Introduction to entrepreneurship
- 1. INTRODUCTION TO ENTREPRENEURSHIP Prepared by – Amanda Bvera
- 2. WHAT IS ENTREPRENEURSHIP? Entrepreneurship is the creation or extraction of value. It can be viewed as change entailing risk beyond what is normally encountered in starting a small business, which may include other than simply economic ones. More definitions of entrepreneurship have described it as the capacity and willingness to develop, organise, and manage a business along with many of its risks in order to make a profit. According to Howard Stevenson- “Entrepreneurship is defined as the pursuit of opportunity beyond resources controlled.” This definition underlines the importance of risk-taking in the field of entrepreneurship.
- 3. WHO IS AN ENTREPRENEUR? The word entrepreneur is derived from the French word ‘Entreprendre’ which means to ‘undertake’, i.e., the person who undertakes the risk of a new enterprise. Joseph A. Schumpeter writes the following on entrepreneurs- “The Entrepreneur in an advanced economy is an individual who introduces something new in the economy- a method of production not yet tested by experience in the branch of manufacturer concerned, a product with which customers are not yet familiar, a new source of raw material or of new markets and the like.” He further states the entrepreneur’s function is to “reform or revolutionise the pattern of production by exploiting an invention or more generally an untried technological possibility for producing a new commodity.” The entrepreneur is an important input of economic development. He is a catalyst of development; with him we prosper, without him we
- 4. EVOLUTION OF ENTREPRENEURSHIP The constant necessity for a good leader is one of the many factors that drive the evolution of entrepreneurship. Apart from there are a few other factors: Trading: With the improvement in communication between the countries and the advancement in transportation, start the process of trading. Advent of stable specialization and communities: When more and more individuals start to settle in secure communities, a huge change in lifestyles was noticed. Each group had a leader who was qualified and specialized in one task and that helped in speeding the development of leadership skills and innovation. Need for an independent career: More and more people are looking for a career path that is totally independent. The majority of them started to take risks by developing their own businesses in order to achieve maximum benefit.
- 5. Early Period: The earliest definition of the entrepreneur as a go-between is Marco Polo. He tried to establish trade route to the Far East. He used to sign a contract with a venture capitalist to sell his goods. The capitalist was the risk bearer. The merchant adventurer took the role of trading. After his successful selling of goods and completing his trips, the profits were shared by the capitalist and the merchant. Middle Ages: The term entrepreneur was referred to a person who was managing large projects. He was not taking any risk but was managing the projects using the resources provided. An example is the cleric who oversees great architectural works such as castles, public buildings, cathedrals etc. 17th Century: An entrepreneur was a person who entered a contractual arrangement with the Govt. to perform a service or to supply some goods. The profit was taken (or loss was borne) by the entrepreneur. 18th Century: It was Richard Cantillon, French Economist, who applied the term entrepreneur to business for the first time. He is regarded by some as the founder of the term. He defined an entrepreneur as a person who buys factor services at certain prices with a view to sell them at uncertain prices in the future. 19th Century: The entrepreneurs were not distinguished from managers. They were viewed mostly from the economic perspective. He takes risk, contributes his own initiative and skills. He plans, organizes and leads his enterprise. 20th Century: During the early 20th century Dewing equated the entrepreneur with business promoter and viewed the promoter as one who transformed ideas into a profitable business. It was Joseph Schumpeter who described an entrepreneur as an innovator. According to him an entrepreneur is an innovator who develops untried technology. 21st Century: Research Scientists live De Bone pointed out that it is not always important that an individual produces an entirely new idea to be called an entrepreneur, but if he is adding incremental value to the current product or service, he can rightly be called an
- 6. CHARACTERISTICS OF ENTREPRENEURS A successful entrepreneur must be a person with technical competence, initiative, and good judgement, intelligence, leadership qualities, self-confidence, energy, attitude, creativeness, fairness, honesty, tactfulness and emotional stability. Some key characteristics of entrepreneurs are as follows: Mental ability Clear objectives Business secrecy Human relation ability Communication ability Technical Knowledge
- 7. Mental ability: Mental ability consists of intelligence and creative thinking. An entrepreneur must be reasonably intelligent, and should have creative thinking and must be able to engage in the analysis of various problems and situations in order to deal with them. The entrepreneur should anticipate changes and must be able to study the various situations under which decisions have to be made. Clear objectives: An entrepreneur should have clear objectives as to the exact nature of the business, the nature of the goods to be produced and the subsidiary activities to be undertaken. A successful entrepreneur has the objective to establish the product, make a profit, or render a social service. Business secrecy: An entrepreneur must be able to guard business secrets. Leakage of business secrets to trade competitions is a serious matter which should be carefully handled by the business owner. An entrepreneur should be able to make a proper selection for his or her staff and personal assistants.
- 8. Human relation ability: The most important personality factors contributing to the success of an entrepreneur are emotional stability, personal relations, consideration and tactfulness. An entrepreneur must maintain good relations with his customers, he is supposed to establish relations that will encourage them to continue to patronise his business. He must also maintain good relations with his employees if he is to motivate them to perform their jobs at a high level of efficiency. An entrepreneur who maintains good relations with customers, employees, suppliers, creditors and the community is much more likely to succeed in his business than the individual who does not invest in maintaining these relations. Communication ability: This ability pertains to communicate effectively. Good communication also means that both the sender and the receiver understand each other and are being understood. An entrepreneur who can effectively communicate with customers, employees, suppliers and creditors will be more likely to succeed than one who does not. Technical knowledge: An entrepreneur must have a reasonable level of technical knowledge. This is one ability that most people are able to acquire if they try hard enough.
- 9. WHO IS A MANAGER? A manager is a person responsible for controlling or administering an organization or a group of staff. Managers must often take decisions regarding various aspects of the business. Effective managers help people stay motivated to do their best work. They make the people they manage feel valued and supported. They feel they are successful when the employees they manage are successful. The employees willingly recommend these individuals as good managers. The manager is responsible for overseeing and leading the work of a group of individuals in many instances. The manager is also responsible for planning and maintaining work systems, procedures and policies that enable and encourage the optimum performance of its people and other resources within a business unit.
- 10. FUNCTIONS OF A MANAGER The managers play a crucial role in the smooth functioning of every business unit. They perform various tasks in the organization on a daily basis. Here are some of the main functions of a manager: Planning Organising Staffing Directing/Leading Coordinating Reporting Budgeting Controlling
- 11. Planning: The basic step required for any project, big or small, is the planning stage. The manager needs to plan the schedule and give the blueprint of how the task is to be done with all the necessary details, and the manager should have a backup plan that if this doesn’t work then what next. Example − There is a new project, how to start, human resource required, resources required, etc., everything should be planned. Organising: Next comes the organizing part, where the manager needs to synchronize and must make sure everything is going according to the plan. Everything should work as per the plan, and if not, then the manager needs to investigate the issue and make it work as planned. Example − A software tester is required, so organize the venue, date and time to interview those eligible for the post. Staffing: In simple words, staffing means grouping of people into different teams and allotting different tasks to them. If the team members have some disputes, then the team member needs to report to the team leader who will forward it to the manager and the issue will be taken care of. Example − Assembling a new team for a new project. Directing/Leading: It is a manager’s responsibility to guide the employees in all situations in order to avoid conflicts and delay in the task. Manager must lead the employees so that they can get a clear idea about what is to be done and how to do it. Example − a team
- 12. Coordinating: It means bringing all the employees together by forming an efficient relationship and making them feel comfortable to share their views and issues freely. Example − Coordinating the schedule for a project. Reporting: The manager must keep updated information about all the ongoing tasks, and it is the sole responsibility of the manager to report the updated status to the higher authorities; while all the employees are bound to report to the manager. Example − Keeping the respective directors informed about the progress on their respective projects. Budgeting: A task must be completed within the given time frame as well as it should be cost efficient. The manager needs to be double sure that all the amount invested in the project doesn’t exceed the budget given and in case of imbalance, the budgeting manager must report to the management. Example − If budget allows to place three employees, then five employees cannot be assigned for the task. Controlling: Last but of course not the least role played by the manager is having everything under control. Whether it is the budget, or resource allocation, everything should be in order. Example − All members of a team cannot be granted leave on the same
- 13. ENTREPRENEUR V/S MANAGERS Entrepreneurs Entrepreneur is the visionary and bears all financial risks. Focuses on starting and expanding the business ideas. Key motivation for entrepreneurs are the achievements. Reward for all the efforts is the profits earned from the enterprise. Entrepreneurs can be informal and casual. Managers Managers works for salary, and does not have to bear any risks. Focus on daily smooth functioning of the business. Manager’s motivation comes from the power that comes with their position. Remuneration is the salary drawn from the company. Manager’s approach to every problem is very formal.
- 14. He is the change agent. He is driven by perception of opportunity. Commitment to opportunity is revolutionary with short duration. Commitment of resources is multi- staged with minimal exposure at each stage. Control of resources is episodic use of rent of required resources. Management structure is flat with multiple informal networks. Mainly focuses on technology, marketplace and overall organisational welfare. Likes risk, invests heavily and expects to succeed. Decision making style is intuitive. He is the product of change. He is driven by resources currently controlled. Commitment to opportunity is evolutionary with long duration. Commitment of resources is single-staged with complete commitment upon decisions. Control of resources is that of ownership or employment of required resources. Management structure is formalized hierarchy. Mainly concentrates on events inside the organisation. Attitude towards risk is cautious and vigilant. Decision making style is calculative.
- 15. TYPES OF ENTREPRENEURSHIP Entrepreneurship is an innovative process that involves multifaceted and diversified activities for providing new things to society and civilization. It is a dynamic process that keeps changing over space and time. It can categorised under nine heads as follows: Administrative Entrepreneurship Opportunistic Entrepreneurship Acquisitive Entrepreneurship Incubative Entrepreneurship Imitative Entrepreneurship Private Entrepreneurship Public Entrepreneurship Individual Entrepreneurship Mass Entrepreneurship
- 16. Administrative Entrepreneurship: The entrepreneurial activity under this category is centered around administration techniques and functions. It gives a new option to handle prevailing or future situations in a more effective way that provides advantages and a competitive edge. Total quality management, job redesigning, new techniques of doing things, participative management or management by consensus are few of the examples of administrative entrepreneurship that increases overall organisational effectiveness and that makes the firm successful and sustainable in the competitive market environment. Opportunistic Entrepreneurship: There is a proverb ‘Strike the iron while its hot.’ it is the best exhibit of the characteristic of this category of entrepreneurship. Environmental changes always offer new opportunities. But everybody is not equally capable of identifying and utilizing that opportunity on time. The entrepreneurship that identifies, exploits and executes the opportunity in the first hand is regarded as opportunistic entrepreneurship. Acquisitive Entrepreneurship: The entrepreneurship that learns from other competencies is called acquisitive entrepreneurship. It acquires something new of value front, the competitive environment or achieves the competitor’s technical capacities. It keeps entrepreneurship sustainable in a competitive environment. The failure never
- 17. Incubative Entrepreneurship: This category of entrepreneurship generates and nurtures new ideas and ventures within the organisation. It productively executes them and ensure material gain for the organization. They pursue and help to get differentiated technologies to promote creations and innovations. Here, the ideas are constructively executed with the assistance of business incubators. A business incubator is a company or an organization that provides a multitude of services to new businesses or start-ups. These services may include anything from management training to workspace, infrastructure, and even access to sponsors. Imitative Entrepreneurship: The entrepreneurship that imitates a good or a service operating in the market under a franchise agreement is the imitative entrepreneurship. It is the medium that spread technology over the world. It adopts an existing technology over the countries of the world. It also adopts an existing technology with minor modifications appropriate to the local condition. Private Entrepreneurship: The entrepreneurship that is initiated under the private sector falls under this category. The government provides various support measures through private and public concerns that encourage private initiative in taking entrepreneurial ventures. A layer and mutual relationship between public and private sectors would make economic development speedy and balanced.
- 18. Public Entrepreneurship: The entrepreneurship that is undertaken by the government through its various development agencies falls under this category. All countries developed or under- developed, take a public initiative in venture ideas to fulfil the initial deficiency of private entrepreneurs. Most of these ventures are aimed at improving the standard of living of the people. The objective of these programs are generally that of public welfare and not that profit maximisation. Individual Entrepreneurship: The entrepreneurial venture that is undertaken by the individual or his family is defined as individual entrepreneurship. These ventures mostly originate out of the desire and vison of the owner, and mostly employ the local labour and resources. They operate on a small scale and are dispersed to smaller regions. Mass Entrepreneurship: This type of entrepreneurship emerges in an economy where a favorable climate of motivation and encouragement exists for developing a wide range of entrepreneurship among general mass is mass entrepreneurship. It increases small and medium enterprises in a country.
- 19. CONCEPTS OF ENTREPRENEURSHIP Entrepreneurship is both a science as well as an art. It combines the knowledge obtained from various disciplines into producing goods and services that benefit the society. There are 10 concepts of entrepreneurship, which are as follows: 1. Risk bearing concept 2. Innovative concept 3. Managerial skill concept 4. Creative and Leadership concept 5. High achievement capacity concept 6. Professional concept 7. Organisation and coordination concept 8. Business oriented concept 9. Result oriented concept 10.Personality, identity or role transformation process concept.
- 20. Risk bearing Concept: The Risk bearing concept details the importance of taking risks in the field of entrepreneurship. This is the premiere and most popular concept. In this regard we can say that entrepreneurship is a function of taking unlimited risks. The entrepreneur has to bear various risks in establishing and operating an enterprise in order to make a profit. These risks are related to time changes and fluctuations in prices. Innovative Concept: According to this concept, the entrepreneur in a developed economy is someone who introduces something new into the economy. The individual brings about various innovations in industries, markets, production techniques, new sources of raw materials and also new methods of marketing. Hence this concept is a modern concept and it is one that is dynamic and not static. Managerial Concept: Every entrepreneur should possess good managerial skills. They are responsible for the day- to-day smooth functioning of the business. Hence being a good manager is necessary for the success of any business venture. A good manager plans, directs and coordinates all the activities of the firm. He or she assigns tasks to the employees and ensures that all the objectives are satisfied and the demands of the clients are met. Creative and Leadership Concept: According to this concept new thoughts emerge due to creativity which can be put to economic use through effective leadership. Entrepreneurs should have strong vision and clear objectives, this together with effective leadership skills can lead to success of the venture.
- 21. High Achievement Capacity Concept: Entrepreneurship is a high achievement capacity concept, for which the capacity of making innovations and taking decisions during risks is essential. According to this concept the inspiration for high-level achievements makes a man an entrepreneur. Every epic journey begins with a single step. Hence an entrepreneur with his vision, creative ability and leadership skills is able to realise an opportunity and make the most of it. Professional Concept: Modern management experts accept entrepreneurship as a professional concept. They are of the view that entrepreneurship may be developed through education and training. A managerial ability may be learned through guidance, similarly entrepreneurship can be learned as well. That is why governments and private organisations should encourage the development of entrepreneurship and should conduct various training programs to create awareness about the hidden opportunities and also should create facilities that provide assistance to budding entrepreneurs to realise such opportunities. Organisation and coordination concept: Entrepreneurship is that economic component that organises and coordinates various sources of production. It is often defined as the ability to ‘organise an enterprise’. Both organisation and coordination are important management functions and they facilitate the smooth conduct of the business. This concept is dynamic, as the structure of organisations are fast changing. Technology is here to stay and improve thereby facilitating better coordination of man, machine and materials.
- 22. Business oriented Concept: Entrepreneurship is closely associated with business. In this concept entrepreneurship is expressed as a business oriented concept in which profit maximisation becomes the primary focus. This concept talks about the various aspects of running a business and how to be successful in a business. As part of running a business, the individual should be able to formulate plans, take risks and coordinate resources. Result oriented Concept: According to this concept entrepreneurship is called as result-oriented in the modern age. In this concept the following questions are asked- ‘How much effort was put in to achieve the objective ?’, ‘How have the resources allocated been utilised by the firm ?’, ‘What is the result of company policies on the output of the firm ?’, etc. Here, entrepreneurship is concerned with the attainment of certain goals which are set by the entrepreneur. Hence it is considered as result-oriented. Personality, identity and role transformation process concept: Entrepreneurship is not only the adoption of new works and behaviours, but it is also the transformation of personality and to establish a new identity through that. It takes transformational leaders to bring about extraordinary changes in organisations and industries. These leaders are able to inspire individuals to unleash their potential thus creating a team of talent and vision.
- 23. ROLE OF ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT Entrepreneurship plays a vital role in economic development. It creates organisations that offer employment to millions of people. They convert resources to useful products and services. They create goods and services that improve the standard of living of the people in the country. Here are some of the important roles played by entrepreneurship in the process of economic development: Wealth creation and Sharing Create jobs Balanced regional development GDP and Per capita income Standard of Living Exports Community development
- 24. Wealth creation & sharing: By establishing the business entity, entrepreneurs invest their own resources and attract capital (in the form of debt, equity, etc.) from investors, lenders and the public. This mobilizes public wealth and allows people to benefit from the success of entrepreneurs and growing businesses. This kind of pooled capital that results in wealth creation and distribution is one of the basic imperatives and goals of economic development. Creates jobs and employment: Entrepreneurs are by nature and definition job creators, as opposed to job seekers. The simple translation is that when you become an entrepreneur, there is one less job seeker in the economy, and then you provide employment for multiple other job seekers. This kind of job creation by new and existing businesses is again is one of the basic goals of economic development. Therefore the Govt. of India has launched initiatives such as Startup India to promote and support new startups, and others like the Make in India initiative to attract foreign companies and their FDI into the Indian economy. All this in turn creates a lot of job opportunities and is helping in augmenting our standards to a global level. Balanced regional development: Entrepreneurs setting up new businesses and industrial units help with regional development by locating in less developed and backward areas. The growth of industries and business in these areas leads to infrastructure improvements like better roads and rail links, airports, stable electricity and water supply, schools, hospitals, shopping malls and other public and private services that would not otherwise be available. Every new business that locates in a less developed area will create both direct and indirect jobs, helping lift regional economies in many ways. The combined spending by all the new employees of the new businesses and the supporting jobs in other businesses adds to the local and regional economic output. Both
- 25. GDP and Per capita income: India’s MSME sector, comprised of 36 million units that provide employment for more than 80 million people, now accounts for over 37% of the country’s GDP. Each new addition to these 36 million units makes use of even more resources like land, labor and capital to develop products and services that add to the national income, national product and per capita income of the country. This growth in GDP and per capita income is again one of the essential goals of economic development. Standard of Living: Increase in the standard of living of people in a community is yet another key goal of economic development. Entrepreneurs again play a key role in increasing the standard of living in a community. They do this not just by creating jobs, but also by developing and adopting innovations that lead to improvements in the quality of life of their employees, customers, and other stakeholders in the community. For example, automation that reduces production costs and enables faster production will make a business unit more productive, while also providing its customers with the same goods at lower prices. Exports: Any growing business will eventually want to get started with exports to expand their business to foreign markets. This is an important ingredient of economic development since it provides access to bigger markets and leads to currency inflows and access to the latest cutting-edge technologies and processes being used in more developed foreign markets. Another key benefit is that this expansion that leads to more stable business revenue during economic downturns in the local economy. Community Development: Economic development doesn’t always translate into community development. Community development requires infrastructure for education and training, healthcare, and other public services. For example, you need highly educated and skilled workers in a community to attract new businesses. If there are educational institutions, technical training schools and internship opportunities, that will
- 26. GROWTH OF ENTREPRENEURSHIP IN INDIA Entrepreneurship is the life blood of the economy. It creates many job opportunities, helps to develop the rural areas and speeds up the process of economic development. Entrepreneurship is that input of production that combines all the other factors of production and brings out innovative goods and services that boost the standard of living of the population. India is a fast-paced developing country. In such a thriving environment, entrepreneurship plays a crucial role in achieving the objective of growth with stability in India. It also helps in creating a balanced regional development. The growth of entrepreneurship in India can be presented in two sections, which are as follows: Entrepreneurship pre-independence Entrepreneurship post-independence
- 27. Entrepreneurship in the Pre-Independence period: The evolution of the Indian entrepreneurship can be traced back to even as early as Rigveda when metal handicrafts existed in society. This would bring the point home that handicrafts entrepreneurship in India was as old as the human civilization itself and was nurtured by the craftsmen as a part of their duty towards the society. Before India met the West, people were organized in a particular type of economic and social system of the village, community. Then, the village community featured the economic scene in India. The Indian towns were mostly religious and aloof from the general life of the country. The elaborated caste-based diversion of workers consisted of farmers, artisans and religious priests (the Brahmins). Most of the artisans were treated as village servants. Such a compact system of village community effectively protecting village artisans from the onslaughts of external competition was one of the important contributing factors to the absence of localization of industry in ancient India. Evidently, organized industrial activity was observable among the Indian artisans in a few recognizable products in the cities of Banaras, Allahabad, Gaya, Puri, and Mirzapur which were established on their river basins. Very possibly, this was because the rivers served as a means of transportation facilities. These artisan industries flourished over the period because the Royal Patronage was to them to support them. The workshops called ‘Kharkhanas’ came into existence. The craftsmen were brought into an association pronounced as ‘guild system’. Overall, perfection in art; durability beyond doubt and appeal to the eye of the individual were the distinguishing qualities inherent in the Indian craftsmanship that brought many everlasting laurels of name and fame to illustrious India in the past To quote, Bengal enjoyed world-wide celebrity for corah, Lucknow for chintzes, Ahmedabad for dupattas and dhotis, Nagpur for silk-bordered cloths, Kashmir for shawls and Banaras for metal wares. Thus, from the immemorial until the earlier years of the eighteenth century, India enjoyed the prestigious status of the queen of international trade with the help of its handicrafts. Unfortunately, the prestigious Indian handicraft industry, which was basically a cottage and small sector, declined at the end of the eighteenth century for various reasons.
- 28. The decline of the handicraft industry can be attributed to the following reasons: The disappearance of the Indian Royal Courts, who patronized the crafts earlier; The lukewarm attitude of the British Colonial Government towards the Indian crafts; The imposition of heavy duties on the imports of the Indian goods in England; Low-priced British-made goods produced on a large scale which reduced the competing capacity of the products of the Indian handicrafts; Development of transport in India’ facilitating the easy access of British products even to far-flung remote parts of the country; Changes in the tastes and habits of the Indian, developing craziness of foreign products, and The unwillingness of the Indian craftsmen to adapt to the changing tastes and needs of the people. Some scholars hold the view that manufacturing entrepreneurship in India emerged as the latent and manifest consequence of East India Company’s advent in India. The company injected various changes in the Indian economy through the export of raw materials and the import of finished goods in India. Particularly, the Parsis established a good rapport with the Company and were much influenced by the Company’s commercial operations.
- 29. He belonged to a Wadia family which gave birth to many leading shipbuilders of Bombay.8 9 In 1677, Minjee Dhanjee was given a contract for building the first large gun-powder-mill in Bombay for the East India Company. Besides, a Parsi foreman of a gun factory belonging to the company established a steel industry in Bombay in 1852. Based on these facts, it can be stated that the East India Company made some contribution towards entrepreneurial growth in India. But, whether the company did it deliberately for the growth of entrepreneurship in India or it was just a coincidence that people met with the Company and entered the manufacturing, nothing can be said with certitude. The actual emergence of manufacturing entrepreneurship can be noticed in the second half of the nineteenth century. Prior to 1850, some stray failure attempts were, indeed, made by the Europeans to set up factories in India. In the beginning, the Parsis were the founder of manufacturing entrepreneurs in India. Ranchodlal Chotalal, a Nagar Brahman, was the first Indian to think of setting up the textile manufacturing on the modem factory lines in 1847 but failed. In his second attempt, he succeeded in setting up a textile mill in 1861 at Ahmedabad.’ But before this, the first cotton textile manufacturing unit was already set up by a Parsi, Cowasjee Nanabhoy Davar in Bombay in 1854 followed by Nawrosjee Wadia, who opened his textile mill in Bombay in 1880. The credit for the expansion of textile industries up to 1915 goes to the Parsis. Out of 96 textile mills existing in 1915, 43 percent (41) were set up by Parsis, 24 percent (23) by Hindus, 10 percent (10) by Muslims and 23 percent (22) by British citizens. 10 Later, the Parsis invaded other fields, mainly iron and steel industry, also Jamshedjee Tata was the first Parsi entrepreneur who established the first steel industry in Jamshedpur in 1911. In the first wave of manufacturing entrepreneurship, except Parsis, all others hailed from non- commercial communities. Why the Well-known commercial communities, namely, Jains and
- 30. Secondly, it can also be attributed to their conservative attitude to change from commercial entrepreneurship to industrial entrepreneurship. The Swadeshi campaign, i.e., emphasis on indigenous goods, provided, indeed, a proper seedbed for inculcating and developing nationalism in the country. It was the influence of Swadeshi that Jamshedji Tata even named his first mill ‘Swadeshi Mill’. The spirit of indigenousness strengthened its roots so much in the country that the Krishna Mills in its advertisement of Tribune of April 13 made the following appeal: “Our concern is financed by native capital and is under native management throughout”. The second wave of entrepreneurial growth in India began after the First World War. Firstly, the improvement of the business climate in the countryside during this period resulted in an increase in the quantum of trade which assured quick returns on investments. This proved the” commercial activity more lucrative during the period. For various reasons, the Indian Government agreed, to ‘discriminating’ protection to certain industries, even requiring that companies receiving its benefits should be registered in India with rupee capital and have a proportion of their directors as Indians. The advantages of these measures were mostly enjoyed by the Indians. The Europeans failed to harness the protectionist policies to their interests, These measures helped in establishing and extending the factory manufacturing in India during the first four decades of the twentieth century. During these decades, the relative importance of Parsis declined and Gujaratis and Marwari Vaishyas gained that pendulum in India’s entrepreneurial scene. The emergence of Managing Agency System which made its own contribution to Indian entrepreneurship can be traced back to 1936 when Carr, Tagore & Co. assumed the management of the Calcutta Steam Tug
- 31. The credit for this initiation goes to an Indian, Dwarkanath Tagore, who encouraged others to form joint-stock companies and invented a distinct method of management in which management remained in the hands of the ‘firm’ rather than of an ‘individual’. Historical evidence also does confirm that after the East India Company lost monopoly in 1813, the European Managing Agency Houses entered the business, trade, and banking. These houses markedly influenced eastern India’s Industrial scene. It is stated that the Managing Agency Houses were the real entrepreneur for that period, particularly in Eastern India. Brimmer holds the opinion that Agency Houses emerged to overcome the limitations imposed by a shortage of venture capital and entrepreneurial acumen through all. may not agree squarely with this view. Entrepreneurship in the Post- Independence period: After taking a long sigh of political relief is 1947, the Government of India tried to spell out the priorities to devise a scheme for achieving balanced growth. For this purpose, the Government came forward with the first Industrial Policy, 1948 which was revised from time to time. The Government in her various industrial policy statements identified the responsibility of the State to promote, assist and develop industries in the national
- 32. It also explicitly recognized the vital role of the private sector in accelerating industrial development and, for this, enough field was reserved for the private sector. The Government took three important measures in her industrial resolutions: to maintain a proper distribution of economic power between the private and public sector; to encourage the tempo of industrialization by spreading entrepreneurship from the existing centers to other cities, towns and villages, and to disseminate the entrepreneurship acumen concentrated in a few dominant communities to many industrially potential people of varied social strata. To achieve these adumbrated objectives, the Government accorded emphasis on the development of small-scale industries in the country. Particularly since the Third Five Year Plan, the Government started to provide various incentives and concessions in the form of capital, technical know-how, markets and land to the potential entrepreneurs to establish industries in the industrially potential areas to remove the regional imbalances in development. This was, indeed, a major step taken by the Government to initiate
- 33. Several institutions like Directorate of Industries, Financial Corporations, Small-Scale Industries Corporations, and Small Industries Service Institute were also established by the Government to facilitate the new entrepreneurs in setting tip their enterprises. Expectedly, the small-scale units emerged very rapidly in India witnessing a tremendous increase in their number from 121,619 in 1966 to 190,727 in 1970 registering an increase of 17,000 units per year during the period under reference. The recapitulation of review of the literature regarding entrepreneurial growth in India, thus, leads us to conclude that prior to 1850, the manufacturing entrepreneurship was negligible lying dormant in artisans. The artisan entrepreneurship could not develop mainly due to inadequate infrastructure and lukewarm attitude of the colonial political structure to the entrepreneurial function. The East India Company, the Managing Agency Houses and various socio-political movements like Swadeshi campaign provided one 'way or the other, proper seedbed for the emergence of the manufacturing entrepreneurship from 1850 onwards. The wave of entrepreneurial growth gained sufficient momentum after the Second World War. Since then, the entrepreneurs have increased rapidly in numbers in the country. Particularly, since the Third Five Year Plan, small entrepreneurs have experienced a tremendous increase in their numbers. But they lacked entrepreneurial ability, however. The fact remains that even the small entrepreneurship continued to be dominated by business communities though at some places new groups of entrepreneurs too emerged. Also, there are examples that some entrepreneurs grew from small to medium-scale and from medium to large-scale manufacturing units during the period. The family entrepreneurship units like Tata, Birla, Mafatlal, Dalmia, Kirloskar, and others grew beyond the normally expected size and established new frontiers in business in this period. Notwithstanding, all this happened without the diversification of the entrepreneurial base so far as its
- 34. CONCLUSION Entrepreneurship is the dynamic process of creating incremental wealth and innovating things of value that have a bearing on the welfare of the general public. It provides civilization with an enormous amount of goods and services and enhances the growth of social welfare. The main importance of entrepreneurship is the creation of job opportunities, innovation, and improve the economy. The man behind the entrepreneurship is an action-oriented and highly motivated individual who is ready to achieve goals. M. Kirzner (1973) observes entrepreneurs as; “one who perceives what others have not seen and acts upon that perception”. Thus, entrepreneurs take the economy and the society that is the whole civilization to the state of progress and prosperity.
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