20142(a)

Definition from notes

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.

(6) 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.

(7) 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.

(8) 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.

(9) 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.

2(b)

1.      Economic Factors

Capital, labour, raw materials and market are the main economic factors.

(a)     Capital:

Capital is one of the most important prerequisites to establish an enterpris1e.

Availability of capital helps an entrepreneur to bring together the land of one,

machine of another and raw material of yet another to combine them to produce

goods. Therefore, capital is regarded as lubricant to the production process.

Basically, capital is the life blood of any activity. If capital is available, people who

have innovative ideas would like to put them into reality. Without having any

obstacles, if capital is available, it will act as a lifeline to entrepreneurs. So, if capital

is available, entrepreneurial activities will increase.

(b)     Labour:

The quality and quantity of labour is another factor which influences the emergence

of entrepreneurship. Availability of labour makes entrepreneurship attractive. More

than abundantly available labour, the presence of skilled labour force is very

important because such a workforce is generally less mobile than other resources. If

entrepreneurial activities are initiated near areas where labour is available, then it is

easy to carry out the business more comfortably and profitably at low cost. This is

why one finds textile units and machine tools manufacturing industries concentrated

in certain cities like Coimbatore, Tiruppur, Ludhiana, Rajkot, Baroda, etc. just

because of availability of skilled labour force required for such units.

(c)     Raw Materials:

Raw materials are required for establishing any industrial activity and therefore has

an influence in the emergence of entrepreneurship. In the absence of raw materials,

neither any enterprise can be established nor an entrepreneur can emerge. In some

cases technological innovations can compensate for raw material inadequacies. The

supply of raw materials is not influenced by themselves but becomes influential

depending upon other opportunity conditions. The more favourable these conditions

are, the more likely is the raw material to have its influence on entrepreneurial

emergence.

(d)     Market :

It is not only the availability of capital, labour and raw materials but a readily

available market that attracts entrepreneurial activities. Ultimately, it is the market

that fetches revenue for any business. If sufficient market is not there, people will

naturally hesitate to do business in a sector where there is no market. In addition to

market opportunities, it is equally important to ensure future market opportunities for

the emergence of entrepreneurial activities.

2.      Social Factors :

Development of entrepreneurship in a society may take place not just because of

better economic factors but because of the presence of positive social factors. The

following social factors influence the development of entrepreneurship in a society.

(a)     Social norms and values:

A society sets certain norms and values for the beha1viour of people who are part of

that society. If people violate or overstep these norms and values, certain restrictions

are likely to be imposed on them. As a result, many people are forced to accept

certain types of jobs and tasks that reflect the social environment. If the society has

an open and flexible approach towards various types of jobs and works, then people

will feel free to do whatever they like and even go in for innovation and creativity.

When there is more openness and flexibility, entrepreneurship will not only emerge

but also thrive.

(b)     Role models:

Societies that celebrate entrepreneurship and felicitate successful entrepreneurs in a

way encourage many future generations to take up entrepreneurial activities. This is

because successful businessmen prove to be role models for the society at large.

For instance, states like Gujarat, Maharashtra and to some extent Tamil Nadu and

Haryana have experienced better industrial development as a result of higher

concentration of entrepreneurs compared to lesser industrialised states such as

Orissa, Chattisgarh, Madhya Pradesh and other Northeastern states.

(c)     Social pressure:

At times, entrepreneurship can emerge in a society due to social restriction too. If a

society is orthodox, close and imposes a lot of restrictions, then it is likely to backfire.

People who are at the receiving end are likely to react strongly and go in for change.

In other words, because of negative pressure, more number of people would like to

become entrepreneurs as a means of improving their status. It has been noticed that

where people were marginalised, they became entrepreneurs just to prove their

abilities and establish an identity in the society.

 

(d)     Respect and Status:

If societies accord recognition and respect to people who dare to do something

different and creative, it proves to be an encouragement for others to do something

enterprising. Therein lies the emergence of entrepreneurship. In the traditional

societies, people were looked down upon rather than encouraged for deviating from

the set norms or regular occupation. This means there was no respect for change.

Thus, societies where there is respect and recognition for people to do something

different are more likely to see the development of entrepreneurial activities.

(e)     Security:

The view regarding role of social security in encouraging entrepreneurship

development is rather divided. One school of thought is of the view that people are

more prone to take entrepreneurial risks in secure social environments. On the other

hand, there are others who argue that entrepreneurship will more likely emerge if

there are turbulent conditions. In both cases, there is scope for entrepreneurship

development.

2©

http://www.authorstream.com/Presentation/jitendra1_smit-851879-types-of-entrepreneurs/

3(a)

It is a commonly held view that entrepreneurs are born, not made – that what leads someone to

become a successful entrepreneur has more to do with their personality and innate qualities than

anything learned through formal education.

The biographies of entrepreneurs such as Richard Branson, Alan Sugar and Theo Paphitis, all of

whom left school at 16 to make their own way in the world of business, add to the impression that

entrepreneurs are born not made.  The idea that certain entrepreneurial traits – such as being

able to spot opportunities, think differently and take risks – may be inherent has even led to a

whole new area of genetic research.

