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State the meaning of the terms, entrepreneur, entrepreneurship and enterprise.

Distinguish between entrepreneurship and management  and discuss the characteristics of entrepreneurship.

Explain the functions of entrepreneurship.

Identify the entrepreneurial competencies.

Explain and follow the process of entrepreneurship development.

Identify the values, attitudes and motivation for a plunge in entrepreneurship.

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Meaning of Entrepreneurs, Entrepreneurship and Enterprise

Difference between Entrepreneurship & Management

Functions of Entrepreneurs in Economic Development

Start Up in India, Intellectual Property Right

Role of Entrepreneurs in relation to their Enterprise

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Entrepreneurship is the process of setting up one’s own business as distinct from pursuing any other economic activity, be it employment or practising some profession.

The person who set-up his business is called an entrepreneur.

The output of the process, that is, the business unit is called an enterprise.

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SYSTEMATIC ACTIVITY It is a systematic, step-by- step and purposeful activity. It has certain temperamental, skill and other knowledge and competency requirements that can be acquired, learnt and developed, both by formal educational and vocational training as well as by observation and work experience.  Such an understanding of the process of entrepreneurship is crucial for dispelling the myth that entrepreneurs are born rather than made.

LAWFUL AND PURPOSEFUL ACTIVITY The object of entrepreneurship is lawful business.  It is important to take note of this as one may try to legitimise unlawful actions as entrepreneurship on the grounds that just as entrepreneurship entails risk, so does illegal businesses.  Purpose of entrepreneurship is creation of value for personal profit and social gain.

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INNOVATION From the point of view of the firm, innovation may be cost saving or revenue-enhancing. Entrepreneurship is creative also in the sense that it involves innovation- introduction of new products, discovery of new markets and sources of supply of inputs, technological breakthroughs as well as introduction of newer organisational forms for doing things better, cheaper, faster and, in the present context, in a manner that causes the least harm to the ecology/environment.

ORGANISATION OF PRODUCTION Entrepreneur, in response to a perceived business opportunity mobilises these resources into a productive enterprise or firm. Organisation of production is the knowledge about availability and location of the resources as well as the optimum way to combine them. An entrepreneur needs negotiation skills to raise these in the best interests of the enterprise.  Organisation of production also involves product development and development of the market for the product. Besides, entrepreneur may be required to develop even the sources of supply of requisite inputs.

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RISK TAKING What is generally implied by risk taking is that  realised profit may be less than the expected profit. It is generally believed that entrepreneurs take high risks. Yes, individuals opting for a career in entrepreneurship take a bigger risk that involved in a career in employment or practice of a profession as there is no “assured” payoff.

In fact, entrepreneurship has come to be regarded as a ‘type of behaviours’, whereby one, ( i ) rather than becoming a part of the problem, proactively tries to solve it; (ii) uses personal creativity and intellect to develop innovative solutions; (iii) thinks beyond resources presently controlled in exploiting the emerging opportunities or attending to the impending problems;  (iv) has the conviction to convince others of one’s ideas and seek their commitment towards the project; and  (v) has the courage of heart to withstand adversities, persist despite setbacks and be generally optimistic.

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Basis of Differentiation Entrepreneurship Management Focus Business start - up Ongoing operations of  an existing business Resource orientation Entrepreneur   mobilises  the resources Manager  is constrained by the resources at his disposal Approach  to the task Informal  Formal  Primary motivation Achievement  Power  Status vis-à-vis the enterprise Owner  Employee  Primary economic reward Profit  Salary  Innovation orientation Challenges the   status quo , that is, the existing Maintains the  status  quo Risk  orientation Risk - taker Risk - averse Approach to decision- making Driven by inductive logic and personal courage and determination Driven by deductive logic and research Scale of operations Small business Large business Primary skill requirement Opportunity spotting, initiative, resource negotiation Organising , systems design and operating procedures, people management Specialisation  orientation Generalist  has to know and do all the trades by himself Specialist

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Functions of Entrepreneurs in Relation to Economic Development

Contribution to GDP Capital Formation Generation of Employment Generation of Business Opportunities for Others Improvement in Economic Efficiency Increasing the Spectrum and Scope of Business Activities Improvement on Local Communities Fostering the Spirit of Exploration, Experimentation and Daring

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Increase in the Gross Domestic Product or GDP is the most common definition of economic development.  You are aware that income is generated in the process of production. So, entrepreneurs generate income via organisation of production be it agriculture, manufacturing or services. You are also aware that income generated is distributed among the factors of production where land gets rent, labour gets wages and salaries, capital gets interest and the residual income accrues to the entrepreneur in the form of profits.  As rent and interest accrue to those few who have land and capital respectively whereas larger masses are destined to earn their incomes via wage employment, the biggest contribution of the entrepreneurship lies in capital formation and generation of employment.

