Entrepreneurship Development

Lecture 1
 Introduction
• The word “entrepreneur” is derived from the French verb
“entreprendre”, which means ‘to undertake’. This refers to
those who “undertake” the risk of new enterprises.
• An enterprise is created by an entrepreneur.
• The process of creation is called “entrepreneurship”.
• The term "entrepreneur" seems to have been introduced
into economic theory by Cantillon (1755) but Say (1803)
first accorded the entrepreneur prominence. It was
Schumpeter however, who really launched the field of
entrepreneurship by associating it clearly with
innovation. 
 Some definitions of an Entrepreneur

• Richard Cantillon: An entrepreneur is a person who pays a certain price

for a product to resell it at an uncertain price, thereby making decisions
about obtaining and using the resources while consequently admitting the
risk of enterprise.
• J.B. Say: An entrepreneur is an economic agent who unites all means of
production- 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 rent of land, wages to labour, interest on capital and what remains
is his profit.
• David McClleland: An entrepreneur is a person with a high need for
achievement [N-Ach]. He is energetic and a moderate risk taker.
• Peter Drucker: An entrepreneur searches for change, responds to it and ex
ploits opportunities. Innovation is a specific tool of an entrepreneur hence
an effective entrepreneur converts a source into a resource.
 Entrepreneurship
• 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.
• It is the process of starting a business, a startup
company or other organization.
• The entrepreneur develops a business plan, acquires
the human and other required resources, and is fully
responsible for its success or failure
 Some Definitions of Entrepreneurship
• John Kaso and Howard Stevenson: Entrepreneurship is the
attempt to create value through recognition of business
opportunity, the management of risk taking appropriate to
the opportunity and through the communicative and
management skills to mobilise human, financial and
material resources necessary to bring up a project.
• J.A. Timmons: Entrepreneurship is the ability to create and
build something from practically nothing.
• Musselman and Jackson: Entrepreneurship is the investing
and risking of time, money and effort to start a business
and make it successful.
 Characteristics of Entrepreneurship
• Economic Activity
• Creative response to environment - Related to
Innovation
• Purposeful Activity - Profit Potential
• Dynamic process
• Risk Bearing
• Creator of organisation - Skilful Management
• Gap Filling Function
• Optimum use of resources
 Importance of Entrepreneurship
• Develops Economy
• Develops N-Ach in Individuals
• Optimum Exploitation of Resources
• Promotes Innovation
• Employment Generation
• Promotes Women
• Promotes Small Businesses
• Balanced Regional Development
Factors Affecting Entrepreneurship
• Personal Characteristics
• Demand
• Control Systems
• Environmental Factors
• Capital
• Life Path Circumstances
– Work Environment
– Negative Displacement
– Career Transitions
 Benefits of Entrepreneurship
• Create a difference to the Society
• Make high Profit
• Work to one’s Full Potential
• Pursue One’s Self Interest
• Motivation
• Entering New Markets
• Financial Satisfaction
• Flexibility
• Decision Making
 Limitations of Entrepreneurship
• Regular Income
• Working Hours
• Stressful Work
• Risk
 Functions of Entrepreneur
• Scouting of Entrepreneurial opportunities
• Generation of Business Ideas
• Converting the idea into Reality
• Arranging Resources
• Supply of Capital
• Establishment of Enterprise
• Managing the Enterprise
• Growth and Development
Characteristics of an Entrepreneur
• Innovation
• Risk taking capability
• Promotion
• Decision Making
• Business Planning
• Leadership
• Organisation Building