Concepts of Entrepreneurship:

Is the process of identifying opportunities in market place & arranging for resources to exploit the
opportunity in order to gain in long term

Entrepreneur:

Is a person who is catalytic agent in converting a situation into opportunity & set up a business in
process.

As per Peter F Drucker, an entrepreneur is one who always searches for changes, responds to it &
exploits it as an opportunity. He believes in increasing the value & consumer satisfaction.

Enterprise:

The outcome of entrepreneur’s endeavor is enterprise. It provides goods & services, jobs,
contributes to national income & overall economic development.

Key highlights of Entreprenuership:

Is introduction of a new product or service though the creation of a new company or innovation of
an existing organization.

Entrepreneurs search for change, respond to change, seize on change as an opportunity.

Entrepreneurs – require access to capital, equipment, land & talent.

Intraprenuership – refers to entrepreneurial activity that originates from within an existing company.

Key elements for entrepreneurial success – identifying market opp., delivering value to customers,
solving problems, recognizing changes.

Evolution of Entreprenuership in India:

Entreprenuership introduces a critical element of dynamism in India into the economic system.

In India, it has been present since ancient times. During medieval & early modern period, it did not
have same vigor that was experienced in contemporary period in western countries.

The people who took entrepreneurship during British period faced insurmountable problems.

Archaeological evidence shows entrepreneurship in India started in early age of Ancient India.
Trading culture followed by Harrapan civilization established a commercial connection with
Mesopotamia society. They used to exchange their handmade craft – products.

Indian Entrepreneurship was ruled by community system in past. Brahmans were learned men who
assisted Kshatriyas (rulers) in administration, Vaishya’s performed trading & industrial producing
activities & shudras engaged in agricultural occupation. People were organized in a very simple type
of economic & social system. It can be compared with modern concept of entrepeurship with
villages as organization & entrepreneur as craftsman.

Organized industrial activity was observable among Indian artisans in few recognizable products in
cities of Banaras, Allahabad, Gaya, Puri & Mirzapur which were on river basins. This was because
rivers served as means of transportation facilities.

Artisan industries flourished because Royal Patronage was available to support them. Workshops
called kharkhanas came into existence. Craftsman brought into association called ‘guild system’.
Qualities of these craftsman were, perfection in art, durability beyond doubt & appeal to eye.

Bengal enjoyed worldwide celebrity for corah, Lucknow for chintzes, Ahmedabad for dupattas &
dhotis, Nagpur for silk bordered cloths, Kashmir for Shawls & Banaras for metal wares.

Therefore, from this time till earlier years of eighteenth century, India enjoyed status of queen of
international trade with help of its handicrafts.

Industrialization had started due to East India Company in 1673 in India. Britishers were responsible
for industrial cultures in India. They came for business purposes in 19th century & industrial
advancement occurred in 20th century. Private sectors were established by britishers. Industries
were in west & east parts of India.

We continue exercising digital peers that anyone package develops their marketing. Family
entrepreneurship like Tata, Birla, Dalmia & Reliance continue as flourishing enterprise in India.

Role of Entrepreneurship in Economic development:

Economic development means a process of upward change where by the real per capita income of
country increases over period of time.

Entrepreneurship plays an important role in development of a country. The no. & competence of
entrepreneurs affect the economic growth of a company.

Economic history of advanced countries like USA, Russia & Japan supports the fact that economic
development is outcome for which entrepreneurship is an inevitable cause. The role of
entrepreneurs in Advanced countries has made people of developing & underdeveloped countries
conscious of entrepreneurship for development.

It is an accepted fact that entrepreneurs can only explore potentials of countries availability of
resources like labor, capital, technology. But technical progress alone cannot lead economic
development, unless technological breakthroughs are put to economic use by entrepreneurs.

Entrepreneurs help in following ways:

1. Increase in Investments: They mobilize saving of public through issues of industrial

securities. It results in productive use of national resources. Rate of capital formation
increases which is essential for rapid economic growth. Thus entrepreneur is creator of
wealth.
2. Increase in Average Income: They identify & exploit opportunities. They convert idle
resources like land, capital, labor into national income in form of goods & services. They help
increase net national product & per capital income of a country, which is important for
measuring economic growth.
3. Generating employment: They generate employment directly & indirectly. Directly, self-
employment for the entrepreneur. Indirectly by setting up business units to offer jobs to
millions.
4. Wealth creation & Distribution: It stimulates equitable income & wealth in the interest of
country to more people & geographical factors.
5. Creating Innovation: An entrepreneur is person who always looks for change. Apart from
combining the factors of production he also introduces new idea & new combination of
factors.
6. Reducing regional imbalance: Entrepreneurs in public & private sector help to remove
regional disparities in economic development. They set up industries in backward areas to
avail subsidies & benefits offered by central & state govt.
7. Improvement in Standard of Living: They set up industries which remove scarcity of essential
commodities & introduce new range of products.
8. Economic Independence & Self-sufficiency: They are essential for national self-reliance.
Industries help to manufacture indigenous substances thereby reducing imports from
foreign countries. Businessman also exports goods & services on large scale.
9. Backward & Forward Linkages: Entrepreneur initiates change which has chain reaction.
Example: setting up a steel plant generates ancillary units & expands demand for iron ore,
coal etc.
10. Facilities & over-all development: Entrepreneurs act as catalyst agent for change which
results in chain reaction. Once an enterprise is established, the process of industrialization is
set up in motion.

