Introduction to

Entrepreneurship
Module 1
Syllabus
Module l- Introduction to
Entrepreneurship

Evolution of the concept of entrepreneur-

Growth of entrepreneurship in India-Role of
entrepreneurship in economic development.
Types of entrepreneurs – Knowledge
entrepreneur-Social entrepreneur- Women
entrepreneur-Profile and problems -Recent
trends and development-Entrepreneurial
competencies.
 Entrepreneurship
⚫ Entrepreneurship is a process of identifying
and starting a business venture, sourcing and
organizing the required resources and taking
both the risks and rewards associated with the
venture.
⚫ The capacity and willingness to develop,
organize and manage a business venture along
with any of its risks in order to make a profit.
The most obvious example of entrepreneurship
is the starting of new businesses.
⚫ In economics, entrepreneurship combined with
land, labour, natural resources and capital can
produce profit. Entrepreneurial spirit is
characterized by innovation and risk-
taking, and is an essential part of a
nation's ability to succeed in an ever
changing and increasingly competitive global
marketplace.
Who is an Entrepreneur?
⚫An individual who, rather than working as
an employee, runs a small business and
assumes all the risk and reward of a given
business venture, idea, or good or service
offered for sale. The entrepreneur is
commonly seen as a business leader and
innovator of new ideas and business
processes.
⚫Entrepreneurs play a key role in any
economy. These are the people who have
the skills and initiative necessary to take
good new ideas to market and make the
right decisions to make the idea profitable.
Evolution of the concept of
Entrepreneur
Earliest period
⚫ The age of new discoveries and extensive
travel.
⚫The entrepreneur means “to undertake”
⚫Example – Marco Polo
Middle ages
⚫In the middle ages the word was used to
describe a person who managed the
production projects. In large
production projects, this individual did
not take risks, but merely managed the
project using the resources provided,
17th century
⚫The connection of risk with
entrepreneurship developed
⚫An entrepreneur entered into a contractual
arrangement with the government to
perform a service or to produce products.
18th century
⚫ A person with capital (venture
capitalists) was distinguished from the
person who needed capital
(entrepreneurs)
⚫Age of many inventions
⚫Example – Thomas Edison
19th and 20th century
⚫The entrepreneur organises and operates
an enterprise for personal gain. He pays
current prices for the materials consumed in
the business. He contributes his own
initiative, skill and ingenuity in planning,
organizing and administering the enterprise.
He also assumes the chance of loss and
gain consequent to unforeseen and
uncontrollable circumstances. The net
residue of the annual receipts of the
enterprise after all costs have been paid, he
retains for himself.
⚫The function of the entrepreneur is to reform
or revolutionize the pattern of production by
exploiting an invention or more generally an
Definition of an entrepreneur today
⚫The concept of an entrepreneur is further
refined when principles and terms from a
business, managerial and personal
perspective are considered.
⚫To an economist, an entrepreneur is one
who brings resources, labour, materials and
other assets into considerations that make
their value greater than before, and also
one who introduces changes,
innovations and a new order.
⚫To a psychologist, such a person is
typically driven by certain forces - need to
obtain or attain something, to
experiment, to accomplish, or perhaps
Growth of Entrepreneurship in
India
Development in the early period
⚫ The development of Indian entrepreneurship is as
old as Harappan culture.
⚫ With the findings, it is seen that the craftsmen of
the time made handicraft items as a part of their
contribution to the society in which they lived. India
also developed a caste based division of work
which helped in the development of skills of the
artisans.
⚫ This system also helped in removing competition
and helped spread the industry in ancient India.
⚫ The artisans in different parts of India grouped
together and developed their own artifacts and
were well known for their quality.
⚫ The royal patronage of the local kings helped the
artisan industry to flourish.
Development in the middle age
⚫The population of India grew in the
middle ages and spread to the full
geographical area.
⚫Cottage industries came into existence.
Development of new items and production
were in the hands of small family setup.
⚫These products enjoyed a prestigious
status in the international trade of that
time. The craftsmen gathered together in
halls which were called Karkhanash where
they could sit together and manufacture
their items with proper division of labour on
individual skills. Examples – Shawls from
Kashmir, spices from Kerala etc.
Development in the industrial period
⚫ New technologies helped to start new
industries in different fields and laid the
foundation for modern industries, the new
breed of entrepreneurs started large
industries.
⚫ During this period the inventors and the
entrepreneurs joined hands for new inventions,
new products and thus adding considerably to
improve human productivity.
Modern Period
⚫ The modern period has two distinct sub
periods, first consists of development of
large manufacturing organisations,
development of multinational corporations and
entry of financial companies across the globe.
Example – the steel plant by Tata Steel. The
second consists of Hi-Tech era when new
Role of Entrepreneurship in
Economic Development
⚫The role involves more than just
increasing the per capita income but it
involves initiating and constituting change
in the structure of the business and society.
⚫Innovation is the key factor for the market
in stimulating investment interest in
the new ventures being created.
⚫This new investment works on both the
demand(utilization) and supply side
(growth)
⚫Product evolution process- this is the
process of developing and commercializing
an innovation.
⚫Iterative synthesis - The critical point in
Role of Entrepreneurship in
Economic Development (contd.)

