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    CHAPTER ONE

    INTRODUCTION

    The ultimate measure of a manIs not where he stands

    In moments of comfort and convenience

    But where he stands

    At times of challenge and controversy.

    - Martin Luther King.

    The words entrepreneur, intrapreneur and entrepreneurship have

    acquired special significance in the context of economic growth in

    a rapidly changing socio-economic and socio-cultural climates,

    particularly in industry, both in developed and developing

    countries. Entrepreneurial development is a complex

    phenomenon. Productive activity undertaken by him and

    constant endeavor to sustain and improve it are the outward

    expression of this process of development of his personality.

    WHO IS AN ENTREPRENEUR?

    An entrepreneur is a person with a dream, originality and daring, who acts as the

    boss, who decides as to how the commercial organization shall run, who co-

    ordinates all activities or other factors of production, who anticipates the future

    trend of demand and prices of products.

    An entrepreneur is one of the important segments of economic growth.

    Basically he is a person responsible for setting up a business or an enterprise.

    Infact, he is one who has the initiative, skill for innovation and who looks for high

    achievements. He is a catalytic agent of change and works for the good of people.

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    He puts up new green-field projects that create wealth, open up many employment

    opportunities and leads to the growth of other sectors.

    The entrepreneur displays courage to take risk of putting his money into an idea,

    courage to face the competition and courage to take a leap into unknown futureand create new enterprises/ business. This creative process is the life blood of the

    strong enterprise that leads to the growth and contributes to the national

    development.

    The entrepreneur will always work towards the creation and enhancement of

    entrepreneurial society. The best entrepreneur in any developing country is not the

    one who uses much capital but an individual who knows how to organize the

    employment and training of his employees.

    We can define entrepreneur as one who innovates, raises money, assembles inputs,

    choose managers and sets the organization going with his ability to identify them.

    ENTREPRENEURSHIP DEFINED:

    Entrepreneurship is an elusive concept.

    Entrepreneurship is based on purposeful and systematic innovation. It included

    not only the independent businessman but also company directors and managers

    who actually carry out innovative functions.

    Schumpeter

    In the above definition, entrepreneurship refers to the functions performed by an

    entrepreneur in establishing an enterprise. Just as management is regarded as what

    managers do, entrepreneurship may be regarded as what entrepreneurs do. In other

    words, entrepreneurship is the act of being an entrepreneur.

    Entrepreneurship is a process involving various actions to be undertaken to

    establish an enterprise. It is thus, process of giving birth to a new enterprise.

    Entrepreneurship is composite skill, the resultant of a mix of many qualities and

    traits- these include tangible factors as imagination, readiness to take risks, ability

    to bring together and put to use other factors of production, capital, labour, land, as

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    also tangible factors such as the ability to mobilize scientific and technological

    advances.

    A practical approach is necessary to implement and mange a project by securing

    the required licenses, approvals and finance from governmental and financialagencies. The personal incentive is to make profits from the successful

    management of the project. A sense of cost consciousness is even more necessary

    for the longterm success of the enterprise. However, both are different sides of the

    same coin.

    Entrepreneurship lies more in the ability to minimize the use of resources and put

    them to maximum advantage. Without any awareness of quality and desire for

    excellence, consumer acceptance cannot be achieved and sustained. Above all,

    entrepreneurship today is the product of teamwork and the ability to create, build

    and work as a team. The entrepreneur is the maestro of the business orchestra,

    wielding his baton to which the band is played.

    The basic two elements involved in entrepreneurship are as follows;-

    INNOVATION

    Innovation, i.e. doing something new or something different is a necessary

    condition to be called a person as an entrepreneur. The entrepreneurs are

    constantly on the look out to do something different and unique to meet the

    requirements of the customers. They may or may not be inventors of new products

    or new methods f production but they possess the ability to foresee the possibility

    of making use of the inventions for their enterprises. In order to satisfy the

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    changing preference of customers nowadays many enterprises have adopted the

    technique of innovation.

    RISK- BEARINGEntrepreneurship is the propensity of mind to take calculated risks with confidence

    to achieve a predetermined business or Industrial objective. The capacity to take

    risk independently and individually with a view to making profits and seizing the

    opportunity to make more earnings in the market-oriented economy is the

    dominant characteristic of modern entrepreneurship.

    In fact he needs to be a risk taker, not risk avoider. His risk bearing ability enables

    him even if he fails in one succeed. The Japanese proverb says Fall seven times,

    stand up eight. Though the term entrepreneur is often used interchangeably with

    entrepreneurship, yet they are conceptually different.

    The relationship between the two is just like the two sides of the same coin.

    Thus, entrepreneurship is concerned with the performance and co-ordination of the

    entrepreneurial functions. This also means that entrepreneur precedes

    entrepreneurship.

    NEED FOR ENTREPRENEURSHIP

    Entrepreneurship promotes small business in the society. Government has

    accepted the fact that small firms have a crucial role to play in the economic

    development of the country. Small businesses are an essential part of our future

    economic prosperity because of the following reasons-

    EMPLOYMENT GENERATION:

    Entrepreneurial development is looked at as a vehicle for employment generation

    through promotion of small business. India, being far more developed and forward

    looking country than some of the third world countries, can provide lead to

    entrepreneurial development activities.

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    However, India can benefit from the well- documented success experiences of

    developed countries like USA, Japan and UK in the field of employment

    generation and small business promotion.

    Steady growth in consumer spending, expanding retail sales, a strong housingmarket, continued expansion of the service sector, low rates of inflation and of

    labour cost increases and failing interest rates contributed to a healthy

    environment for small business.

    In India, the government policies, political and economic environment greatly

    encourage the establishment of new and small enterprises. Self- employment and

    small scale industry schemes have been further liberalized during the last decade.

    The employment in the small-sector increased from 9.00 million people in 1984-

    85 to 13.9 million people in 1994-95. This indicates an increase of 5.4% p.a in

    employment in this sector.

    SMALL BUSINESS DYNAMISM:

    Great dynamism is one of the qualities of the small and medium enterprises.

    This quality of dynamism originates in the inherent nature of the small business.

    The structure of small and medium enterprises is less complex than that of large

    enterprises and therefore facilitates quicker and smoother communication and

    decision- making. This allows for the greater flexibility and mobility of small

    business management. Also, small enterprises, more often make it possible for

    owners, who have a stronger entrepreneurial spirit than employed mangers, to

    undertake risk and challenges.

    BALANCED ECONOMIC DEVELOPMENT:

    Small business promotion needs relatively low investment and

    therefore can be easily undertaken in rural and semi-urban areas.

    This in turn creates additional employment in these areas and

    prevents migration of people from rural to urban areas. Since

    majority of the people are living in the rural areas, therefore,

    more of our development efforts should be directed towards this

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    sector. Small enterprises use local resources and are best suited

    to rural and underdeveloped sector. This in turn will also lead to

    dispersal of industries, reduction in concentration of economic

    power and balanced regional development.INNOVATIONS IN ENTERPRISES:

    Business enterprises need to be innovative for survival and better performance. It

    is believed that smaller firms have a relatively higher necessity and capability to

    innovate. The smaller firms do not face th

    e constraints imposed by large investment in existing technology. Thus they are

    both free and compelled to inno