Theories of entrepreneurship:

1.Innovation Entreprenuership theory:

Joseph A Schumpeter – founded this theory. The quality that makes an entrepreneur different
from normal businessman is finding innovative solutions & having foresight. Joseph was one of
the greatest economist put forth the well known innovative theory which changed the
entrepreneur’s perspective.

Assumptions for the theory are:

Entrepreneur is born with desire to establish his own industry.

He desires to do something new.

Takes pleasure of creativity & learning experiences of skills doing various tasks.

Main objective – to earn profit, by way of search of raw material, new sources, new machinery,
new methods of productions, new workers & providing customer satisfaction.

According to Joseph, entrepreneurs take stationary or stagnant economy to a new level of

development by adding innovation & creativity of own.

They bring innovation in 2 ways:

By reducing cost of production or cost effective.

By increasing the demand for certain products.

2.Economic Entreprenuership Theory:

This theory was proposed by Prof. Richard Cantillon, who considered economy as one of fields
affected by entrepreneurship.

According to him, entrepreneur acts as both producer & exchanger. An entrepreneurs action
greatly affects supply chain of raw material being collected, to become an end product for
consumers that has certain amount of utility.
He included everyone as an entrepreneur, be a beggar or restaurant owner as they also have a
source of unfixed income, this counts as unique factor & made his theory stand out from other
theories.

3.Theory of Need of Achievement:

It was proposed by McClelland. His assumption is based on desire of high achievements

obtaining specific achievements, making the best performance, touching heights of excellence &
developing entrepreneurial tendencies in individuals.

But, for that entrepreneur should have adequate capacity of imaginations, thinking & developing
new combinations.

For this, feeling for achievement are inculcated in him, from very beginning & therefore it is
especially attempted that he may become a successful entrepreneur. He had recognized the
desire to achieve major factor in entrepreneurship development. He had suggested conducting
motivational training programmers for development of entrepreneurs.

4.Theory of Recover the withdrawal of Status:

Was proposed by Prof. Everett Hagen. The assumption is that creativity of any suffering minority
group in society is the main source of entrepreneurship. In this regard, he is of opinion that if
any community has to lose its reputation due to some reasons the group becomes quite strong
to regain it.

As a result, my entrepreneurs are born. Hence it can be said that withdrawal of status of any
social group is root cause of its personality development & entrepreneurship development also.

According to him, withdrawal of status is caused due to:

When a reputed group is forcefully displaced by another group.

When a better group changes its views about its subordinate group.

When a group starts living in some new society. The persons or group tend to do creativity to
regain status & reputation after withdrawal of status etc. which will result in entrepreneurship
development.

5.Behaviour Theory:

Was proposed by John Kunkel. He assumed that entrepreneurship development of any society
depends upon its past & existing economic social aspirations.

He feels that following 4 types of compositions are essential for entrepreneurs:

The behavior of individuals may be made entrepreneurial by influencing major factors of

demand composition.

Opportunity competition is decided by various factors like labor market, production methods,
training opportunities, skills etc.

Labor composition is operated by various factors like sources of livelihood, traditional approach
& aspirations of life etc.

Hence it may be said that supply & development of entrepreneurs depend upon aforesaid
composition methods, assumptions & their scope.
Thus, entrepreneurship depends upon particular combination of circumstances, whose creation
is difficult, but destruction is easy.

In aforesaid physiological theories of entrepreneurship development, Thomas Beagle & David. P

Bayad stated 5 dimensions of entrepreneurship development

Need for high achievement

Entrepreneur is controlled by self, rather than by luck

The entrepreneur always remains ready to take risk in anticipation of risk & returns.

Entrepreneur remains ready to take uncertain & ambiguities because he knows that work which
is done for first time involves some uncertainties & ambiguities.

The behavior of entrepreneur may include making hurry in almost all activities & feeling
pressure of time & sometimes getting hyperactive & aggressive.

6.Socialogical Entreprenuership theory:

It talks about social aspects of entrepreneurship. If entrepreneur considers all social aspects such
as social taboos, customs, cultures & other religious beliefs they might have a well-established
business that is up to mark with consumer’s expectations.

Was proposed by Prof. Max Weber. It stated that entrepreneurs should accept the system of
society for development of themselves as well as their startup.

For the first time he stated that emergence & development of entrepreneurs depend upon
ethical values system of society.

He was of a view that religion in which person survives & religious values & faiths which he
accepts, substantially affect his business life, occupation, entrepreneurial enthusiasm & energy.

He had linked entrepreneurship development with protein & with various religious communities.

His observes that those religious communities which lay emphasis on capitalism, materialism &
currency rationalization have been successful in emergence of entrepreneurs, wealth,
technology, capital formation & economic formation.

7.Psychological Entreprenuership theory:

Are 3 sections based on personal characteristics of a typical entrepreneur.

Locus of control: Entrepreneur’s success is result of internal locus of control as well as external
locus of control. His or her inner abilities & support from outside.

Theory of personality traits: Inborn qualities of individual are one that naturally makes them an
entrepreneur.

Theory of need for achievement: Entrepreneurs are driven by a need for achievement & it
eventually makes them succeed.

