ENTREPRENEURSHIP

1. UNDERSTANDING OF THE TERM. The word is derived from the French word entreprendre which means undertakers. The word referred to those0 who undertook the risk of starting a new enterprise. Entrepreneurship is among the four mainstream economic factors land, labour, capital and entrepreneurship. The word entrepreneurship has a very wide range of meaning. In one extreme, an entrepreneur is one who pioneers a change and in the other extreme he is one who works for himself. Richard Cantillon (1755) a French economist introduced the concept of entrepreneurship in economics. As per him an entrepreneur is one who buys a product, repacks and transforms the farms produce to market and then sells it at uncertain price. Thus he takes decisions regarding resource allocation and bears the consequential risks. He evidently seeks best opportunities for highest yields/profit. According to Adam Smith (1776) entrepreneurs were economic change agents who reacted to environmental changes. They were agents who converted new demand in to supply. Entrepreneur was a proprietary capitalist that is a supplier of capital and at the same time working as a manager intervening between the labour and consumer There is no indisputable definition of entrepreneurship. Some are discussed below: The American Heritage Dictionary defines an entrepreneur to be "a person who organizes, operates, and assumes the risk for business ventures." According to Joseph Schumpeter (1950) entrepreneur is one who coverts a new invention or idea in to successful innovation. Schumpeter in his definition made the distinction between entrepreneurs and inventors clear. The inventor might create a new product but the entrepreneur gathers resources, organises talent and provides leadership to make the venture a
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commercial success. He essentially implements change within markets by carrying out new combinations. The execution of new combinations can take several forms such as: -The introduction of a new product or standard of quality, -The introduction of a novel method of production, -The opening of a new market, -The use and acquisition of a new source of raw materials and resources, -The implementation of a new form of organization. Sociologists assert that entrepreneur brings in overall change through innovation for the good of the society. He contributes in modernising society. In Peter Druckers view (1985) in entrepreneurship resources are redirected to progressive opportunities rather than to just ensure administrative efficiency. The redirection of resources distinguishes the entrepreneurial role from the traditional management role. For instance Henry Ford reversed the fundamental way things were manufactured by introducing the assembly line concept in automobile industry. Peter Drucker stressed on the risk-taking abilities of the entrepreneurs. They are motivated and driven by the idea of creative endeavor. They maximize opportunities through systematic innovations. Systematic innovation is a specific tool for entrepreneurs. It can be presented as a discipline that can be learned and practiced. WHO CAN BE CALLED AN ENTREPRENEUR? Let us first start with some questions: 1. Is a fruit vendor an entrepreneur? 2. Were G.D. Birla, Jamnalal Bajaj, Laxmanrao Kirloskar entrepreuners?

3. Was Ohno the GM of Toyota Motors who introduced many innovative measures that revolutionized automobile industry an entrepreneur? Now founders of small industries/ small business, trading establishments etc are loosely termed as entrepreneurs. They might have the attributes of an entrepreneur but they are not entrepreneurs in the purest sense of the term, if they have not innovated. They can just be called businessmen with entrepreneurial attributes of risk taking and organising. Individuals who leave jobs and substitute their income by operating local stores or start service outlets are essentially small business persons. In developing countries there have been great visionaries who have promoted many large and small enterprises adapting western techniques of production and distribution to the prevailing conditions. Hoselitz terms them as imitative entrepreneurs and considers their contribution in mixed economy very meaningful. Professionals in corporate organizations often exhibit high degree of innovativeness. But they cannot be called entrepreneurs because they are essentially salaried employees. This form of corporate entrepreneurship also called Intrapreneurship emerges within existing enterprise. Intraprenurs introduce innovative ideas in the organizations they work for and thus add great value. Few examples are given below, for a better understanding of the terms entrepreneurship and innovation. o Mary Quant, the English fashion designer, arguably invented the miniskirt in the sixties. But she definitely was the first to name, market and popularize the product. Skirts were not a new outfit but her redefining the hemline and popularizing it was innovative enough to call her an entrepreneur. o Jeff Bezos, the founder of Amazon (a Web-based bookstore) was the fist to sell books online on a large scale and patented the one-click system for online buying. Though selling books is not an innovation in itself, Jeff Bezos was innovative in the use of the
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Internet as a viable marketing and sales channel for selling books. So an individual could be termed as an entrepreneur if he or she sells a product or service using new systems and/ or mediums of marketing, distribution or production methods as a basis for a new business venture. o Muhammad Yunus started a micro-loan program named Grameen for the poor villagers in a rural part of Bangladesh, with only US$26. The loan was divided among 42 villagers to help them to buy small items such as scissors, needles etc to start their own home businesses. Now after almost 25 years, Grameen Bank has grown with over $2 billion loans granted. It has now become a model for several micro-loan facilities. Yunus created innovative banking and lending facilities specifically for the poor villagers. Banking and lending money activities are not new but Yunus was the first to provide such facilities in a rural part of Bangladesh. This definitely is an example of innovation and risk bearing on his part as a social entrepreneur. So innovation need not necessarily arise from the introduction of a new product or service but it could be an old product or service finding a new market for penetration. o Stuart Skorman was the founder of Reel.com, which is essentially one of the first cyber movie stores. It has a very large inventory of over a 100 000 videos. Though setting a movie store was revolutionary then, Reel.com main distinction was being known as the first online store to expand by opening an offline store. Stuart Skorman felt that by doing so, the online store could be an advertisement for the offline store and vice versa, thus strengthening this click and mortar business venture. It was an example of creativity and innovation in the field of e-commerce.

STAGES OF ENTREPRENEURSHIP
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Fundamentally there are five (often overlapping) stages : (1) Discovery: in which the entrepreneur generates ideas, recognizes opportunities, and determines the feasibility of ideas, markets, and ventures; (2) Concept development: in which the entrepreneur plans the venture, identifies needed resources using a business plan, and identifies strategies for penetrating markets or protecting intellectual property; (3) Resourcing: in which the entrepreneur identifies and acquires the financial, human, and capital resources needed for the venture start-up, (4) Actualization: in which the entrepreneur operates the venture and utilizes resources to achieve its goals and objectives (5) Harvesting: in which the entrepreneur decides on the ventures growth, development, or even demise. BENEFITS OF ENTREPRENEURSHIP Benefits of entrepreneurial activities are immense both in terms of personal growth and contribution to the society. Only a few have been listed below: 1. Opportunity of huge personal financial gain 2. Scope of high order of Job satisfaction, sense of achievement, self employment 3. Generation of employment / income for others 4. Contribution to overall growth in the region/ nation /world 5. Encourages higher quality products 6. Development of new products and markets 7. Contribution towards growth and promotion of the use of modern technology.