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Introduction to
Entrepreneurship
Learning Points
1. What is Entrepreneurship and who is
an Entrepreneur?
2. Growth engines of Entrepreneurship
3. Importance of entrepreneurship
4. Entrepreneur in the history of
Economic Theory
5. Entrepreneur in the history of
Economic Theory- Major thoughts/
view points
6. Role of Constellation of Forces
ENTREPRENEURSHIP
It is the process of starting,
establishing and expanding an
enterprise that produces and markets
goods and/ or services.
It is creative act --- finds opportunities
and derive benefits.
Process by which opportunities to
create future goods and services are
discovered, evaluated and exploited.
Entrepreneur- definition
An economist defines him as one
who brings resources, labor, material
and other assets in to combinations
that make their value greater than
before and also one who introduces
changes, innovation and a new order.
Entrepreneur- definition
Peter Drucker says, Innovation is
the specific tool of entrepreneurs, the
means by which they exploit changes
as an opportunity for a different
business or service. It is capable of
being presented as a discipline,
capable of being learnt, capable of
being practiced.
Importance of
entrepreneurship
Growth engines of
Entrepreneurship
Growing unemployment and
underemployment- entrepreneurship as
an alternative to search for jobs
Rise of Individualism- especially in USA
(Schumcher,1994) as a mega trend in
1990s
Growing entrepreneurial behavior in
developing and under developed countries
Liberalization and Globalization trends
etc)
2
Who supplies financial capital (Smith)
3
Is an innovator (Weber, Schumpeter)
4
Is a decision maker (Menger, Keynes)
5
Is an industrial leader (J.B.Say, Francis)
6
Is a manager or a superintendent (Mill, Marshall)
7
Is an organizer and coordinator of economic resources (Say,
Schumpeter)
8
Is an owner of enterprise
(Quesney)
9
Is an employer of factors of production (Walker, Keynes)
10
Is a contractor (Bentham)
11
Is an arbitrageur (Cantillon )
12
Is an allocator of resources among alternate uses (Cantillon )
raw
3. Entrepreneur as Alert
Discoverer- Hayak (1949)
Markets help people to communicate
their discoveries to others and learn of
others discoveries (Casson, 1982)
Entrepreneur make use of asymmetry in
information to his advantage
Cognitive learning ability of the individual
decides market equilibrium process
Behavioral Approach
It revolves around the following:
What kind of activities he performs
With whom he works
What basic rules can be inferred from
the study of entrepreneurs activities?
Where does the entrepreneur start?
Where do his ideas come from?
How does he try them etc
Critique of Behavioral
Theory
Methodology- It is very difficult to
observe the behavior of the
entrepreneur.
1.
2.
1.
2.
3.
4.
5.
6.
7.
8.
Role of Constellation of
forces
Rise of Knowledge Intensive Industries
resulting in the rise of technopreneurs
Liberalization and Globalization trends
resulting in to dismantling of licence-raj
and deterritoralization in business activities
Growing literacy and the rise of
indigeneous enterprise
Growth in infrastructure- thanks to 5 year
plans
Role of Constellation of
forces-cont
Growing urbanization
Growth of Service and Primary Sectors
and the gradual decline of Primary
Sector
Information Technology, growing Social
Network, improved communications,
data warehousing- World crumbling in
to Global Village
Reducing trend of cultural barriers
Role of Constellation of
forces-cont
Women empowerment resulting in
Woman Entrepreneurship
Electoral Politics leading to
empowerment of Dalits- Dalit
Entrepreneurship
Nucleus families, decline of joint
families- growing entrepreniurial
behavior and individualism
Family back grounds, gender, age etc
Conclusion
Entrepreneurial behavior cannot be
explained purely economic theory because
psychological, cultural and sociological
factors are important too (Campbell, 1992)
Innovation is the specific tool of
entrepreneurs, the means by which they
exploit changes as an opportunity for a
different business or service. It is capable
of being presented as a discipline, capable
of being learnt, capable of being
practiced.
Conclusion- con
Three critical characteristics of entrepreneur
being moderate risk taking, innovation and
venturing in to New Business
Entrepreneurship is the professional
application of knowledge, skills and
competencies; and of monetizing a new idea,
by an individual or a set of people by launching
an enterprise de novo or diversifying from an
existing one, thus pursuing growth while
generating employment, wealth and social
good- National Knowledge Commission, 2008