8.Oppurtunity based Entreprenuership Theory:

Peter Drucker proposed this theory. He stated that entrepreneur & entrepreneurship, the
entrepreneur always searches for change, responds to it & exploits it as opportunity. Prof Peter
& Prof. Howard focused on a wide ranging conceptual framework of entrepreneurship & hence
contradicted Schumpeter’s theory which stated entrepreneurship as change.

9.Anthropological Entreprenuership Theory:

It relates to cultural model of entrepreneurs. Anthropologists study human aspects within past &
present. This makes them good observers of society hence according to them, to have a
successful venture, entrepreneurs should consider social & cultural contexts. Entrepreneurs can
find possibilities that present themselves as difficulties because of social aspects of business
activities. It pushes them to come up with new ways to solve difficulties or at very least
contribute to their solutions.

10.Process of Stage Entreprenuership Theory:

This theory is divided into 5 stages describing the development journey of an entrepreneur. It is
theory by Prof. Venkat Rao. The 5 stages of entrepreneurship development according to this
theory are:

Simulation for stimulation of entrepreneurship

Identifying abilities & capacities of entrepreneurship

Expansion & development stage

Publicity foundation/ promotion

Feedback

11.Economic Theory:

This theory has been propounded by Prof. Pepuek & prof. Hassis. Their assumption is that
psychological motivation for economic gains or increase in real income exists in every society.

In addition, he has also stated that economic motivation are sufficient conditions for individual
industrial entrepreneurship.

But if in spite of that, entrepreneurship response lacks in individuals, it is result of various types
of market imperfections & propositions of policy determination.

This theory is based on assumption that entrepreneurial development is result of various

economic motivations.

Hence, individuals enter into industrial field with aim of maximum utilization of economic
opportunities available within economy & market.

12.Entreprenurship Disposition Theory:

It has been propounded by T.V.S Rao. His assumption is that courageous entrepreneurial
disposition Is very important for entrepreneurship development.

Besides for entrepreurship establishments, individual, physical & orienting factors are also
essential.

According to Rao, entrepreneurial disposition includes factors like dynamic motivation, long
term devotion, individual, social & physical sources & political system. These factors influence
entrepreneurial development & also promote industrial activities.
13.Process of Stage theory:

Within accepted theory, process or stage theory is developed by Venkat Rao. He assumptions
are as follows:

Simulation: In this stage environment is built for development of entrepreneurs by way of

providing them various simulations.

Various policy announcements are made in country, specific plans are prepared for
development, wide publicity is done, support institutions are established & entrepreneurship
development programs are organized. All these help in stimulating entrepreneurship.

Identification of Entrepreneurial Abilities & Capacities in Society:

At this stage identification of entrepreneur is carried out & advanced systems are adopted. The
entrepreneurs are directed toward constructive activities.

Development & expansion of entrepreneurs:

At this stage various programs are organized for development of entrepreneurs, which include
vocational guidance programs, management training & technical training. In addition, various
policies & programs are organized for expansion of industrial activities.

Promotion:

At this stage various support organization, like central labor organizations, state level
organizations & research, testing & standards organizations etc. are established for expansion of
economic activities & entrepreneurial promotion.

Follow up: At the last stage, follow up of govt. programs & policies formulated for
entrepreneurial development is undertaken. The system of feedback is introduced for
entrepreneurial expansion & development.

14.Cultural Value Theory:

Has been developed by Prof. Kroken. He emphasized that cultural values, expected rules & social
approvals have specific importance in entrepreneur development. So entrepreneur is an ideal
personality for society. In addition, Prof. Kroken also explained that the success of entrepreneur
& his performance are influenced by following 3 factors:

Entrepreneurs own inclination towards his work & profession.

Expectations of acceptance groups regarding the role of entrepreneur.

Functional requirements of work.

15.Socio-Cultural Value Theory:

This theory was developed Prof. Stokes. He is of the view that during the period of economic
transition, socio-cultural values play an important role.

The physiological factors encourage economic development by stimulating entrepreneurship.

According to him, mental thinking does create directions of entrepreneurial development, but
group generated value matrix has significant contributions in attracting entrepreneurship.

Models of Entreprenuership:
It is nothing but methodology that is properly structured in order to incorporate the
entrepreneurial traits in businesses. Let’s have a look at these:

1.Large Business Entrepreneurship: These are massive businesses that constantly works towards
sustaining innovative products & services. Over a while, they have built an expansive
organization. They are constantly engaged in R & D to keep advancing their technology to meet
the ever-evolving needs of their customers. A classic example of it is Samsung.

2.Small Business Entreprenuership: These start with single person often, a pretty a basic idea &
lot of passion & determination. Research says 75% of businesses are part of small
entrepreneurship & capital is raised via friends & family. They usually hire local manpower as
well as family members & thrive on high profit. Examples: Hair Salon, grocery store etc.

3.Social Entreprenuership: This model of entrepreneurship is for people who think that they can
bring change in world with their innovations & actually have potential to do so. Their focus is on
social cause rather than profits. Non-profit organizations are part of this business model.
Examples are microfinance institutions, co-operatives, educational programs & welfare services.

