
be availed by female entrepreneurs under the Credit Guarantee Fund Trust
for Micro and Small Enterprises. The program initiated by Bhartiya Mahila
Bank offers the owner to repay the loan amount over a period of seven years.
 Dena Shakti Scheme: Maximum loan amount of Rs 20 lakh can be availed by
women entrepreneurs with a concession of 0.25 percent.
 Udyogini Scheme: Women (18-45 Yrs) with a family income below Rs 45,000
can avail of loans up to Rs 1 lakh. Widowed, destitute, or disabled women are
exempted from income limit. Whereas ST/SC among them (widowed,
destitute or disabled) can get 30 percent subsidy up to Rs. 10,000.
 Cent Kalyani Scheme: With varying market interest rates, women can avail of
loans up to Rs 1 crore from the Central Bank of India for their startups in
areas like agricultural work or retail trading.
  Mahila Udyam Nidhi Scheme: It’s a combined Punjab National Bank and
Small Industries Development Bank of India (SIDBI) program for women
entrepreneurship. Women can avail of loan up to ₹10 lakh and repay through
a period of 10 years while setting up a new business.
 Orient Mahila Vikas Yojana Scheme: It is an initiative by the Oriental Bank of
Commerce to assist women entrepreneurs who hold a minimum 51 percent
share capital individually or jointly can avail of the loan. With up to 2 percent
interest concession and a repayment period of seven years, loan amounts
between ₹10 lakhs to ₹25 lakhs can be availed without collateral security.

Some women entrepreneurs have started unique businesses that are solving
specific problems for women.
Nykaa: Nykaa, the famous e-commerce and retail brand for beauty products
for women was started by Falguni Nayar in 2012 to break the myth that e-
commerce is not effective for sales of beauty products. Nykaa makes quality
beauty products and international beauty brands.
Mann Deshi Bank: Social entrepreneur, Chetna Gala Sinha started Mann
Deshi Bank in 1997 as a cooperative bank to give out micro loans to women.
The bank is based in Maharashtra and has encouraged many women in the
state to start micro businesses.
HeyDidi: Revathi Kulkarni Roy is a serial entrepreneur, especially focused on
running businesses that provide unique services for women. Revathi started
ForShe in 2007, the first taxi service only with woman drivers. Similary, she
started Viira in Mumbai in 2010. Her recent startup is called HeyDidi, which is
a women-only platform providing its delivery service through a mobile app.
Baby Chakra: Naiyya Saggi started BabyChakra, and targets the maternity-
child market. It is an online platform that provides information on hospitals,
doctors, cord blood banks, maternity activities, products, events and even
playschools.
Menstrupedia: Aditi Gupta’s Menstrupedia works towards educating society,
especially the underprivileged sections, about menstrual hygiene and health.
It operates through a website and has designed various comic books which
have its reach not only in India but have even been shipped to other
countries in Asia and South America.
Limeroad: Suchi Mukherjee’s Limeroad is a online clothing and lifestyle
accessories marketplace. Today this company is known as Indian’s most
stylish online shopping website for men and women.

Differently-abled Entrepreneurs

India is a country of diversity, and the ethos of India is unity in diversity. The sense of
unity will be manifested in a true sense if all sections of the society have equal
opportunity access and participation to add to the economy of the nation. The Govt.
of India has come up with policies that aim to offer all people equal opportunity to
create a sustainable business irrespective of their age, gender, and background.

Inclusive entrepreneurship typically targets underrepresented groups in society or

business, disadvantaged and face barriers to starting any business venture that
others may not face. Apart from the women who are considered disadvantaged in
their pursuit of entrepreneurship, another group that deserves attention is differently-
abled people.

Several differently-abled people in India have risen above their physical and mental
disabilities and pushed society to change its perception of them. According to the
Census in 2011, 2.21 percent of the total population in India are differently-abled,
and 36 percent of total disabled persons are employed. However, a focus on self-
employment and entrepreneurship will enable the differently-abled to work around
their limitations in their own way and transform disability into ability.

The differently-abled entrepreneurs can be designated as individuals with different

abilities who can form, arrange, and start a company.

