ENTREPRENEURSHIP

DEVELOPMENT
UNIT 2
ENTREPRENEURIAL DEVELOPMENT
ENTREPRENEURSHIP & ECONOMIC
DEVELOPMENT
• An entrepreneur affects the lives of many people as it creates new job, provides
the product, develops the technology and provides feasible solutions to the
existing social and environmental problems.
• Entrepreneurship plays a vital role in economic development. Entrepreneurs
serve as the catalyst in the process of industrialization and economic growth.
• Entrepreneurs initiate and sustain the process of economic development in the
following ways:
• Capital formation
• Improvement in per capita income
• Generation of employment
• Balanced regional development
• Improvement in living standards
• Economic independence
• Backward and forward linkages
• Growth of entrepreneurs
CAPITAL FORMATION
• Entrepreneurs promote capital formation by mobilizing the idle
savings of public. They employ their own as well as borrowed
resources for setting up their enterprises. Such type of
entrepreneurial activities lead to value addition and creation of
wealth, which is very essential for the industrial and economic
development of the country.
IMPROVEMENT IN PER CAPITA INCOME
• Entrepreneurs explore and exploit opportunities, encourage effective
resource mobilization of capital and skill, bring in new products and
services and develops markets for growth of the economy. In this way,
they help increasing gross national product as well as per capita
income of the people in a country. Increase in gross national product
and per capita income of the people in a country, is a sign of
economic growth. An increasing number of entrepreneurs are
required to meet this increasing demand for goods and services. Thus
entrepreneurship increases the national income.
GENERATION OF EMPLOYMENT
• Entrepreneurs provide immediate large-scale employment to the
unemployed which is a chronic problem of underdeveloped nations.
With the setting up of more and more units by entrepreneurs, both
on small and large scale, numerous job opportunities are created for
others. As time passes, these enterprises grow, providing direct and
indirect employment opportunities to many more. In this way,
entrepreneurs play an effective role in reducing the problem of
unemployment in the country which in turn clears the path towards
economic development of the nation.
BALANCED REGIONAL DEVELOPMENT
• Entrepreneurs help to remove regional disparities through setting up
of industries in less developed and backward areas. The growth of
industries and business in these areas lead to a large number of
public benefits like road transport, health, education, entertainment,
etc. Setting up of more industries lead to more development of
backward regions and thereby promotes balanced regional
development. When the new entrepreneurs grow at a faster rate, in
view of increasing competition in and around cities, they are forced to
set up their enterprises in the smaller towns away from big cities. This
helps in the development of backward regions.
IMPROVEMENT IN LIVING STANDARDS
• Increase in the standard of living of the people is a characteristic
feature of economic development of the country. Entrepreneurs play
a key role in increasing the standard of living of the people by
adopting latest innovations in the production of wide variety of goods
and services in large scale that too at a lower cost. This enables the
people to avail better quality goods at lower prices which results in
the improvement of their standard of living.
ECONOMIC INDEPENDENCE
• Economic power is the natural outcome of industrial and business
activity. Industrial development normally lead to concentration of
economic power in the hands of a few individuals which results in the
growth of monopolies. In order to redress this problem a large
number of entrepreneurs need to be developed, which will help
reduce the concentration of economic power amongst the
population.
BACKWARD & FORWARD LINKAGES
• Entrepreneurs like to work in an environment of change and try to
maximise profits by innovation. When an enterprise is established in
accordance with the changing technology, it induces backward and
forward linkages which stimulate the process of economic
development in the country.
GROWTH OF ENTREPRENEURS
• Entrepreneurship has created millions of good jobs. In a startup
workplace, jobs often call for creativity and collaboration, leading to
personal development. Those exposed to entrepreneurship have
higher confidence and greater independence. Not bound by the
hierarchy and restrictions of large corporations, young entrepreneurs
can take on greater responsibility, work flexible schedules and use
creative solutions to problem solve. The freedom associated with
entrepreneurship comes with certain challenges. Entrepreneurs often
work long hours and risk their personal assets in developing their
business.
EVOLUTION OF ENTREPRENEURSHIP IN INDIA
• INDUS VALLEY CIVILIZATION
• Apart from agriculture and hunting, the Indus people supported themselves
by trading goods like exchange of Potteries, ornaments, exchanges of animals
etc…
• THE EARLY YEARS (1000 B.C-500 B.C):
• Indian trader introduced re-exporting bought silk from Chinese and sold to
central Asia. Bought horses from west Asians and sold to the Chinese.
• THE MAURYA ERA:
• In modern times the Maurya Empire is remembered as one of the golden
ages of Indian history, a time when the country was united and independent.
Vast territory, better trade. Widespread use of metallic money, Missions to Sri
Lanka and Southeast Asia increase trade.
EVOLUTION OF ENTREPRENEURSHIP IN INDIA
• The Middle ages-(700 A.D-1300 A.D): Paper & Printing was invented. Dams,
roads ease trade, south –East Asia & indoasiea.
• The Mughal age (1500 A.D-1600 A.D): Dominated world commerce, large
quantities of gold and silver flow into the country.
• The Mughal Era II (1600 A.D-1700 A.D): British arrive in this era. The person
named Surat merchant virji Vora among first entrepreneurs.
• The colonial era I (1700 A.D-1850 A.D): Europe was then the hotbed of
technological innovation. The traders brought with them plenty of new
ways of doing business. Seizing the opportunities that emerged, many
Indians became entrepreneurs.
