Unit – I: Entrepreneur and Entrepreneurship:

Understanding Concept of Entrepreneurship, Evolution of Entrepreneurship, Characteristics of

Entrepreneur, Types of Entrepreneurs, Recent Trends in Entrepreneurship Development, Role of
Entrepreneurship in Economic development in India; Rural Entrepreneurship, Need and Importance
of Rural Entrepreneurship – Problems and Perspectives of Rural Entrepreneurship.
Entrepreneurs play a vital role in the economic development of a country. Economic development of a
country depends primarily on its entrepreneurs. An entrepreneur often considers as a person who sets up his
own business or industry. He has initiative, drive, skills & sprit of innovation who aims at high goals.
The entrepreneur is the individual that identifies the opportunity, gathers the necessary resources and is
ultimately responsible for the performance of the organization.
Entrepreneurs are action oriented, highly motivated individuals who take risks to achieve goals.
Entrepreneurship is the purposeful activity of an individual or a group of associated individuals, undertaken
to initiate maintain or aggrandize profit by production, or distribution of economic goods and services.
Entrepreneurship is very often associated with adventurism, risk bearing, innovating creativity etc. it is
concerned with making dynamic changes in the process of production, innovation in production, new usage
for materials etc.
It is mental attitude to take calculated risks with a view to attain certain objectives. It also means doing
something in a new and better manner.
ENTREPRENEUR
In the words of J B Say, “An entrepreneur is one who brings together the factors of production and
combines them into a product”.
Joseph A Schumpeter defines an entrepreneur as “one who innovates, raises money, assembles inputs and
sets the organization going with the ability to identify and explore opportunities which others are not able to
fulfill such economic opportunities.”
ENTREPRENUERSHIP Entrepreneurship is the indivisible process of an entrepreneur. It is the process of
identifying opportunities in the market place, arranging the resources required to pursue these opportunities
and investing the resources to exploit the opportunities for long term gains. According to Cole,
“Entrepreneurship is the purposeful activity of an individual or a group of associated individuals undertaken
to initiate, maintain and gain profit by production or distribution of economic goods and services.”
ENTREPRISE Entreprise simply means an economic organization or activity. It may also be called as a
place of business of an entrepreneur or an individual. Here it is considered as a business organization. This
emphasis the boldness and initiative of an entrepreneur who creates a business with innovative ideas.
Therefore enterprise may be considered as “an organization engaged in a business activity.”

The word "entrepreneur derived from the French verb enter render which means to “undertake”. It refers to
an individual who undertake the risk of new enterprise. In the early 16th century, the Frenchman who
organized and led military expeditions were referred to as 'entrepreneurs pop'. Later on, entrepreneur was
con- severed as a coordinator who combined all means of production and managed them. Today, he is
considered as an innovator who intro-duces new production functions and techniques.

Characteristics of Entrepreneur
1. Creativity.
2. Professionalism.
3. Risk-taking.
4. Passion.
5. Planning.
6. Knowledge.
7. Social Skills.
8. Open-mindedness towards learning, people, and even failure.
9. Empathy
10. Customer is Everything.
FUNCTIONS OF AN ENTREPRENER: An entrepreneur performs a series of functions necessary right
from the genesis of an idea up to the establishment and effective operation of an enterprise. He carries out
the whole set of activities of the business for its success. He recognizes the commercial potential of a
product or a service, formulates operating policies for production, product design, marketing and
organizational structure. He is thus a nucleus of high growth of the enterprise.
According some economists, the functions of an entrepreneur is classified into five broad categories:
1. Risk-bearing function
2. Organizational function
3. Innovation function
4. Managerial function, and
5. Decision making function

Types of Entrepreneur
BASED ON THE TYPE OF BUSINESS
1. Business Entrepreneurs
2. Trading Entrepreneurs
3. Industrial Entrepreneurs
4. Corporate Entrepreneurs
5. Agricultural Entrepreneurs
6. Retail Entrepreneurs
7. Service Entrepreneurs
8. Social Entrepreneurs.

BASED ON FUNCTIONAL CHARACTERISTICS –

Innovative entrepreneur An innovative entrepreneur is one who introduces new product, new service or
new market. An innovative entrepreneur is also known as modern entrepreneur. An innovative entrepreneur
can work only when a certain level of development is reached. These entrepreneurs introduce new changes
and develop the business after a certain level of development is reached. They invent new products. Such
kind of entrepreneurs can be seen in developed countries, as large sum of money can be diverted towards
research and development purposes.
Adaptive entrepreneur / Imitative Adaptive entrepreneur is one who adopts the successful innovations of
innovative entrepreneur. These entrepreneurs imitate the techniques and technologies innovated by others.
These entrepreneurs can be seen both in underdeveloped and developing countries. They also make small
changes in relevance to their market environment.
Fabian entrepreneur A Fabian entrepreneur is one who responds to changes only when he is very clear
that failure to respond to changes would result in losses. Such entrepreneurs do not introduce new
changes. They also do not desire to adopt new methods. They are very shy and stick to old customs. They
are very cautious.
 Drone entrepreneurs Drone entrepreneurs do not make any changes. They refuse to utilize the
opportunities and may also suffer losses. They are very conventional. They refuse to introduce changes.
They even make losses but avoid changes. Sometimes they may be pushed out of the market.

BASED ON THE STAGES OF DEVELOPMENT

1. First Generation Entrepreneurs
2. Modern or Innovative Entrepreneurs
3. Classical Entrepreneurs
4. Inherited Entrepreneurs

BASED ON MOTIVATIONAL ASPECTS

1. Pure - a person who is motivated by psychological and economic factors. Entrepreneurial task is
undertaken by them due to certain reasons.
2. Induced entrepreneur- are those who takes up entrepreneurial task due to the incentives and subsides
granted by the government
3. Motivated entrepreneur- They are motivated by the desire for their self-fulfillment.
4. Spontaneous entrepreneur -A person, turns out to be an entrepreneur, because of the natural talent
vested in him. These entrepreneurs have self-confidence and emerge as challengers.

BASED ON TECHNOLOGICAL ASPECTS

1. Technical Entrepreneurs - one who concentrates more on production activities. He has got sound
technical knowledge
2. Non-Technical Entrepreneurs - concentrates more on marketing activities. He tries to find out new
strategies for marketing goods. He also promotes his business by employing various marketing methods.
3. Professional Entrepreneurs- a person who applies innovative ideas in setting up of a business. He is
interested in establishing the enterprises rather than managing it. Once the business is established. the
entrepreneur will sell the business to someone else.

Recent Trends in Entrepreneurship:

1. Startup India: January 2016, GOI launched Startup India initiative. It promotes entrepreneurship by
mentoring, nurturing and facilitating startups. It provides a comprehensive four-week free online learning
program, set up research parks, incubators and startup centres across the country. A ‘Fund of Funds’ has
been created for funding. The effort is to build an ecosystem to innovate and excel without any barriers.
“India is one of the fastest growing startup landscapes in the world and every major accelerator, investor,
angel group, is participating in becoming a part of this growth journey,” said Nasscom Chairman Raman
Roy.
2. Make in India: September 2014, make in India was launched to transform India into a global design and
manufacturing hub. The initiative was taken to renovate the out-dated processes and policies, and centralise
information about opportunities in India’s manufacturing sector. And also, the initiative has ensured the
replacement of obsolete and obstructive frameworks with transparent and user-friendly systems which helps
in procure investments, foster innovation, develop skills, protect intellectual property and build best
manufacturing infrastructure. After the launch, India received Rs 16.40lakh worth of investment
commitments September 2014 to February 2016. In the FY 2016-17, India Received Rs Four thousand
Twenty Crore.
3. Atal Innovation Mission (AIM): AIM promotes a culture of innovation and entrepreneurship and it
serves as a platform for promotion of world-class innovation. AIM recently launched Atal Tinkering Labs
(ATL) across India to foster curiosity, creativity and imagination right at the school. ATL is the workplace
where students can work with tools and equipment to gain hands-on training in the concepts of STEM
(Science, Technology, Engineering and Math). Atal Incubation Centre (AIC) is another programme of AIM
created to build innovative start- up businesses as scalable and sustainable enterprises. It provides world
class incubation facilities with appropriate physical infrastructure in terms of capital equipment and
operating facilities.
4. Support to Training and Employment Programme for Women (STEP): The Ministry of Women and
Child Development, Government of India launched STEP to train especially the rural women above 16 years
of age in formal skill training facilities. The training is given in agriculture, horticulture, food processing,
handlooms, traditional crafts, travel and tourism, hospitality, computer and IT services.
5. Jan Dhan-Aadhaar-Mobile (JAM): It is a technological intervention that enables direct transfer of
subsidies to intended beneficiaries and eliminates all intermediaries and leakages in the system. Guinness
World Records Recognises the Achievements made under PMJDY, Guinness World Records Certificate says
"The most bank accounts opened in 1 week as a part of financial inclusion campaign is 18,096,130 and was
achieved by Banks in India from 23 to 29 August 2014". By 1 June 2016, over 22 crore bank accounts were
opened and ₹384.11 billion were deposited under the scheme.
6. Digital India: The initiative was launched on 1 July 2015 to modernize the Indian economy to make all
government services available electronically. The initiative aims to transform India into a digitally-
empowered society and knowledge economy. It aims to improve the digital and financial space.
The BharatNet project will be the custodian of Digital India (DI) project. BharatNet will connect all the
625,000 villages of India. Pradhan Mantri Gramin Digital Saksharta Abhiyan is being executed by
PMGDisha with an outlay of Rs 2,351.38 crore with the objective of making 6 crore rural households
digitally literate.
7. Biotechnology Industry Research Assistance Council (BIRAC): It is a non-profit Public Sector
Enterprise, set by Department of Biotechnology. The aim is to strengthen and empower emerging
biotechnology enterprises and bridge the existing gaps between industry and academia.
8. Department of Science and Technology (DST): It comprises several arms that work across the spectrum
on all major projects that require scientific and technological intervention. The intervention for Disabled and
elderly provides technological solutions to address challenges and improve quality of life. It encourages
cooperation in science, technology and innovation through joint research across sectors.
9. Stand Up India: It is launched in 2015. It aims to enable economic participation among women
entrepreneurs, Scheduled Castes and Scheduled Tribes. These underprivileged are granted loans between
Rs1 million to Rs10 million to set up green field enterprises in manufacturing, services or the trading sector.
It also acts as a digital platform for small entrepreneurs and provides information on financing and credit
guarantee.
• Start-up profits to be tax-free for 3 years and also no labour inspections for 3 years of launch of the
venture.
• Compliance regime based on self-certification for labour and environmental laws. Easy exit policy for
start-ups with 90 days.
• Tax exemption to be provided on capital gains if money is invested in another start up.
10. Trade Related Entrepreneurship Assistance and Development (TREAD): The critical issues of
access to credit among underprivileged women are addressed through non-governmental organisations.
Accessing loan facilities, receiving counselling and training opportunities are provided which pathways for
women to take up non-farm activities. Under the scheme, there is a provision for Government of India grant
up to 30% of the loan/credit maximum up to Rs. 30.00 lakh as appraised by lending institutions/ banks, thus,
promoting “small-scale entrepreneurs”.
[Link] Mantri Kaushal Vikas Yojana (PMKVY): An initiative of the Ministry of Skill Development
& Enterpreneurship (MSDE). It is a skill certification initiative that aims to train youth in industry relevant
skills to enhance opportunities for livelihood creation and employability. Training and Assessment fees are
entirely borne by the Government under this program. In less than two years of its commencement, the
programme has covered 458 districts across India covering skills ranging from carpet weavers in Rajasthan,
tea plantation workers in West Bengal and rubber plantation workers in North East. Over 4.8 lakh skilled
workers have been certified under PMKVY.
12. National Skill Development Mission: It is launched in July 2015, with a mission to build synergies
across sectors in skilled industries and initiatives and with a vision to build a ‘Skilled India’. And seven sub-
missions are proposed to guide the mission’s skilling efforts across India.
13. Science for Equity Empowerment and Development (SEED): SEED aims to provide opportunities to
motivate scientists and field level workers to undertake action-oriented, location specific projects for socio-
economic gain in rural areas. It emphasizes equity in development of the disadvantaged. These are the
initiatives taken for the Entrepreneurship Development in India.
Top 5 trends that will drive the sector
→ Digitization & Automation
→ Business Collaborations
→ Customer Service Focus
→ Diversification
→ Focus on R&D/Innovation

ROLE OF ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT The entrepreneur who is a

business leader looks for ideas and puts them into effect in fostering economic growth and development.
Entrepreneurship is one of the most important input in the economic development of a country.
The entrepreneur acts as a trigger head to give spark to economic activities by his entrepreneurial decisions.
He plays a pivotal role not only in the development of industrial sector of a country but also in the
development of farm and service sector.
The major roles played by an entrepreneur in the economic development of an economy is discussed in a
systematic and orderly manner as follows.
(1) Promotes Capital Formation: Entrepreneurs promote capital formation by mobilising 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.
(2) Creates Large-Scale Employment Opportunities: 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.
(3) Promotes 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.
(4) Reduces Concentration of Economic Power: 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.
(5) Wealth Creation and Distribution: It stimulates equitable redistribution of wealth and income in the
interest of the country to more people and geographic areas, thus giving benefit to larger sections of the
society. Entrepreneurial activities also generate more activities and give a multiplier effect in the economy.
(6) Increasing Gross National Product and Per Capita Income: Entrepreneurs are always on the look out
for opportunities. They explore and exploit opportunities,, encourage effective resource mobilisation 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.
(7) Improvement in the Standard of Living: 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.
(8) Promotes Country's Export Trade: Entrepreneurs help in promoting a country's export-trade, which is
an important ingredient of economic development. They produce goods and services in large scale for the
purpose earning huge amount of foreign exchange from export in order to combat the import dues
requirement. Hence import substitution and export promotion ensure economic independence and
development.
(9) Induces Backward and 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.
(10) Facilitates Overall Development: Entrepreneurs act as catalytic agent for change which results in
chain reaction. Once an enterprise is established, the process of industrialisation is set in motion. This unit
will generate demand for various types of units required by it and there will be so many other units which
require the output of this unit. This leads to overall development of an area due to increase in demand and
setting up of more and more units. In this way, the entrepreneurs multiply their entrepreneurial activities,
thus creating an environment of enthusiasm and conveying an impetus for overall development of the area.

Rural entrepreneurship
It is generally defined as entrepreneurship emerging at village level which can take place in a variety of
fields of attempt such as commercial, manufacturing, agriculture and acts as an effective factor for economic
development.

“Entrepreneurship development at village level which can take place in a variety of fields of enterprise such
as business, industry, agriculture and acts as a powerful factor for economic development can be defined as
Rural Entrepreneurship.”

NEED;
As Industrial units started by rural entrepreneurs are providing much employment to men than machines
there is a rising need for rural entrepreneurs. Because of additional employment occasions, it has high
potential for income generation in rural areas.

Importance of Rural Entrepreneurship: Following are the advantages of rural entrepreneurship:

Creating employment opportunities

Check on migration
Regional Growth
Promotion of art and handicrafts
Check on social evils
Awaken the rural youth
Improved standards of living
Utilisation of local resources
Foreign exchange

Types of Rural entrepreneurship

Rural industry or village industries are generally classified into the following categories:

Agro Based Industries

Forest Based Industries
Mineral Based Industry
Textile Industry
Handicrafts
Engineering and services

Challenges of Rural Entrepreneurship

Developing entrepreneurship, predominantly rural entrepreneurship, is not so easy. It is controlled by
numerous problems.
 Finance
 Knowledge
 Technical know-how
 Enterprising skill
 Infrastructural facilities
 Unfavourable social, cultural and industrial environments
 Communication
 Skilled labour
 Low-quality products
 Risk bearing ability
 Competition