Centre for the Empowerment of Differently Abled (CEDA)

State and Societies have continually tried to create methods for an inclusive
approach to growth so that the struggles of the disadvantaged and the deprived
could be reduced. Policies are made to bring all into the mainstream social structure.
To create this equitable society, where the differently-abled (Divyangjan) do not feel
inhibited, and see a plethora of opportunities, Entrepreneurship Development
Institute of India (EDII), under the aegis of Directorate of Social Defence and Gujarat
State Handicapped (Divyang) Finance and Development Corporation, and Social
Justice and Empowerment Department, Govt. of Gujarat, has set up a Centre for
Empowerment of Differently Abled (CEDA) on its Campus. The Centre aims at
promoting entrepreneurship, employability, and livelihood activities among the
differently-abled.

Problems of Differently abled Entrepreneurs in India

The problems or barriers that the differently-abled entrepreneurs usually face are as
follows:
 Financial shortages
 Lack of training
 Legal measures regarding registering their companies under regular bodies
 Not being taken seriously by financers, customers, or society at large
 The societal bias and stereotype about physical or mental disability
 Lack of mainstream opportunities.
Support System

 National Handicapped and Finance Development Corporation (NHFDC) is the

apex institution in the field of financial support to differently-abled people for
entrepreneurship development through awareness creation, capacity building,
training, and different financial support. The institution is supported by the
Govt. of India and other non-governmental agencies.
 NHFDC has introduced a scheme, ‘Divyangjan Swavalamban Yojana,’ to
support the differently-abled for entrepreneurship.
 The Department of Empowerment of Persons with Disabilities in the Ministry
of Social Justice & Empowerment facilitates the empowerment of persons
with disabilities through various schemes, awards, and grants

Following are the cases of a few differently-abled entrepreneurs who have

risen above their struggles of disability:
Gamatics.in: Gamatics, a venture of Sharath M Gayakwad, a Paralympic
swimmer, is the online portal that not only is a market place for high quality
products and gears for swimmers but also is a platform for guidance and
tips. Born with a deformed left hand, Sharath never allowed that to be an
obstacle in his path.
Maa Ulaa: Mohammed Gaddafi’ Maa Ulaa in Chennai is the first bike taxi
service run by differently abled people. Gaddafi had lost his leg when he was
19 years old but that has never sopped him from his dreams. He is a PhD in
History and teaches at Presidency College.
Raw Nature Company: Sangita Desai was born with a difficulty characterized
by limb anomalies. Sangita has been a successful fashion designer. She
started Raw Nature Company in Mumbai to offer botanical grooming
solutions. Her products are cruelty free, vegan, and without artificialities.
Voice of Specially Abled People (VoSAP): Being crippled with polio at an
early age, Pranav Desai of Ahmedabad, decided to use his personal and
professional experience to empower the differently abled through his
organisation, the Voice of Specially Abled People (VoSAP).
Antarnaad: Shailesh Sheth from Gujarat did not allow his polio to make him a
victim, but turned into a social entrepreneur by creating Antarnaad , a
platform for the differently abled to accomplish their respective dreams.

6.2 Rural Entrepreneurship

Rural Entrepreneurship contributes majorly to the economic development of a nation.

Rural Entrepreneurship has its roots in rural areas and has immense potential to
drive various interventions to strengthen business, industry, and agriculture. In India,
almost 65% of the population resides in rural areas, and their livelihood depends on
agriculture, livestock, and other allied activities. An increase of entrepreneurship in
these fields will nurture rural development that can be made possible through the
growth of rural entrepreneurs, reducing poverty, unemployment, etc. Rural
entrepreneurship also means rural industrialisation that will enhance the socio-
economic development of the country. To elaborate, we can say that rural
entrepreneurship is all about opening new enterprises that promote new products
and services, opening new markets, and encouraging the use of technology in rural
areas.

The needs for rural entrepreneurship can be summed up in the following points that
assert rural entrepreneurship:

 Generates employment in the rural areas as it is mostly labour intensive

 Reduces migration of villagers from rural to urban areas
 The low migration reduces the generation of slums in urban areas
 Reduces income disparity between urban and rural areas
 Fosters regional development as it stimulates different economic activities
 Protects and promotes heritage in the form of art, culture, creativity

The different types of rural entrepreneurship include:

1. Agro-Based Enterprises that involve direct selling or processing of

agriculture products
2. Forest-Based Industries that deal with the supply of wood or wood
products, the coir industry, honey making, bamboo products, minor forest
products, etc
3. Mineral Based Industries including cement industry, stone crushing, wall
coating powders, etc
4. Textile Industry, which involves weaving, spinning, tie and dye, bleaching
of textile
5. Handicrafts, items made of wood, bamboo, glass, jute, soil, etc
6. Engineering Services, which include tools and equipment used in
agriculture such as tractors, pumps, pipes and fittings, repairs, etc

