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CHAPTER I
ENTREPRENEURIAL SCENE IN INDIA
In 1947, India had inherited a shrivelled industrial economy after nearly 200 years
of British rule. If anything was available, it was shortage. The government's idea
was that a rationing of resources might work and hence it adopted socialist
policies. Through the 1960s, the Indian government was in the throes of the licence
raj, also known as the Industrial Development and Regulation Act, and business
houses were hostage to the Monopolies and Restrictive Trade Practices (MRTP)
Act. Government of India's economic policies sent Indian industry into a tailspin
for nearly 20 years. There were problems aplenty-licences, red tapes quota. Indian
business was characterized by high taxes, low productivity, strict licensing and a
parallel economy called the black market.
It was only in the 1980s that things began to change. The new leaders began to
forge a laissez-faire economic policy. Four decades of Nehruvian socialism had
built a steel grid of bureaucratic control, dismantled overnight. But the seeds were
planted by him in two things; he wanted to modernize India and he introduced
computerization in the public sector, irrespective of whether the computer were
being used or not.
MEANING OF ENTREPRENEUR
The word entrepreneur is derived from the French word Entreprendre which means
to undertake that is the person who undertakes to organise. Manage and assume the
risks of a business.
According to A.H. Cole, Entrepreneur is defined as an individual who undertakes
to initiate, maintain or organise a profit oriented business unit for production or
distribution of economic goods and services.
MEANING OF ENTREPRENEURSHIP
The word entrepreneurship is actually derived from the French term Entreprendre
which means to undertake to pursive opportunity fulfil needs and wants of people
through innovation.
According to A.H.Cole, Entrepreneurship is defined as the purposeful activity of
an individual or group of associated individuals, undertaken to initiate, maintain or
earn profit by production or distribution of economic goods and services.
MEANING OF ENTERPRISE
Carrying out of new combination of productive factors is called as enterprise.
IMPORTANCE OF ENTREPRENEURS
Importance of entrepreneurs as an innovator in economic growth.
Importance of entrepreneur in generation of employment opportunities.
Importance of entrepreneur in bringing social stability.
Importance of entrepreneur in bringing balanced regional development of
industries.
Importance of entrepreneur in export promotion and impact substitution.
Importance of entrepreneur in foreign exchange earnings.
Importance of in meeting local demand.
CHARACTERISTICS OF AN ENTREPRENEUR
Need to achieve
Clear objective
Creativity
Mental ability
Risk bearing
Locus of control
Commitment, determination and perseverance
Initiative and responsibility.
Team building
Leadership
Problem solving
Business planning
Innovation
Motivation
Independence.
ENTREPRENEUR CREATIVITY
Creativity is refers to the ability to combine ideas in a unique way or to
make unusual associations between ideas. It is the ability to develop unique ways
to work or novel solutions to problems. It is a function of knowledge, imagination
and evaluation.
QUALITIES OF CREATIVE ENTREPRENEUR
Sensitivity
Fluency
Flexibility
Originality
Redefinition skill
ENTREPRENEUR INNOVATION
Innovation is the means by which the entrepreneur either creates new
wealth-producing resources or endows existing resources with enhanced potential
for creating wealth.
SKILLS REQUIRED FOR INNOVATION
Creative skills
Analytical skills
Technical skills
TYPES OF ENTREPRENEURS
1. Classification according to type of business
Business entrepreneurs
Trading entrepreneurs
Industrial/Manufacturing entrepreneurs
Corporate entrepreneurs
Agricultural entrepreneurs
2. Classification according to the use of technology
Technical entrepreneurs
Non- technical entrepreneurs
Professional entrepreneurs
3. Classification according to motivation
Pure entrepreneurs
Induced entrepreneurs
Spontaneous entrepreneurs
4. Classification according to stages of development
First generation entrepreneurs
Modern entrepreneurs
Classical entrepreneurs
Entrepreneurs by inheritance
5. Classification according to capital ownership
Private entrepreneurs
State entrepreneurs
Joint entrepreneurs
6. Classification of other categories
Large scale entrepreneurs
Small scale entrepreneurs
Women entrepreneurs
Rural entrepreneur
Urban entrepreneur
Skilled and non-skilled entrepreneurs
National and International entrepreneurs
FUNCTIONS OF AN ENTREPRENEUR
Innovation
Risk-bearing
Decision making
Planning
Organisation building
Managing
Leading
ADVANTAGES OF BEING AN ENTREPRENEUR
Entrepreneur can become their own boss.