4. Scalable Start-up Entreprenuership: These kinds of entrepreneurship models get funding from
venture capitals for further growth. Entrepreneurs who pick this model are confident of their
vision & believe that it can change their world. One of the most famous examples of a scalable
startup is Twitter, WhatsApp etc.

5.Innovation Entreprenuership: Is a model based on finding gaps in market. These entrepreneurs

use innovative thinking & technology to develop products & services that can make life easier for
people & something no one else has clocked yet. This is ideal for people who are constantly
thinking outside the box. IPhone & Tesla are examples of this.

Emerging Models of Corporate Entrepreneurship:

These are discussed by Prof Robert C. Wolcott & Prof Michael J. Lippitz in Grow from Within.

Mapping these models on 2 dimensions via, organizational ownership & resource authority, the
above 4 models are as follows:

1.The Opportunist: This model works well in trusting corporate cultures that are open to
experimentation & that have diverse social networks behind the official hierarchy. As per them,
“There need to be multiple executives who can say yes to a new business concept. Without this
type of environment, good ideas can easily fall through organization cracks or receive insufficient
funding to prove feasible.

2.The Enabler: The enabler model has dedicated resources. Early stages of new business
conception are explicitly supported, encouraged & often strategically channeled with a promise
of serious management attention to those concepts that look promising. But enabler model is
not only about allocating capital for corporate entrepreneurship. It is also about personal
development & executive programs.

3.The Advocate: the advocate, a company assigns organizational ownership for driving the
creation of new businesses to a designated corporate-level group, but it intentionally provides
group with only a modest budget. Advocate organizations act as evangelists & innovation
experts, facilitating corporate entrepreneurship in conjunction with business units which must
demonstrate their commitment to new business development by paving most of the bills, as
authors note.
4. The Producer: The last model of entrepreneurship, with focused ownership & dedicated
resources that aims to protect emerging projects from turf battles to encourage cross-unit
collaboration, to build potentially disruptive business & create pathways for executives to
pursue careers outside their business units.

Dimensions of Entrepreneurship:

The issues of corporate entrepreneurship have evoked interest not only from academics, but
also from business practitioners & policy makers. The interest stems from recognition of
advantage that can be gained from corporate entrepreneurship activities.

There are 4 dimensions of corporate entrepreneurship being studied,

Pro activeness,

Risk taking,

Innovations & Self renewal.

Independent variables – Innovativeness, Pro activeness, Risk taking

Dependent variables – performance

The finding of various studies shows that pro activeness has a positive & significant impact on
financial performance of company, the resource availability, supportive organizational structure
& rewards do moderate the relationship between pro-activeness & financial performance.

In contrast, it was also found that risk-taking does not have a direct effect of financial
performance of a company. However, resource availability, supportive organizational structure
& rewards are shown to moderate relationship between risk taking & financial performance.

Meanwhile, for innovation & self-renewal, both are negatively related to financial performance.
Innovation is a key factor for success of many businesses. As businesses seek to improve
productivity & ensure sustained growth, they need to improve capacity to innovate. Therefore, it
would be worthwhile to note additional corporate entrepreneurship strategies, as such
strategies may not only benefit firm internal innovation performance but also benefit firm’s
productivity, marketability & competitive advantage.

Further, analysis shows that although all moderating factors were positively related with these 2
corporate entrepreneurship dimensions, but they are not significant.

Entrepreneurial Society:

It is a prosperous society; wherein more & more people are able to choose what they do & when
they do it. Innovation & Entreprenuership driven society where the institutional framework of
systems & policies processes is focused on practicing entrepreneurial management for self-
renewal.

Prior to globalization, domestic economies were insulated to some degree against competition
from countries offering lower cost wages & other costs. When China was closed, Eastern Europe
was closed off & India was inaccessible, political barriers, the Berlin Wall, kept western
companies from accessing & taking advantage of many lower cost production locations.

Thus, it was viable for previous generations to earn a visible living engaged in essentially menial
work that involved routinized & repetitious tasks. But with globalization, such routinized &
repetitious work can be outscored & off shored to lower costs locations in Eastern & Central
Europe, China & India & elsewhere in world.

Globalization renders either wage in West to come down or else for economic activity to shift
areas which cannot be easily & costless outsourced & offshored, which involves working with
ideas & knowledge.

However, it does not suffice just to have great & new ideas, these also have to be implemented
& commercialized. That’s where entrepreneurship comes in. In addition to this, entrepreneur
requires more than just an entrepreneurial orientation. It also crucially depends upon
institutions & policies to invest in knowledge, human capital & capabilities & facilitate an
entrepreneurial environment.

Entrepreneurial Culture:

It can be described as an environment wherein someone is motivated to innovate, create & take
risks. In business, it means that employees are encouraged to brainstorm new ideas or products.
When work time is dedicated to these activities, it is called entrepreneurship.

Characteristics of this:

Shared Values-

Growth through excellence & innovation

Collective responsibility for experimentation

Job execution is incomplete without improvement.

Skills-

Competence upgraded & nurtured continuously

Learning to unlearn & learn

Job rotation for wider perspective & cross pollination

Others like in depth analysis, risk evaluation etc.

Staff-

Optimal & Multi-skilled

Ownership & belonging

Inclusion of innovation for performance evaluation, growth & rewards.

