Unit: -01 Entrepreneurship Development

Syllabus: -
Introduction -Meaning& Definition of Entrepreneurship, Entrepreneur &
Enterprise -functions of entrepreneur -Factors influencing Entrepreneurship -Pros
& Cons of Being Entrepreneur -Qualities of an Entrepreneur -Types of
Entrepreneur.

The Entrepreneur: -

The term “entrepreneur” is derived from the French word “ENTERPRENDRE”,

which means ‘to undertake’. The simple meaning of an “entrepreneur” is “a person
who is responsible for setting up a business or an enterprise”. He possesses skill,
initiative and innovative ideas and aspires for high achievements in business. He
promotes projects for the welfare of the society. In the process of implementing
new projects, he creates employment.

According to J B Say “an entrepreneur is the economic agent who unites all
means of production, the labour force of the one and the capital or land of the
others and who finds in the value of the products which results from their
employment, the reconstitution of the entire capital that he utilizes and the value of
the wages the interest and rent which he pays as well as profit belonging to
himself”.

Enterprise: It is a business organization that is formed and which provides goods

and services, creates jobs, contributes to the national income, imports, exports, and
above all sustainable economic development.

Entrepreneurship: The capacity and willingness to develop, organize and manage

a business venture along with any of its risks in order to make a profit. The most
obvious example of entrepreneurship is the starting of new businesses.

Entrepreneurship is both the study of how new businesses are created as well as the
actual process of starting a new business.

Entrepreneurship is the activity of setting up a business or businesses, taking on

financial risks in the hope of profit.
Evolution of entrepreneurs in India: -

India moved from an agricultural economy to an industrial one to a service-

driven one.
With liberalization setting in, new business class emerged. Before 1943 the
Indian business scene was completely dominated by British companies.
After II World War reconstruction required cement, steel, other infrastructure
industries. Handful of Indian business houses with financial resources and a
working relationship with British companies came into existence. Example Tata
Steel, Wadias Shipbuilding Birla Jute Mill was established.

After independence

• It faced deficit of resources hence government followed rationing of

resources. License raj brought into existence later business became
hostages to Monopolies and Restrictive Trade Practices. (MRTP).
• Indian businesses were characterized by high taxes, low productivity,
strict licensing, and parallel economy led to black market.
• Foreign currencies were banned, hard currency shortages made foreign
travel luxury.
• Lot of formalities to obtain license for starting business

It was only in the 1980s that things began to change. Finance minister V P
Singh’s budget was a benchmark for economic liberalization. Stock market
attracted foreign investment; abolished industrial licensing many industries
came into existence

Financial institutions started funding small and large industries

Industries started to move from asset-based industries to knowledge-based

industries.

Features of Entrepreneur: -

1). Self-Motivated: -

An entrepreneur is naturally motivated as there is typically no financial reward

in the beginning stages of starting a business. Rather than wait for progress and
success, an entrepreneur takes whatever action is necessary to facilitate these
things. Much of this self-motivation is because entrepreneurs enjoy a challenge
and are naturally competitive.

2). Leadership Skills: -

An entrepreneur must have the ability to motivate his employees to work

together toward their goals, which requires earning their trust and respect.
Entrepreneurs must also have excellent communication skills as they will work
with a variety of types of personalities in dealing with employees, clients and
investors.

3). Risk-takers: -

Risk is inherent when starting a business. An entrepreneur should possess well-

developed decision-making skills, even in the face of failure, should be flexible
enough to alter methods when things to not go as planned.

4). Innovative: -

The ability to not only come up with new ideas but develop and improve them
as the business grows is an essential characteristic of a good entrepreneur.
These individuals are constantly inspecting their products, services and business
model in an effort to find ways to improve.

5). Ethical: -

Entrepreneurs must possess a "strong sense of basic ethics and integrity",

clients and investors will lose interest in doing business with an entrepreneur
who lacks credibility in the long run

Entrepreneurship: -

Entrepreneurship is ”the ability of a person who detects and evaluates a new

situation in his environment and directs the making of such adjustments in the
economic systems as he deems necessary” he understands profitable
investments, examines in detail the investment opportunities, mobilizes capital,
competes statutory proceedings, adopts required technology and faces threats
which come in the way of promoting his idea.
The growth of an economy depends upon the strength of entrepreneurs who
work for the growth. The higher the birth rate of genuine industrial and
innovative entrepreneurship, the faster is the rate of economic growth.
Entrepreneur is a person who is responsible for setting up a business or an
enterprise.