Put their ideas into practise.
Opportunity to create their own destiny.
Independence and the opportunity to achieve what is important to them.
Make money for themselves.
Opportunity to them to make a difference.
Gain experience ina variety of disciplines.
Particular business fields.
Instruments for self expression.
Opportunity to contribute to the society.
Personal satisfaction.
DISADVANTAGES OF BEING AN ENTREPRENEUR
Entrepreneurs confrontation with risk
High level of risk.
Uncertainty of income.
Complete responsibility.
Discouragement.
WOMEN ENTREPRENEURS
According to Schumpeter, women who innovate, imitate or adopt a business
activity are called Women entrepreneur.
According to Government of India, an enterprise owned and controlled by the
women having a minimum financial interest of 51% of the capital and giving at
least 51% of the employment generated in the enterprise to women.
FUNCTIONS OF A WOMEN ENTREPRENEUR
Exploration of the prospects of a satisfying a new business enterprise.
Undertaking of risks and the handling of economic uncertainties involved in
business.
Introduction of innovations or imitation of innovations.
Co-ordination, administration and control. and
Supervision and leadership.
FACTORS INFLUENCING WOMEN ENTREPRENEURS:
A. Motivational factors
Economic necessity
Economic independence
Self-actualisation
Establishing their own creativity
Establishing their own identity
Equal status in society
Achievement excellence
Education and qualification
Building self confidence
Developing risk-taking ability
Employment generation
Family occupation
Greater freedom and mobility
Government policies and programmes
Success stories of friends
Role model to other
B. Facilitating factors
Adequate financial facilities
Innovative thinking
Self-satisfaction
Co-operation of family
Network of contracts
Experienced and skilled people at work
Support of family members.
PROBLEMS OF WOMEN ENTREPRENEUR
Problem of assess to finance
Limited mobility
Family ties
Male dominated society
Family conflicts
Role conflict
Lack of education
Low risk bearing ability
Lack of self confidence
Problems of middlemen
Lack of managerial efficiency
Lack of experience
Lack of training
PROMOTION OF WOMEN ENTREPRENEURS
Establishing only small units
Deciding the correct time of establishment
Providing adequate financial assistance
Solving the problem of gender inequality
Coordinating the dual role of family and business
Imparting training in financial management, quality concept, availing
technology etc.
Training to have patience and tolerance
ASSOCIATIONS PROMOTING WOMEN ENTREPRENEUR
A brief analysis of various associations and agencies that are function at state and
national levels to promote women entrepreneurs is made for reference.
Self-Help Groups (SHGs)
This is an association of small group of self-employed rural or urban women
entrepreneurs who join together to take care of group welfare. The group with the
help of financial institutions and other NGO get needs satisfied. This is voluntary
association. Each member contributes little amount to cover seed money.
Federation of Indian Women Entrepreneur (FIWE)
FIWE is the outcome of resolution passed in 4 th international conference women
entrepreneurs held at Hyderabad. This was founded in1993. It mainly interacts
with various women associations of the country through network to facilitate the
members in diversified activities.
Women's India Trust (WTI)
This trust was established in 1968. The promoter Kamila Tyabji made a small
beginning with two shops in Mumbai and a training and production centre at
Panavel. The trust was started with the main objective of helping women
entrepreneurs. Encouraged by the growth of the activities of the trust.
Consortium of Women Entrepreneurs of India (CWEI)
CWEI is a voluntary organisation, consisting of NGOs, SHGs, voluntary
organisations and individual business units. This came into being in 2001. The
objective is to provide technology up gradation facilities to women entrepreneurs
and other facilities in marketing, finance, HRD and production. CWEI takes up
activities of synergising product development and manpower training. The
consortium is also having international businesss connections and provides its
members, marketing and export support through this connection. It plays the role
of liaison between Indian entrepreneurs and international agencies.