Style-

Participative & inclusive

Tolerance towards ambiguity

Openness to new ideas

Support of risk taking

Strategy-
Long term focus

Innovative problem solving & performance improvement

Risk taking is essence of business

Structure-

Limited horizontal layers & vertical differentiation

Cross-functional task teams

Dedicated team for nurturing creativity

Systems-

Simple, flexible & evolving

Result-oriented, rather than process-oriented approach

Quick approval mechanism for innovative ideas

Dimensions of Entrepreneurial culture:

Autonomy

Risk taking

Innovativeness

Aggressive competitiveness

Proactiveness

Difficulties faced in establishing an entrepreneurial culture:

Ignorance

Employees Laziness

Fear of unknown

Religious & cultural constraints.

In addition, the established entrepreneurial culture requires a common effort to maintain EC in a

way that avoids such risks as employee conflicts & perceived jealousy, insuffienct reward system
& problem associated with balancing existing responsibilities.

Rural Entreprenuership:

India being a country of villages, majority of population lives in villages. People in rural areas
suffer from unemployment, poverty, poor infra, etc. which may be solved with development of
rural entrepreneurs.

Rural entrepreneurs refer to those who carry out business in rural areas with utilization of local
resources. Rural entrepreneurship is nowadays a major opportunity for people who migrate
from semi urban or rural to urban areas.
It can be considered one of the solutions to reduce poverty, migration, unemployment & to
develop rural areas. Rural entrepreneurs may increase standard of living & purchasing power of
rural people & bottom of pyramid by offering them employment opportunity. This paper makes
an attempt to find out various problems & challenges for potentiality of rural entrepreneurship.
It focuses on major problem faced by rural entrepreneurs.

Growth & development of rural economy is essential pre-condition to development of nation as

a whole. The gap between rural & urban should be reduced. Standard of living for rural people
should increase.

Entreprenuership in rural sector provides an answer to above problems. Today it has emerged as
dynamic concept. In general parlance, rural entrepreneurship can be defined as
entrepreneurship emerging at village level which can take place in variety of fields like
agriculture, business, industry etc. & act as a factor for economic development. Development of
rural areas has been linked to entrepreneurship.

In single terms, entrepreneurship is act of being an entrepreneur, which can be defined as one
who undertakes innovations, finance & business acumen in effort to transform innovations into
economic goods.

Principles Applicable to Rural Development:

Optimum & full utilization of local resources in entrepreneurial venture by rural population.

Better distribution of firm produce results in rural prosperity.

Entrepreneurship occupation opportunities for rural population to reduce discrimination & also
providing alternative occupations as against rural system.

To activate such system as to provide basic manpower, money & materials, management &
machinery market to rural population

Types of Rural Entrepreneurship:

Agro Based:

These industries comprise direct sale or processing of agro based products such as pickles, sugar
industries, oil processing, fruit juice, dairy products.

Forest based:

It comprises of industries like wooden products, honey making, coir making, eating plates from
leaves, bamboo products.

Textile Industry:

These comprise of spinning, weaving, bleaching & coloring.

Services: It includes wide range of services like mobile repair, agricultural related machinery etc.

Importance of Rural Entrepreneurship in India:

Importance of Rural entrepreneurship is as under:

1.Resource Utilization:
Rural industries foster the appropriate utilization of local resources like raw materials & labor for
productive purposes & thus enhance productivity.

2.Employement generation:

Rural industries create large scale employment openings for rural people. The basic issue of
large scale unemployment & under employment can be efficiently solved through rural
industrialization.

3.Avoid the Migration of Rural population:

Lack of employment, poverty etc. has forced rural people to head to urban areas for livelihood.
It creates urban-rural imbalance. Under these situations, rural entrepreneurship can provide
employment & it will discourage rural people to migrate from rural areas in search of jobs.

4.Artisitic Activities Promotion:

Rich heritage of rural India is conserved by protecting & promoting handicrafts & art though
rural entrepreneurship.

5.Check on Social Evils:

The growth of rural entrepreneurship can diminish social evils like poverty, growth of slums,
pollution in cities.

6.Encourage Rural Youth:

Rural Entrepreneurship can promote rural youth & expose them to several paths to adopt
entrepreurship & promote it as career.

7.Stilumate Economic development:

Rural industrialization can stimulate economic development of rural areas. It will curb migration
to urban areas, social tensions, pollution, increase in slums etc.

8.Foreign exchange earnings:

Rural industries play a prominent role enlargement of foreign exchange earnings of the country
by export of their offerings.

9.Entreprenuership Development: Rural industries encourage entrepreneurial development in

rural areas. It persuades entrepreneurs to improve & carry out entrepreneurial activities which
eventually facilitate the enhancement of rural areas.

10.Standard of living: It will also improve literacy rate. Their education & self-employment will
flourish & it will develop their standard of living.

Problems faced by Rural entrepreneurship:

Scantiness of Knowledge: There is no doubt about lack of adequate skill/knowledge of

entrepreneurial opportunities among youth.

The educated & trained youths mostly relinquish villages & head towards urban destinations in
search of jobs.

Scarcity of Finance: Finance is the most crucial portion of business. Most rural entrepreneurs are
mainly scuffing to raise the finance for their business. Due to non-availability of finance the
entrepreneurs are compelled to take credit from money lenders, who charge overpriced rates of
interest.