Rural entrepreneurship can be developed and strengthened, if there is an adequate

supply of raw material. Apart from that availability of funds, grants, loans at
reasonable rates will make the path smooth. Technology support and the
development of platforms for marketing and selling will also strengthen rural
entrepreneurship. Awareness training, capacity building, and the spread of relevant
education will bridge the gap and make rural entrepreneurship a powerful tool for
socio-economic improvement and growth.
Rural Entrepreneurship Development Programme

The rural population constitutes a significant segment of India, and hence, the key to
India’s socio-economic growth lies in rural development. Poverty and unemployment
appear to be the major obstacle in the path of rural development. Considering
entrepreneurship as the essential input for economic development by alleviating
poverty and unemployment, EDII-Ahmedabad planned strategic and sequential
REDPs. EDII contributed by institutionalising rural entrepreneurship through
implementing Rural Entrepreneurship Development Programmes (REDPs), using
training as a strategy that has yielded positive results. The support for conducting
these training programmes came from a number of prominent national-level financial
institutions like the National Bank for Agriculture and Rural Development (NABARD),
Small Industries Development Bank of India (SIDBI), Rashtriya Grameen Vikas Nidhi
(RGVN), and the Ford Foundation.

Apart from this, the Start-up Village Entrepreneurship Programme (SVEP), which is
run under Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-
NRLM), is a forward-looking initiative by the Ministry of Rural Development,
Government of India. The SVEP is being implemented by two National Resources
Organisations, viz. EDII-Ahmedabad and Kudumbshree. By 2020, EDII has
implemented SVEP programmes in 68 blocks of 14 states, fostering 665 trained
cadres of Community Resource Person-Enterprise Promotion, who provide services
to 42657 rural entrepreneurs of around 41182 enterprises. Since 2016,
Kudumbashree, another National Resource Organisation for SVEP, has
implemented this programme in Kerala, Jharkhand, Rajasthan, Bihar, Chhattisgarh,
Uttar Pradesh, Madhya Pradesh, and Andhra Pradesh. [For more details:
https://www.ediindia.org/Doc/SVEP-Brochure.pdf].
Examples of Innovation by Rural Entrepreneurs:

1. Rai Singh Dahiya’s efficient biomass gasifier

Raj Singh Dahiya helped his parents on their farms by weeding and watering plants
in rural India. He did not go to regular school but was a good learner, and he was a
regular listener of BBC radio for Science called Gyan-Vigyan. he understood the
language of machines.

In 1982, he started a brick kiln in which bricks are baked by burning the agriculture
waste. He noticed that burning of biowaste in the kiln was producing gas. When fuel
prices were going high Dahiya felt that he must find some cheaper alternative to fuel.
After years of experimenting, in 2001, he succeeded in running a diesel engine on
biofuel by converting biomass into producer gas.

In 2001, NIF scouted him and provided commercialization support. He has sold
several units of varied capacity and the latest version of the biomass gasifier is made
of steel.

2. Mansukhbhai Jagani’s Bullet Shanti

Due to drought and dry farmland, and shortage of cattle fodder Mansukhbhai Jagani
of Amreli could not afford to use cattle for tilling his 20 bighas of land. With no money
and bullocks, he was forced to think of an alternative. He borrowed his friend’s Royal
Enfield Bullet motorcycle and created ploughing attachments to fit in it. Replacing the
rear wheels with two smaller wheels he attached a metal plough with the bike.

He began using it for ploughing his farm. Jagani named it ‘Bullet Santi.’ Bullet Shanti
worked as a faster alternative to traditional farming that uses bullocks, and as a
cheaper alternative to modern farming that uses tractors. In 1994, Jagani had
developed the prototype. NIF and GIAN helped in its commercialization.

6.3 Social Entrepreneurship

Economic Social/
Entrepreneur

Benefit Environment
Social

al Benefit

You have come across the term ‘social entrepreneurship in this unit before. Let us
learn the concept in detail. It is an approach in which individuals/groups develop and
find a solution to social, environmental, cultural issues through enterprise options.
Many times, we ignore social/environmental/cultural problems with the assumption
that these belong to the domain of the Government. It is believed that the
Government, union or provincial, will appropriately address many such problems we
are encountering in our daily life.