So, is it really that simple?  Do entrepreneurs pursue their path because of a genetic

predisposition to do so? 

I am not convinced.  Having met many successful entrepreneurs in the course of my work, I can

safely say that they have included an enormous diversity of individuals and personality types – a

mix of introverts and extroverts, natural risk-takers and those with a more cautious outlook, each

exhibiting their own particular strengths in their entrepreneurial endeavours.

There isn’t one single type of entrepreneur, just as there isn’t one single type of business

opportunity.  The talent of many entrepreneurs lies in their ability to align their skills and their

passion with potential opportunities – and, as the next stage on, to develop the skills and

attributes they need to maximise those opportunities.

A survey last year by Ernst & Young of 685 entrepreneurial leaders found that experience is key

to people becoming entrepreneurs.  Fifty eight per cent of the respondents were “transitioned”

entrepreneurs who had previously been employees.  Many cited their experience in a corporate

environment as an important training ground for their subsequent entrepreneurial career.

As well as experiences gained through work, another type of experience relevant to

entrepreneurial success is the wider set of life skills which span both our personal and

professional lives.  A recent blog by Nischala Murthy Kaushik highlighted the “33 Life Lessons No

School Really Taught Me”, touching on skills such as; how to deal with change, handling failure,

learning when and how to say ‘no’, how to ask for help, and mastering the art of prioritisation.  All

valuable lessons for any entrepreneur.

In short, entrepreneurial skills and attributes can be taught and are something that I believe

should be part of the educational experience of all young people.

That is why City College Norwich is at the forefront of the Gazelle group, which is bringing

together like-minded entrepreneurs and college leaders nationally to create a new generation of

entrepreneurial colleges.  Using the inspirational environment of The StartUp Lounge, we are

giving students opportunities to experience what it is like to be part of a business start-up and to

develop the skills of an entrepreneur as a core part of their education.

So, entrepreneurs can be made as well as born… and we can all play our part in helping to make

the next generation of entrepreneurs and innovators.

3(b)

Notes

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http://onlinelibrary.wiley.com/doi/10.1111/0447-2778.00010/abstract

http://www.marsdd.com/mars-library/environmental-analysis-or-pest-an-element-of-your-startups-strategic-plan/

4(a)

4(b)

Notes

4©

Notes

Innovation is a new idea, device or method; or the act of introducing new ideas, devices or methods. Innovations can be new products, business models, customer experiences or any form of new idea. Innovation, however, doesn’t have to mean the creation of something entirely new. Iterations and improvements upon an existing idea are also innovations. Take the iPod, for example. While far from the first personal music player, the iPod introduced an unprecedented customer experience and business model, shaking up the industry.

Innovation creates change; it disrupts the status quo, but it does not automatically translate to entrepreneurship or new business. Plus, innovation occurs in plenty of other contexts beyond business. Government, academic and non-profit organizations also generate groundbreaking ideas, often sparking social change.

Entrepreneurship is the practice of starting and managing a business, usually with considerable risk. Entrepreneurs are often innovators, creating ventures from new ideas, but sometimes they see the opportunity to cash in on an existing idea. While always enterprising, entrepreneurs are not necessarily disruptive. 

Entrepreneurship also focuses on the tangible task of building a business, while innovations sometimes do not evolve beyond intangible ideas.

Intersection of both

While each provide value on their own, the intersection of innovation and

entrepreneurship produces the greatest impact on our economy.

Innovation is the fuel to the entrepreneurial fire, the seeds of a sustainable

business. The best entrepreneurs are innovators first, armed with brilliant ideas

to introduce something new and valuable to the market.

“In a globally competitive economic environment, the only source of sustained

competitive advantage has to come through innovation,” said Hugh Courtney,

dean of the D’Amore-McKim School of   Business .

A venture lacking innovation will have little impact on the marketplace.

 But when it comes to business, innovation without entrepreneurship is even

less valuable. Innovation cannot thrive in a vacuum. It requires a vehicle

to realize its full potential and evolve from the intangible into the tangible.

Entrepreneurship and intrapreneurship - the creation of new ideas, systems or

products within an existing organization - are prime channels for empowering

innovations. Both serve as incubators to grow forward-thinking ideas into

actionable, and often profitable, ventures.

“Today’s entrepreneur is an important engine for growth and job creation in our

economy,” Marc H. Meyer, Professor of Entrepreneurship at the D’Amore-

McKim School of   Business , said. 

Without entrepreneurs and intrapreneurs, innovation would stagnate and

economic growth would stall.

 Innovation creates valuable ideas and entrepreneurship capitalizes on those

ideas and gives them life. The combination of these two elements produces new

businesses or business initiatives that advance industries, disrupt markets and

spur economic growth.

5(a)

http://www.forbes.com/sites/johnrampton/2014/04/14/5-personality-traits-of-an-entrepreneur/

5(b)

Notes

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http://yourbusiness.azcentral.com/theories-entrepreneurship-23795.html

Rest all in notes