Paucity of Enterprising skill: Most of rural individuals lack risk bearing ability. Reluctances to
include oneself in business, inclination towards wage employment & lack of innovation &
creative thinking are few reasons which have restricted growth of self-employment in rural
areas.

Scantiness of Technical Know-How: Rural people have adequacy of managerial, technical,

professional know-how which is hindrance in developing the spirit of enterprise, subsequently
not many people come further to establish employment units.

Paucity of Infrastructural Facilities: Rural areas are characterized by poor infrastructural facilities
such as roads, transport, market, electricity, street lighting, storage of communication etc. which
hinder smooth & fluent movement of several industrial activities.

Adverse Socio-cultural & industrial environment: Case systems, social evils, religious
superstitions, fatalism et, restrict advancement of venturous spirit. Inadequacy of skill &
expertise in laborers, their propensity to migrate to cities & consumer tradition to purchase
goods produced by MNCs, big companies etc. create many complications for new entrepreneurs.

Paucity of market Information: Absence of power & efficient communication & ingress to proper
& right information makes it intricate for rural entrepreneurs to understand market trends,
scenario & policies followed by govt on industrialization.

Inadequacy of skilled laborers: Skilled labor cannot be found easily in rural areas. High skilled
personnel wish to work in cities due to more salary as compared to rural areas.

Inferior Quality Products: Rural entrepreneurs cannot produce quality products because of poor
quality of raw materials & inadequacy of standardized tools, machinery & equipment. Presently
the consumers are more sensitive towards quality of products.

Fear to Invest in Venture: Rural entrepreneurs have low risk taking ability due to financial
constraints & external support. Therefore, they restrict to invest in their businesses in rural
areas.

Marketing Problems: are allied with distribution channels pricing, product promotion etc.

Women Entrepreurship:

Investing in women’s education yields one of the highest returns that equip women with skills,
knowledge & self-confidence required for carrying the role of better parents, workers, citizens
which are regarded as permanent solution to no. of economic & social problems that improve
quality of life.

Women entrepreneurs face a series of problems right from beginning till the enterprise starts
functioning. Being a woman itself possesses various problems to female entrepreneur.

The problem of Indian women pertains to her responsibility towards family, society & huge
workload at home. At rural India, condition is still worse.

Rural women face tough resistance from men. They are considered as helpers. The attitude of
society towards them & the constraints in which they have to live & work are not very conducive
for their individual growth & development.
Features of Women Entrepreneurship:

Most women with small income are likely to become entrepreneurs.

Women with small facilities are likely to become entrepreneur.

Most spinsters face difficulties in obtaining financial support to start their enterprises.

A majority of women entrepreneurs are married. With support of their spouse, they accepted
entrepreneurship.

A large no. of women with little or no education & training enter business field.

Many women become entrepreneurs out of economic necessity.

Women’s sincerity & hard work is cause for sustainability & growth.

Women entrepreneurs are security oriented rather than growth oriented.

Limitations faced by Women Entrepreneurs in India:

Patriarchal society: India is predominantly a male dominated society. Women are considered as
burden on family rather than asset. This gender bias limits growth of them in entrepreneurship.

Lack of opportunities: There is a general lack of social infrastructure in our country. Even today,
in many areas, there is lack of educational facilities. The lack of condition of female education is
still worse. This stands as a barrier in their progress. This challenge can be overcome by initiating
focused programs for female education which will enhance their skills & enable them to work.

Enabling technologies for women: There is a need to create more opportunities regarding new
methods of production, marketing & other modern technologies & special programs should be
launched to familiarize women with these technologies & methods. This lack of knowledge,
pertaining to new technology is major cause hindering growth of women entrepreneurs.

Social Barriers: Traditions & customs prevailing in Indian society are hindrance in path of women
prosperity & growth. In rural areas, they face social barriers like pardah system, having a
secondary status in family, early marriage, status of widow etc. These barriers can be overcome
through education & positive legislation. The govt. policies should be framed in such a way that
these barriers are banned & women entrepreneurship is encouraged.

Attitude of creditors towards women: Women entrepreneurs face a lot of problems while
arranging for finance for business. The creditors are slightly biased in their attitude towards
women entrepreneurs & do not grant loans easily. But records reflect the women have least
case of bad debts.

Lack of opportunities: The skilled women work more in unorganized sector, which are forced to
work more in the unorganized sector, where they are forced to work on minimum wages with no
social securities. If women are educated & are aware of all govt. schemes they would be able to
join organized sector & also be a leader in it.

Future of Women entrepreneurs in India:

In spite of all above mentioned problems, women entrepreneurs are growing is slowing
increasing. Hina Shah, a pioneer in women entrepreneurship for 3 decades & founder of
International Centre for entrepreneurship & career development says currently overall
environment for women entrepreneurship in India is conducive & series of initiatives have been
taken up to encourage it. However, macro policy point of view, women entrepreneurship
development has been residual category.

She is of a view, the govt. policy for women employment & enterprise development needs a
change from piecemeal approach to comprehensive one. Also according to a study conducted by
Dell in Jan 2012, the ideal country where a woman can start business in 2012 was India. During
this survey, women entrepreneurs said that they expected an average growth rate of 90% over
next 5 years.

