factor In

e worideconomies vivid
ntrepreneur either
given with discovery
defined ertrepreneurship
tractors, ENTREPRENEUR: with present long fact.he extends t
The the a with The
developed ENTREPRENEURSHIP
that and The
ENTREPRENEUR AND
The The economy
advent great
popularity term
wn termd1fferently concept of
concepts
their explains like and
rermarkable
rchitects terns of
in ENTREPRENEURSHIP
ENTREPRENEURAND
deal the entrepreneur thrives
and
entrepreneur of of USA
can entrepreneurship
tory today. have significant
modern
of others
of of of why
bycivilizaiion CONCEPTUAL
FRAMEWORK: and all
goachievements
and
entreprencurial cntreprencur becn luck. entrepreneur the without Japan
ows It different are sOme and nations
ganisers was in with Thistimes. two mark backward.
economies CHAPTER-1
its itscl! entrepreneurship
it to
us concepts the and has
thatoriginally carly scholars. is it onand and
has since seems
the myth. a the its poorest
societies inlong a
the
of phase
functions evolved entrepreneurship are
wordmusical long, reflects asprocess strides. process
Almost The if rich of history
used had and ranging
ur or over we and are the
nothing
or to concepts Perhaps, world ofand
entrepreneurial all their have as of others so
other refer
the the if
civilisation. vital fromgrowth it
to centuries traces struck these have it like enjoys
ainment to do definitions of are is that the
s African and
ed military with entrepreneur
could with are been poor: the most a
no
development.
characteristics.the and However, with most part long
be the the developed
why countries.
economic have has explored concepi "sudden us crucial of trail
leaders,
from events.
since some
been been and the the of
thc
 ENTREPRENEURSHIP
2 LIBERATING DEVELOPMENT
CREATING NEW VENTUREAND
entreprendre which implied
15th century French words 'enterprise and events bearing high-risk
individuals who were "undertakers" of the mega
It also imbibed in its fold the contractors, soldiers. builders, tax.
propositions.
bands who bore the risk of
contractors, merchants andorganisers of musical
profit or loSs of an uncertain activity)
economic
Richard Cantillon is considered to be the ßriginator of the
factors of
cóncept of entrepreneur. He defined entreprencur as one who buys
production at certain prices and sells his products at uncertain prices and
thereby bears a non insurable risk that may arise due to depressed demand for
his product
Adam Smith, the classical economist, did not assign a specific identity to
entrepreneur as an important factor of production. He. however. in his famous
work "The Wealth of Nations"" did spoke of "enterpriser" who as an individual
undertook the launch of an organisation for commercial purposes with a motive
toearn profit.
ACcording to Walrus entrepreneur is a buyer in factor's market and seller
in the goods and services market. He himself is not a factor of production. He
simply performsthe function of buying the factors of production and of selling
the output in the goods and services market
J. B. Say considered entrepreneur as one who performs the functions of
rationally combining. coordinating and supervising the various factors of
production. He further distinguished the functions and remuneration of the
entrepreneur from that of the provider of the funds.
JohnStuart Mill accorded a central position to entrepreneur inthe process
of economic development. To him. entrepreneur is the fourth factor in all
economic pursuits and is central to all economic and business endeavours. As a
founder and owner of business he gives impetus to economic development.
Cari Mengar considered entrepreneur a change agent. To him, economie
chanee is more than the simple change in circumstances. What is more important

tAS given in Encarta. World EnglishDctuonarn. Microsoli. Specal Indian Edition, Mauemilla
the old French word enreprendre means 0 undlertake, Iiterally "to take belween"
2Tax entrepreneurs were individuals who paid a fixed sunof money to a
government
inense t0coHect taxes in ther regionald boe he risk Ol colecung individual tov
for the
Essai surla nature du commerce en general,
3 Richard Cantillon,
London, 1931, pp 47, 48,
and 49. translated
by H. Higgs.
Macmillan.
Adam Smith, Inquiryinto the Natureand Caauses of the Wealth of Nations, Originally printed in
Glasgow, Scotland, 1776, Reprinted as The Wealth of Nutions, Random House, New York.

