UNIT 1

ENTREPRENEUR: An entrepreneur is an individual who creates a new business, bearing

most of the risks and enjoying most of the rewards.
The entrepreneur is commonly seen as an innovator, a source of new ideas, goods, services,
and business/or procedures.
ENTREPRENEURSHIP: The process of setting up a business is known as entrepreneurship.
FEATURES OF ENTREPRENEURSHIP
Let’s look at the various features of entrepreneurship that make it a successful and sustainable
means of growing a business.
1. Risk-taking ability
The willingness to take risks is the essence of entrepreneurship. Not every business idea
gets support, funding or recognition. There is a considerable amount of failure risk when
it comes to building something from the ground up. As an entrepreneur, you need to be
prepared for all kinds of risks and have measures in place to tackle them. You need to
prioritize risk evaluation.
2. Creativity and innovation
Starting a new venture means coming up with a new business idea. For an enterprise to
be financially sound, you need the support of investors. Without something unique, it’s
highly difficult to get funding. Therefore, planning to launch a new product in the market
automatically pushes you out of your comfort zone and forces you to engage in
innovative thinking.
3. Vision
Converting a business idea into a product or service requires resources and effort. There
is a lot that goes into establishing an enterprise—funding, hiring and understanding the
requirements of clients and customers. To drive your vision and mission, leadership
qualities become paramount. You need to be able to communicate and guide your
employees in the right direction.
4. Open-mindedness
Open-mindedness and flexibility are the most important features of entrepreneurship. An
entrepreneur should be open to change and have the power to adapt quickly. For
example, if you launch a new product in the market and there are several user complaints,
you should keep an open mind and pay attention to the feedback. Consider it when you
update your product.

5. Profit-oriented
 A key goal of a majority of enterprises is to generate profit. However, in order to drive
profits and enhance business growth, you need to pay attention to changing industry and
market trends. Being accountable and meeting the needs and expectations of your
customers and clients is a vital part of entrepreneurship.
6. Entrepreneurship involves decision making, innovation, implementation, forecasting of
the future, independency, and success.
7. Entrepreneurship is a discipline with a knowledge base theory and is an outcome of
complex socio-economic, psychological, technological, legal and other factors.
8. It is a dynamic process.
9. It involves a fusion of capital, technology and human talent.
10. Entrepreneurship is equally applicable to big and small businesses, to economic and non-
economic activities.
11. Different entrepreneurs might have some common traits but all of them will have some
different and unique qualities.
12. Entrepreneurship is a process. It is not a combination of some stray incidents.
13. It is the purposeful and organized search for change, conducted after systematic analysis
of opportunities in the environment.
14. Entrepreneurship is a philosophy and is the way one thinks, one acts and therefore it can
exist in any situation, be it business or government or in the field of education, science &
technology.
15. Entrepreneurship is a creative activity.
16. It is the ability to create and build something from practically nothing.
17. It is sense of opportunity where others see chaos and confusion.
18. Entrepreneurship is the attitude of mind to seek opportunities, take calculated risks and
derive benefits by setting up a venture.
19. It is made up of activities to conceive, create and run an enterprise.
FUNCTIONS OF ENTREPRENEURSHIP
(i) Innovation and Creativity – Innovation generally refers to changing processes or creating
more effective processes, products and ideas. For businesses, this could mean implementing
new ideas, creating dynamic products or improving your existing services. Creativity is
defined as “the tendency to generate or recognize ideas, alternatives, or possibilities that may
be useful in solving problems, communicating with others. Creativity and innovation have
always been recognized as a sure path to success. Entrepreneurs think outside of the box and
explore new areas for cost-effective business solutions.
(ii) Risk taking and Achievement – Entrepreneurship is a process in which the entrepreneur
establishes new jobs and firms, new Creative and growing organization which is associated
with risk, new opportunities and achievement. It results in introducing a new product or service
to society. In general, entrepreneurs accept four types of risks namely Financial Risk, Job Risk,
Social & Family Risk & Mental & Health Risk, which are as follows:
(a) Financial Risk – Most of entrepreneurs begin by using their own savings and
personal effects and if they fail, they have the fear of losing it. They take risk of failure.
(b) Job Risk – Entrepreneurs, not only follow the ideas as working situations, but
also consider the current risks of giving up the job & starting a venture. Several entrepreneurs
have the history of having a good job, but gave it up, as they thought that they were not cut out
for a job.
(c) Social and Family Risk – The beginning of entrepreneurial job needs a high
energy which is time consuming. Because of these undertakings, he/she may confront some
social and family damages like family and marital problems resulting on account of absence
from home and not being able to give adequate time to family.
(d) Mental Health Risk – Perhaps the biggest risk that an entrepreneur takes it is,
the risk of mental health. The risk of money, home, spouse, child, and friends could be adjusted
but mental tensions, stress, anxiety and the other mental factors have many destructive
influences because of the beginning and continuing of entrepreneurial activity. This can even
lead to depression, when faced with failure.
(iii) Organization and Management – The entrepreneurial organization is a simple
organizational form that includes, one large operational unit, with one or a few individuals in
top management. Entrepreneurial management means the skills necessary to successfully
develop and manage a business enterprise. A small business start-up under an owner-manager
is an example of an entrepreneurial organization. Here, the owner-manager generally
maintains strict control over business operations. This includes directing the enterprise’s core
management functions. According to Mintzberg, these include the interpersonal roles,
informational roles and decision-making roles. The smaller the organization, the more
concentrated these roles are in the hands of the owner-manager. The entrepreneurial
organization is generally unstructured.
(iv) Research – An entrepreneur is a practical dreamer and does a lot of ground-work before
taking a leap in his/her ventures. In other words, an entrepreneur finalizes an idea only after
considering a variety of options, analysing their strengths and weaknesses by applying
analytical techniques, testing their applicability, supplementing them with empirical findings,
and then choosing the best alternative. It is then that he/she applies the ideas in practice. The
selection of an idea, thus, involves the application of research methodology.
(v) Overcoming Resistance to Change – New innovations are generally opposed by people
because it makes them change their existing behaviour patterns. An entrepreneur always first
tries new ideas at his/her level. It is only after the successful implementation of these ideas that
an entrepreneur makes these ideas available to others for their benefit. His/her will power,
enthusiasm and energy help him/her in overcoming the society’s resistance to change.
(vi) Catalyst of Economic Development – An entrepreneur plays an important role in
accelerating the pace of economic development of a country, by discovering new uses of
available resources and maximizing their utilization. Today, when India is a fast-developing
economy, the contribution of entrepreneurs has increased multi-fold.
DIFFERENT TYPES OF ENTREPRENEURSHIPS:
Although profit is the chief motivator in entrepreneurship, it sometimes focuses on other
aspects such as solving a problem or creating an impact. Let’s see how the role of
entrepreneurship changes with these different motivations.
(i) Innovative Entrepreneurs – These entrepreneurs have the ability to think newer, better
and more economical ideas of business organisation and management. They are the business
leaders and contributors to the economic development of a country.
(ii) Imitating Entrepreneurs – These entrepreneurs are people who follow the path shown by
innovative entrepreneurs. They imitate innovative entrepreneurs because the environment in
which they operate is such that it does not permit them to have creative and innovative ideas
on their own. In our country also, a large number of such entrepreneurs are found in every field
of business activity. Development of small shopping complexes is the work of imitating
entrepreneurs.
(iii) Fabian Entrepreneurs – Fabian entrepreneurs are those individuals who do not show
initiative in visualising and implementing new ideas and innovations. On the contrary, they
like to wait for some development, which would motivate them to initiate unless there is
an imminent threat to their very existence. For example Kodak.
(iv) Drone Entrepreneurs – Drone entrepreneurs are those individuals who are satisfied with
the existing mode and speed of business activity and show no inclination in gaining market
leadership. In other words, drone entrepreneurs are ‘die-hard conservatives’ and even ready
to suffer the loss of business.
(v) Social Entrepreneurs – Social entrepreneurs drive social innovation and transformation in
various fields including education, health, human rights, workers’ rights, environment and
enterprise development. Gramin Bank is a case of social entrepreneur.
(vi) Agricultural Entrepreneur – The entrepreneurs who undertake agricultural pursuits are
called Agricultural Entrepreneurs. They cover a wide spectrum of agricultural activities like
cultivation, marketing of agricultural produce, irrigation, mechanization and technology.
(vii) Trading Entrepreneur – As the name itself suggests, the trading entrepreneur undertakes
the trading activities. He/she procures the finished products from the manufacturers and sells
these to the customers directly or through a retailer. These serve as the middlemen as
wholesalers, dealers, and retailers between the manufacturers and customers.
(viii) Manufacturing Entrepreneur – The manufacturing entrepreneurs manufacture
products. They identify the needs of the customers and, then, explore the resources and
technology to be used to manufacture the products to satisfy the customers’ needs.
(ix) Women Entrepreneurs – Women entrepreneurship is defined as the enterprises owned
and controlled by a woman/women having a minimum financial stake of 51 per cent of the
capital and giving at least 51 per cent of employment generated in the enterprises to women.
(x) Inventors & Challenger Entrepreneurs – Inventor entrepreneurs with their competence
and inventiveness invent new products. Their basic interest lies in research and innovative
activities & Challenger entrepreneurs plunge into industry because of the challenges it
presents. When one challenge seems to be met, they begin to look for new challenges.
(xi) Life-Timer Entrepreneurs – These entrepreneurs take business as an integral part to their
life. Usually, the family enterprise and businesses which mainly depend on exercise of personal
skill fall in this type/category of entrepreneurs.
NEED FOR ENTREPRENEURSHIP
Entrepreneurship isn’t easy; in fact, a majority of businesses fail but that shouldn’t stop you
from pursuing your dream. It’s an instrument of social change and has proven to provide
continuous opportunities for growth. It plays a vital role in the economy and encourages people
to bring new and innovative ideas to market. Here are several factors that highlight the need
for entrepreneurship in today’s fast-paced world.
1. ENCOURAGES INNOVATION
A majority of entrepreneurs solve challenges in society through technological
innovations. For example, Tartan Sense—a Bangalore-based startup provides an AI-
based Robot vehicle to be used in farms for weed management. It reduces chemical usage
and helps farmers avoid unnecessary costs.
2. CREATES JOBS
Entrepreneurship generates employment. Once a new business gets launched, it requires
people who can drive that mission and vision forward. Entrepreneurs take the risk of
employing even themselves. As the business continues to grow, the need to hire more
people also increases. Take any leading education technology startup for example. Some
of them have become unicorns (reached a valuation of $ 1 Million) and opened branches
across the globe.

3. IMPROVES STANDARD OF LIVING

 Entrepreneurship increases income levels, therefore improving standards of living.
Entrepreneurs identify challenges in the lives of customers and provide appropriate
business solutions. Additionally, they hire new employees who receive remuneration and
this income gets circulated in the economy. All of the spending and salaries generate
incremental wealth, therefore improving standards of living.
4. INTRODUCES VISIBLE CHANGE
You need to dream big and take risks if you want to be a successful entrepreneur. As you
progress to solving existing challenges and gaps in society, you take responsibility for
impacting various sections of society. A majority of businesses strive to make the world
a better place by contributing to socio-economic development through their products and
services.
5. CONTRIBUTES TO RESEARCH AND DEVELOPMENT
New products and services need to be tested before they can be launched. In the process,
entrepreneurs are encouraged to invest their resources into effective research and
development. Even after businesses get funding, entrepreneurs continue to prioritize
research and development by creating educational institutes. This further encourages the
next generation of entrepreneurs to take risks and pursue their dreams.

FACTORS AFFECTING ENTREPRENEURIAL DEVELOPMENT:

Entrepreneurship is influenced by four distinct factors: economic development, culture,
technological development and education. In areas where these factors are present, you can
expect to see strong and consistent entrepreneurial growth. These conditions may have both
positive and negative influences on the emergence of entrepreneurship. Positive influences
constitute facilitative and conducive conditions for the emergence of entrepreneurship, whereas
negative influences create inhibiting milieu to the emergence of entrepreneurship.
1. Economic Factors:
Economic environment exercises the most direct and immediate influence on entrepreneurship.
This is likely because people become entrepreneurs due to necessity when there are no other
jobs or because of opportunity.
The economic factors that affect the growth of entrepreneurship are the following:
a. Capital
Capital is one of the most important factors of production for the establishment of an enterprise.
Increase in capital investment in viable projects results in increase in profits which help in
accelerating the process of capital formation. Entrepreneurship activity too gets a boost with
the easy availability of funds for investment.
Availability of capital facilitates for the entrepreneur to bring together the land of one, machine
of another and raw material of yet another to combine them to produce goods. Capital is
therefore, regarded as lubricant to the process of production.
France and Russia exemplify how the lack of capital for industrial pursuits impeded the process
of entrepreneurship and an adequate supply of capital promoted it.
b. Labor
Easy availability of right type of workers also effect entrepreneurship. The quality rather than
quantity of labor influences the emergence and growth of entrepreneurship. The problem of
labor immobility can be solved by providing infrastructural facilities including efficient
transportation.
The quality rather quantity of labor is another factor which influences the emergence of
entrepreneurship. Most less developed countries are labor rich nations owing to a dense and
even increasing population. But entrepreneurship is encouraged if there is a mobile and flexible
labor force. And, the potential advantages of low-cost labor are regulated by the deleterious
effects of labor immobility. The considerations of economic and emotional security inhibit
labor mobility. Entrepreneurs, therefore, often find difficulty to secure sufficient labor.
c. Raw Materials
The necessity of raw materials hardly needs any emphasis for establishing any industrial
activity and its influence in the emergence of entrepreneurship. In the absence of raw materials,
neither any enterprise can be established nor can an entrepreneur be emerged.
It is one of the basic ingredients required for production. Shortage of raw material can adversely
affect entrepreneurial environment. Without adequate supply of raw materials no industry can
function properly and emergence of entrepreneurship to is adversely affected.
In fact, the supply of raw materials is not influenced by themselves but becomes influential
depending upon other opportunity conditions. The more favorable these conditions are, the
more likely is the raw material to have its influence of entrepreneurial emergence.
d. Market
The role and importance of market and marketing is very important for the growth of
entrepreneurship. In modern competitive world no entrepreneur can think of surviving in the
absence of latest knowledge about market and various marketing techniques.

The fact remains that the potential of the market constitutes the major determinant of probable
rewards from entrepreneurial function. Frankly speaking, if the proof of pudding lies in eating,
the proof of all production lies in consumption, i.e., marketing.
The size and composition of market both influence entrepreneurship in their own ways.
Practically, monopoly in a particular product in a market becomes more influential for
entrepreneurship than a competitive market. However, the disadvantage of a competitive
market can be cancelled to some extent by improvement in transportation system facilitating
the movement of raw material and finished goods, and increasing the demand for producer
goods.
e. Infrastructure
Expansion of entrepreneurship presupposes properly developed communication and
transportation facilities. It not only helps to enlarge the market, but expand the horizons of
business too. Take for instance, the establishment of post and telegraph system and construction
of roads and highways in India. It helped considerable entrepreneurial activities which took
place in the 1850s.
Apart from the above factors, institutions like trade/ business associations, business schools,
libraries, etc. also make valuable contribution towards promoting and sustaining
entrepreneurship’ in the economy. You can gather all the information you want from these
bodies. They also act as a forum for communication and joint action.
Social Factors
Social factors can go a long way in encouraging entrepreneurship. In fact it was the highly
helpful society that made the industrial revolution a glorious success in Europe. Strongly affect
the entrepreneurial behavior, which contribute to entrepreneurial growth. The social setting in
which the people grow, shapes their basic beliefs, values and norms.
The main components of social environment are as follows:
f. Caste Factor
There are certain cultural practices and values in every society which influence the’ actions of
individuals. These practices and value have evolved over hundreds of years. For instance,
consider the caste system (the varna system) among the Hindus in India. It has divided the
population on the basis of caste into four division. The Brahmana (priest), the Kshatriya
(warrior), the Vaishya (trade) and the Shudra (artisan): It has also defined limits to the social
mobility of individuals.
2. Family Background
This factor includes size of family, type of family and economic status of family. In a study by
Hadimani, it has been revealed that Zamindar family helped to gain access to political power
and exhibit higher level of entrepreneurship.
Background of a family in manufacturing provided a source of industrial entrepreneurship.
Occupational and social status of the family influenced mobility. There are certain
circumstances where very few people would have to be venturesome. For example in a society
where the joint family system is in vogue, those members of joint family who gain wealth by
their hard work denied the opportunity to enjoy the fruits of their labor because they have to
share their wealth with the other members of the family.
3. Education
Education enables one to understand the outside world and equips him with the basic
knowledge and skills to deal with day-to-day problems. In any society, the system of education
has a significant role to play in inculcating entrepreneurial values.
In India, the system of education prior to the 20th century was based on religion. In this rigid
system, critical and questioning attitudes towards society were discouraged. The caste system
and the resultant occupational structure were reinforced by such education. It promoted the
idea that business is not a respectable occupation. Later, when the British came to our country,
they introduced an education system, just to produce clerks and accountants for the East India
Company, The base of such a system, as you can well see, is very anti-entrepreneurial.
Our educational methods have not changed much even today. The emphasis is till on preparing
students for standard jobs, rather than marking them capable enough to stand on their feet.
4. Attitude of the Society
A related aspect to these is the attitude of the society towards entrepreneurship. Certain
societies encourage innovations and novelties, and thus approve entrepreneurs’ actions and
rewards like profits. Certain others do not tolerate changes and in such circumstances,
entrepreneurship cannot take root and grow. Similarly, some societies have an inherent dislike
for any money-making activity. It is said, that in Russia, in the nineteenth century, the upper
classes did not like entrepreneurs. For them, cultivating the land meant a good life. They
believed that rand belongs to God and the produce of the land was nothing but god’s blessing.
Russian folk-tales, proverbs and songs during this period carried the message that making
wealth through business was not right.
5. Cultural Value
Motives impel men to action. Entrepreneurial growth requires proper motives like profit-
making, acquisition of prestige and attainment of social status. Ambitious and talented men
would take risks and innovate if these motives are strong. The strength of these motives
depends upon the culture of the society. If the culture is economically or monetarily oriented,
entrepreneurship would be applauded and praised; wealth accumulation as a way of life would
be appreciated. In the less developed countries, people are not economically motivated.
Monetary incentives have relatively less attraction. People have ample opportunities of
attaining social distinction by non-economic pursuits. Men with organizational abilities are,
therefore, not dragged into business. They use their talents for non-economic end.
Psychological Factors:
Many entrepreneurial theorists have propounded theories of entrepreneurship that concentrate
especially upon psychological factors. These are as follows:
1. Need Achievement
The most important psychological theories of entrepreneurship were put forward in the early
1960s by David McClelland.
2. Withdrawal of Status Respect
Everett Hagen stated that a radical loss of status of a group/ individual leads to the genesis of
entrepreneurship.
3. Motives
Other psychological theories of entrepreneurship stress the motives or goals of the
entrepreneur. Cole is of the opinion that besides wealth, entrepreneurs seek power, prestige,
security and service to society. Stepanek points particularly to non-monetary aspects such as
independence, persons’ self-esteem, power and regard of the society.
On the same subject, Evans distinguishes motive by three kinds of entrepreneurs
1. Managing entrepreneurs whose chief motive is security.
2. Innovating entrepreneurs, who are interested only in excitement.
3. Controlling entrepreneurs, who above all otter motives, want power and authority.
Finally, Rostow has examined inter gradational changes in the families of entrepreneurs. He
believes that the first generation seeks wealth, the second prestige and the third art and beauty.
4. Others
Thomas Begley and David P. Boyd studied in detail the psychological roots of entrepreneurship
in the mid-1980s. They came to the conclusion that entrepreneurial attitudes based on
psychological considerations have five dimensions:
1. First came ‘need-achievement’ as described by McClelland. In all studies of successful
entrepreneurs a high achievement orientation is invariably present.
2. The second dimension that Begley and Boyd call ‘locus of control’ This means that the
entrepreneur follows the idea that he can control his own life and is not influenced by
factors like luck, fate and so on. Need-achievement logically implies that people can
control their own lives and are not influenced by external forces.
3. The third dimension is the willingness to take risks. These two researchers have come
to the conclusion that entrepreneurs who take moderate risks earn higher returns on
their assets than those who take no risks at all or who take extravagant risks.
4. Tolerance is the next dimension of this study. Very few decisions are made with
complete information. So all business executives must, have a certain amount of
tolerance for ambiguity.
 5. Finally, here is what psychologists call ‘Type A’ behavior. This is nothing but “a
chronic, incessant struggle to achieve more and more in less and less of time”
Entrepreneurs are characterize by the presence of ‘Type A’ behaviour in all their
endeavors.
ENTREPRENEURIAL MOTIVATION
Entrepreneurial motivation is the process that motivates the entrepreneur to exert a higher
level of effort for the achievement of his entrepreneurial goals. ... They influence the
entrepreneurial behavior and operation of the business. Entrepreneurial motivation serves as
fuel or power that makes the Organization run.

MC CLELLEND’S ACHIEVEMENT MOTIVATION THEORY:

Mc. Clellend found that there are factors (need) for motivation viz: Power, Affiliation and
Achievement.
1. Power need:
• Power is ability to induce or influence behaviour.
• People with high power need have a great concern for exercising influence and control.
• Such individuals generally seek position of leadership.
2. Affiliation Need:
• Man is a social animal.
• Every individual need to be loved and accepted by the society.
• Entrepreneurship provides them such opportunity.
3. Achievement Need:
• Individual with achievement need keeps-
i) Moderate risk
ii) Immediate feedback
iii) Accomplishment of task
iv) Preoccupation with the task

JOHN KAO’S CONCEPTUAL MODEL ON ENTREPRENEURSHIP

John Kao has developed a conceptual model of entrepreneurship in his article:
Entrepreneurship, creativity and organisation in 1989. This model has four main aspects:
1. Entrepreneurial Personality: The overall success of a new venture largely depends upon
the skill, qualities, traits and determination of the entrepreneur.
2. Entrepreneurial Task: It is a role played by entrepreneur in an enterprise. The major task
of the entrepreneur is to recognize and exploit opportunities.
3. Entrepreneurial Environment: It involves the availability of resources, infrastructure,
competitive pressures, social values, rules and regulations, stage of technology etc.
4. Organisational Context: It is the immediate setting in which creative and entrepreneurial
work takes place. It involves the structure, rules, policies, culture, human resource system,
communication system.

ENTREPRENEUR VS. INTRAPRENEUR:

 BASIS FOR
ENTREPRENEUR INTRAPRENEUR
COMPARISON

Meaning Entrepreneur refers to a person Intrapreneur refers to an employee/stake

who set up his own business holder of the organization who is in
with a new idea or concept. charge of undertaking innovations in
product, service, process etc.

Approach Intuitive Restorative

Resources Uses own resources. Use resources provided by the company.

Capital Raised by him. Financed by the company.

Enterprise Newly established An existing one

Dependency Independent Dependent

Risk Borne by the entrepreneur Taken by the company.

himself.

Works for Creating a leading position in Change and renew the existing
the market. organizational system and culture.

CLASSIFICATION OF ENTREPRENEURS:
1. Innovating Entrepreneurs
2. Imitating Entrepreneurs
3. Fabian Entrepreneurs
4. Drone Entrepreneurs
Refer Types of Entrepreneurs.

BARRIERS TO ENTREPRENEURSHIP

Financial barriers:
This is one of the most prominent barriers in the life of an entrepreneur. Such barriers are quite
common. Availability of funds is of great significance. If a delay happens in gathering enough
funds, then it may further delay the commencement of an enterprise. Also, various business
operations need a persistent flow of funds.

Personal barriers: Personal barriers are caused because of the emotional and psychological
blocks of an entrepreneur. Let us have a look at the various types of personal barriers:

1. Lack of motivation and encouragement: When an idea does not turn out to be fruitful,
these entrepreneurs give up quite easily. Even a minor failure is enough to demotivate
them.
2. Inability to depend on and trust others: These entrepreneurs often find it difficult to
trust others while hiring their expert services. They waste much of their time deciding
upon the best service provider and then, too, cannot put their trust completely.
3. Lack of patience: If an entrepreneur loses interest because of any hurdle or obstacle,
then he does not have enough patience and perseverance to carry on with the
entrepreneurship. Even the initial losses are enough to discourage them and shut their
enterprises.
4. Lack of confidence: These entrepreneurs never have enough confidence. They never
trust in themselves. They are somehow convinced that they will never be able to come
up with a successful business idea. They are always bothered about their inability to
attract enough funding. Hence, they almost give up on their dream of being self-
employed and thus do not carry on with entrepreneurship.
5. Lack of vision: There should never be any limitation to what you can achieve. Some
entrepreneurs, after making short progress, lose their vision and show no more interest
in expanding the business.
6. Sense of embarrassment/pride: Such entrepreneurs are way too proud or embarrassed
to ask for help from someone.

Environmental barriers:

1. Machinery: Machines are extremely significant to carry out multiple operations.

However, machinery does come costly. Also, technology keeps changing quite rapidly,
and hence, machines tend to get obsolete quite often. Thus, an entrepreneur needs to
replace them. This process is quite difficult for the entire organization.
2. Raw material: The situation can get quite distressful if there is no raw material
available during the peak season of the work. This further increases the price of limited
raw materials available because of an increased level of competition.
 3. Land and building: For an enterprise, it is necessary that proper acquisition of land is
made. Then, the construction of buildings will also have to be done. However, all these
can be quite expensive. When the land is rented, the fixed cost becomes a cause of
worry for the entrepreneur. He needs to keep paying the rents whether he is making any
profit out of business or not.
4. Infrastructure support: There have to be proper roads, adequacy of power, drainage
facilities, water, and other such infrastructural supports. But because of red-tapism and
increased corruption, things tend to be quite complicated.
5. Labour: For successful entrepreneurship, there has to be the availability of skilled
labor, quality and quantity labor, and committed and loyal employees. Lack of any of
these can lead to severe disruptions in the working procedure of the enterprise.

Political barriers:

When there are not enough government concessions, and incentives offered, things start getting
difficult for the entrepreneurs. Also, there has to be a proper socio-economic setting to make
things happen the way they need to. A politician should also focus on making a society
economically developed. Only then will things smoothen up for the entrepreneurs.

Societal barriers:

1. Caste and religious affiliations often act as hurdles in the way of a business.
2. Financial stability and family backgrounds also have to be kept in mind. These, too,
can impact the operations and development of an enterprise.
3. Socio-cultural norms and values often act as barriers for modern-day budding
entrepreneurs. These age-old norms hamper the smooth development and progress
of business enterprises.
4. Degree of disapproval and approval of entrepreneurial behavior.

ENTREPRENEURIAL DEVELOPMENT PROGRAMMES:

Entrepreneurship plays a significant role in the economic development of a country. The
developed countries like USA, Russia and Japan supports the fact that entrepreneurship is the
cause for the economic development in their country. Entrepreneurship is the most powerful
weapon in the hands of one to fight against poverty and unemployment. It is widely accepted
by every, big or small country, that well motivated entrepreneurs are must for accelerating the
process of economic development. Entrepreneurship acts as a catalyst for the economic
prosperity of a nation as it leads to:
5. generation of employment
6. contribution in national income
7. rural development
8. Industrialization
9. technological development
10. export promotion etc.
Considering these benefits, various initiatives have been taken by the government from time to
time for entrepreneurship development in the country such as
• Industrial Policies and Five-Year Plans specifically focusing on the growth of small
scale sector
• setting up of Special Economic Zones (SEZs)
• setting up of Entrepreneurship Institutions
• organizing Entrepreneurship Development Programmes (EDPs)
• various Government Programmes and Schemes for the promotion of entrepreneurship
like Pradhan Mantri Employment Generation Programme, Credit Guarantee Scheme,
Credit Linked Capital Subsidy Scheme for Technology Up-gradation, National
Manufacturing Competitiveness Programme, Micro and Small Enterprises Cluster
Development Programme, Technology Centre Systems Programme, Rajiv Gandhi
Udyami Mitra Yojana, Khadi Reform Development Programme, Market Development
Assistance Scheme etc.

RECENT POLICY REFORMS FOR ENTREPRENEURSHIP DEVELOPMENT:

A. Ministry of Skill Development and Entrepreneurship (MSDE)
It came into existence as Department of Skill Development and Entrepreneurship on 31st July
2014 and later was created as Ministry on 10th November 2014. It is responsible for co-
ordination of all skill development efforts across the country, removal of disconnect between
demand and supply of skilled manpower, building the vocational and technical training
framework, skill up-gradation, building of new skills and innovative thinking. It is aided by
following functional arms:
• National Skill Development Agency (NSDA):
is an autonomous body which coordinates and harmonizes the skill development efforts
of the Government and the private sector to achieve the skilling targets of the 12th Plan
and beyond, and attempts to bridge the social, regional, gender and economic divide. It
acts as a nodal agency for State Skill Development Missions. The main functions of
NSDA is to evaluate existing skill development schemes, create and maintain a national
data base related to skill, ensure that the skilling needs of the disadvantaged and the
marginalized groups are taken care of etc.
• National Skill Development Corporation (NSDC): is a one of its kind, Public Private
Partnership in India which acts as a catalyst in skill development by providing funding
to enterprises, companies and organisations that provide skill training. NSDC with 160
training partners and 1722 training centres has so far trained around 35 lakh persons
across India. NSDC has taken few initiatives such as ‘Innovations for Skills
Marketplace’ and ‘Innovations for Skills Challenge’. ‘Udaan’ a special industry
initiative for Jammu & Kashmir implemented by NSDC which aims to provide skills
training and enhance the employability of unemployed youth of J&K.
• National Skill Development Fund (NSDF): was set up for raising funds both from
Government and Non-Government sectors for skill development in the country. The
fund is contributed by various Government sources, and other donors/ contributors to
enhance, stimulate and develop the skills of Indian youth by various sector specific
programs. Till 31st March 2015, NSDF has released Rs. 2333 crore to NSDC towards
skill development programmes.
• Sector Skill Councils (SSCs): are industry led bodies which are responsible for defining
the skilling needs, concept, processes, certification, and accreditation of their respective
industry sectors. The SSCs shall prescribe the National Occupational Standards (NOSs)
and Qualification Packs (QPs) for the job roles relevant to their industry, and shall work
with the NSDA to ensure that these are in accordance with the National Skill
Qualification Framework (NSQF).
B. National Policy on Skill Development and Entrepreneurship 2015
It aims to provide an umbrella framework to all skilling activities being carried out within
the country, to align them to common standards and link the skilling with demand centres.
This policy links the skills development to improved employability and productivity.
C. National Skill Development Mission:
It was launched on 15th July 2015 on the occasion of World Youth Skills Day. The Mission
has been developed to create convergence across sectors and States in terms of skill training
activities to achieve the vision of ‘Skilled India’.
D. Entrepreneurship Development Scheme
It is currently being developed by MSDE. The scheme is being designed around various
elements like entrepreneurship education curriculum, web and mobile based networking
platform, entrepreneurship hubs (e-hubs) network, international linkages, national
entrepreneurship day, promotion of entrepreneurship among women and minority sections,
social entrepreneurship etc.
E. Pradhan Mantri Kaushal Vikas Yojana (PMKVY)
It is the flagship outcome-based skill training scheme of the MSDE that aims to offer 24
lakh Indian youth meaningful, industry relevant, skill-based training. The objective of this
skill certification and reward scheme is to enable and mobilize a large number of Indian
youth to take up outcome based skill training and become employable and earn their
livelihood. As on 3rd March 2016, 1599895 people have been enrolled, 956871 completed
trainings and 290002 got certified under PMKVY. The skill card will also be given to those
certified under PMKVY which will act as authenticate skill certification.
F. Make in India
It is an initiative of the Government of India launched on 25th September 2014 to
encourage multi-national, as well as domestic, companies to manufacture their products in
India. The major objective behind the initiative is to focus on job creation and skill
enhancement in 25 sectors of the economy. The initiative also aims at high quality standards
and minimising the impact on the environment. The initiative hopes to attract capital and
technological investment in India.
G. ‘Start-Up India’ Initiative
It aims to encourage entrepreneurship among the youth of India. The ‘Start-up India: Stand
up India’ promotes bank financing for start-ups and offer incentives to enhance
entrepreneurship and job creation. Prime Minister, Narendra Modi said that, “Each of the
1.25 lakh bank branches should encourage at least one Dalit or Adivasi entrepreneur and at
least one-woman entrepreneur”. This initiative will provide a new dimension to
entrepreneurship and help in setting up of a network of start-ups in the country.
H. MUDRA Bank
Micro Units Development Refinance Agency (MUDRA) Bank has been set up on 8th April
2015 for development of micro units to encourage entrepreneurship in India and provide
the funding to the non-corporate small business sector. MUDRA Bank provides refinance
to Banks, MFIs, NBFCs etc. for loans to micro units having loan requirement from Rs
50000 to Rs. 10 lakh. Under MUDRA Yojana, MUDRA Bank has launched three products
named Shishu, Kishor and Tarun to signify the stage of growth and funding needs of
entrepreneurs. Rs. 20000 crore has been allotted to MUDRA Bank for the SME sector
which will enhance credit facility to boost the growth of small businesses and
manufacturing units.

I. ATAL Innovation Mission (AIM)

It also called as AIM Platform was established through 2015 budget within National
Institution for Transforming India (NITI) to provide innovation promotion platform
involving academicians, and drawing upon national and international experiences to foster
a culture of innovation, research and development. The 2015 budget has earmarked Rs.150
crores for the AIM Platform.
J. Self-Employment and Talent Utilization (SETU)
It is a Techno-Financial, Incubation and Facilitation Programme to support all aspects of
start-up businesses, and other self-employment activities, particularly in technology-driven
areas. An amount of Rs.1000 crore is being set up initially in NITI Aayog for SETU. It also
aims to create around 100,000 jobs through start-ups.

CONCLUSION:
The recent policy reforms clearly reveal that government is leveraging on skill development
for ensuring sustainable entrepreneurship development in the country. However, a proper
supervision and monitoring mechanism should be set to analyse the outcome of these
initiatives on periodic basis and to avoid the overlapping of activities performed by the
newly established government agencies and programmes. According to survey undertaken
by Local Circles, 59 percent of citizens still feel that corruption and delays prevent the
growth of entrepreneurship in India while only 14 percent felt funding as the main problem.
Thus, the effectiveness of the recent policy reforms needs to be checked by analysing the
benefits entailed by the entrepreneurs on regular basis to ensure that these initiatives deliver
maximum results unlikely the previous reforms. According to Economic Survey 2015-16,
start-up sector is witnessing unusual dynamism with focus mainly on e-commerce and
financial services sector which led to huge growth of technology enabled start-ups in the
year 2015. Therefore, the ‘Start-up India’ mission of government should go beyond digital
or technology start-ups and enable entrepreneurship in manufacturing sector to ally with
Make-in-India drive and particularly at grassroot level so as to provide self-employment
opportunities to technology-deficient section of the society.