Emerging Trending in Social Entrepreneurship:

Some emerging trends are:

1.Public-private community partnerships:

Social Innovation encourages a blend of efforts from 3 parties – social purpose organization
(SPO), the government, the community, working together to fulfill societal needs.

When initiatives fail to look at community & involve them in decision making processes that
affect them, they will be less inclusive. While SPOs provide funds & expertise in economically
viable business model, they need to be guided in right direction by active participation from
government & community.

2.Promise of Technology Adoption: Social entrepreurship will increasingly need to appreciate

value that technology could bring to social changes with proper training & empowerment.
Technology can transform social entrepreneurship initiatives by effectively utilizing information,
creating value & enriching capabilities. Besides this technology will impact the perception of
marginalized societies as greater adoption will lead to a realization of potential & capabilities.

3.Increased Impact Investing:

The focus of social entrepreneurs here is to provide funding to sectors such as healthcare,
education, conservation, renewable energy etc. Besides financial profit, emerging idea is to
address the needs with positive social & environmental impact. Investments in impact based
social enterprise could take form of blended fund portfolios. Social entrepreneurs will continue
to benchmark the investments with an impact return, leading to efficiency.

4.Creating social value:

They look at functioning in framework to maximize economic growth in conjunction with social
progress. By creating value on both fronts, the social entrepreneur will also have to focus on
communities needs where it functions in. Sharing created value will look like expanding the
framework, expanding total wealth of knowledge & mutual gain & social gain.

Business Opportunity:

It is an economic idea which can be implemented to create enterprise & earn profits. Numerous
opportunities exist in our environment which we fail to notice.

However, entrepreneurs perceive opportunities quickly, synthesise the available information &
implement it in form of enterprise.

Two things to be kept in mind while selecting an opportunity are as follows:

Ensure good market for product

Ensure suitable rate of return on investment.

Elements of a Business Opportunity

All ideas cannot be converted into attractive business opportunities. Before starting a business,
certain elements should be considered, which are as follows

Assured market scope.

An attractive & acceptable rate of return on investment

Practicability of the idea.

Competency & ability of entrepreneur to encash it

Potential of future growth

Exploring Opportunities in Environment:

Opportunities exist in environment. They may exist in form of needs & problems of society. An
entrepreneur spots opportunity evaluates the idea & through creativity & innovation, he builds
something valuable in form of enterprise.

Table later.

Stages of Enterprise building process:

Spotting an opportunity by analyzing the needs & problems of society.

Evaluating ideas received from different sources to find a creative solution.

Identifying a product or service through innovation.

Setting up a project & nurturing it to success

Perceiving & sensing opportunities:

Sensing entrepreneurial opportunities is a process of converting an idea into an opportunity &

then into enterprise.

Entrepreneurs are people with vision & after spotting the opportunity are able to synthesise the
available information of other people.

An entrepreneur with a vision is able to persuade others such as customers, partners &
employees to see opportunity, share & support it.

Factors Involved in sensing opportunities:

The most important factors involved in process of sensing opportunities:

1.Ability to perceive & preserve the basic ideas:

Perceiving opportunities or an idea might come from different sources, such as

Problem: many times a solution to problem leads to idea generation. Eg. Water heaters
operated on LPG, is the outcome of low power supply in small town & villages.
Change: Any change in social, legal to a new business opportunity. E.g. product with zero
cholesterol, zero calorie coke, multigrain breads, etc. result of movement of society towards
health consciousness.

Invention: New products or services lead to new business opportunities. E.g. with development
of android, most mobile companies started offering it.

Competition: It is often a source of new & better ideas that result in new business opportunities.
E.g. emergence of 3D Tv’s, curve TV etc.

Innovation: Creating new things of value as well as new & creative processes that add value to
existing products & services. E.g. computers to tablets.

2.Ability to harness different sources of information:

There are various sources from which information can be gathered like magazines, books,
journals etc. This information has to be analyzed & opportunity has to be identified.

3.Vision & creativity:

Through creativity, entrepreneurs provide a solution. With their vision, they can convert solution
into business opportunity.

Through their vision & creativity, they constantly

Overcome adversity

Exercise control over business

Make a significant difference

Environment Scanning:

Business environment is set of all those factors & conditions, which are external to business to
but effect the working of a business. These factors may be social, economic, political legal &
other factors.

It means careful monitoring of an organization of an organization’s internal & external

environment for detecting early signs of opportunities & threats that may influence its current &
future plans.

Need of Environment Scanning:

If you don’t adapt, you don’t endure, is the idea behind environment scanning.

Organizations have to be constantly aware of the changes taking place in environment & adapt
to those changes to survive & be successful. The right information, combined with right
adaptations, can determine an organization’s future visibility. Otherwise, the organization may
succumb to failure.

Importance of Environment:

The following benefits arise by understanding the environment:

Identification of opportunities to get first mover advantage: Be being always vigilant & aware, a
enterprise can identify the opportunities at earliest. E.g. LPG rationing led the manufacturers to
come out with induction cooker.
Formulation of strategies & policies: The threats are always present from the competitors for
which counter strategies have to be formulated to tackle competition. Also opportunities can
only be capitalized by suitable strategies & policies.

E.g. depleting reserves of petrol is a threat for car manufacturers.

Tapping useful resources: If a company has throughout knowledge of environment, the

enterprise can tap resources, like financial resources, human resources, etc. from market at
economical prices at the right time.

