CHAPTER I

ENTREPRENEURIAL SCENE IN INDIA

In 1947, India had inherited a shrivelled industrial economy after nearly 200 years

of British rule. If anything was available, it was shortage. The government's idea

was that a rationing of resources might work and hence it adopted socialist

policies. Through the 1960s, the Indian government was in the throes of the licence

raj, also known as the Industrial Development and Regulation Act, and business

houses were hostage to the Monopolies and Restrictive Trade Practices (MRTP)

Act. Government of India's economic policies sent Indian industry into a tailspin

for nearly 20 years. There were problems aplenty-licences, red tapes quota. Indian

business was characterized by high taxes, low productivity, strict licensing and a

parallel economy called the black market.

It was only in the 1980s that things began to change. The new leaders began to

forge a laissez-faire economic policy. Four decades of Nehruvian socialism had

built a steel grid of bureaucratic control, dismantled overnight. But the seeds were

planted by him in two things; he wanted to modernize India and he introduced

computerization in the public sector, irrespective of whether the computer were

being used or not.

MEANING OF ENTREPRENEUR

The word entrepreneur is derived from the French word Entreprendre which means

to undertake that is the person who undertakes to organise. Manage and assume the

risks of a business.

According to A.H. Cole, Entrepreneur is defined as an individual who undertakes

to initiate, maintain or organise a profit oriented business unit for production or

distribution of economic goods and services.

MEANING OF ENTREPRENEURSHIP

The word entrepreneurship is actually derived from the French term Entreprendre

which means to undertake to pursive opportunity fulfil needs and wants of people

through innovation.

According to A.H.Cole, Entrepreneurship is defined as the purposeful activity of

an individual or group of associated individuals, undertaken to initiate, maintain or

earn profit by production or distribution of economic goods and services.

MEANING OF ENTERPRISE

Carrying out of new combination of productive factors is called as enterprise.

IMPORTANCE OF ENTREPRENEURS

Importance of entrepreneurs as an innovator in economic growth.

Importance of entrepreneur in generation of employment opportunities.

Importance of entrepreneur in bringing social stability.

Importance of entrepreneur in bringing balanced regional development of

industries.

Importance of entrepreneur in export promotion and impact substitution.

Importance of entrepreneur in foreign exchange earnings.

Importance of in meeting local demand.

CHARACTERISTICS OF AN ENTREPRENEUR

Need to achieve

Clear objective

Creativity

Mental ability

Risk bearing

Locus of control

Commitment, determination and perseverance

Initiative and responsibility.

Team building

Leadership

Problem solving

Business planning

Innovation

Motivation

Independence.

ENTREPRENEUR CREATIVITY

Creativity is refers to the ability to combine ideas in a unique way or to

make unusual associations between ideas. It is the ability to develop unique ways

to work or novel solutions to problems. It is a function of knowledge, imagination

and evaluation.

QUALITIES OF CREATIVE ENTREPRENEUR

Sensitivity

Fluency

Flexibility

Originality

Redefinition skill

ENTREPRENEUR INNOVATION

Innovation is the means by which the entrepreneur either creates new

wealth-producing resources or endows existing resources with enhanced potential

for creating wealth.

SKILLS REQUIRED FOR INNOVATION

Creative skills

Analytical skills

Technical skills

TYPES OF ENTREPRENEURS

1. Classification according to type of business

Business entrepreneurs

Trading entrepreneurs

Industrial/Manufacturing entrepreneurs

Corporate entrepreneurs

Agricultural entrepreneurs

2. Classification according to the use of technology

Technical entrepreneurs

Non- technical entrepreneurs

Professional entrepreneurs

3. Classification according to motivation

Pure entrepreneurs

Induced entrepreneurs

Spontaneous entrepreneurs

4. Classification according to stages of development

First generation entrepreneurs

Modern entrepreneurs

Classical entrepreneurs

Entrepreneurs by inheritance

5. Classification according to capital ownership

Private entrepreneurs

State entrepreneurs

Joint entrepreneurs

6. Classification of other categories

Large scale entrepreneurs

Small scale entrepreneurs

Women entrepreneurs

Rural entrepreneur

Urban entrepreneur

Skilled and non-skilled entrepreneurs

National and International entrepreneurs

FUNCTIONS OF AN ENTREPRENEUR

Innovation

Risk-bearing

Decision making

Planning

Organisation building

Managing

Leading

ADVANTAGES OF BEING AN ENTREPRENEUR

Entrepreneur can become their own boss.

Put their ideas into practise.

Opportunity to create their own destiny.

Independence and the opportunity to achieve what is important to them.

Make money for themselves.

Opportunity to them to make a difference.

Gain experience ina variety of disciplines.

Particular business fields.

Instruments for self expression.

Opportunity to contribute to the society.

Personal satisfaction.

DISADVANTAGES OF BEING AN ENTREPRENEUR

Entrepreneurs confrontation with risk

High level of risk.

Uncertainty of income.

Complete responsibility.

Discouragement.

WOMEN ENTREPRENEURS

According to Schumpeter, women who innovate, imitate or adopt a business

activity are called Women entrepreneur.

According to Government of India, an enterprise owned and controlled by the

women having a minimum financial interest of 51% of the capital and giving at

least 51% of the employment generated in the enterprise to women.

FUNCTIONS OF A WOMEN ENTREPRENEUR

Exploration of the prospects of a satisfying a new business enterprise.

Undertaking of risks and the handling of economic uncertainties involved in

business.

Introduction of innovations or imitation of innovations.

Co-ordination, administration and control. and

Supervision and leadership.

FACTORS INFLUENCING WOMEN ENTREPRENEURS:

A. Motivational factors

Economic necessity

Economic independence

Self-actualisation

Establishing their own creativity

Establishing their own identity

Equal status in society

Achievement excellence

Education and qualification

Building self confidence

Developing risk-taking ability

Employment generation

Family occupation

Greater freedom and mobility

Government policies and programmes

Success stories of friends

Role model to other

B. Facilitating factors

Adequate financial facilities

Innovative thinking

Self-satisfaction

Co-operation of family

Network of contracts

Experienced and skilled people at work

Support of family members.

PROBLEMS OF WOMEN ENTREPRENEUR

Problem of assess to finance

Limited mobility

Family ties

Male dominated society

Family conflicts

Role conflict

Lack of education

Low risk bearing ability

Lack of self confidence

Problems of middlemen

Lack of managerial efficiency

Lack of experience

Lack of training

PROMOTION OF WOMEN ENTREPRENEURS

Establishing only small units

Deciding the correct time of establishment

Providing adequate financial assistance

Solving the problem of gender inequality

Coordinating the dual role of family and business

Imparting training in financial management, quality concept, availing

technology etc.

Training to have patience and tolerance

ASSOCIATIONS PROMOTING WOMEN ENTREPRENEUR

A brief analysis of various associations and agencies that are function at state and

national levels to promote women entrepreneurs is made for reference.

Self-Help Groups (SHGs)

This is an association of small group of self-employed rural or urban women

entrepreneurs who join together to take care of group welfare. The group with the

help of financial institutions and other NGO get needs satisfied. This is voluntary

association. Each member contributes little amount to cover seed money.

Federation of Indian Women Entrepreneur (FIWE)

FIWE is the outcome of resolution passed in 4 th international conference women

entrepreneurs held at Hyderabad. This was founded in1993. It mainly interacts

with various women associations of the country through network to facilitate the

members in diversified activities.

Women's India Trust (WTI)

This trust was established in 1968. The promoter Kamila Tyabji made a small

beginning with two shops in Mumbai and a training and production centre at

Panavel. The trust was started with the main objective of helping women

entrepreneurs. Encouraged by the growth of the activities of the trust.

Consortium of Women Entrepreneurs of India (CWEI)

CWEI is a voluntary organisation, consisting of NGOs, SHGs, voluntary

organisations and individual business units. This came into being in 2001. The

objective is to provide technology up gradation facilities to women entrepreneurs

and other facilities in marketing, finance, HRD and production. CWEI takes up

activities of synergising product development and manpower training. The

consortium is also having international businesss connections and provides its

members, marketing and export support through this connection. It plays the role

of liaison between Indian entrepreneurs and international agencies.

Self-Employed Women's Association (SEWA)

SEWA is Trade Union of Women Which was registered in 1972 under Trade

Union Act. This has been functioning since then to empower poor rural women

entrepreneurs. Even urban poor women have become the members of SEWA to

become self-employed persons. The SEWA members are not coming from the

organised sector. They are the women of unorganised sector and are not coming

from the organised sector. They are the women of unorganised sector and are

unprotected. They constitute nearly 90 percent of the women labour force of the

country.

Association of women entrepreneurs of Karnataka- (AWAKE)

AWAKE was established in 1983, with an intention to help women entrepreneurs,

and today it is one of the pioneer institutions in India which is working in the areas

of training and helping the women to start their own business and there by

empower them to join the economic mainstream. AWAKE focuses on women

from both urban and rural areas. Who are aspiring to be socially and economically

self-reliant, irrespective of their academic, social and economic background.

ROLE OF ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT

Effective utilization of resources

Increase in per capita income

Improvement in physical quality of life

Growth of infrastructural facilities

Export of handicraft items

Promotion of technology

Export promotion

Capital formation

Creation of employment

CHAPTER II

ENTREPRENEURSHIP DEVELOPMENT

The concept of entrepreneurship has assumed prime importance for accelerating

economic growth both in developed and developing countries. It is a basis of free

enterprise. It promotes capital formation and creates wealth in the country. It is the

hope and dream of millions of individuals around the world. It has the thrill of risk,

change, challenge and growth. It builds wealth. It is a pathway to prosper. It

reduces unemployment and poverty.

NATURE AND CHARACTERISTICS OF ENTREPRENEURSHIP

Creative activity

Economic activity

Purposeful activity

Risk-bearing activity

Ability to innovate

Business oriented tendency

Organising function

Low risk

Creation of resources

Result oriented behaviour

NEED FOR PROMOTION OF ENTREPRENEURSHIP DEVELOPMENT

Dealing with uncertainty

Innovation

Job creation

Number of new start-ups

Managing resources

Capital formation

Economic growth

Productivity

VARIOUS APPROACHES TO ENTREPRENEURSHIP DEVELOPMENT

Economic approach

Sociological approach

Psychological approach

PROBLEMS IN THE GROWTH OF ENTREPRENEURSHIP

Incompetence and poor management

Low level of commitment

Restrictions imposed by custom and tradition

Involvement of high risk

Socio-cultural rigidities

Lack of motivation

Lack of infrastructural facilities

Lack of communication n network

Absence of entrepreneurial aptitude

Low status of businessmen

Market imperfections

Legal formalities involved to set up a unit

Low quality products

Low package of salaries to employee

ENTREPRENEURSHIP DEVELOPMENT PROGRAMME

Entrepreneurship is one of the inputs in the economic development of a

country. Entrepreneurs are regarded as the nation builders and wealth creators.

They are the change agents who initiate economic activities to create wealth. They

undertake the business initiative employee themselves in that business and open up

employment avenues for others.

NEED OF ENTREPRENEURSHIP DEVELOPMENT PROGRAMME

EDP is meant for developing those first generation entrepreneurs who on their

own cannot become successful owners of enterprises.

The effective entrepreneurial class is necessary to speed up the process of

activating the factors of production to ensure higher rate of economic growth.

EDP ensures potential entrepreneurs of backward and tribal areas to set up their

enterprises with the help of government and institutional support system.

EDP develops the persons who are interested to work as job providers by

establishing enterprises not to those who are job seekers.

EDP improves the standard of living of the weaker sections of society.

EDP develops motivation and competence necessary for successful launching

management and growth of the enterprise.

OBJECTIVES OF ENTREPRENEURSHIP DEVELOPMENT

PROGRAMME

To accelerate the process of entering into business for those who come from

business families.

To encourage first generation entrepreneurs who do not have any business

background.

To develop and strengthen the entrepreneurial competencies of prospective

entrepreneurs.

To provide help in identification and formulation of viable projects.

To arrange support system about the process and procedures of setting up of an

enterprise.

To impact training in managerial understanding and skills.

To provide post-training assistance and monitoring facilities.

PHASES OF ENTREPRENEURSHIP DEVELOPMENT

Pre-training preparation

Entrepreneurial training or development phase

Post-training or follow-up phase