CM4710 – Construction Economics and Finance

Assignment - 1
(Economics – Report on Entrepreneurship)

Teaching Faculty: Teaching Associate:

Prof. Rajnikant Trivedi Naman Khamar
Prof. Shamina Ansari

Hitarth Goswami | UG190568

Siddharth Kabra | UG191324

Bachelor of Construction Technology

Kasturbhai Lal Bhai Campus, University Rd, Navrangpura, Ahmedabad, Gujarat

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CONTENTS

1. Introduction .......................................................................................3
2. Detailed Explanation ........................................................................4
2.1 Characteristics of Entrepreneurship: ......................................................... 5
2.2 Importance of Entrepreneurship: .............................................................. 6

3. Post-Covid Scenario .........................................................................7

4. Analytical View .................................................................................9
5. Conclusion ......................................................................................10
6. Suggestions for Fostering Entrepreneurship: .................................11
7. Limitations of Entrepreneurship: .....................................................12

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1. Introduction

Entrepreneurship is the art of starting a business, basically a startup company

offering creative product, process, or service. We can say that it is an activity
full of creativity. An entrepreneur perceives everything as a chance and
displays bias in taking decision to exploit the chance.

An entrepreneur is a creator or a designer who designs new ideas and business

processes according to the market requirements and his/her own passion. To
be a successful entrepreneur, it is very important to have managerial skills and
strong team building abilities. Leadership attributes are a sign of successful
entrepreneurs. Some political economists regard leadership, management
ability, and team building skills to be the essential qualities of an entrepreneur.

An entrepreneur is an innovator or a creator who introduces something new to

the firm or economy. It can be a new method of production, a new product,
a new source of material, a new market, or any other similar innovation. Thus,
an entrepreneur is an innovator, creator, borrower, purchaser, etc.
https://www.tutorialspoint.com/entrepreneurship_development/entrepreneur
ship_development_introduction.htm

In economics, entrepreneurship connected with land, labour, natural

resources, and capital can generate a profit. The entrepreneurial vision is
defined by discovery and risk-taking and is an indispensable part of a nation’s
capacity to succeed in an ever-changing and more competitive global
marketplace.
https://byjus.com/commerce/what-is-entrepreneurship/

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2. Detailed Explanation

There are 4 Types of Entrepreneurships which are classified as follows:

Small Business Entrepreneurship: These businesses are hairdressers, grocery

stores, travel agent, consultant, carpenter, plumber, electrician, etc. These
people run or own their own business and hire family members or local
employee. For them, the profit would be able to feed their family and not
making 100 million business or taking over an industry. They fund their business
by taking small business loans or loans from friends and family.

Scalable Startup Entrepreneurship: This start-up entrepreneur starts a business

knowing that their vision can change the world. They attract investors who think
and encourage people who think out of the box. The research focuses on a
scalable business and experimental models, so, they hire the best and the
brightest employees. They require more venture capital to fuel and back their
project or business.

Large Company Entrepreneurship: These huge companies have defined life

cycle. Most of these companies grow and sustain by offering new and
innovative products that revolve around their main products. The change in
technology, customer preferences, new competition, etc., build pressure for
large companies to create an innovative product and sell it to the new set of
customers in the new market. To cope with the rapid technological changes,
the existing organizations either buy innovation enterprises or attempt to
construct the product internally.

Social Entrepreneurship: This type of entrepreneurship focuses on producing

product and services that resolve social needs and problems. Their only goal is
to work for society and not make any profits.
https://byjus.com/commerce/what-is-entrepreneurship/

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2.1 Characteristics of Entrepreneurship:

Not all entrepreneurs are successful, there are definite characteristics that
make entrepreneurship successful. A few of them are mentioned below:

• Ability to take a risk: Starting any new venture involves a considerable

amount of failure risk. Therefore, an entrepreneur needs to be courageous
and able to evaluate and take risks, which is an essential part of being an
entrepreneur.

• Innovation: It should be highly innovative to generate new ideas, start a

company and earn profits out of it. Change can be the launching of a new
product that is new to the market or a process that does the same thing but
in a more efficient and economical way.

• Visionary and Leadership quality: To be successful, the entrepreneur should

have a clear vision of his new venture. However, to turn the idea into reality,
a lot of resources and employees are required. Here, leadership quality is
paramount because leaders impart and guide their employees towards the
right path of success.

• Open-Minded: In a business, every circumstance can be an opportunity

and used for the benefit of a company. For example, Paytm recognized
the gravity of demonetization and acknowledged the need for online
transactions would be more, so it utilized the situation and expanded
massively during this time.

• Flexible: An entrepreneur should be flexible & open to change according

to the situation. To be on the top, a businessperson should be equipped to
embrace change in a product and service, as and when needed.