E.g. Parle should buy wheat for biscuits when new crop comes in market, as it is available at
cheap prices.

Better performance: It can be increased with timely action in dealing with threats & availing
opportunities for purpose of improvement in performance of firm.

E.g. Make in India scheme is declared by govt. opens new avenues for entrepreneurs to diversify.

Idea generation:

Idea generation is process of creating, developing & communicating ideas which are abstract,
concrete & visual. It includes process of developing idea through creativity & innovation &
bringing concept of reality.

Business ideas are an outcome of

Careful analysis of market trends

Careful analysis of consumer needs

Serendipity. I.e. creation of something or discovery through accident.

Exploring the ways of getting ideas.

Idea Fields:

Idea fields are convenient frames of reference for streamlining the process of generation of
ideas.

Process of generation of ideas can be streamlined by developing an awareness for different idea
fields.

Idea fields help in enlarging scope of thinking & also gives the entrepreneur with benefit of
structuring ideas based on convenient frames of reference.

Table later.

Market assessment:

Once entrepreneur has assessed opportunities, he has to assess market. Selection of product
will depend upon market assessment. The following factors require careful evaluation while
assessing market:

Demand:
The demand of product should be assessed on basis of market being targeted, viz local markets
or markets at state, national or international level. Also, a study should be conducted on target
customers to assess their tastes & preferences

Supply & nature of competition:

The present supply schedule of competitors should be assessed. Not only this, future supplies by
possible new entrants have to be gauzed too.

Cost & price of product:

The price of product should be competitively set with regard to existing competitors of the
product. Cost reduction in variable costs should be strived to be achieved.

Project Innovation & change:

The entrepreneur has to consistently keep a watch on technological changes & innovation,
otherwise he or she will lose market because his product will not be according to trends, quality
etc. present in market.

Trend spotting:

It means identification of new trends. It is a great help for entrepreneurs as he is able to come
out with products which are according to trends of market. But they charge huge sums of
money. So even entrepreneurs can become trend-spotters.

Ways in which an entrepreneur spots trends:

Read trends:

Wide variety of information can be collected from various sources given below:

Read the leading publications

Websites related to their business

Industry publications

Business Magazines

Major Newspapers

International trends through websites

Influential blogging

Niche bloggers focused on specific aspects of their industry.

The information available from above sources is vast & every piece of information may not be
relevant for entrepreneurs. They have to make intelligent choice as to which source is valuable
for them & which is not. For this, they use websites & forums to get information they want, they
also use RSS feeds, emails, newsletters.

Talk trends:
Talking to people is an equally important trend-spotting tactic. For this, entrepreneurs should
participate in events organized by specific industry’s trade association, whether online or offline.
They should also take advantage of social networking tools like social network sites & forums.
They can also start or join groups on networks to get latest trends. They can also start or join
groups on the networks to get the latest trends. It is also important to talk to customers both
online & offline. They should pay attention to what the customers are saying not only on their
product but also on competitor’s product.

Watch trends:

Observation in market place is best way to get on actual trends. Entrepreneurs can study habits,
preferences & likes & dislikes of the consumers. If target consumers of a product are youth, then
they can visit a mall & observe trends of clothing, eating habits, how youth are engaging
themselves in different activities. They can see which stores are attracting max. crowd & which is
lying vacant. Trade shows also are a great place to get trend ideas.

Think Trends:

When an entrepreneur begins gathering information regularly, he becomes a trend spotter.

After reading, watching, talking & observing trends, they will use their abilities of thinking,
analyzing & synthesizing to make connections with their business & can come up with a great
idea for a new product or new product line or new business.

Creativity:

It is seen that new entrants often start their beginning by giving reason of novelty, usefulness &
appropriateness, which are nothing but an extension of creativity.

The creative process;

1.Idea germination:

It is seeding stage, where the new idea grows. The idea germinates from interest & curiosity of
the entrepreneur. He then explore & exploits it to its best potential. The ideas can also
germinate from need of specific problem or area of study.

2.Preparation:

Now, with germination if idea, it needs to be implemented. For this entrepreneur takes up
market research to see whether the product will have future or not.

3.Incubation:

This is subconscious assimilation of information. This is transition period. The entrepreneur

thinks about his idea, its pros & cons, process of its implementation in his mind. The idea is
spreading its roots.

4.Illumination:

Fourth stage or illumination stage occurs when idea resurfaces in a realistic way. The
entrepreneur comes with a viable plan to give practical shape to his idea by collecting raw
materials, arranging for finance etc.

5.Verification:
This is also called validation or testing stage. In this, the idea or plan is translated into useful
application which has value. It is stage when knowledge is developed into application.

Innovation:

It is process of entrepreneurship which involves translation of a useful idea into application

which has commercial value. Innovation is required to work out analytically the details of
enterprise, to develop marketing strategies, to organize, finance & strategies operations.

Elements of its process:

Analytical planning involves:

Identifying the product or service features

Design

Resources

Resource organization involves:

Humor resources.

Material resources

Technology

Capital resources

Implementation involves:

Applying resources

Delivering results

Commercial application involves:

Provision of value of customers.

Reward employees

Satisfy stakeholders

Concept of Business:

Every individual is busy in one or another activity. Human activities can be broadly classified as
economic & non-economic activities.\