Self-Employed Women's Association (SEWA)
SEWA is Trade Union of Women Which was registered in 1972 under Trade
Union Act. This has been functioning since then to empower poor rural women
entrepreneurs. Even urban poor women have become the members of SEWA to
become self-employed persons. The SEWA members are not coming from the
organised sector. They are the women of unorganised sector and are not coming
from the organised sector. They are the women of unorganised sector and are
unprotected. They constitute nearly 90 percent of the women labour force of the
country.
Association of women entrepreneurs of Karnataka- (AWAKE)
AWAKE was established in 1983, with an intention to help women entrepreneurs,
and today it is one of the pioneer institutions in India which is working in the areas
of training and helping the women to start their own business and there by
empower them to join the economic mainstream. AWAKE focuses on women
from both urban and rural areas. Who are aspiring to be socially and economically
self-reliant, irrespective of their academic, social and economic background.
ROLE OF ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT
Effective utilization of resources
Increase in per capita income
Improvement in physical quality of life
Growth of infrastructural facilities
Export of handicraft items
Promotion of technology
Export promotion
Capital formation
Creation of employment
CHAPTER II
ENTREPRENEURSHIP DEVELOPMENT
The concept of entrepreneurship has assumed prime importance for accelerating
economic growth both in developed and developing countries. It is a basis of free
enterprise. It promotes capital formation and creates wealth in the country. It is the
hope and dream of millions of individuals around the world. It has the thrill of risk,
change, challenge and growth. It builds wealth. It is a pathway to prosper. It
reduces unemployment and poverty.
NATURE AND CHARACTERISTICS OF ENTREPRENEURSHIP
Creative activity
Economic activity
Purposeful activity
Risk-bearing activity
Ability to innovate
Business oriented tendency
Organising function
Low risk
Creation of resources
Result oriented behaviour
NEED FOR PROMOTION OF ENTREPRENEURSHIP DEVELOPMENT
Dealing with uncertainty
Innovation
Job creation
Number of new start-ups
Managing resources
Capital formation
Economic growth
Productivity
VARIOUS APPROACHES TO ENTREPRENEURSHIP DEVELOPMENT
Economic approach
Sociological approach
Psychological approach
PROBLEMS IN THE GROWTH OF ENTREPRENEURSHIP
Incompetence and poor management
Low level of commitment
Restrictions imposed by custom and tradition
Involvement of high risk
Socio-cultural rigidities
Lack of motivation
Lack of infrastructural facilities
Lack of communication n network
Absence of entrepreneurial aptitude
Low status of businessmen
Market imperfections
Legal formalities involved to set up a unit
Low quality products
Low package of salaries to employee
ENTREPRENEURSHIP DEVELOPMENT PROGRAMME
Entrepreneurship is one of the inputs in the economic development of a
country. Entrepreneurs are regarded as the nation builders and wealth creators.
They are the change agents who initiate economic activities to create wealth. They
undertake the business initiative employee themselves in that business and open up
employment avenues for others.
NEED OF ENTREPRENEURSHIP DEVELOPMENT PROGRAMME
EDP is meant for developing those first generation entrepreneurs who on their
own cannot become successful owners of enterprises.
The effective entrepreneurial class is necessary to speed up the process of
activating the factors of production to ensure higher rate of economic growth.
EDP ensures potential entrepreneurs of backward and tribal areas to set up their
enterprises with the help of government and institutional support system.
EDP develops the persons who are interested to work as job providers by
establishing enterprises not to those who are job seekers.
EDP improves the standard of living of the weaker sections of society.
EDP develops motivation and competence necessary for successful launching
management and growth of the enterprise.
OBJECTIVES OF ENTREPRENEURSHIP DEVELOPMENT
PROGRAMME
To accelerate the process of entering into business for those who come from
business families.
To encourage first generation entrepreneurs who do not have any business
background.
To develop and strengthen the entrepreneurial competencies of prospective
entrepreneurs.
To provide help in identification and formulation of viable projects.
To arrange support system about the process and procedures of setting up of an
enterprise.
To impact training in managerial understanding and skills.
To provide post-training assistance and monitoring facilities.
PHASES OF ENTREPRENEURSHIP DEVELOPMENT
Pre-training preparation
Entrepreneurial training or development phase
Post-training or follow-up phase