Entrepreneurship is a process of actions of an entrepreneur who is a person

always in search of something new and exploits such ideas into gainful
opportunities by accepting the risk and uncertainty with the enterprise.

The qualities of Entrepreneur: -

1. Calculated risk taker: - An entrepreneur avoids low-risk situation

because there is a lack of challenge and he avoids high risk-situation
because he wants to succeed. He enjoys the excitement of a challenge but
he does not gamble.
2. Innovator: - entrepreneur exploits the available resources/opportunities to
make profits and to get satisfaction. He introduces new goods, new methods
of production try new markets, seeks new source of supply of raw materials.
3. Organizer: - An entrepreneur has to bring together various factors of
production, minimize losses and reduce the cost of production. He produces
the best result as an organizer.
4. Creative: - successful innovation depends on creativity and one of the most
important requirements of an entrepreneur is to be creative as creativity may
be taken as the cause and successful innovation as the effect.
5. Achievement motivated: - an entrepreneur is an achievement-oriented
person, not money hungry. He works for his desire for challenge,
accomplishment and service to others.
6. Technically competent: - An entrepreneur must have reasonable level of
technical knowledge. It is the ability that people can acquire with hard work.
A dynamic entrepreneur changes the pattern of production to suit the
requirements.
7. Self-confident: - it is necessary for an entrepreneur to be self-confident. He
should have faith in himself, only then he can trust others. While expanding
business, he can seek cooperation of his staff ad inculcate a sense of team
work in them.

8. Socially responsible: - An entrepreneur should think of projects of social

significance and of importance to others. His ability creates jobs for others,
and is not threat to other progress.
9. Optimistic: - An entrepreneur should approach his task with a hope of
success and optimistic attitude. This positive attitude will lead him to
success

10.Equipped with a capability to drive: - entrepreneurs who work hard in

planning organizing coordinating and controlling their business are more
likely to have a successful business than the entrepreneur who is lost and
haphazard.

11.Mental ability: - An entrepreneur must be intelligent adaptable, creative and

he must be able to engage in analysis of various problems and situations in
order to deal with them.

12.Human relation ability: - personality factors like emotional stability,

personal relations, sociability, consideration and tactfulness are important
contributors to entrepreneur’s success.

13.Communication ability: - quality of entrepreneur in communicating

effectively in writing as well as orally is very important aspect.

14.Decision making: - an entrepreneur should consider all the matters before

making any decision, he should be clear, non-bias not influenced by others
while making any decision and it should be benefitting the organization.
 15.Business planning: - the entrepreneur is the most knowledgeable person to write the
business plan. An effectively written plan is an asse to the entrepreneur as his or her
personal set of guidelines for creating a successful venture.

16.Visionary: - entrepreneur has a vision for growth, commitment to constructive change

persistence to gather necessary resources and energy to achieve results. He is the one
who incubates new ideas, starts is enterprise with these ideas and provides added value
to society based on their independent initiative,

17.Courage to face adversities: - entrepreneur faces the adversities boldly and bravely.
They refuse to be bean and become tougher during adverse situations; they have faith
in themselves and attempt to solve problem even under pressure.

18.Leadership: - without leadership an organization would be only a confusion of people

and machines, leadership is one of the primary traits of an entrepreneur by which he
can influence others to voluntarily seek defined objectives.

Advantages (Pros) of being an entrepreneur: -

1. Bridge the gap between knowledge and application: - he bridges the gap between
knowledge and its applications. He converts knowledge into an economic activity and
gain out of it.
2. Converting an idea into money: - entrepreneur is dynamic creative skillful and is
ready to take calculative risk, he or she puts societal resources into societal use
3. Be your own boss: - they possess high capacity to take risk and to have adventurous
life.
4. Originality respected: - the creative and original business ideas of an individual can
be used for societal benefit and with this the originator is respected in the society.
5. Competition: - by adapting innovative ideas of entrepreneur the product or service
can be produced at a low cost
6. Better utilization of skills and knowledge: - The advantage of becoming an
entrepreneur is that creative skill and knowledge of an individual can be used for the
benefit of the society otherwise it would go waste.
7. Alternative to current career: - people with entrepreneurial skill working in other
organization as employee has alternative career opportunities where they can use their
skill and can be successful entrepreneurs

8. Business opportunity: - business development process is continuous activity where

people with entrepreneurial ability can seize such opportunities and have personal
gain.
 Disadvantages (Cons) of being an entrepreneur: -

1. Remuneration: - entrepreneur is not assured of positive economic gain.

The reward for risk bearing in entrepreneurship may be positive or
negative. Continuous loss may result in closure of business.