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The entrepreneurial decision, in effect, is an investment decision that augments the productive capacity of the economy and hence results in capital formation. In fact, GDP and capital formation are related to each other via Capital Output Ratio (COR); more precisely Incremental Capital Output Ratio (ICOR) that measures the percentage increase in capital formation required obtaining a percentage increase in GDP. Entrepreneurs, by investing their own savings and informally mobilising the savings of their friends and relatives contribute to the process of capital formation. These informal funding supplements the funds made available by the formal means of raising resources from banks, financial institutions and capital markets.

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Every new business is a source of employment to people with different abilities, skills and qualifications. As such entrepreneurship becomes a source of livelihood to those who do neither have capital to earn interest on nor have the land to earn rent . In fact, what they earn is not only a livelihood or means of sustenance but also a lifestyle for themselves and their families as well as personal job satisfaction. As such entrepreneurs touch the lives of many, directly as well as indirectly.

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GENERATION OF  BUSINESS  OPPORTUNITIES FOR  OTHERS

Every new business creates opportunities for the suppliers of inputs (this is referred to as backward linkages) and the marketers of the output (what is referred to as forward linkages). As a pen manufacturer you would create opportunities for refill manufacturers as well as wholesalers and retailers of stationery products. These immediate linkages induce further linkages. For example greater opportunities for refill manufacturers would mean expansion of business for ink manufacturers. In general, there are greater opportunities for transporters, advertisers, and, so on. So, via a chain-reaction, entrepreneurship provides a spur to the level of economic activity.

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Efficiency means to have greater output from the same input. Entrepreneurs improve economic efficiency by, Improving processes, reducing wastes, increasing yield ,and, Bringing about technical progress, that is, by altering labour capital ratios. You are aware that if labour is provided with good implements (capital), its productivity increases.

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INCREASING THE  SPECTRUM AND  SCOPE OF ECONOMIC  ACTIVITIES

Development does not merely mean ‘more’ and ‘better’ of the existing, it also and more crucially means diversification of economic activities– across the geographic,  sectoral  and technological scope. You are aware that underdeveloped countries are caught in the vicious cycles on the demand as well as supply side. Entrepreneurs penetrate into and break these cycles. Economic development is also constrained by the supply-side pressures resulting into absence of capacity to meet the demand whether domestic or overseas. Entrepreneurs mobilise local and even overseas resources to augment the productive capacity of a country. Entrepreneurs lead the process of economic development via bringing about  sectoral  change. Entrepreneurs through their decisions to divest from the stale sectors and invest in green-field sectors bring about a virtual transformation of  the economy from ‘underdeveloped’ to an ‘emerging’ and ‘developed’ status.

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Entrepreneurship, in its natural habitat, that is, small business is a great leveller. That small-scale entrepreneurship enables marginalised groups such as women, SC, ST and OBC to pursue their economic dreams. As there are no entry barriers in terms of educational qualifications, entrepreneurship is an even more attractive career option for such marginalised groups. Agro-based rural industries and craft based cottage industries can really catapult local communities to socio-economic success stories. Local governments do their bit in developing these entrepreneurship clusters with a view to encouraging inter-firm collaboration and development of common facilities.

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FOSTERING THE  SPIRIT OF  EXPLORATION,  EXPERIMENTATION  AND DARING

The established ways of life need to be challenged and change must be seen as an opportunity to improve rather than something to be scared of. Entrepreneurs, through their urge to do something new, seeing change as an opportunity, experimenting with the novel ideas and showing the courage to try them prepare a fertile ground for persistent economic development. An important observation needs be made here. While entrepreneurship leads to economic development, the vice-versa is also true. That is, economic development also fosters entrepreneurship development. Growing economies provide a fertile soil for the flourishing of entrepreneurship, an aspect that we will take up while discussing entrepreneurship development.

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Role of Entrepreneurs in Relation  to their Enterprises

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Entrepreneurs must develop a exchange relationship for the success of the business.  He should perceiving market opportunities it helps to enlarge the business activities.  The entrepreneur have the awareness about the scarce resources and gaining command over scarce resources. Entrepreneur keep a relationship with the suppliers it helps to purchase inputs easily. Market relation is also important good relationship with the market helps to marketing the product and responding to the competition.

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Political administration is needs to dealing with public bureaucracy. Public bureaucracy means the approval, concessions, tax , etc, that are related to a business.  The entrepreneur managing the human relations within the firm. He should manage the relationship with the customer and supplier. Good administration is needed for the good management of the firm.

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Entrepreneur should be act as a manager also. He should have the ability to manage the total activities of the management. Entrepreneur should manage the finance of the business. From the starting of a firm, the entrepreneur should think about the finance and its management. He also managing the production activities it includes the purchase of inputs, production, warehousing etc.

