2018 - 14GEE81 - Unit I

14GEE81 ENTREPRENEURSHIP
DEVELOPMENT
UNIT-I
S.Janarthanan
Assistant Professor( Sr.G)
Department of EIE
Kongu Engineering College
Perundurai,Erode-638060
12/29/2018 ED_2018_UNIT_I_SJ_EIE_KEC 1
UNIT – I
Course Outcome:
Entrepreneurship Concepts: Meaning and
concept of entrepreneurship, Role of
Entrepreneurship in Economic Development.
Factors affecting Entrepreneurship – Creativity,
Innovation and Entrepreneurship,
Intrapreneurship
ENTREPRENEURSHIP HISTORY
The word ‘entrepreneur' is derived from the
French word ‘entreprendre’ which means ‘to
undertake’. In the early 16th century the French
men who organized and led military expeditions
were referred to as ‘entrepreneur'.
After 1700,the term was applied to other types
of adventures, mainly civil engineering like
constructions of roads etc.
Meaning and concept of
entrepreneurship
J.B.SAY: Is another Frenchman, expanded Cantillon’s ideas and
conceptualized the entrepreneur as an organizer of the business
firm, central to its distributive and productive functions.
E.E.HAGEN: The entrepreneur is an economic man,who tries to

maximise his profits by innovations.
GALBRAITH: ‘People are poor because they prefer in that way’.

An entrepreneur must accept the challenge and should be
willing hard to achieve something.
Definition of Entrepreneurship
An Entrepreneur
One who
Organizes, Manages and Assumes Risk of a
Business or Enterprise
• Entrepreneurship – Mindset
 Opportunity-focused
 Innovative
 Growth-oriented
• The Promise of Entrepreneurship
 An integrated input/output model
 The career assessment approach
 The new venture creation process
Outcomes of Entrepreneurship
• Economic growth
• New industry formation

• Job creation
Growth of Entrepreneurship in
Economic Development.
Entrepreneurship During pre independence
 Home : handicraft-Village
 The elaborated caste-based diversion of
workers consisted of farmers, artisans and
religious sections (the Brahmins).
 Artisans industry Established: Banaras,
Gaya, Puri etc .,- Rivers basins
 Examples: Lucnow –Chintzes (printed
multicolor cloths),Kashmir- Shawls, Banaras-
Metal wares
 Textile Mills- Swadeshi Mill- parsis, hindus,
musilims, British citizens
Entrepreneurship During pre independence
• Unfortunately, so much prestigious Indian handicraft industry, which
was basically a cottage and small sector, declined at the end of the
eighteenth century for various reasons but not confined to the
following only
• - Disappearance of royal courts
- lukewarm attitude of British
- Heavy duties on the imports of the Indian goods
- Low price British made goods
- development of transport easily for British goods
- changes in the tastes and habits of the Indian customers
- unwilling of the Indian craftsman to adapt to the changing tastes and
need of the people
Entrepreneurship During post independence
First Industrial Policy in 1948 revised
- Recognized the private sector
- Government took three important Industrial
Resolutions:
- 1. To maintain a proper distribution of economic

power between private sector and public sector
- 2. To encourage the tempo of industrialization by
spreading entrepreneurship from the existing
centers to other cities , towns and villages
- 3. To disseminate the entrepreneurship acumen
concentrated in a few dominant communities to a
large number of industrially potential people of
varied social strata
Entrepreneurship During post independence
- Development of Small scale Industries

- Third five year plan : Incentives and
concessions , land to the potential
entrepreneurs to establish industries
- Increased Entrepreneurship
- Tata, Birla, Mafatlal, Dalmia, Kirloskar
Role of Entrepreneurship in Economic
Development
Classical Theory:
Adam Smith (1776)- the foremost classical
economist, assigned no significance to
entrepreneurial role in economic development in
his monumental work.
- according to him, each individual is led by
an ‘invisible hand’ in pursuing his/her interest.
Davis Ricardo identified only three factors of
production namely , machinery, capital and labor
: rent , profit and wages.
• It provides capital formation by mobilizing the idle saving of the
public.
• Large Scale Employment
• Balanced Regional Development
• Reduces economic power
• Equitable redistribution of wealth, income and even political power
in the interest of country
• Encourages effective resource mobilization of capital
• Increasing Gross National Product and Per Capita Income
• Improvement in the Standard of Living
• It induces backward and forward linkages
• It promotes country’s exports trade
“ An economy is the effect for which
entrepreneurship is the cause”
Development
• Employment opportunities
• Balanced Regional Development
• Mobilization Of Local Resources
• Optimization Of Capital
• Promotion of Exports
• Consumer Demands
• Social Advantage
• Increase per capita income
• Capital formation
• Growth of capital market
• Growth of infrastructure
• Development of Trader
• Economic Integration
• Inflow of Foreign Capital
Development
Barriers of Entrepreneurship
• Lack of a Viable Concept
• Lack of Market Knowledge
• Lack of Technical Skill
• Lack of Initial Capital
• Lack of Business Know How
• Complacency- Lack of Motivation
• Social Stigma
• Time Pressures and Distractions
• Legal Constraints and Regulations
• Inhibitions due to Patents
Factors affecting Entrepreneurship
It is two broad categories:

• Economic Factors
• Non Economic Factors
• Government Actions
Economic Factors
1. Capital - Land, Machine and Raw Material
2. Labor-
- low-cost labor (mobile and immobile)
- dexterity labor (immobile)
- Productivity based on market and Labor
3. Raw Material-
- influence in the emergence of entrepreneurship
- Some times ,Technological innovation compensate for
raw material inadequacies
4. Market-
- Potential of Market constitutes
- Transportation of goods
Non Economic Factors
• Social Conditions:
 Legitimacy of entrepreneurship
 Social Mobility
 Marginality
 Security
• Psychological factors
 Need Achievement
 withdrawal of Status Respect
a. Retreatist – different to his work
b. Ritualist – no hopes of improving
c. Reformist – establish a new society
d. Innovator – creative individual
• Government Actions
Creativity
Creativity is any
Creativity can be
act, idea, idea or
described as the
product that
discovery of
changes an
something that is
existing domain
novel but also
or that
useful or relevant
transforms an
or economical ,
existing domain
valuable.
into new one.
Creativity - Types
• Primary creativity : deals with
spontaneous creations.
• Secondary creativity : is more
deliberate and skilled as in the
application of ideas and insight
to inventions. E0
• Technical creativity : aims at
finding out improvement in a
process so as to improve
efficiency. E1 E11
• Inventive creativity : aims at
making or devising new
combination of ingredients E2
E22
CREATIVE PROCESS
• INITIATE (I),
Preparation
• DEVELOP (D), Incubation
• EVOLVE (E) and Insight
• ACTION (A)
Evaluation
IDEA
Elaboration
CREATIVE PROCESS
 Preparation : successful creations are
preceded by investigation and information
Preparation
gathering. It can be achieved by gathering
information from journals, attending meeting
seminars etc. Incubation
 Incubation : creative person allows their sub
consciousness mind to dwell over Insight
tremendous amount of ideas and information
accumulated during the preparation phase. Evaluation
 Insight : this is the moment when the person
is able to locate solution to their problems.
Generally in most of the cases ideas comes to Elaboration
person in incremental way. The perso
improves on solution slowly and steadily.
CREATIVE PROCESS
• Evaluation : this phase is
regarded as the most emotional
trying part, when one feels
uncertain and insecure and
thinks about reaction of other
people.
• Elaboration : this is the most
difficult step of creativity
endeavour and requires great self
discipline, dedication and
perseverance.
Innovation
• Innovation relies on trust.

Listen to ideas
Reward Bravery
Embrace Risk
Learn from Failure
Solution
Ideas
Intelligence Innovation
Inspiration
Creativity
12/29/2018
Vision
ED_2018_UNIT_I_SJ_EIE_KEC 28
Innovation
• Innovation is about creating value and

increasing efficiency, and therefore growing
your business.
Creativity Vs Innovation
Creativity Innovation
Meaning Creativity is any act, idea, idea Innovation is about creating value
or product that changes an and
existing domain or that increasing efficiency, and therefore
transforms an existing domain growing your business.
into new one.
Process Imaginative Productive

Related to Thinking something New Introducing something new
Money No Yes
Risk No Yes
Ideas Ideas based on scientific skills Market and technical skills
Entrepreneurship Vs. Intrapreneurship
Difference ENTREPRENEUR INTRAPRENEUR
Dependency An entrepreneur is independent in An intrapreneur is dependent on the
his operations entrepreneur, i.e. the owner
Raising of An entrepreneur himself raises Funds are not raised by the Intrapreneur.
Funds funds required for the enterprise.
Risk Entrepreneur bears the risk An intrapreneur does not fully bear the
involved in the business. risk involved in the enterprise.
Operation An entrepreneur operates from On the contrary an intrapreneur operates
outside. from within the organization itself.
Orientation An entrepreneur begins his An intrapreneur sets up his enterprise
business with a newly set up after working someone else’s
enterprise. organization.
Experience As an entrepreneur establishes An intrapreneur establishes his business
new business, so he does not after gathering experiences through
possess any experience over the working in the other organizations
12/29/2018 business. ED_2018_UNIT_I_SJ_EIE_KEC 31

2018 - 14GEE81 - Unit I

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2018 - 14GEE81 - Unit I

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14GEE81 ENTREPRENEURSHIP

E.E.HAGEN: The entrepreneur is an economic man,who tries to

GALBRAITH: ‘People are poor because they prefer in that way’.

• New industry formation

- 1. To maintain a proper distribution of economic

- Development of Small scale Industries

It is two broad categories:

• DEVELOP (D), Incubation

• EVOLVE (E) and Insight

• Innovation relies on trust.

• Innovation is about creating value and

Process Imaginative Productive

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