2. Benefits: - entrepreneur may not earn much in initial stages. It takes

considerable time to reap the benefit of being an entrepreneur.
Entrepreneurs enjoys normal profits has threat of completions and any
extra profit expected to be earned will be eaten by competitors.

3. Time Management: - time is money entrepreneur. One cannot enjoy

time in self-employment as one enjoys in paid employment. Entrepreneur
should manage time to be successful.

4. Management: - entrepreneur should have sound support system to take

good decision on all the issues concerned with the business. Decision
should not be postponed

5. Experience: - unskilled person with an unskilled staff will have a

difficult time in running the business. Inexperience person without
entrepreneurial ability cannot manage one’s own business

Difference between Entrepreneur and Entrepreneurship: -

Entrepreneur Entrepreneurship

1). The term entrepreneur is used to describe 1). The process involved is called
men entrepreneurship.
and women who establish and manage their
own
business. 2).EntrepreneurshipisanAbstraction.
Entrepreneurship is Process.
2). Entrepreneurs are tangible people.
3). Entrepreneurship is out Come of complex
socio –
3). Entrepreneur is a person. Entrepreneur is the
key Economic, factor
individual.
Difference between entrepreneur and manager: -

Entrepreneur Manager

Entrepreneur is involved with the A manager with running the

1. startup 1. business over a
process. long period of time.
An entrepreneur assumes financial, A manager does not have to bear
2. material 2. risks.
A manager by the resources he
and psychological risk. 3. currently
An entrepreneur is driven by
3. perception of possesses.
A manager follows rules and
opportunity. 4. procedures.
4. An entrepreneur changes. 5. A manager is hired employee.
A manager gets fixed rewards and
5. An entrepreneur is his own boss. 6. salary
An entrepreneur gets uncertain
6. rewards.

Classification/Types of Entrepreneurs: -

The entrepreneurs in business are broadly classified according to the types of

business, use of professional skills, motivation, growth and stages of development.

1). According to the type of business: -

a. Business Entrepreneur: - are those who conceive the idea of new product
or service and then translate their ideas into reality.
b. Trading Entrepreneur: - it concerned with trading activity. He identifies
potential market create demand through extensive advertisement of his
product and thus inspire people to buy his product.
c. Industrial Entrepreneur: he sets up an industrial unit. He perceives the
opportunity to set up his unit, complies with necessary formalities to getting
license, power connection, pollution control clearance, arrange initial
capital, providing securities and guarantees to financial institutions, making
payment of wages and supply necessary technical knowhow.
d. Corporate Entrepreneur: one plans and develops and manages a corporate
 body, he is a promoter, gets corporate body registered under the requisite
act which gives company the status of separate legal entity.
e. Agricultural Entrepreneur: is engaged in the agricultural activities. He
uses latest technology to increase the productivity of agriculture and also
adopts mechanization.

2). According to Motivation: -

Motivation is the force that influence the efforts of the entrepreneur to achieve his
objectives. An entrepreneur is motivated to achieve or prove his excellence in job
performance. He is also motivated to influence others by demonstrating his power
thus satisfying his ego.
i). Pure Entrepreneur: - Is a person who may or may not possess an aptitude or
entrepreneurship but is tempted by the monetary rewards or profits to be earned
from the business venture. He is status conscious and wants recognition.

ii). Induced Entrepreneur: - Entrepreneur is attracted by the various incentives

subsidies and facilities offered by the government.

iii). Motivated Entrepreneur: - Is one who is motivated by the desire for self-
fulfillment. They come into being because of the possibility of making and
marketing some new product for the use of consumers.

iv). Spontaneous Entrepreneur: - These entrepreneurs start their business out of

their natural talent. They are initiative, bold, and confident about their ability
which motivates them to undertake entrepreneurial activity.

3). According to the Use of Technology: -

The application of new technology is various sectors of the national economy is

essential for the further growth of business. These entrepreneurs are broadly
classified into:

a). Technical Entrepreneur: - The strength of technical entrepreneur is in his skill

in production techniques. He concentrates more on production than on marketing.
He is interested in bringing new technologies to the organization.

b). Non-technical Entrepreneur: - He is not concerned with technical aspect of

the product rather he spends more time in developing alternative strategies of the
marketing and distribution to promote his business.

c). Professional Entrepreneur: - Person who is interested in floating a business

but does not want to manage or operate it. Once the business is established, he sells
it out and catches on to float a new business.

4). According to the Stage of Development: -

Entrepreneurs may also be classified as the first-generation entrepreneur, modern

entrepreneur and classical entrepreneur, depending upon the stage of development.

i). First generation: - Entrepreneurs who start an industrial unit by means of their
own innovative skills. They do not possess any entrepreneurial background. He is
essentially an innovator, combining different technologies to produce a marketable
product or service.

ii). Second generation/Modern Entrepreneur: - A Modern entrepreneur is one

who undertake those venture which go along with the changing demand in the
market. They undertake those ventures which suit the current marketing needs.
iii). Classical Entrepreneur: - A classical entrepreneur is one who is concerned
with the customers and marketing needs through the development of a self-
supporting ventures. He is a stereotype entrepreneur whose aim is to maximize his
economic returns at a level consistent with the survival of the firm with or without
an element of growth.

5). According to Growth: -

The development of a new venture has a greater chance of success. The

entrepreneur enters a new and open field of business. The customer approval to the
new product give them psychological satisfaction and enormous profit. The
industrial units are identified as high growth, medium growth and low growth
industries and such we have “Growth Entrepreneur and Super growth
entrepreneur”.

a). Growth Entrepreneur: - those who necessarily take up a high growth

industry. These entrepreneurs choose an industry which has sustained growth
prospects.

b). Super growth Entrepreneurs: those who have shown enormous growth of
performance in their venture the growth performance is identified by the liquidity
of funds, portably and gearing.

Intrapreneur: -

Many executives in top corporations started leaving their jobs because of their
entrepreneurial urge and drive. They preferred to have many fascinating and
lucrative jobs and started their own enterprise. They are the employees who want
to start business of their own.

Ultrapreneur: -

Entrepreneurs identifies a business opportunity, determine its viability and form a

company, it requires assembling a super competent management team, who then
develop, produce and markets the product or service I the shortest optimum time
period. They create business and then sell out, merge or combine.

Factors influencing entrepreneurship growth: -

➢
Psychological factors: -
1. Need for achievement: - drive to achieve a goal people who believe in
themselves and not on mere luck work hard to achieve the goal.

2. Recognition: - many people need recognition from others which motivates

them to become entrepreneur
 3. Need of authority: - people who has the ability of controlling or leading
others or who can exercise authority on others would like to work
independently

➢ Cultural factors: - culture is values and behavior which accepted within the
society. it consists of Tangible concepts like furniture buildings and
intangible concepts like Laws, morals, knowledge etc.

1. Religious belief: entrepreneurism is a function of religious belief and the

impact of religion shapes the entrepreneurial culture. Entrepreneurial
energies are exogenous supplied by means of religious belief.

2. Minority groups: cultural minority groups are the spark plugs of

entrepreneurial and economic development. They play important role in
development of community.

3. Sprit of capitalism: the profit motive charcter coupled with the attitude
towards acquisition of money urges the individual to start new venture.

➢
Social factors: - social factors includes
1. Legitimacy of entrepreneurship: -

The system of norms and values within a socio-cultural setting is responsible for
the emergence of entrepreneurship. The degree of approval or disapproval granted
to entrepreneurial behavior will influence its emergence

2. Family role models and association with similar type of individuals: -

If an individual has a supportive family, he or she is more likely to become an

entrepreneur. Similarly, if an individual has role models who have been successful
in entrepreneurship, certainly, he may be motivated to start ventures.
Entrepreneurial heritage which includes father’s occupation, the family work ethic
and religion, family size and the first-born son growing up experience and so on.

3. Caste system: - The caste system in Hindu society has promoted to the
growth of business and professional skills. Eg: - parsees, marwaris and
shindhees.

4. Occupation: -Children born in business family learn the business skills by

continuous interaction and contacts with parents, customers employees and
visitors in family shops, office and homes
5. Education & Technical Qualification: - Education is the best means of
developing man’s resourcefulness which encompasses different dimensions
of entrepreneurship.

6. Social status: - Human being aspires for a high social status and he works
hard to maintain their status as it also contributes to their entrepreneurial
growth.
 ➢ Economic factors: -

1. Infrastructural facilities: -

Infrastructural facilities improve the efficiency of investments by entrepreneurs.

The availability of basic infrastructure like power, transportation, communication,
technical information motivates people to become entrepreneur

2. Financial resources: -

Finance is life blood of business activity. Capital is regarded as lubricant to the

process of production; the lack of financial resources discourages the youth and
potential entrepreneurs to start new ventures. Adequate fixed and working capital
may encourage them to do business

3. Availability of material and knowhow: -

Easy availability of materials attracts more individuals towards entrepreneurship.

Technical knowhow is essential for innovation, with technical knowledge, men
discover more and sophisticated techniques of production.

4. Labour conditions: -

Quality and quantity of skilled labour influences the development of

entrepreneurship, and also availability labour at cheap cost, mobility of labour,
incentives, also influences on availability of labour.

5. Market: -

Market size, composition of market, type of market influences the growth of

entrepreneurship.

6. Support system: -

Availability of initiative and support systems include financial and commercial

institutions research training consultancy services ancillary industry etc

7. Government policy: -

Concessional rates of power, subsidy, tax rate, government policy towards any
industry affects the growth of any industry.
 ➢
Personality factors: -
It comprises of person, his skills styles and motives, impressive personality are
required as entrepreneurs required to work with officers, managers, engineers,
labourers, customers, investors, government officers, ministers etc.
 1. Independence: - A person who is allowed to work out plan on his own,
searches and explores resources and experiences and uses inner urge to make
the enterprise a success instead of waiting for suggestion or directions from
others can become entrepreneur.

2. Compulsion: certain compelling reason like-

A). Unemployment or dissatisfaction with existing job or occupation.

B). To use technical or professional knowledge and skills
C). To put idle funds to use

Functions of entrepreneur: -

An Entrepreneur performs a series of functions necessary, right from the beginning

of an idea up to the establishment. Functions of an entrepreneur are classified into
5 categories:

1). Risk bearing functions: - Entrepreneur assumes all risks of business which
emerges due to the possibility of changes in the tastes of consumers, modern
techniques of production and new inventions such risk are not insurable and
incalculable.

2). Organizational functions: - As an organizer combines the land of one, the

labour of another and the capital of yet another and thus produces a product. By
selling the product in the market, he pays interest on capital, rent on land and
wages to labourers and what remains is his/her profit. He brings various factors of
production, ensures continuing management and renders risk-bearing functions.

3). Innovative functions: - Innovation is the means by which the entrepreneur

either creates new wealth producing resources or provides existing resources with
enhanced potential for creating wealth, as an entrepreneur he foresees the
potentially profitable opportunity and tries to exploit it. He introduces new product,
new technology, and new method, tries new market, discovers new source of
supply, & so on.

4). Managerial function: - Determination of business objectives, formulation of

production plans, product analysis and market research organization of sales
procuring

5). Decision making functions: - He determines the business objectives suitable

for the enterprise, he take decision on matters like bringing new technology,
modifying the product, decides on bringing adequate financial resources, he
develops an organization and creates an atmosphere for maintaining a cordial
relationship in the organization
Problems in growth or entrepreneurship/ factors responsible for slow growth
are: -

1). Incompetence & poor management.

2). Low level of commitment.

3). Restrictions imposed by custom and tradition.

4). Involvement of high risk.

5). Socio-cultural rigidities.

6). Lack of motivation’ lack of infra structural facilities.

7). Lack of communication network.

8). Absence of entrepreneurial aptitude.

9). Low status of businessmen.

10). Market imperfections, legal formalities involved to set up a unit.

11). Low quality products.

12). Low package of salaries to employees.

Risk involved with Entrepreneurship: -

A). Financial risk: - Entrepreneur may not see the enough profit in the initial
stages, earning profit is always uncertain and irregular. Amount invested may earn
in same rate
B). Personal risk: - Starting new venture uses much of the entrepreneur’s energy
and time. He or she has to sacrifice the pleasures attached to family and social life.

C). Career risk: - Leaving successful career to start a new business or the
potential of failure causing damage to professional reputation and it might be
difficult for him leave business and join as employee elsewhere.

D). Psychological risk: - Mental sufferings an entrepreneur bears while organizing

and running a business venturesome who have suffered financial disasters have
been unable to bounce back
Barriers to entrepreneurship: -
It is classified into 3 categories:

1. Environmental barriers: -
a. Non-availability of raw materials: - non availability of raw materials
during peak time, is an obstacle to entrepreneur it leads to stiff
competition
b. Lack of skilled labour: due to lack of availability skilled labour, or loyal
employees or committed employees are harmful to the growth of
organization
c. Lack of good machinery: rapid technological developments demands for
new machinery, for small investors it is difficult to invest very often hence
the machines become obsolete.
d. Lack of infrastructure: infrastructure includes availability of land building
at right place, adequate water supply, uninterrupted electricity supply,
transportation
e. Lack of fund: accumulation of fund from bank, relatives, friend and other
institution may be big problem due to uncertainty of earning in business
f. Other environmental barriers: high cost of production, lack of motivation
from government, corruption in administration, could be barriers for
entrepreneurship.

2. Personal barriers: -
Are those caused by emotional blocks of an individual some of them are-
a. People who do not want to take risk in spite of having enough money may
be not willing to invest money in business
b. Lack of confidence: ignorance or lack of skills required for business, or
failing to plan well, may lead to lack of confidence
c. Lack of motivation: when an entrepreneur faces the challenges of real
business of bears loss or his ideas don’t work he loses interest or
motivation
d. Lack of patience: the desire to achieve success in the first attempt or
become rich very soon is the prime motivating factor of modern youth.
When such dreams do not come true, they lose interest, this gradually
drives to fail in business.
e. Inability to dream: those who short of vision or become satisfied with what
they achieve, sometimes lose interest in further expansion/growth of
business.

3. Social barriers: -
a. Low status: the society things that entrepreneurs are the people who exploit
 the society. Thus, the attitude of the society towards entrepreneurs is not
positive.
b. Custom and tradition of people: most people want real job. Parents who
entrepreneurs do not want their children to be entrepreneurs. Thus, lack of
support from society and family hinder the growth of entrepreneurs.

Entrepreneurship & Economic Growth: -

1. Wealth Creation and Sharing: -

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

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

3. Balanced Regional Development: -

Entrepreneurs setting up new businesses and industrial units help with regional
development by locating in less developed and backward areas. The growth of
industries and business in these areas leads to infrastructure improvements like
better roads and rail links, airports, stable electricity and water supply, schools,
hospitals, shopping malls and other public and private services that would not
otherwise be available.
Every new business that locates in a less developed area will create both direct and
indirect jobs, helping lift regional economies in many different ways. The
combined spending by all the new employees of the new businesses and the
supporting jobs in other businesses adds to the local and regional economic output.
Both central and state governments promote this kind of regional development by
providing registered MSME businesses various benefits and concessions.

4. GDP and Per Capita Income: -

India’s MSME sector, comprised of 36 million units that provide employment for
more than 80 million people, now accounts for over 37% of the country’s GDP.
Each new addition to these 36 million units makes use of even more resources like
land, labor and capital to develop products and services that add to the national
income, national product and per capita income of the country. This growth in
GDP and per capita income is again one of the essential goals of economic
development.

5). Standard of Living: -

Increase in the standard of living of people in a community is yet another key goal
of economic development. Entrepreneurs again play a key role in increasing the
standard of living in a community. They do this not just by creating jobs, but also
by developing and adopting innovations that lead to improvements in the quality of
life of their employees, customers, and other stakeholders in the community. For
example, automation that reduces production costs and enables faster production
will make a business unit more productive, while also providing its customers with
the same goods at lower prices.

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

7. Community Development: -
Economic development doesn’t always translate into community development.
Community development requires infrastructure for education and training,
healthcare, and other public services. For example, you need highly educated and
skilled workers in a community to attract new businesses. If there are educational
institutions, technical training schools and internship opportunities, that will help
build the pool of educated and skilled workers.
A good example of how this kind of community development can be promoted is
Azim Hashim Premji, Chairman of Wipro Limited, who donated Rs. 27,514 crores
for promoting education through the Azim Premji Foundation. This foundation
works with more than 350,000 schools in eight states across India. So, there is a
very important role for entrepreneurs to spark economic development by starting
new business.
Entrepreneurial competencies: - Competencies are characteristics of person,
which results in effective and/or superior performance in a job. It is the
combination of knowledge, skills and appropriate motives or traits than an
individual must possess to perform a given task.

Types of entrepreneurial competencies: -

1). Personal entrepreneurial competencies

2). Venture initiation and success competencies

Personal entrepreneurial competencies: - some of personal competencies

required for an entrepreneur are as follows:
a. Initiative:
b. Ability to see and act on opportunities
c. Persistence
d. Information seeking
e. Concern for high quality of work
f. Commitment to work
g. Commitment to efficiency
h. Systematic planning
i. Problem solving
j. Assertiveness
k. Persuasion
l. Use of influence strategies

Venture initiation and success competencies: - entrepreneur should possess

competencies required for launching the enterprise and for its survival and
growth. These competencies divided into 2 categories:
a. Enterprise launching competencies: it includes understanding nature of
business, to comply with government regulations, to deal with business, to
finance the business, to locate the business, apply marketing strategy, to
choose type of ownership, obtain technical assistances, develop a business
plan, etc.
b. Enterprise management competencies: it consists of competencies like-
capacity to protect the business, manage customer and credit, manage the
finances, manage the business records, manage sales efforts, promote goods
and services, manage human resources, manage business Women
 Entrepreneurship: Government of India has defined women
entrepreneurship as An enterprise owned and controlled by women having
minimum financial interest of 51% of the capital and giving at least 51% of
the employment generated in the enterprise to women.

Problems faced by women entrepreneurs: -

1. Male dominated society: - women face role conflicts as soon as they initiate
any business activity. Family plays major role influencing factor for married
women entrepreneur and husband being main constituent of the family, has a
major influencing role.

2. Absence of entrepreneurial aptitude: - as per study, involvement of women in

the small-scale sector as owners stands at mere 7% only.
3. Marketing problems: - it is one of the core problems as this area is mainly
dominated by males and even women with adequate experience fail to make a
dent.
4. Financial problems: - obtaining the support of bankers, managing the working
capital, lac of credit resources are the problems which still remain in the domain
of males.
5. Family conflicts: - They spend long hours in business and as a result, they find
it difficult to meet the demands of their family members and society as well.
6. Shortage of raw materials: - it may be difficult for them to travel a lot to have
a greater number of choices of suppliers.
7. Heavy competition: -women entrepreneurs have imperfect organizational set
up. But they have to face severe competition from organized industries.
8. High cost of production: - it is due to low investment, labour problems, over
load of work family tension so on.
9. Lack of self-confidence: - women hesitate to take risk, they conservative to
taking risks and their risk-bearing capacity is also less.
10.Social barriers: - Women entrepreneurs in India are always seen with
suspicious eyes. Particularly in rural areas, they face more social barriers. Caste
and religions dominate with one another and hinders women entrepreneurs.

Promotions of women entrepreneurs: -

Development of women has been a policy objective of the government since

independence. Some of the programs for women are as follows:

1). 1980-improtance were given to implementation of programmes for women

 under different sectors of agricultural and its allied activities of dairying,
poultry, animal husbandry, handlooms, hand-crafts, small scale industries etc.

2). 8th 5-year plan: efforts were made to increase employment for women.
Training programming for women in agriculture was launched. Full assistance
given to start agro-based industries. The scheme named as IIRDP) integrated
rural development programme, Jawahar Rojgar yojana, (TRYSEM) training of
rural youth for self-employment, (DWCRA) development of women and
children in rural areas were started to alleviate poverty

3). 9th 5-year plan: state and central government adopted a strategy called
“Women Component Plan”

a). Under this 30% of funds/benefits are earmarked in all women-related sectors

b). Provided forward and backward linkages for credit and marketing facilities
to women entrepreneurs

c). TREAD programmes aims at economic empowerment of women in rural,

urban and semi-urban areas. It develops their entrepreneurial skills, eliminates
constraints faced by women and strengthens their trade support networks.

4). 10th 5-year plan: it suggests a 3 fold strategy for empowering women
through1-social empowerment,2-economic empowerment,3-gender justice

Other schemes:
1. Nmahila vikas nidhi
2. Micro credit scheme
3. The Rastriya mahila kosh
Institutional support: -
NWDC: NATIONAL WOEMN DEVELOPMENT CORPORTATION serves all
women with the intention of promoting women entrepreneurship

• Provision of training
• Technical consultancy services
• Necessary linkages

1. FICCI Ladies Organization:

FEDERATION OF INDIAN CHAMBERS OF COMMERCE AND INDUSTRIES
–promotes women entrepreneurship and professional excellence. It organizes
seminars, conferences, training programming in areas like IT, insurance, venture
capital, travel and tourism. Exports gems and jewellery, stock market, accounting,
marketing, mutual funds etc.

2. State financial corporation:

(SFC) exists in almost every state of India provides financial assistance to
women’s entrepreneurs with liberal terms and at reduced rate of interest.

3. SIDBI-SMALL INDUSTRIAL DEVELOPMENT BANK OF

INDIA:

Special scheme of financial and managerial assistance for women entrepreneurs.

Like to set up industrial units in small scale sectors. Schemes SIDBI are-

1. MARKETING FUND FOR WOMEN, (MFW)

2. MAHILA UDYAM NIDHI (MUM)

NABARD: National Bank for Agricultural and Rural Development.

• Has set up women cells at its head office and

• Appointed nodal officers in each regional office.
• It is implemented exclusive schemes for women entrepreneurs
• Assistance to rural women in non-farm products of rural women in
non-farm development
• Assistance in marketing on non-farm products of rural women

Commercial banks:
All commercial banks extend term loans and working capital to women
entrepreneurs. All most all banks have set up women development cells to assistant
the women entrepreneurs.

World Association of Women Entrepreneurs:

It is an international women’s business organization. It comprises of more than 40
members countries with 2900 business owners, the members represent various
sectors like corporate, academic, government, education, agriculture, commerce,
manufacturing and servicing industry. It promotes women entrepreneurship,
• participation in international conferences,
• facilitating international collaboration,
• setting up new units,
• helps in exports and import business
Consortium of women entrepreneurs of India:
• It assist women entrepreneurs in global marketing skill level
• Organizes exhibitions
• Arranges buyer seller meets
• Market promotion and selling activities
• Provides essential marketing linkages within the country and overseas

Association f lady Entrepreneurs of Andhra Pradesh:

Came into existence in 1993. Its objectives are:
• It provides technological information
• Helps in aspiring women to identify projects by counseling
• To undertake schemes and programs for the upliftment of women
• Promotes small and medium enterprises
• Helps in marketing their products

Association of women entrepreneurs of Karnataka: (AWAKE):

• Imports technical knowledge

• Trains women entrepreneurs in preparation of projects reports
• Helps in establishment of contracts for finance
• Helps in identification and selection of product line and a product
• Helps in tackling labour problems

The Self-employed women’s association: (SEWA):

It is registered in 1972 as women’s trade union.

Its membership is open only to poor women on payment of Rs.10 as
share capital Help women become financially independent and start
their own economic activity Help women to get small loans without
difficulty.

Micro finance scheme:

Rural women who come together n weekly/fortnightly/monthly-basis to save and

borrow loans from banks and to rotate these among their members for petty and
emergent purposes.
It is promoted by NGOs
government provides
finance
Canara bank and ICICI bank provided grants to promoted self-help groups through
NGO, creating jobs, and contributing to improvement in various key goals such as
GDP, exports, standard of living, skills development and community development.

2marks questions

1). Define entrepreneur

2). Define entrepreneurship
3). Give the meaning of Women owned enterprise
4). Give the meaning of Intrapreneur
5). Define enterprise
6). Define Ultrapreneur
7). What are entrepreneurial competencies?

6marks question

1). Explain qualities of an Entrepreneur?

2). What are the problems in the growth of an
entrepreneur?
3). Explain the problems faced by women
entrepreneur
4). Explain the help provided by SEWA &
AWAKE
5). Briefly explain about any 2 successful
entrepreneurs
6). Differentiate between Entrepreneur and
Manager
7). Differentiate between Entrepreneur and Entrepreneurship
8). What are the different types of Entrepreneurial competencies of great
Entrepreneurs?

14marks questions

1). Define Entrepreneur. Explain the qualities of an

Entrepreneur
2). Explain the functions of an entrepreneur
3). Explain types of Entrepreneurs
4). Explain the factors influencing entrepreneurship. Explain the advantages and
disadvantages of being an Entrepreneur
5). What are the risk involved with Entrepreneurship?
6). Explain women entrepreneurship