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Entrepreneurs must have the technical knowledge about the operations with the firm. He should have the knowledge about the technology acquired in the factory and overseeing the assembly of the factory. He should aware about the industrial engineering ( minimising inputs with a given production process ). Technologies helps to upgrading the production process and product policy. If the entrepreneur have good technical knowledge it helps to introduce new production techniques and products.

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Discover:  Any new process begins with fresh ideas and objectives, wherein the entrepreneur recognizes and analyzes business possibilities. The analyzing of opportunities is a risky task, and an entrepreneur looks out for inputs from other persons, including channel partners, employees, technical people, consumers, etc. to reach an ideal business opportunity.  Evaluation:   The evaluation of an opportunity can be done by asking several questions to oneself. For instance, questions like whether it is worth taking a chance and investing in the idea, will it attract the consumer, what are the competitive advantages and the risk linked with it are asked. A reasonable and sensible entrepreneur will also analyze his skills and whether it matches his entrepreneurial objectives or not. Developing a Plan:  After the identification of an opportunity, an entrepreneur has to build a complete business plan. It is the most important step for new business as it sets a standard and the assessment criteria and sees if a company is working towards the set goals.

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4. Resources:  The next step in the process of entrepreneurial development is resourcing. Here, the entrepreneur recognizes the source of finance and from where the human resource can be managed. In this step, the entrepreneur also tries to find investors for his new business. 5. Managing the Company:  After the hiring process and funds are raised now its time to start the operation to accomplish the desired goals. All the entrepreneur will decide on the management structure that will be assigned to resolve the operational problems whenever it occurs. 6. Harvesting:  The last step in this process is harvesting, where an entrepreneur determines the future growth and development of the business. Here, real-time development is compared with the projected growth, and then the business security or the extension is initiated accordingly.

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The  Startup  India Scheme is a flagship  initiative of the Government of India with an objective to carve a strong ecosystem for nurturing innovation and  startups  in the country. This drive will lead towards sustainable economic growth and generate large-scale employment opportunities. The Government of India aims to empower  startups  to grow through innovation and design. The scheme specifically aims to:  1. trigger an entrepreneurial culture and inculcate entrepreneurial values in the society at large and influence the mindset of people towards entrepreneurship, 2. create awareness about the charms of being an entrepreneur and the process of entrepreneurship, especially among the youth, 3. encourage more dynamic  startups  by motivating educated youth, scientists and technologists to consider entrepreneurship as a lucrative, preferred and viable career, and

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4. support the early phase of entrepreneurship development, Including the pre- startup , nascent, as well as, early post  startup  phase and growth enterprises.  5. Broad base the entrepreneurial supply by meeting specific needs of under represented target groups, like women, socially and economically backward communities, scheduled castes and scheduled tribes; under represented regions to achieve inclusiveness and sustainable development to address the needs of the population at the bottom of the pyramid.

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Simplification and Handholding:  In order to make compliance for  startups , friendly and flexible, simplifications are announced. 2.  Startup  India Hub:  The objective  is to create a single point of contact for the entire  startup  ecosystem and enable knowledge exchange and access to funding. 3. Legal support and  Fasttracking  Patent Examination:  The scheme  for  Startups  Intellectual Property Protections (SIPP) is envisaged to facilitate protection of patents, trademarks and designs of innovative and interested  startups . 4. Easy Exit:  In the event of a  business failure and wind up of operations, procedures are being adopted to reallocate capital and resources towards more productive avenues. This will promote experimentation with new and innovative ideas, without fearing complex and long drawn exit process. 5. Harnessing private sector for  incubator setup:  To ensure  professional management of government sponsored/funded incubators, the government envisages setting up of incubators across the country in PPP mode. 6. Tax exemption:  The profits of  startup  initiatives are exempted for income tax for a period of three years.

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It is the pooling of resources by a group of people for a common goal. Crowd funding is not new to India. There are many instances of organisations reaching out to common people for funding. However, the emergence of platforms that promote crowd funding is fairly recent to India. These platforms help  startups  or small businesses to meet their funding requirements. Crowd funding

Boot Strapping Commonly known as self financing, it is considered as the first funding option because by stretching out your personal savings and resources, you are tied to your business. Also, at a later stage, investors consider it as your merit. However, it is a good option of funding only if the initial requirement is small and handy

Angel investors are individuals with surplus cash who have keen interest to invest in upcoming  startups . They also offer mentoring or advice alongside capital.

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Venture capital There are professionally managed funds which are invested in companies that have huge potential. Venture capitalists provide expertise, mentorship and act as a litmus test of where a business organisation is going, evaluating business from sustainability and scalability point of view.

