MODULE 1 - INTRODUCTION TO ENTREPRENEURSHIP
HISTORY OF ENTREPRENEUR
The term entrepreneur is derived from the French word “enterprendre”. It means “to undertake”. It is commonly used to describe an individual who organizes and operates a business or businesses, taking on financial risk to do so. Around 1700 A.D. the term was used for architects and contractor of public works. In many countries, the term entrepreneur is often associated with a person who starts his/her own new business.
MEANING OF ENTREPRENEURSHIP
An entrepreneur is an individual who initiates, organizes, and manages a business or startup venture, taking on financial risks with the goal of achieving profit and success. Entrepreneurs are characterized by their innovative ideas, willingness to take calculated risks, and their ability to identify and capitalize on opportunities in the market. They often play a central role in the creation and growth of new businesses, introducing novel products, services, or business models. Entrepreneurs are essential to economic development and job creation, as they drive innovation and competition, leading to economic growth and the advancement of society.
Examples: Elon Musk is a visionary entrepreneur known for co-founding PayPal, SpaceX, and Tesla, Inc. His innovative spirit has revolutionized the electric car industry, space exploration, and renewable energy technology.
DEFINITION OF ENTREPRENEURSHIP
Peter F. Drucker’s Views on Entrepreneur - “An entrepreneur is the one who always searches for change, responds to it and exploits it as an opportunity. Innovation is the specific tool of entrepreneurs, the means by which they exploit changes as an opportunity for a different business or different service”.
ELEMENTS OF ENTREPRENEURSHIP
To set up an enterprise and for it to grow successfully, a number of elements must be in place. Let us look now at some key elements that are necessary for entrepreneurship:
(1) Innovation: Innovation means doing something new or something different transforming creative ideas into useful applications. Entrepreneurs use innovation to exploit opportunities available in the market and overcome any threats. This innovation can be a new product, service, technology, production technique, marketing strategy, etc or innovation can involve doing something better and more economically. According to Schumpeter (a renowned economist), a person is an entrepreneur only when he is engaged in innovative behavior.
(ii) Risk-Taking: Entrepreneurship is the propensity of mind to take calculated risks with confidence to achieve a predetermined objective. Entrepreneurship and risk-taking therefore go hand in hand. The willingness of an entrepreneur to take risks gives a competitive edge in the economy. It helps to exploit the opportunities the economy provides. A good entrepreneur should know how and when to take and manage the risks of his business. In fact one needs to be a risk taker, not a risk avoider but there should be a balance. Not taking any risks can make a business stagnant and excessive impulsive risk-taking can cause losses. If an entrepreneur does not have the willingness to assume risk, entrepreneurship would never succeed.
(iii) Vision: Vision or foresight is one of the main driving elements behind any entrepreneur. It is the energy that drives the business forward by using the foresight of the entrepreneur. It gives the business an outline for the future tasks to complete, the risks to take, the culture to establish, etc. This helps in setting out short term and long term goals for the business and also plan ways to achieve these objectives.
(iv) Organization: The work of an entrepreneur involves the use of managerial skills. His managerial skills get strengthened when he engages himself in establishing equilibrium between his organization and its environment. The entrepreneur bears all the risks and enjoys all the rewards. An entrepreneur must be able to manage and organize his finances, his employees, his resources, etc. So organizational abilities are one of the most important elements of entrepreneurship.
(v) Perseverance: The process of setting up an enterprise cannot be done in a few days or a few months. It may sometimes take years and during this period. There will be good days and bad days. Being persistent and not giving it up when the going gets tough is what will eventually enable an entrepreneur to achieve his/her goals. Perseverance is an important element because if an entrepreneur gives up, that itself will be the end of the journey.
