1

Entrepreneurship

I keep revising my vision. Only when you can dream it,

you can do it

Dhirubhai Ambani
 Learning Objectives
Upon completion of this chapter, you should be able to:

•  Understand the role and importance of the entrepreneur in economic development.

• Introduce the evolution and concepts of entrepreneurship.
• Identify the various types of entrepreneurs and their functions.
• Recognize entrepreneurial competencies.
• Explain the myths of entrepreneurship.
• Identify the factors required for capacity building for entrepreneurs.
 
 Role and Importance of Entrepreneurs in
Economic Development
• Contribution to GNP and Per Capita Income
• Employment Generation
• Balanced Regional Development
• Promotion of Export and Trade
• Improvement in the Standard of living
• Increase in Innovation
• Overall development of the Economy
 Evolution of the Concept of
Entrepreneurship
• Richard Cantillon viewed entrepreneurs as non fixed income earners and therefore, operating
at risk
• Adam Smith introduced the concepts of liberal and entrepreneurial capitalism
• Jean-Baptiste Say defined entrepreneur as a person able to recognise opportunities and
manage them effectively.
• Francis Walker defined an entrepreneur as one who is endowed with more than average
capacity
• Joseph Schumpter defined entrepreneur as an innovator
 Who Is an Entrepreneur?

• The word “entrepreneur” is derived from the French verb enterprendre (to
undertake)

• The word entrepreneur is derived from Sanskrit word called “Antaraprerana”

• A person who starts or organises a commercial enterprise, especially one

involving financial risk (Timmons)

Entrepreneurship Development -2e

 What Is Entrepreneurship?

• The process of creation of a business enterprise

• It is the dynamic process of creating incremental wealth

 How Do I Become an Entrepreneur?
 Generating business ideas and identifying business opportunities
 Conducting a feasibility analysis
 Making a business plan
 Arranging funds
 Setting up an enterprise and building a venture team
 Smooth management of the enterprise
 Nurturing growth
 Exit Strategies
 Advantages of Being an Entrepreneur
• Independent Person and makes own decisions
• Enough scope for innovation
• Opportunity of realising dreams and achieving excellence while simultaneously
contributing to the welfare of society
• Usually has immense job satisfaction
• Able to bring socio-economic transformation by generating employment and
creating wealth
• Able to make a significant contribution to the development of the country
 Types of Entrepreneurs
• Innovative Entrepreneur

• Imitative or Adoptive Entrepreneur

• Fabian Entrepreneur

• Drone Entrepreneur
 Intrapreneurship /Corporate
Entrepreneurship
• Process by which teams within an established company conceive, foster, launch, and manage a
new business that is distinct from the parent company by leveraging from parent company’s
resources

• The innovation that occurs inside established companies through the efforts of creative
employees.

• Intrapreneurs are employees within an organisation who use their entrepreneurial spirit to
introduce new products, new processes, new methods and new forms within the corporation
Table 1.1 Entrepreneur Versus Intrapreneur

Criteria Entrepreneur Intrapreneur

Dependency Independent in his operations Dependent on the entrepreneur/owner

Fund raising Raises the fund required for the Funds are not raised
enterprise

Risk taking Fully bears the risk involved in Does not fully bear the risk involved
the business in the business

Operation Operates from outside Operates within the organization

Primary Motive Goal oriented, self reliant and Excess to corporate resources and also
self motivated responds to corporate rewards and
recognition
 Difference Between a Manager and an
Entrepreneur
• The entrepreneur starts a venture and is the owner of the enterprise, whereas the manager is an employee in
an enterprise.
• The entrepreneur starts an enterprise and creates wealth and generates profit. The manager receives salary
for the services rendered to the enterprise.
• An entrepreneur is an employer whereas a manager is an employee.
• An entrepreneur is a job provider whereas a manager is a job seeker.
• An entrepreneur assumes more risk and uncertainty than a manager does.
• Entrepreneurs take mainly strategic decisions, whereas managers take operational decisions.
 Entrepreneurial Competencies
• Creativity and Innovation
• Leadership and team building
• Opportunity seeking and initiative
• Risk taking and decision making ability
• Tolerance of ambiguity and uncertainty
• Motivation to excel
• Problem solving
• Goal orientation
• Self efficacy and adaptability
• Internal locus of control
• Persistence, persuasion and networking
 Myths About Entrepreneurship
• Entrepreneur are born, not made
• Entrepreneurs are academic and social misfit
• All you need is money to be an entrepreneur
• All you need is luck to be an entrepreneur
• A great idea is the only ingredient in a recipe for business
• My best friend will be a great business partner
• Having no boss is great fun
• I can start making lots of money immediately
Capacity Building for Entrepreneurs
 Create the right eco-system
 Build skills
 Provide access to capital
 Enable networking and exchange
 Create tax benefits, incentives and simplify the bureaucratic process.