Micro finance is basically access to financial services to those who either do not have access to conventional banking services or have not qualified for a bank loan. Similarly, NBFCs (Non Banking Financial Corporation) provides banking services without meeting legal requirement/definition of a bank. Microfinance and NFBCs

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Intellectual property (IP) refers to the creations of the human mind, like inventions, literary and artistic works, symbols, names, images and designs used in business. Intellectual property is divided into two board categories: industrial property, which includes inventions (patents), trademarks, industrial designs and geographical indications, while the other is copyrights, which includes literary and artistic works, such as novels, poems, plays, films, musical works, artistic works, such as drawings, paintings, photographs and sculptures and architectural designs. The most noticeable difference between intellectual property and other forms of property is that intellectual property is intangible i.e., it cannot be defined or indentified by its own physical parameters.

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Why Intellectual Property Rights is Important?

It encourages creation of new, path breaking inventions, such as cancer cure medicines. ii. It incentivises inventors, authors, creators, etc., for their work. iii. It allows the work created by a person to be distributed and communicated to the public only with his/her permission. Therefore, it helps in the prevention of loss of income. iv. It helps authors, creators, developers and owners to get recognition for their works.

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Acting out of choice rather than compulsion, taking the lead rather than waiting for others to start. Initiative

A mindset where one is trained to look for business opportunities from everyday experiences. Sees and Acts on Opportunities

A ‘never say die’ attitude, not giving up easily, striving continuously until success is achieved. Persistence

Knowing and knowing who knows, consulting experts, reading relevant material and an overall openness to ideas and information. Information Seeking

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Attention to details and observance of established standards and norms. Concern for High Quality of Work

Taking personal pains to complete a task as scheduled. Commitment to Work Contract

Concern for conservation of time, money and effort. Efficiency Orientation

Breaking up the complex whole into parts, close examination of the parts and inferring about the whole Systematic Planning

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Observing the symptoms, diagnosing and curing. Problem Solving

Not being afraid of the risks associated with business and relying on one’s capabilities to successfully manage these. Self - Confidence

Conveying emphatically one’s vision and convincing others of its value. Assertiveness

Eliciting support of others in the venture. Persuasion

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Providing leadership.   Use of Influence Strategies

Ensuring the progress of the venture as planned. Monitoring

Believing in employee well being as the key to competitiveness and success and initiating programmes of employee welfare. Concern for Employee Welfare

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Need for Achievement (N- Ach) Need for achievement implies a desire to accomplish something difficult. To increase self–regard by successful exercise of talent. Entrepreneurship provides you with the best opportunity for making the best use of your talents as in employment the 9-5 routine, pressure to adhere to rules and regulations, preference for compliance of boss’s instructions over the use of personal creativity and innovativeness stifles your progress and self-development.

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Need for Power (N-  Pow ) Need for Power is the concern for influencing people or the behaviour of others for moving in the chosen direction and attaining the envisioned objectives. Power may not be used to further one’s self- interests alone, it may be also be used to touch the lives of others, to make a difference. Entrepreneurs driven by this socialised face of the need for power. They found organisations that are a source of sustenance and self- respect for many.

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Need for Affiliation (N-  Aff ) If a man thinks about interpersonal relationships, he has a concern for affiliation. It implies, among other things a tendency of the people to conform to the wishes and norms of those whom they value Entrepreneurs are believed to be low on affiliation, as they are and expected to be, innovative, trendsetters and tradition breakers.  However, it is not necessary that affiliation should only interfere with achievement.

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Need for Autonomy (N-  Aut ) The need for autonomy is a desire for independence and being responsible and accountable to oneself rather than some external authority for performance. In the context of entrepreneurship, it is usually interpreted as the determination not to work for someone else.  In most job situations, employees are given little freedom to exercise their discretion in taking decisions and choosing a course of action so much so that absence of it drives them into starting their own ventures.

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Entrepreneur is the person (the subject), entrepreneurship is the process  (theverb ) and enterprise is the creation of the person and the output of the process(the object). Entrepreneurs play important roles both in relation to economic development and in relation to the enterprise. Given its critical role in economic development at a broader level and business start-ups at the micro level, it is imperative that a conscious effort be made to popularise entrepreneurship as a career option. In this regard, EAPs and EDPs can play an important role. Besides, there is a need to create an entrepreneurship friendly environment. Since, entrepreneurship is the outcome of a dynamic interaction between the person and the environment, there is need also for developing entrepreneurial competencies, motivations, values and attitudes.

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What are the difference between Entrepreneurship & management

Explain the Process of Entrepreneurship Development

What are the Characteristics of Entrepreneurship

Write down the names of one of your favourite book/film, song. Find out who the original creators are and who owns the copyright for each creation?

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