1937, pp 48-49.
 ENTREPRENEUR AND ENTREPRENEURSHIP
is the awareness and understanding of the circumstances (existing as wel! s
projected)) by an individual (entrepreneur). This helps him identifythefavourable
circumstances and thereby leading a change in circumstances that presents him
opportunities to canalise his resources in avenues of offering new and more
useful goods and services to the society to fulfil human needs. Mengar saw
entrepreneur as an astute change agent who envisions unexplored interrelated
chain of events that present a model of value-added transformation of resources:
resources which prior to this had no direct use in terms of fulfilling human
needs 5

Frank H. Knight defined entrepreneur as a person who guesses the price

at which he is to sell the product and thereby carns a good amount of profit even
in "uncertainty". Knight in his work on "Risk. Uncertainty and Profit" (192)
contemplated that some uncertainties cannot be insured. cannot be capitalised,
andcannot even be remunerated as salary. To him. there is adifference in risk
and uncertainty. While uncertainty cannot be measured. predicted, and insured,
risk is that uncertainty whiç) gan masured and predicted and thus can also
be insured. As such.(entreþreneur is the person who ventures into akind of
activity that is. by its very nature. uncertain and non-insurableand there he earns
a good deal of profit with his effective performance.
A major change took place in the concept when Joseph A. Schumpeter
defined entrepreneur as an innovator who acquires the central position in the
process of economicdevelopment. Entrepreneurship is a creative force that creates
new and newer ways of doing things by dismantling. destructing. and
deconstructing the old well-established traditional waysof doing things. As an
innovator. he tries to introduce something new in the process of development
which may be anew combination of goods.the opening up of anew combination
of market. a new combination of methods of production. a new source of the
supply of raw materials and a new organisationof any industry. According to
him. profits are generated because of this innovativeness and dynamic change.
The moment there is no innovation theprofit is wiped off. 1For profits tocontinte
the organisation must be ahcad of competitors and it can be ahead of competitors
only with innovations.4
$Carl Mengar. Principles of Economics, translated by J. Dingwalland D F Hoselitz, Glche
IL, Free Press, 1950. pp 8- 14.
Joseph ASchumpeter, The Theorv of Economiu Development, Iranslated by R Ope Canbde:
MA, Harvard University Press. 1934. Also see Joseph A Schunpetet onoe Iheutah
neh
eneurship
ENTREPRENEURSHIP: way. supply entrepreneur
toscratch "HEFFALUMP" commonentrepreneur. are
giant differently induces
society do for the various to in
it. highentrepreneur that thdegree
is high mosthet
have and
of work, achieve this moves
his/her then supply similar Ahe enough purpose
needs motivates effort
If seen Having Given animal Frank DaviMcd.
reneur of eitheracquires
by him resources process him to
various to in above high the transforms
distinguishing
entrepreneur.
an create some
judiciously everyone's and to
Young with N-Ach
tries of CREATING
the
"HEFFALUMP".
as and needing does achieve
on psyche, defined some react degree purpose. of
entrepreneurs
"HEFFALUMP" an a
It they
isdiscussion full
may
defin1tions have because different not that purpose Clelland
a previously new existingperson in
distinction defined awareness.
hard are him NEW
behaViOur
is be entrepreneur, combining description.