⚫ Large scale Employment Generation

⚫ Balanced regional development
⚫ Dispersal of economic power
⚫ Better standard of living
⚫ Creating Innovation
⚫ Promotes capital formation
Role of Entrepreneurship in
Economic Development (contd.)

⚫ Resource mobilisation
⚫ Promotes foreign trade
⚫ Harnessing Locally available
resources.
⚫ Reducing unrest and social tension
amongst youth
⚫ Innovations in enterprises
⚫ Economic Independence
⚫ Technological development
Types of Innovations:
⚫Ordinary innovations – New products with little
technological change
⚫Breakthrough innovations – New innovations
with some technological change
⚫Technological innovations – New products with
significant technological advancements

Technology transfer –Commercializing

the technology in the laboratories into new
products. The lack of expertise in any area,
matching the technology with the appropriate
market and making the needed adjustments is
an underlying problem in any technology
transfer.
 Types of Entrepreneurs
1. Classification based on the timing of
venture creation
⚫ Early starters
An early starter, starts the venture with little or
no full-time work experience. Often, early
starters are from business families and have
participated in the family business. An early
starter is generally convinced of great potential of
his/her business idea and feels that the
opportunity may cease to exist if he/she waits
too long.
⚫ Experience
This type of entrepreneur has spent a few years
in the family business or in some other
large company. Usually, the venture is related
⚫ Mature
The senior professionals, some at the level of
CEO, who quit their jobs to start their own
venture. This is probably because they have
very high confidence in their abilities and have a
desire to do things in a way that may not be
totally acceptable to their erstwhile employers.
Example Ashok Soota and Subroto Bagchi who
quit Wipro to start Mindtree.
2. Classification based on socio-cultural
variables
⚫ First Generation entrepreneurs
This category consists of those entrepreneurs
whose parents or family had not been into
business and were into salaried service. The
booming economy of India has led to a multitude
of business opportunities and with deregulation it
has become easier to set up a business. Also with
⚫ Entrepreneurs from business families
Traditionally there have been a few socio-ethnic
groups who have dominated the business scene in
India. It is argued that entrepreneurship becomes
easier for someone from a business family as there
is a very solid support structure to help in times of
need. But entrepreneurial success needs far more
than just that. Example -Tatas
⚫ Minority entrepreneurs
There are many small ethnic groups that have
traditionally not ventured into business. It has
become important for them to venture out and
create lasting enterprises. They will serve as
examples for the rest of their community. Example-
Parsee community
⚫ Women Entrepreneurs
Women entrepreneurs have been a recent
phenomenon in India. The social norms in India had
made it difficult for women to have a professional
life. Now this has changed. Progressive laws and
3. Classification based on entrepreneurial
activity
⚫ Novice
A novice is someone who has started his/her
first entrepreneurial venture, not to be
confused with an early starter a novice can be
a 50 year old with over 25 years of
experience in the industry.
⚫ Serial entrepreneur
Is one who is devoted to one venture at a
time but ultimately starts many. It is
process of starting that excites the starter.
Once the business is established the
entrepreneur may lose interest and may
consider selling the business.
⚫ Portfolio Entrepreneur
Starts and runs a number of businesses. It
may be a strategy of spreading risk or it may
4. According to the type of business
⚫Business entrepreneur
Those who receive / conceive the idea of a
new product or service and translate it
into reality. They undertake the trading
business or manufacturing business.
⚫Trading entrepreneur
Those who are concerned with trading
activities and not manufacturing. Trading
is buying the finished product from the
producer and selling it to the customer
directly or through the retailer.
⚫Industrial entrepreneur
One who sets up an industrial unit. He
perceives the opportunity to set up his unit
and complies with the necessary
⚫ Corporate entrepreneur
Is one who plans, develops and manages a
corporate body. He is a promoter, an
essential part of board of directors, an owner
as well as an entrepreneur. He gets his
corporate body registered under the
requisite act which gives the company the
status of separate legal entity.
⚫ Agricultural entrepreneur
Is one who is engaged in the agricultural
activities. He uses latest technology to
increase the productivity of agriculture and
also adopts mechanisation.
5. According to motivation
⚫ Pure entrepreneurs
Is one who may or may not possess an aptitude
for entrepreneurship but is tempted by the
monetary rewards from the business
⚫Induced entrepreneurs
They are attracted by the various
incentives, subsidies and facilities
offered by the government.
6. According to the use of technology
⚫Technical entrepreneurs
The strength of a technical entrepreneur is
in his skills in production techniques. He
concentrates more on production than
on marketing. He possesses craftsman
skill in himself which he applies to develop
and to improve the technical aspect of
the product.
⚫Non technical entrepreneurs
They are not concerned with the technical
aspect of the product. He spends more
time in developing alternative
⚫Professional entrepreneurs
An entrepreneur, who is interested in floating
a business but does not want to manage
or operate it.
7. According to stages of development
⚫First generation
⚫Second generation
Who inherit the family business and pass it
on from generation to generation.
⚫Classical Entrepreneur
Is a stereotype, whose aim is to maximise
his economic returns at a level
consistent with the survival of the unit but
with or without an element of growth.
8. Classification given by Danhof
⚫ Innovating entrepreneurs
Those who possess the art of cleverly putting the
attractive possibilities into practice. He
introduces new goods, introduces new ways
of production, discovers new markets etc.
⚫ Imitative entrepreneurs
They are characterized by the readiness to
adopt successful innovations inaugurated
by innovative entrepreneurs. They do not
imitate the changes but imitate the
techniques and technology.
⚫ Fabian entrepreneurs
Are cautious and sceptical in experimenting
change in their enterprises. They are generally
shy, lazy and lethargic.
⚫ Drone entrepreneurs
Are characterised by a refusal to adopt
opportunities to make changes in production
even at the cost of severely reduced returns.
9. According to capital Ownership
⚫ Private entrepreneur
When an individual or a group of individuals set
up an enterprise.
⚫ State entrepreneur
When trading or industrial venture is undertaken
by the state or government
⚫ Joint entrepreneurs
A combination of private and state entrepreneurs
10. According to Gender and age
⚫ Men
⚫ Women
⚫ Young
⚫ Old
⚫ Middle aged
11. According to Area
⚫ Urban entrepreneurs
⚫ Rural entrepreneurs
12. According to scale
⚫ Large scale industry entrepreneurs
⚫ Medium scale industry entrepreneurs
⚫ Small scale industry entrepreneurs
⚫ Tiny industry entrepreneurs
13. Modern types
⚫ Spiritual Entrepreneur – Example:- Sri Sri
Ravi Shankar
⚫ Edupreneurs – contribution to the field of
education
⚫ Event entrepreneurs – Contribute to an
event in a unique way, can also be an event
manager
⚫ Intrapreneur – a manager within a company
Social Entrepreneur
⚫ They are innovative, highly motivated and
very creative thinkers. When these
attributes are combined with the drive to solve
social problems, then they are called Social
entrepreneurs.
⚫ They are pioneers of innovations that benefit
humanity at large.
⚫ They are :-
Ambitious
Persistent
Tackling major social issues and
Offering new ideas for wide scale change
⚫ The common element found in each of the
above persons is that they are mass recruits of
local change, makers of role model proving
that citizens who channel their passion into
 Knowledge Entrepreneur
Many organisations have devoted great effort to
capturing knowledge and building extensive
corporate intranets. However, the extent to which
the enormous potential of stored information and
knowledge is realized and additional revenues
are generated, depends upon the energy and
imagination of information and knowledge
entrepreneurs, people whose calling and practice
is the acquisition, development and
commercial exploitation of information,
knowledge and understanding.
The knowledge entrepreneur needs to understand
how to:
⚫ Acquire, develop, package, share, manage and
exploit information, knowledge and support tools.
Knowledge
Entrepreneur:
⚫Use combinations of emerging technologies
to network people, organizations and
relevant sources of information
⚫Handle knowledge in multiple formats,
including animation, audio and video
material.
⚫Develop and use appropriate job support
tools to increase individual productivity and
corporate performance.
⚫Collaborate with others, and work and learn
in new ways in order to create and deliver
greater value.
 Women Entrepreneurs: Concept
and Functions of Women
Entrepreneurs

Concept:
Women entrepreneur may be defined as a woman
or group of women who initiate, organize,
and run a business enterprise. In terms of
Schumpeterian concept of innovative
entrepreneurs, women who innovate, imitate or
adopt a business activity are called “women
entrepreneurs”.

Kamal Singh who is a woman entrepreneur from

Rajasthan, has defined woman entrepreneur as
“a confident, innovative and creative woman
capable of achieving self-economic independence
individually or in collaboration, generates
employment opportunities for others through
initiating, establishing and running the enterprise
The Government of India has defined women
entrepreneurs based on women participation in
equity and employment of a business enterprise.
Accordingly, the Government of India (GOI2006)
has defined women entrepreneur as “an
enterprise owned and controlled by a women
having a minimum financial interest of 51 per
cent of the capital and giving at least 51 per cent
of the employment generated in the enterprise
to women.” However, this definition is subject to
criticism mainly on the condition of employing
more than 50 per cent women workers in the
enterprises owned and run by the women.

In nutshell, women entrepreneurs are those

women who think of a business enterprise,
initiate it, organize and combine the factors of
production, operate the enterprise and
undertake risks and handle economic uncertainty
Functions of Women
Entrepreneurs
As an entrepreneur, a woman entrepreneur
has also to perform all the functions
involved in establishing an enterprise.
These include idea generation and
screening, determination of objectives,
project preparation, product analysis, and
determination of forms of business
organization, completion of promotional
formalities, raising funds, procuring men,
machine and materials, and operation of
business.
Frederick Harbison (1956) has enumerated
the following five functions of a woman
entrepreneur:
1. Exploration of the prospects of starting a
new business enterprise.
2. Undertaking of risks and the handling of
economic uncertainties involved in business.
3. Introduction of innovations or imitation of
innovations.
4. Coordination, administration and control.
5. Supervision and leadership.
The fact remains that, like the definition of
the term ‘entrepreneur’, different scholars
have identified different sets of functions
performed by an entrepreneur whether man
or women.
Problems of women
entrepreneurs
⚫ Access to start up finance
⚫ Managing working capital
⚫ Marketing skills
⚫ Access to technology and adopt it in production
process
⚫ Administrative and regulatory requirements
⚫ Lack of managerial skills
⚫ Lack of confidence
⚫ Mobility or the inability to drive vehicles
⚫ Family responsibilities
⚫ Protected life – making them weak and unable
to face risks and troubles
⚫ Literacy - Women are provided less or
inadequate education
Entrepreneurial
competencies
The terms "ENTREPRENEURIAL
COMPETENCIES" refer to the key
characteristics that should be
possessed by successful entrepreneurs
in order to perform entrepreneurial functions
effectively
1. Initiative
The entrepreneur should be able to take
actions that go beyond his job
requirements and to act faster. He is always
ahead of others and able to become a
leader in the field of business.
Examples :
⚫Does things before being asked or
2. Sees and acts on opportunities
An entrepreneur always looks for and takes
action on
opportunities.
Examples
Sees and acts on new business opportunities
Seizes unusual opportunities to obtain
financing, equipment, land, work space or
assistance
3. Persistence
An entrepreneur is able to make repeated
efforts or to take different actions to
overcome an obstacle that get in the way of
reaching goals.
Examples
Takes repeated or different actions to
4. Information Seeking
An entrepreneur is able to take action on
how to seek information to help achieve
business objectives or clarify business
problems.
Examples :
⚫Does personal research on how to provide a
product or service
⚫Consults experts or experienced persons to
get relevant information
⚫Seeks information or asks questions to
clarify a client's or a supplier's need
5. Commitment to Work Contract
An entrepreneur places the highest priority
on getting a job completed.
Examples :
⚫Makes personal sacrifice or expends
extraordinary effort to complete a job
⚫Accepts full responsibility for problems in
completing a job for customers
6. Efficient Orientation
A successful entrepreneur always finds ways
to do things faster or with fewer resources
or at a lower cost.
Examples :
⚫Looks for or finds ways to do things faster
or at less cost
⚫Uses information or business tools to
7. Systematic Planning
An entrepreneur develops and uses logical, step-
by-step plans to reach goals.
Examples :
⚫ Plans by breaking a large task down into sub-
tasks
⚫ Develops plans that anticipate obstacles
⚫ Evaluate alternatives
⚫ Takes a logical and systematic approach to
activities
8. Problem Solving
Successful entrepreneur identifies new and
potentially unique ideas to achieve his goals.
Examples :
⚫ Switches to an alternative strategy to reach a
[Link]-Confidence
A successful entrepreneur has a strong belief in
self and own abilities.
Examples
⚫ Expresses confidence in own ability to
complete a task or meet a challenge
⚫ Sticks with own judgment in the face of
opposition or early lack of success
[Link]
An entrepreneur confronts problems and issues
with others directly.
Examples
Confronts problems with others directly
Tells others what they have to do
Reprimands or disciplines those failing to
[Link]
An entrepreneur can successfully persuade or
influence others for mobilizing resources,
obtaining inputs, organizing productions and
selling his products or services.

Examples
Convinces someone to buy a product or service
Convinces someone to provide financing
Convinces someone to do something else that he
would like that person to do
Asserts own competence, reliability, or other
personal or company qualities
Asserts strong confidence in own company's
products or services
[Link] of Influential strategies
An entrepreneur is able to make use of
influential people to reach his business
goals.
Examples :
⚫Acts to develop business contracts
⚫Uses influential people as agents to
accomplish own objectives
⚫Selectively limits the information given to
others
⚫Uses a strategy to influence or persuade
others