However, a proactive individual might think of addressing these issues through the
enterprise option. Therefore, he or she establishes an enterprise that directly
addresses some of the pressing problems of society, community, or environment.
Social Entrepreneurship revolves around the idea of Social Value Creation and
Innovation. Innovation is needed to address the inherent problems of society and
create value in the end.

Thus “ Social Entrepreneurship” encompasses the activities and processes

undertaken to discover, define, and use opportunities in order to enhance social
wealth by creating new ventures or innovatively managing existing organization”
(Zahra et al. 2008, p.118). Mair and Marti defined Social Entrepreneurship as a
“…process involving the innovative use and combination of resources to pursue
opportunities to catalyze social change and/or address social needs” (Mair and Marti,
2006, p.37).
Who is a Social Entrepreneur?

A social entrepreneur is sensitive towards social, economic, technological,

environmental, and other problems and applies entrepreneurial acumen to solve
them by creating and managing a venture to fulfill these social motives over and
above profit-making. Thus, a social entrepreneur creates value for the
society/community/ environment and generates income. In the process of value
creation, a social entrepreneur always thinks about positive returns to society. For
doing that, he/she needs to be innovative, unique, and possess a sound
understanding of the issues confronted by society, community, and environment.

Social entrepreneurs strive to bridge the gap between social needs and existing
services. In order to bridge this gap, they apply entrepreneurial skills and innovation
to find solutions as well as business opportunities based on these solutions to the
existing social problems. In such endeavors, they might propagate methods to solve
social problems like eradicating polio or creating wealth from waste, reducing carbon
emission and global warming, promoting afforestation, working on health and
nutrition issues, etc. In simple terms, a Social Entrepreneur applies business
principles to solve social problems.
Opportunities for Social Entrepreneur

Enterprising individuals like to work on many of the society/ community/ environment

problems today. They convert these problems into enterprise options by creating
value for the customers. Some of the social and environmental problems which
eventually turn out to be a seedbed for entrepreneurship are as under,

 Environmental Protection: Due to rapid industrialization, industrial pollution is

increasing day by day. Industrial effluents are causing serious damage to the
environment and the ecosystem. Therefore, a social entrepreneur might
address some of these issues through the creation of a venture for converting
waste to wealth, plastic recycling, effluent treatment, etc.

 Carbon emission and global warming: Because of the unregulated burning of

fossil fuels, coal, and other natural resources, the environment is getting
increasingly polluted through carbon dioxide emissions. This has caused
global warming and the rapture of the ozone layer. Promoting renewable
energy, adopting energy efficiency technologies would reduce the possibilities
of carbon emission and global warming.

 Forestation and ecological balance: Due to the enlargement of the city and
industrial expansion, deforestation is happening across the length and
 breadth of the country. Our forest reserves are getting depleted, and a social
entrepreneur might convert this as an appropriate business opportunity and
get engaged in forestation and natural resources preservation activity.

 Safety and security of the society and community: Many of the problems of
the community and society emanate due to erosion of the value system, lack
of proper upbringing, and unemployment issues. Some social entrepreneurs
are working on these issues through appropriate engagement with the local
community and society and channelizing resources of the youth for productive
purposes.

 Education: Though access to education is one of the fundamental rights of

human beings, one can argue about the quality of education, especially the
education system prevalent in remote and far-flung areas. The availability of
teachers and quality of education is a matter of serious introspection, and
there is a lot of scope for improvement. Some of the social entrepreneurs are
working to provide access to quality educations for the masses.

 Social justice: As indicated earlier, many problems of society and community

can be addressed through entrepreneurship. Many social entrepreneurs in the
country are working on the agenda of justice for the community. They are
relentlessly working to eradicate such problems as human trafficking, early
marriage, consumption of drugs and narcotic substances, etc.

 Presentation of art, culture, and tradition: Many of our ancient art and culture
forms are getting extinct due to the inability to find a suitable and sustainable
market. Lack of demand for these products and services is affecting the
livelihood of scores of artisans. Given the drawbacks, the younger generation
has started losing interest in pursuing these art forms as their career. A social
entrepreneur would be interested in working on the agenda of ensuring
sustainability and preserving the art and culture of a region.