all response of exhibit hi s
an wants who, described present commitment, He featurcs
lconsiders
tor deiined business definitions of shows efforts necessary
achievement, goal ENTREPRENEURSHIP
into VENTURE
riser" fulfilled entrepreneur commits achieve
status to
sS of of through this behaviour is
entreprencurs between Different He and the an
patterns, as the
various problem, Kilby vivid athatresources to on that
the it or its knows for
entrepreneur.
bring need the AND
es makes wants
society creates the different a himself
other
entrepreneur
different emphasise picture. continuous
perseverance, achieving goes constitutes need
who raw persons has of for
aLIBERATING
factors as his
side and sense inthat his/her at rightly so a well
it a
for
highlighting material this scholars man gambler. achievement.
towithdream
ith as a features who We as to
functions.
an of more were of different to basis that the The achievement
a the to juncture,
own related find with the a to surpass
idual
e and production
previously achieve self-imposed
purpose DEVELOPMENT
define of claimed have and thepurpose. reality. main
coin.
entrepreneurship. efficient his/her that and He
different venture and a
entrepreneur defined reactive performance; purpose the
to entrepreneurship,
Seen let theredimensions no a a goes psychological This
takes
rn to tw o new betief and The ascribed (N-Ach)
unfulfilled,
and with right ideas us have In
dimensionsthis entrepreneur status organises
heintoresponsibility force-mover personwith A A
it. a define is definitions quality doingentrepreneur,
effective and that achieving is
view from nothing seen )
way, with of in he striving
a one as
his the We hard our so,
or tothe the the that can level force and one
a an the for
of
 entrepreneurship effectively.
perform nor person previously
activity entrepreneurship.
"uncertainty"; envisions endeavours
value-added of
pursuits ofcombining. this
entrepreneurship. andgoods act
Mc. and there
is materials,
profits some something
combinationnew established of potential
wiped business economic of
doing be Let Similarly, Likewise act If' of If
doing
it is combination If and we
dWhile can no are so we remunerated
that who us and of selling
we services
off. mentioned
begenerated things to unexplored
unexplored our view consider
innovation, or traditional new consider produces is, consider is of
central
development coordinating this
ining ahead For a of guesses transformation
entrepreneurship.giving entrepreneur when
new uncertainty
by when our the is
ho profits goods,
of in by is entrepreneurship.
market.
its entreprencur ENTREPRENEURSHIP
we ENTREPRENEUR
entrepreneur AND
s of because organisation methods the
dismantling. defined impetus to output
our factors. Schumpeterian new we
mpctitors there ways good verysalary.as the the interrelated all accord
processor definition and
eur, continue to the nature, that price
consider economic constitutes and then
is of as deal model of supervising
e According of opening of As to
considercentral a inthis
innovativeness no production. doing creative a
of of such. can at
resources. economic as the as
entrepreneurship
d of destructing. uncertain of chain our one
only development
any profit neitherwhich valuc-added of and function a
the things. entrepreneurship.
position goods buyer
up entrepreneurentrepreneurshipentrepreneur cntreprencur of him who
or we with
business industry.
to force business the
of if he thenevents development
have or
this Entrepreneurship the and be the performs
various of in
nnovative anew a and that insured. is to and
buying sfactor'
and new activity
non-insurable this "fourth
ored must dynamic approach or
which transformation
to that endeavours, our
and combination deconstructing creates wherein
sourcea who sell process to entrepreneur factors the services
thcombination
e presents be
asfactor the
market
eursh1p be may
is may nor the functions
new is properly a a factors
the ahead profit change. of of an be he ofchange founder of market
entreprencurship, the beproduct and
iews betries innovator. and capitalised,
and envisioning
is a his inproduction.
of of supply
of defined of new of
as competitors the The ofmarket,either tothnewer e managed thus definedresources pursuits all in
the ofproduction scller
agent andeconomic
of business the introduce even model rationally reflects
moment old has as owner process
avid who then in
ot all raw of ornew a well ways then and as the and the
or a to the the in a is of
 Looking
tion nrocess certain
repreneurship. work.
hard thus
uninsurable 6
supplyvarious orour society. entrepreneur
society, the that enterprise
opportunities. level
entrepreneurshipcntrepreneurship to
responsibility
nresources
high a isientrepreneurship that this high most
creating striving moves
The to purposes. society.induces achieving motivates
qualities.
of Having According To effortdegree
distinguishing
through ENTREPRENEUR above leadsomefactors or
een venture Hoselitz,
so for him
primary to him that transforms CREATING
previously
value explored
a Thus.
in as enoughneeds to of
discussion Entrepreneurship of new regain combining the committing
he and response to to to are entrepreneurs N-Ach
trepreneurship
tcreation production entrepreneurship
Frank
undertake can purpose does achieve
in
eurprism the
addition venture entrepreneurship react
risk the needing hard high necessary this
DIFFERENCES POINTSOF the achieve not hi m
features NEW
functions through fulfilled to Young in degree process tries
ofand reveals concept resources lost response the exhibit
with everything
and with right status he
his into toVENTURE
ENTREPRENEURSHIP
above its tvarious it. goal isachieve that
and AND wealth is entrepreneur productive of full fo r of the an
the wants from a an of effortson
commitment, a behaviour
smooth isand that view that to is awarenessachieving purpose entrepreneur.
and constitutes AND
hip
scussed the ra w entrepreneurship. need
ENTREPRENEURSHIPactivities
entrepreneur in activity
the resources
somay factors the to
role ereation a to th e as process
conduCt material more to -achievemnent th e bring for status a LIBERA
supply
scratch entrepreneur be activity.
that of achieve is ofcontinuous of
purposeachievemnent. entrepreneur.
ncepts eflicient defined so a perseverance, knowing a t h e his
of in acquiring personproduction, of gambler. The to TING
with an of either as surpass
entrepreneur
the is
entrepreneurial the by exploring purpose.
can entrepreneur a let a to and dream
societyjudiciously new achieve goes maiDEVELOPMENT
n
be of view a person and sOme as with well
an us oncehigher the basisand a
Entrepreneurship organises
een
various eftective existing define and wi th into This the To
by new reactionreactive a viable and that In psychological him.
toendowed enjoyed a
organising ascribed
on earn
plays status neW doing reality. a
constitute : bearing combining wants the performance: the self-imposed
force-mover a
holars ideas investment to r person
profit in way business ternm status belief that purpose
with or in in ofquality so,
various one
the and the and
to for th e Thus.
the the In the goes the force and with
it
 ENTREPRENEUR AND ENTREPRENEURSHr

DISTINCTION BETWEEN ENTREPRENEUR AND I

ENTREPRENEURSHIP

ENTREPRENEUR ENTREPRENEURSHIP

1. Entrepreneur is a Person. Entrepreneurship is a procesS.

2. Entrepreneur is a doer. Entrepreneurship is what entrepreneur
does.

3. Entrepreneur is initiator of a Entrepreneurship is initiation of

business activity. business.
4. Entrepreneur is an innovator. Entrepreneurship is innovation.
5. Entrepreneur is endowed with Entrepreneurship is putting into
an indomitable Need for practise the Need for Achievement"
Achievement urge. urge.
6. Entrepreneur is tangible. Entrepreneurship is intangible and is
an abstraction.

7. Entrepreneur is risk taker! Entrepreneurship is risk taking.

8. Entrepreneur is an organiser Entrepreneurship results into organisa
of various factors of production. tion of a business with various factors
of production combined together judic
iously.
9. Entrepreneur is a leader. Entrepreneurship is leadership.
10. Entrepreneur is a motivator. Entrepreneurship is motivation.

CHARACTERISTIC FEATURES OF ENTREPRENEURSHIP

Entrepreneurship is the psycheand behaviour pattern of a person that makes
an entrepreneur. It is socio-psycho-economictendency of doing something with
indomitable spirit with a view to supply some human wants, and thereby, in the
process, the person- entrepreneur gets rewarded with profit. It seems that
entrepreneur precedes entrepreneurship. But in the absence of any conclusive
study on the issue, it is advisable to leave aside the controversy. It is logical and
thus makes sense also to unearth the underlying issue that an entrepreneur can
no longer be called entrepreneur if he/she shuns entrepreneurship. Similarly,on
the same token, there can be no entrepreneurship without entrepreneur. Given
this, the main features of entrepreneurship may be discussed as follows:
1. Entrepreneurship isan Economic Business Activity: Our explorations
into various concepts of entrepreneurshipreveals that it is primarily an
activity in the pursuit of business. It was only in the distant past ofeconomic
the 15ih
century the concept was used to denote different things, including both business
entrepreneur unfulfilled,
way. business from The
defining
new Cantillon
entrepreneurship and 8
risesociety,
.trepreneurship business
entrepreneurial
entrepreneur products.other. uncertainty
combine succeeds
ofpeoplepeople way.society nature. cannotprofit
"riskentrepreneur Entrepreneur an
is
economicproduction.
ofrom
5. sell venturedefinition other
what 4. The 3. even the the 2.
and
Entrepreneurship Entrepreneurship and together
and
Entrepreneurship or so
uncertain beEntreprencurship
with to process the earning that factors than
capital their to capitalised, in final CREATING
is in
creates or had run supply
various and right
to a and with "uncertainty". is in
dcting the view been stride it to the productmarket thatbusiness.
nAs in labour measure
a his/heractivity
procesSs 1s supply entrepreneurship
altogether
there
to
of strive of
some good person
and from as
entrepreneurship
yet
entrepreneurship factors the an we
ch, new a a supply creates NEW
funcion some
some he for
previously accuracy
non-insurable. and
entrepreneurial in at activity
the This
in deal its who the
certain have
assumes
with business is the brings
achieving of is that is scratch ENTREPRENEURSHIP VENTURE
ip a some altogether is others probability
of cannot product We fog
Function previously past. new a a
production an ventures Risk-Bearing used
the to profit. and know goes of relating
of new Creative
wherein fulfilled prices
the to The way and his creates Organising even acquiringbyessentially
for AND
entrepreneur
new produce wants th e effectiveness The market
that with judiciously
n-insurable entreprencurial a entrepreneurial
thereby and into andstride
offulfilled new dream so be
some our LIBERATING to
usiness
IS Enterprise
a we
new Activity: an
wants as entrepreneur a guesses inherent the
of business organisation to thereby remuneratedkin d and
purchases Activity: purp0se
an
enot and the way
have organises Activity:
that supply
in uncertainties thereby existing as
concept
ibleo and wants
society of of combining an
and risksupply that noted he/she more a converts activity
his/her the economic
or We stride uncertainties We DEVELOPMENT
very
enterprise.
Entrepreneur:and
inherent stride some strives price the was
thus some inthat
creatively acquiresis thatmanufacture Entrepreneurship
cost-quality by carn have businesS
in altogether have combininghas as factors specitically cleared
werecreatesentrepreneur the new prediction thatsalary.cannot a at
the the
wants uncertainty goodwhich seen various business
ence in defined land seen. to
reeule that When previously an wants is, of that
different predict by be
production and
or with
of a the existing and ofWith efficient
several As amount creating
of of : bis the an new new some of he/she its insured, he/she business factors activity.
inour sale the the is into the very such, risks. defines Richard
to of is of
 ENTREPRENEUR AND ENTREPRENEURSHIP

entrepreneurship. Similarly. cntreprencur and entrepreneurship are reflected only

when thereis some enterprisc. Said simply. if there be no entrepreneur or no
cnterprise. there can be no entreprencurship.
6.Entrepreneurship is Purposeful Activity: Entrepreneurship is always
business comes
purpose directed. The entreprencurial idca of creating a new
specific purpose; the
into being only when the cntreprencur has visualised a fostering
and thcreby
purpose ofsupplying some wants ofthesociety in particular
the pace of economic devclopment in general.
seen that entrepreneurship
7. Entreprencurship is Innovation: We have
force that creates a new business or acquires an existing business to
is acreative
new way. It in fact is more than being simply creative. It is innovative
run it in a
always strives for new and newer ways by dismantling., destructing.
in nature as it
deconstructing the old well-established traditional waysof doing things.
and new in the process of development
Entrepreneurship tries to introduce something
either anew combination of goods. or the opening up of a new
which may be of methods of production. or a
combination of market, or a new combination of any industry,
materials, or a new organisation
newsource of the supply of raw the somentioned factors.
some of
or aconmbination of the all or seen
Entrepreneurship Emerges from a StrongN-Ach": We have
8.
Me. Clelland who considersthe need for achievement (N
the views of David of entrepreneurship. To him. a
the most distinguishing features
Ach)as one of achieve a status to surpass the ascribed
degree of N-Ach tries to
person with high entrepreneur. The main psychological
one and this effort transforms him into an force-mover
motivates entrepreneurs is the need for achievement. This
force that
bring his dream into reality.
moves him to achieve his goal and
Entrepreneurship is an IndomitableUrge to Do: Entrepreneurship is
9. journey, i.e. before the
things in the mid of the
an urge to do without leaving entrepreneurship
is achieved. Thus, in this process of purpose
purpose committing everything to
achievement goes with a self-imposed hesponsibility
and organises for various resources that are necessary for achieving
the purpOse goes into achieving the purpose
doing so. the entrepreneurship
the purpose. In that the purpose it is striving for needs
with an indomitable urge knowing well
degree of commit1ment, perseverance, and performance: a level high enough
high belief that entrepreneurship can
needing hard efforts ona continuous basis and a
achieve it.
Entrepreneurship is Productive and Leads to Value-Addition:
10. productive in nature. It leads
Entrepreneurial stride is always utility creating and
value-addition by putting the land. labour. capital, and other resources of the
to process works as catalytic agent
society to productive uses. Entreprencur inthe events that present a model of
whoenvisions unexplored interrelated chain of
novation
there newer
old that, fproducts times;
or and impending 10
with
canstart-stop Perhaps,
development
and reflectsentrepreneurship toand economically
the development.
development.
richDevelopment: circumstances resources
society. in
favourable
understanding
thatso this"change change Value-added drect
established consumers their the
is according continue. the others
13. societies process supply helps
no ways wherein poorest Entrepreneurship12.is 11. use
rights; have Entreprenéurship life kind it the Entrepreneurship agent.
in
urial
be the threat are is identify in
of of real of of avenues and
circumstances". transformation CREATING
termsof
business doing to being become
business of'activity. End poor; the ofrangingof
economic
entrepreneurs. developed
Countries of To
the the potential It unfavourable
Schumpeter, of of most anthe Entrepreneurship
with defines entrepreneurship. the
entrepreneurship
traditional business. why economy the
out things short-lived, entrepreneurship
more closure. crucial
world from of existing fulfilling NEW
Wil has development a favourable
they
It some long orthat offering
mtion, by aware assumed is of like the vice-versa and
remain In So adevelopment is factor at If are presentEntrepreneurship and is VENTURE
ENTREPRENEURSHIP of
dismantling, is dynamic a are African legacy circumstances Changehumanresources:
ss. ways. complex a long a most new
innovativecompetition of Dynamic specific we rich gets Cause projected
market global developed that
developed explore and "economic
in has as of of defined isopportunities
economically and AND
protits
business Thus, in process countries. nations. in unfavourable needs.
any there explains vivid cause and more
to
dimensions business point
of entrepreneurial the Leading: resourcesLIBERA
destructing, s0 dynamics in be Process: cireumstances More IS
would has business is and the and
world also Effect and
long nature aentrepreneurship, that economies
of It and useful
goodsand believes
change
with why extends TING
dynamic taken continues
otherseconomy time remarkable In thereby
be as environment developed by
effect to Entrepreneurship
have Entrepreneurship some fact, economic
Both circumstances. which
DETELOPMI
with is and, the canalise
wipedprofitsthere and and cut-throat essentially are that is
strives
process. become the itlike and supply leading more
deconstructing is backward.
economies more depicts
in level both of prior
off and death forever- thrives the
epreneurial the achievements countries
of USA history, entrepreneurial
the servicesto the awarenesssimple thanthe
and the for
proportions, the importantly, near are of of to 7
more
A ofthe a the and important
a as
iness
moment new distance, signal business all economic
countries Economic
economic Identifying
change works this
process present forever is future. are state nations we
alert not Japan have had
the and of rich find
a of in in
and as
a no
a
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