• Dwarkanath Tagore, who formed India‘s first Joint Venture with a foreigner,
Carr Tagore Nanabhai Davar, who put up the country first textile mill in
1854.But could not able to run that.
EVOLUTION OF ENTREPRENEURSHIP IN INDIA
• The colonial ERA II (1850 A.D-1900A.D): Railways set up (1853). Sir J.N Tata
founded Jamshedpur steelworks. Foundations of jute mills, pharmaceutical
industry were laid.
• Some of the major players of the era were Ghanshyam das, Birla, khaitans,
Laxmanrao kirlsokar, pirojsha Godrej, K.Gopalakrishnan, L.K.singhania and Lala
shriram
• The colonial era III (1900 A.D-1947A.D): New crop arises in this Period. Change
makers like JRD Tata, MS Oberai, Jamnalal Bajaj lead the way for Indian
entrepreneurs.
• After Independence: scale industrialization entrepreneurs like Dirubai Ambani
emerged. Globalisation arrives, and with it the Premjis, the Narayana murthys,
the Rajesh Jains etc., Over the last 72 years, India has seen the entrepreneur
evolves in different role. The modern entrepreneurs are wealth creators,
communicators, change agents, entertainers etc.
CONTRIBUTION OF SMALL & MEDIUM
ENTERPRISES IN ECONOMIC DEVELOPMENT
• SMEs plays an important role in the economic development of a country. Their
role in terms of production, employment generation, contribution to exports &
facilitating equitable distribution of income is very critical. The SMEs broadly
consists of:
• The traditional cottage & household industries such as village industries, handicrafts, and coir
industries.
• Modern SMEs.
• The traditional village and cottage industries as distinguished from modern SMEs
are mostly unorganized and located in rural areas and semi urban areas. They
normally do not use power operated machines/appliances & use relatively lower
levels of investment & technology.
• The modern SMEs are mostly defined in terms of the size of investment & labour
force. The industries (Development & Regulation) defines, SMEs having less than
50 workers with the aid of power or less than 50 workers without the aid of
power.
CONTRIBUTION OF SMALL & MEDIUM
ENTERPRISES IN ECONOMIC DEVELOPMENT
• Small scale sector’s contribution to the manufacturing sector and GDP as a whole
is significant in terms of its share in total value added.
• SMEs can play a role in mitigating the problem of imbalance in the balance of
payment accounts through its export promotion.
• While the large scale industries are expected to increase the inequities of income
and concentration of wealth, SMEs are expected to help widespread equal
distribution of income and wealth.
• Small sector may provide opportunities to a large number of capable and
potential entrepreneurs who are deprived of appropriate opportunities.
• SMEs can reap the benefits of lean production and can find new cost-efficient
techniques of lean production.
• As small units can use resources more efficiently to the full capacity without any
wastage, they may have higher allocation efficiency.
• As the element of risk is low in SMEs, more resources will be employed by large
number of labor force.
TECHNOPRENEURSHIP
• Technopreneurship comprises of identifying modern technologies and
even creation of technological opportunities by presentation of
commercial products and services
• Technology -based entrepreneur is a process and formation of a new
business that involves technology and these “technopreneurs” use
technological innovations and translate such technology into
successful products or services.
• Various literatures use the term “technology-based entrepreneurs”,
“technical entrepreneurs”, “high technology entrepreneurs” or even
“high tech new ventures” to describe new business that combine
entrepreneurial skills and technology
EDUPRENEURSHIP
• The educational entrepreneur or so called edupreneur is defined as ‘a
person who has served as an educator prior to organizing a business
related to education and has invested time, energy, and capital to
create, develop, and market a program, product, service, or
technology to enhance learning.’
• They can be developers or editors of educational products and
materials, providers of tutoring services, educational consultants,
educational software providers, founders of independent schools,
owners of shops specialized in educational products and so on. Some
of them could be former employees in public educational system who
decided to leave the system in order to make their dreams come true,
others could be still in the system and act in entrepreneurial way.
ENTREPRENEURIAL ENVIRONMENT
• Entrepreneurship environment refers to the various facets within which
enterprises- big, medium, small and other have to operate. The
environment therefore, influences the enterprise. By and large, an
environment created by political, social, economic, national, legal forces,
etc influences entrepreneurship.
• Entrepreneurial environment is broadly classified into six important
segments,
• Political-Political Atmosphere, Quality of Leadership
• Economic-Economic Policies, Labour, Trade, Tariffs, Incentives, Subsidies
• Social-Consumer, Labour, Attitudes, Opinions, Motives
• Technological-Competition And Risk, Efficiency, Productivity, Profitability
• Legal-Rules, Regulations
• Cultural-Structure, Aspirations And Values
TYPES OF ENTREPRENEURS
• BASED ON CLARENCE DANHOF CLASSIFICATION
• INNOVATIVE ENTREPRENEURS
• IMITATIVE ENTREPRENEURS
• FABIAN ENTREPRENEURS
• DRONE ENTREPRENEURS
• BASED ON TYPE OF BUSINESS
• TRADING ENTREPRENEURS
• MANUFACTURING ENTREPRENEURS
• AGRICULTURAL ENTREPRENEURS
• BASED ON SIZE OF THE ENTERPRISE
• SMALL SCALE ENTREPRENEUR
• MEDIUM SCALE ENTREPRENEUR
• LARGE SCALE ENTREPRENEUR