Examples of Social Entrepreneurship

India has witnessed several social entrepreneurship funds, like United India and
Aavishkaar. The organization called Shop for Change aims to address the difficulties
the marginalized artisans face in market reachability by enabling rural artisans to
reach fair trade certification. Similarly, Chetna Organic Cooperative seeks to enable
ethical supply chains that benefit the lives and livelihood of small farmers. On the
same lines, the Foundation for Inclusion Growth, founded by Nachiket Mor, has
created a banking and business services platform for India’s underserved.
Child labour is a major problem in some industries. The mission of Kailash
Satyarthi’s RugMark was to stop child labour in the carpet industry. While analysing
the situation, he recognized the problem of enslaved children in rug-weaving.
RugMark created a certification program and a public campaign designed to educate
consumers on child labour in the carpet industry. RugMark created value-added
services to eradicate the problem of child labour and also provided economic
subsistence to the business. For a customer, whenever they would buy a carpet with
RugMark label, it would mean that the carpet they have bought is not made by any
child or in any unfair labor conditions. Thus, consumer education by RugMark has
helped in transforming the entire carpet-weaving industry, which was predominantly
using child labour practices.

Grameen Bank, started by Prof. Muhammad Yunus, an economist, and Nobel

Laureate of Bangladesh, is another classic example of social entrepreneurship. He
identified that there were limited options for securing even very small funds for credit
by the poor people in Bangladesh. They were unable to access funds through the
formal banking system due to a number of reasons. As a result, they were at the
mercy of the money lenders charging them exorbitant rates of interest, which led to a
vicious cycle of poverty and hardships for them.

Prof. Yunus believed that even a small amount of funds could create an impact in
this situation. Therefore, as a remedy for this situation, he lent a sum of $27 from his
own pocket to each of the 42 women in the village of Jobra for starting a micro
business. In fact, all the women who took a loan from him had repaid the entire loan
based on income generated through the business, which fulfilled Prof. Yunus’s
assumption that even with a small amount, one can generate income. For example,
a sewing machine bought from the loan amount could result in tailoring services,
leading to an earning sufficient to return the loan and create a better quality of life for
her family. Subsequently, the Grameen Bank was formed on a sustainable model, in
which the bank charges interest on its loans and then reutilizes the same capital to
help other women. His inspiration, creativity, and action led to a huge microcredit
movement in Bangladesh that later traveled to other parts of the globe and
established microcredit as an industry.

Social enterprises are often confused with Non-Governmental Organisations

(NGOs). The main difference between a social enterprise and NGO lies in the
revenue model. Whereas NGOs rely primarily on charitable contributions and public
funding, social enterprises aim to generate enough revenue to sustain themselves
financially. Following are a few NGOs that made a difference in society.

Goonj is an NGO in India that works for community development and other
humanitarian activities such as disaster relief. The reach out to people in need
across 23 states in India and their contribution to support people during COVID 19
Pandemic has been noteworthy.
Urvashi Sahni, the founder, and CEO of SHEF (Study Hall Education Foundation), is
noteworthy in this context. Her organisation is dedicated to offering education to the
most disadvantaged girls in India.

Sushmita Ghosh is the founder of Ashoka Changemakers, an open-ended platform

for social innovation. Sushmita aims to recover and recognise the craftsmanship and
talent unharnessed in rural India.

Summary

The chapter mentions specific types of entrepreneurship based on orientation and

socio-cultural perspectives that make entrepreneurship an inclusive phenomenon.
Social Entrepreneurship and Rural Entrepreneurship are discussed as distinct
phenomena where individuals/groups develop and find solutions to social,
environmental, cultural issues through enterprise creation. For the empowerment,
attention must be given to the disadvantaged sections. Entrepreneurship can serve
as a robust vehicle to enable and empower the disadvantaged or the marginal
sections such as women and the differently-abled as well as strengthen rural India.

SAQ 4.1

Try to gather information about any a) social enterprise, b) enterprise run by women,
c) venture by differently-abled, d) rural enterprise, and identify the problem and the
solution on which the business opportunities are based. Also, appreciate the level of
innovativeness and appropriateness in the solution and record your observations
below:

1. My observations regarding the problem and innovative solution adopted by the

social enterprise identified by me are as follows:

2. My observations regarding the problem and innovative solution adopted by the

enterprise owned by the woman are as follows:
3. My observations regarding the problem and innovative solution adopted by the
enterprises owned by differently-abled persons are as follows:

4. My observations regarding the problem and innovative solution adopted by the

enterprises owned by the rural entrepreneur are as follows: