ED_UNIT-1: ENTREPRENEURSHIP
Concept of Entrepreneurship:
Entrepreneurship is the ability and readiness to develop, organize and run a business
enterprise, along with any of its uncertainties in order to make a profit. The most
prominent example of entrepreneurship is the starting of new businesses.
In economics, entrepreneurship connected with land, labour, natural resources and capital can
generate a profit. The entrepreneurial vision is defined by discovery and risk-taking and is an
indispensable part of a nation’s capacity to succeed in an ever-changing and more
competitive global marketplace.
Meaning of Entrepreneur:
The entrepreneur is defined as someone who has the ability and desire to establish,
administer and succeed in a startup venture along with risk entitled to it, to make
profits. The best example of entrepreneurship is the starting of a new business venture. The
entrepreneurs are often known as a source of new ideas or innovators, and bring new ideas in
the market by replacing old with a new invention.
It can be classified into small or home business to multinational companies. In economics, the
profits that an entrepreneur makes is with a combination of land, natural resources, labour
and capital.
In a nutshell, anyone who has the will and determination to start a new company and deals
with all the risks that go with it can become an Entrepreneur.
Types of Entrepreneurship
It is classified into the following types:
Small Business Entrepreneurship-
These businesses are a hairdresser, grocery store, travel agent, consultant, carpenter, plumber,
electrician, etc. These people run or own their own business and hire family members or local
employee. For them, the profit would be able to feed their family and not making 100 million
business or taking over an industry. They fund their business by taking small business loans
or loans from friends and family.
Scalable Startup Entrepreneurship-
This start-up entrepreneur starts a business knowing that their vision can change the world.
They attract investors who think and encourage people who think out of the box. The
research focuses on a scalable business and experimental models, so, they hire the best and
the brightest employees. They require more venture capital to fuel and back their project or
business.
Large Company Entrepreneurship-
These huge companies have defined life-cycle. Most of these companies grow and sustain by
offering new and innovative products that revolve around their main products. The change in
technology, customer preferences, new competition, etc., build pressure for large companies
to create an innovative product and sell it to the new set of customers in the new market. To
cope with the rapid technological changes, the existing organisations either buy innovation
enterprises or attempt to construct the product internally.
Social Entrepreneurship-
This type of entrepreneurship focuses on producing product and services that resolve social
needs and problems. Their only motto and goal is to work for society and not make any
profits.
Characteristics of Entrepreneurship:
Not all entrepreneurs are successful; there are definite characteristics that make
entrepreneurship successful. A few of them are mentioned below:
Ability to take a risk- Starting any new venture involves a considerable amount of
failure risk. Therefore, an entrepreneur needs to be courageous and able to evaluate
and take risks, which is an essential part of being an entrepreneur.
Innovation- It should be highly innovative to generate new ideas, start a company
and earn profits out of it. Change can be the launching of a new product that is new to
the market or a process that does the same thing but in a more efficient and
economical way.
Visionary and Leadership quality- To be successful, the entrepreneur should have a
clear vision of his new venture. However, to turn the idea into reality, a lot of
resources and employees are required. Here, leadership quality is paramount because
leaders impart and guide their employees towards the right path of success.
Open-Minded- In a business, every circumstance can be an opportunity and used for
the benefit of a company. For example, Paytm recognised the gravity of
demonetization and acknowledged the need for online transactions would be more, so
it utilised the situation and expanded massively during this time.
Flexible- An entrepreneur should be flexible and open to change according to the
situation. To be on the top, a businessperson should be equipped to embrace change in
a product and service, as and when needed.
Know your Product-A company owner should know the product offerings and also
be aware of the latest trend in the market. It is essential to know if the available
product or service meets the demands of the current market. Being able to be
accountable and then alter as needed is a vital part of entrepreneurship.
Importance of Entrepreneurship:
Creation of Employment- Entrepreneurship generates employment. It provides an
entry-level job, required for gaining experience and training for unskilled workers.
Innovation- It is the hub of innovation that provides new product ventures, market,
technology and quality of goods, etc., and increase the standard of living of people.
Impact on Society and Community Development- A society becomes greater if the
employment base is large and diversified. It brings about changes in society and
promotes facilities like higher expenditure on education, better sanitation, fewer
slums, a higher level of homeownership. Therefore, entrepreneurship assists the
organisation towards a more stable and high quality of community life.
Increase Standard of Living- Entrepreneurship helps to improve the standard of
living of a person by increasing the income. The standard of living means, increase in
the consumption of various goods and services by a household for a particular period.
Supports research and development- New products and services need to be
researched and tested before launching in the market. Therefore, an entrepreneur also
dispenses finance for research and development with research institutions and
universities. This promotes research, general construction, and development in the
economy.
Role of Entrepreneurship: The role of entrepreneurship in economic development is
substantial. After all, entrepreneurs don’t just build businesses and grow their personal
wealth; they also impact the economy by creating new jobs and opportunities, driving
innovation, and developing new markets, products, and services.
1. Raises Standard of Living
A significant role of entrepreneurship in economic development is that it can greatly enhance
the standard of living for individuals and communities by se be tting up industries and
creating wealth and new positions.
2. Economic Independence
Entrepreneurship can a path to economic independence for both the country and the
entrepreneur. It reduces the nation’s dependence on imported goods and services and
promotes self-reliance.
3. Benefits of New Firms and Businesses
By starting new firms and businesses, entrepreneurs play a key role in shaping the economy
and creating a more dynamic and diverse business landscape.
4. Creation of Jobs
Entrepreneurship drives innovation and competition that encourages other entrepreneurs and
investments, creating new jobs in a wide range of industries, from manufacturing and
construction to service and technology sectors.
5. Encourages Capital Formation
Capital formation is Entrepreneurship can encourage the process of accumulating resources,
such as savings and investments, to fund new business ventures and support economic
growth.
6. Elimination of Poverty
Entrepreneurship has the potential to lift people out of poverty by generating employment
and stimulating economic activity.
7. Community Development
Many entrepreneurs also make a positive impact on their communities and improve their
well-being by catering to underserved areas and developing environment-friendly products.
8. Optimal Use of Resources
Entrepreneurs play a key role in developing innovative products and services that meet the
needs of customers while optimizing the use of available resources.
9. Increases Gross National Product and Per Capita Income
Entrepreneurship can play a significant role in increasing economic growth and prosperity by
increasing Gross National Product (GNP) and Per Capita Income (PCI).
Social Responsibilities of Entrepreneurs:
The manager sees himse and lf as an arbiter among the many interests of ‘public’ affected by
the business, the stockholders, the employees, the suppliers, the local community and the
customers. It is his duty to divide the returns from the business equitably by providing a ‘fair’
return to the shareholders, ‘fair’ working conditions and pay for the employees or ‘fair’ prices
to the suppliers customers and to make the business, in general, an asset to the local
community and the nation.” The most important social obligation of an entrepreneur is to
reconcile and balance the various conflicting interests in the best possible manner.
1. Employees: Employees need security of job, higher wages, full employment, better
conditions of work and opportunities for self-development and promotion. Management, as a
part of its social responsibilities, is expected to provide for their social security, welfare,
grievances settlement machinery and sharing of excess profits.
2. Stockholders: An entrepreneur must provide safe, fair adequate and stable long-run rate of
return and steady capital appreciation to the shareholders for their investments. It must also
provide regular, accurate and adequate information about the working of the company.
3. Suppliers: Dealings with the suppliers should be based on integrity, impartiality and
courtesy. Terms and conditions regarding delivery of goods and payment of prices must be
reasonably fair.
4. Customers: Entrepreneurial ventures must meet the requirements of the customers of
different classes, tastes and with different purchasing power at the right time, place, and price
and in right quality. He must try to protect consumers’ interest at all costs. He must guard
against adulteration, poor quality, lack of service and courtesy to the consumer, misleading
and dishonest advertisement, underweighting, supply of stale goods, etc.
5. Government: Entrepreneurs must abide by the laws of the country in their true spirit. The
must conduct their affairs as may cause the minimum possible social damage such as air or
water pollution. They must pay taxes honestly and promptly.
6. Trade Associations and Competitors: An entrepreneur should develop healthy inter-
business relationships with fellow-entrepreneurs. He must adopt fair trade practices regarding
prices, quality, terms and conditions of sale and after-sales service.
7. Community: Enterprise, on the whole, should act on the ideas of social justice without
discrimination of any kind. It must help in bringing about a cultural, social and economic
revolution in the society and lead to the economic growth of the backward regions of the
world.
Ethical Issues for Entrepreneurs:
When faced with an ethical decision, it’s best to trust on your own strong personal values to
help guide your response.
Intellectual property is artistic and industrial creations of the mind.
Copyright is the exclusive right to perform, display, copy, or distribute an artistic
work.
A patent is the exclusive right to make, use, or sell a device or process.
A trademark is a symbol that indicates that the use of a brand or brand name is
legally protected and cannot be used by other businesses.
A conflict of interest exists when personal considerations and professional obligations
interfere with each other.
Confidentiality involves respecting the privacy of others.
Concept of Women Entrepreneurship: Women Entrepreneurs m entrepreneurs eans the
women or a group of women who initiate, organize and operate a business enterprise. A
woman entrepreneur is therefore a confident, creative and innovative woman, desiring
economic independence individually and simultaneously creating employment opportunities
for others.
Importance of women entrepreneur:
1. Women can provide innovative solutions to existing problems in various industries. They
often bring different perspectives, insights, and ideas to their businesses that can help drive
growth and innovation.
2. Women entrepreneurs tend to be more risk-averse than their male counterparts, which can
lead to better decision-making and more sustainable business growth over time.
3. Women entrepreneurs often prioritize social responsibility when running their businesses,
leading to more solid community engagement initiatives that benefit those around them, such as
providing employment opportunities and investing in infrastructure and green initiatives.
4. Women entrepreneurs often serve as mentors to other female entrepreneurs, which can
help build networks that can further the success of all involved. By creating these networks,
women are connecting and building strong communities that will benefit their businesses in the
long run.
5. Women-owned businesses tend to be more resilient during economic downturns as they
take a longer-term view of investment and growth strategies. It can lead to increased
stability for employees and customers alike.
Role of Women Entrepreneurship: The role of women entrepreneurship in economic
development is substantial. After all, women entrepreneurs don’t just build businesses and
grow their personal wealth; they also impact the economy by creating new jobs and
opportunities, driving innovation, and developing new markets, products, and services.
1. Raises Standard of Living
A significant role of women entrepreneurship in economic development is that it can greatly
enhance the standard of living for individuals and communities by setting up industries and
creating wealth and new positions.
2. Economic Independence
Women Entrepreneurship can be a path to economic independence for both the country and
the women entrepreneur. It reduces the nation’s dependence on imported goods and services
and promotes self-reliance.
3. Benefits of New Firms and Businesses
By starting new firms and businesses, women entrepreneurs play a key role in shaping the
economy and creating a more dynamic and diverse business landscape.
4. Creation of Jobs
Women Entrepreneurship drives innovation and competition that encourages other women
entrepreneurs and investments, creating new jobs in a wide range of industries, from
manufacturing and construction to service and technology sectors.
5. Encourages Capital Formation
Capital formation is women Entrepreneurship can encourage the process of accumulating
resources, such as savings and investments, to fund new business ventures and support
economic growth.
6. Elimination of Poverty
Women Entrepreneurship has the potential to lift people out of poverty by generating
employment and stimulating economic activity.
7. Community Development
Many women entrepreneurs also make a positive impact on their communities and improve
their well-being by catering to underserved areas and developing environment-friendly
products.
8. Optimal Use of Resources
Women Entrepreneurs play a key role in developing innovative products and services that
meet the needs of customers while optimizing the use of available resources.
9. Increases Gross National Product and Per Capita Income
Women Entrepreneurship can play a significant role in increasing economic growth and
prosperity by increasing Gross National Product (GNP) and Per Capita Income (PCI).