• Know your Product: A company owner should know the product offerings
and be aware of the latest trend in the market. It is essential to know if the
available product or service meets the demands of the current market, or
whether it is time to tweak it a little. Being able to be accountable and then
alter as needed is a vital part of entrepreneurship.
https://byjus.com/commerce/what-is-entrepreneurship/

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2.2 Importance of Entrepreneurship:

Creation of Employment: Entrepreneurship generates employment. It provides
an entry-level job, required for gaining experience and training for unskilled
workers.

• Innovation: It is the hub of innovation that provides new product ventures,

market, technology, and quality of goods, etc., and increase the standard
of living of people.

• Impact on Society and Community Development: A society becomes

greater if the employment base is large and diversified. It brings about
changes in society and promotes facilities like higher expenditure on
education, better sanitation, fewer slums, and a higher level of
homeownership. Therefore, entrepreneurship assists the organization
towards a more stable and high quality of community life.

• Increase Standard of Living: Entrepreneurship helps to improve the standard

of living of a person by increasing their income. The standard of living
means, increase in the consumption of various goods and services by a
household for a particular period.

• Supports research and development: New products and services need to

be researched and tested before launching in the market. Therefore, an
entrepreneur also dispenses finance for research and development with
research institutions and universities. This promotes research, general
construction, and development in the economy.
https://byjus.com/commerce/what-is-entrepreneurship/

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3. Post-Covid Scenario

Companies face problems in supply chains because of the number of

employees stuck in their homes. The result is that the supply chain was
interrupted, and specific sectors were diminished. Around the same time,
major companies have continued working and implementing new wellness
measures, such as personal protective devices, physical separation, and
continuous cleaning. Thus, entrepreneurship is also a means of dealing with the
covid-19 crisis for people, firms, and governments (Kraus et al., 2020).

To deal with the Covid-19 crisis, entrepreneurs play a vital role in solving the
problem and the changes in the environment. The entrepreneurial orientation
applies to 'solid behavioral characteristics of ingenuity for a product,
promotion of creative behavior, risky ventures, and constructive
innovation'(Wang & Altinay, 2012). That means innovation, risk taking, and
enterprise are the main business elements needed to deal with the Covid-19
crisis. More and more people and enterprises are looking to be regarded as
entrepreneurs and involved in cultural and social activities. This suggests that a
more modern understanding of entrepreneurship combines cultural, social,
and lifestyle aspects.

Environmental perceptions include measuring the probability of such incidents.

Because of a long cycle of continuous work, specific fields may be more robust
than others. That will facilitate an assessment of how environmental events
affect a business. Other contexts may be a more complex and political event-
based transition. To evaluate possible market routes, some caution is
necessary. The shifts can be more profound because of insecurity in turbulent
conditions. In terms of scenario preparation for dealing with covid19 several
proposed routes may also be derived. This makes it possible to develop a
proactive approach to potential impacts on the action.

An entrepreneur is described as an individual who uses some creativity to

maximize market opportunity. This means that they anticipate a market gap
that a new company product will cover. To do this, you need to create a
layout that can contribute to financial benefits for the product, processes, or
service. The entrepreneur focuses on how to participate in innovation-focused
and profitable ventures to pursue new opportunities successfully.

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In addition, the atmosphere has an important impact on entrepreneurial

behavior because of social and environmental influences. In some instances,
this means that family enterprises can face social pressure to make certain
decisions. The environment may support or impede entrepreneurs in terms of
their business activities in the family. It includes focusing on how the
environment will help entrepreneurship.

Entrepreneurship involves understanding the identification of possibilities and

innovative ideas. This also provides imagination, and various ways of thought
can create new ideas. Creativity is described as 'the creation by a single or
small group of people together of new and valuable ideas’ (Amabile, 1996).
Creativity is essential to address the Covid-19 situation since it can have a
strategic edge on the global market.

Business concepts arising from imagination require relative reasoning on how

they succeed. For ideas to reach the industry, companies impacted by Covid-
19 need such forms of action. This includes theories that are being perfected
and created iteratively. The idea must be shaped into business ideas that
stakeholders can embrace before entering the market. Arguments continue
to be feedback and recommendations from others to educate stakeholders.
Initial opinions may be modified depending on the perception of others. This
suggests that ideas to promote their market growth are necessary to create.
This includes joining in discussions with others. It can help influence more
developments by sharing concepts. However, based on input from covid 19
effects, those ideas can need to be revoked.
https://www.hansshodhsudha.com/fourth-issue/April-June%20article%201.pdf

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4. Analytical View

Economic Impact: Entrepreneurial endeavors are fundamental drivers of

economic growth. Through the creation of new businesses, entrepreneurs
introduce innovative products, services, and business models that stimulate
demand, increase competition, and contribute to a more dynamic market
environment. These ventures attract investment, generate revenue, and
ultimately bolster gross domestic product (GDP), playing a pivotal role in both
developed and developing economies.

Innovation and Technological Advancement: Entrepreneurs are the trailblazers

of innovation, propelling industries forward through breakthrough ideas and
advancements. From disruptive technologies to novel processes,
entrepreneurs challenge the conventional norms and reshape industries. Their
willingness to take risks and experiment with new concepts fosters a culture of
innovation that drives sustained economic progress.

Job Creation and Employment: One of the most notable impacts of

entrepreneurship is its role in job creation. Startups and growing businesses
provide numerous employment opportunities, addressing unemployment
concerns and driving economic stability. As these businesses expand, they
contribute to the development of local communities by creating jobs across
various skill levels and sectors.

Challenges Faced by Entrepreneurs: While entrepreneurship offers substantial

benefits, it is not without its challenges. Entrepreneurs often grapple with limited
access to capital, regulatory complexities, and the inherent risks associated
with launching new ventures. Navigating market uncertainties, securing
funding, and overcoming initial hurdles are critical aspects that entrepreneurs
must tackle to ensure the sustainability of their enterprises.

Societal Impact: Beyond economic contributions, entrepreneurship can also

have a profound societal impact. Social entrepreneurs, for instance, address
societal issues such as poverty, education, healthcare, and environmental
sustainability through innovative business models. These ventures leverage
market mechanisms to drive positive change, demonstrating the potential of
entrepreneurship to serve as a force for social good.

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5. Conclusion

In conclusion, entrepreneurship emerges as a dynamic force that shapes

economies, drives innovation, and addresses societal challenges. The art of
entrepreneurship involves identifying opportunities, taking calculated risks, and
creating innovative solutions that lead to economic growth and societal
progress.

The post-COVID scenario has highlighted the flexibility and adaptability of

entrepreneurs in the face of extraordinary challenges. Entrepreneurs have
demonstrated their capacity to innovate & contribute to supply chain,
creating new market opportunities, and addressing emerging needs during
uncertainty.

The significance of entrepreneurship goes beyond financial gains.

Entrepreneurial activities lead to the creation of jobs, faster technological
advancements, and stimulate competition, ultimately benefiting consumers
and societies at large.

However, entrepreneurship is not without its obstacles. Entrepreneurs often

deal with financial constraints, regulatory hurdles, and market uncertainties.
The high failure rate of startups highlights the inherent risks associated with
entrepreneurship, but this risk-taking attitude fuels innovation & progress.

From economic growth to innovation, job creation, and social change,

entrepreneurship shapes diverse aspects of our world. As economies continue
to evolve and adapt, the role of entrepreneurs remains crucial in steering the
trajectory of progress and development.

In essence, entrepreneurship stands as a testament to human ingenuity,

creativity, and resilience. By embracing the entrepreneurial spirit, individuals
and societies can contribute to shaping a future defined by progress,
innovation, and positive impact. Remember that the conclusion provided
above is a summary of the main points discussed in the provided text.
Depending on the specifics of your report and your desired emphasis, you
might want to tailor the conclusion accordingly.

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6. Suggestions for Fostering Entrepreneurship:

Access to Funding: Governments and financial institutions should create

accessible funding options for startups and entrepreneurs. Initiatives like
venture capital funds, angel investor networks, and microfinance programs
can provide the necessary capital for innovative ventures.

Entrepreneurial Education: Incorporating entrepreneurial education at various

levels of the education system can equip individuals with the necessary skills,
knowledge, and mindset to succeed in business. Workshops, training programs,
and mentorship can nurture entrepreneurial capabilities.

Supportive Ecosystem: Establishing innovation hubs, incubators, and

accelerators can provide entrepreneurs with the resources, infrastructure, and
networking opportunities they need to develop and scale their ventures.

Regulatory Reforms: Simplifying business registration processes and reducing

bureaucratic hurdles can encourage more individuals to enter the
entrepreneurial space. Clear and favorable regulations can create a
conducive environment for startups to thrive.

Research and Development Collaboration: Encouraging partnerships between

entrepreneurs, research institutions, and universities can lead to innovative
solutions that address real-world challenges.

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7. Limitations of Entrepreneurship:

High Failure Rate: Many startups and entrepreneurial ventures fail due to
factors like market uncertainties, inadequate funding, and competition. This
high failure rate highlights the inherent risks associated with entrepreneurship.

Financial Constraints: Limited access to funding, especially for early-stage

startups, can hinder growth and innovation. Lack of capital can lead to missed
opportunities and stunted development.

Regulatory Challenges: Complex and ever-changing regulations can pose

significant challenges for entrepreneurs, especially those operating in highly
regulated industries.

Market Competition: Saturated markets and competition from established

players can make it difficult for new startups to gain traction and secure a
market share.

Risk and Uncertainty: Entrepreneurship involves taking calculated risks, and the
outcome is often uncertain. Factors beyond an entrepreneur's control, such as
economic downturns or technological shifts, can impact the success of a
venture.

Work-Life Balance: Entrepreneurs often face long working hours and high levels
of stress as they strive to establish and grow their businesses. Balancing personal
and professional commitments can be a challenge.

Sustainability Concerns: While entrepreneurship drives innovation, not all

ventures consider environmental and social sustainability in their pursuits,
leading to potential negative impacts on the environment and society.

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