IMPORTANCE OF ENTREPRENEURSHIP
Entrepreneurship is the dynamic process of creating incremental wealth. It provides the economy with goods and services and enhances the growth of social welfare. The significance or importance of entrepreneurship is stated below:
(i) Creation of job opportunities: Entrepreneurship contributes to job opportunities. It provides entry-level jobs so necessary for training or gaining experience for unskilled workers. The small enterprises are the only sector that generates a large portion of total employment every year. Moreover, entrepreneurial ventures prepare and supply experienced labor to large industries.
(ii) Gives impetus to innovations: Entrepreneurship nurses innovation that provides new ventures, products, technology, market, quality of goods, etc. to the economy that increases national income and standard of living of the people.
(iii) Impact on community development: Entrepreneurship leads to more stability and a higher quality of community life. A community is better off if its employment base is diversified.
(iv) Enhances the standard of living: Entrepreneurship provides enormous kinds of product/service of various nature by virtue of application of innovative ideas. In effect, entrepreneurship enhances the standard of living of the people of a country
(v) Promotes research and development: Entrepreneurship provides funds for research and development with universities and research institutions. This promotes the general development, research, and development in the economy.
DETERMINANTS OF ENTREPRENEURSHIP
(i) Independent & achiever - They are rough, tough & pragmatic people who are driven by needs of independence and achievement.
(ii) Optimistic - They are extreme optimists in their decision making processes.
(iii) Keen learners. They have the ability to prioritize ideas over data, to be nomadic and to learn endlessly.
(iv) Urge to build They are primarily motivated by an overwhelming need for achievement and strong urge to build a business empire
(v) Initiative-An entrepreneur takes actions that go beyond job requirements or the demand of the situation.
(vi) Opportunity grabber - An entrepreneur is quick to see and seize opportunities.
(vii) Persistent - An entrepreneur is not discouraged by difficulties and once the goal is set he she is committed to the goal and will become completely absorbed in it.
(viii) Information seeker- An Entrepreneur undertakes personal research on how to satisfy customers and solve problems. He/she always wants to learn things which will help the business to grow.
(ix) Believer in quality and efficiency - An entrepreneur is always competing with others to do things better, taster and at less cost he/she strives to achieve excellence.
(x) Risk take - They place themselves in situations involving moderate risk so they are moderate risk takers.
(xi) Goal setter - An entrepreneur sets meaningful and challenging and realistic goals for him/herself.
(xii) Hard working-An entrepreneur will work long hours, just to be able to keep his/her commitment to his/her client.
(xiii) Systematic planner-Since entrepreneur knows what to expect at anytime he/she is able to change plans and strategies to achieve what he/she aims at
(xiv) Persuasive and networker - An entrepreneur acts to develop and maintain business contacts by establishing good working relationships. Uses deliberate strategies to influence others.
(xv) Independent and self confident - Most entrepreneurs start business because they like to be their own boss. They are responsible for their own decisions
(xvi) Well versed in managerial skill and strong team builder - They are often perceived as essential leadership attributes for successful entrepreneurs
(xvii) Aggressive catalyst - The entrepreneur is the aggressive catalyst in bringing change in the world of business.
(xviii) Dynamic and visionary - Dynamism and capacity to foresee in future are the necessary attributes of an entrepreneur.
(xix) Go-getter spirit - The spirit to go and achieve, despite hurdles, is a virtue possessed by all entrepreneurs, otherwise they will never be able to build that big.
(xx) Never say die spirit - any setbacks do not discourage entrepreneurship from their path.
ENTREPRENEURIAL CREATIVITY
Entrepreneurial creativity refers to a specific state of mind which orients human conduct towards entrepreneurial activities and outcomes. Individuals with entrepreneurial mindsets are often drawn to opportunities, innovation and new value creation.
According to Schumpeter, "the capabilities of innovating, introducing new technologies, increasing efficiency and productivity, or generating new products or services, are characteristic qualities of entrepreneurs." Entrepreneurs are catalysts for economic change, and researchers argue that entrepreneurs are highly creative individuals with a tendency to imagine new solutions by finding opportunities. These Characteristics include the ability to take calculated risks and accept the realities of change and uncertainty.
Attributes of a creative Entrepreneur
(i) Passion - for achieving success
(ii) Belief in what he/she is doing
(iii) Courage - to take the decision
(iv) Determination - to reach the top
(v) Risk Taking- attitude
(vi) Vision - to foresee in future.
(viii) Discipline in everything the entrepreneur does
(ix) Resiliency-strong will power and undying stamina to face difficulties and setback
ENTREPRENEURSHIP AND CREATIVE RESPONSE TO THE SOCIETY PROBLEMS AND AT WORK
Entrepreneurship and creative problem-solving play a crucial role in addressing society's challenges and creating innovative solutions at work. Here's how they are interconnected:
Identifying Opportunities: Entrepreneurs are skilled at identifying unmet needs and problems in society. They observe pain points and challenges faced by individuals, communities, or businesses and recognize them as opportunities for innovative solutions.
Creating Solutions: Entrepreneurship involves turning ideas into action. Creative problem-solving enables entrepreneurs to come up with novel and effective solutions to address societal issues. They might develop new products, services, or business models to meet these needs.
Social Entrepreneurship: Some entrepreneurs focus on social entrepreneurship, which emphasizes creating ventures that have a positive impact on society. Social entrepreneurs tackle problems related to poverty, education, healthcare, environmental issues, and more. They leverage creativity to design sustainable and impactful solutions.
Innovation and Adaptability: Entrepreneurship demands constant innovation and adaptation. Creative thinking helps entrepreneurs stay ahead of the curve and respond to rapidly changing circumstances, allowing them to navigate challenges effectively.
Collaboration and Networking: Entrepreneurs often collaborate with diverse stakeholders, including governments, non-profits, and other businesses, to address societal problems. Creative communication and networking skills facilitate effective partnerships and collective problem-solving.
Risk-taking and Resilience: Entrepreneurship involves risk-taking, as entrepreneurs embark on uncharted paths. Creative responses enable them to think outside the box, make bold decisions, and bounce back from failures with resilience.
Disruptive Technologies: Entrepreneurs frequently introduce disruptive technologies that can transform industries and society. Creative ideas lead to innovations that reshape the way we live, work, and interact with one another.
Empowerment and Inclusivity: Entrepreneurship can empower individuals from diverse backgrounds to create their own solutions to societal issues. Creativity enables inclusive thinking, ensuring that solutions cater to a broader range of needs and perspectives.
Sustainable Business Practices: Entrepreneurs can incorporate creativity in building environmentally and socially responsible businesses. They find inventive ways to minimize their ecological footprint and contribute positively to society.
Economic Growth and Job Creation: Successful entrepreneurship can lead to economic growth and job creation, which, in turn, addresses social issues like unemployment and poverty.
EXAMPLES OF CREATIVE ENTREPRENEURS FOR SOCIETY PROBLEM
Urban Farming Startups: Given the limited availability of green spaces in urban areas, some entrepreneurs in Chennai have launched urban farming startups. They creatively use vertical farming techniques, hydroponics, and rooftop gardens to produce fresh, organic produce locally, addressing food security and promoting sustainable agriculture.
Waste Management Solutions: Chennai, like many other cities, faces waste management challenges. Entrepreneurs have set up waste management startups that employ creative recycling and upcycling techniques to minimize waste and turn recyclables into valuable products.
Technology for Education: With a strong educational background in Chennai, EdTech startups have emerged, offering interactive learning platforms, language learning apps, and online tutoring services. These initiatives enhance access to quality education and skill development.
Women's Empowerment Initiatives: Several entrepreneurship initiatives in Chennai focus on empowering women through skill training, micro-financing support, and mentorship programs. These efforts help women achieve financial independence and contribute to the local economy.
E-Mobility Solutions: In response to environmental concerns and traffic congestion, entrepreneurs have introduced electric vehicle (EV) rental services and e-bike sharing programs in Chennai. These initiatives encourage sustainable transportation options and reduce carbon emissions.
DIMENSIONS OF ENTREPRENEURSHIP
The dimensions of entrepreneurs are mentioned below:
Social Entrepreneurship - Social entrepreneurs recognize a social problem and plan their entrepreneurial initiatives to benefit the society. These entrepreneurs develop innovative goods, services or remedies to tackle urgent societal challenges. Efforts to protect the environment, animal welfare, care for underserved populations through humanitarian endeavors, encouraging community health and education etc. are some of the areas where social enterprises work. The non profit enterprises are motivated by the realization of societal benefits rather than absolute orientation towards profit. The goal of the majority of social enterprises is to prioritize financially sustainable social change. These organizations use moral strategies to encourage success, such as mindful consumption and corporate social responsibility. Instead of focusing on making money and expanding the owners' wealth, social entrepreneurship seeks to better the world. The non-profit organizations committed to resolving various social issues are the best examples of social enterprises.
Cultural Entrepreneurship - Cultural entrepreneurship is the practice of applying entrepreneurial principles to the creation, preservation, and promotion of cultural products, events, and initiatives. It involves a diverse range of activities, from managing cultural institutions to producing and marketing cultural goods. Cultural entrepreneurs often work to innovate within their cultural contexts, breathing new life into traditions or introducing novel artistic expressions. This form of entrepreneurship not only fosters cultural diversity and heritage but also generates economic value, making it a vital force in the intersection of culture and business.
Intrapreneurship - Intrapreneurship is a dynamic organizational strategy where employees within a company act like entrepreneurs, driving innovation, and taking calculated risks to develop new products, services, or processes. Intrapreneurs exhibit the same spirit of creativity, independence, and ambition as entrepreneurs, but they operate within the confines of an established corporation. They identify opportunities for growth, challenge the status quo, and often work in specialized teams or divisions to nurture and execute innovative ideas, ultimately contributing to the company's competitiveness, adaptability, and long-term success.
Technopreneurship or Technological Entrepreneurship - A technopreneur builds a company that heavily depends on innovative use of technology, and this involves efficient use of his technical expertise and entrepreneurial acumen. These businessmen have the ability to change the market and offer their clients cutting-edge solutions. Technopreneurs undertake measured risks that could be financially rewarding. The backbone of the products and services provided by such a corporation is technology. Technology companies prefer to employ innovative and tech-savvy employees who are eager to explore technological advancements to offer unique solutions to the consumers.
Environmental Entrepreneurship - This form of entrepreneurship is also known as ecopreneurship and green entrepreneurship. These businesses undertake environmentally conscious endeavors or practices while making profit from their business activities. An ecopreneur employs practices and business philosophies that are environmentally conscious. Furthermore, they work to supplant the existing products or services with environment friendly alternatives. So, as opposed to prioritizing monetary gain, environmental entrepreneurship promotes social and environmental value. The creation of audiobooks, impact blogs, and SaaS software are a few examples of environment friendly enterprises that don't hurt plants.
International Entrepreneurship - In international entrepreneurship, entrepreneurs carry out business operations outside the borders of India. This involves setting up a sales unit overseas or exporting goods from one host country to another. International entrepreneurship is profitable when local demand for goods and services is declining and demand in the world market is rising. Before they are mature enough to explore other overseas markets, international business entrepreneurs initially offer their products just in their home territory.
Cyber Entrepreneurship - Cyber entrepreneurs are those who exploit the advantages of information technology to run a business. They create original concepts for supplying goods and services to consumers via internet-based applications. These individuals are well-informed about the digital or virtual environment and provide their goods or services via online portals to avoid the inconvenience of going to a physical store. Since these businesses operate online, they are known as virtual businesses. Cyberpreneurship includes online retail and over-the-top (OTT) entertainment services.
FACTORS INFLUENCING ENTREPRENEURSHIP
The factors influencing the emergence of entrepreneurship can be categorized into (a) Internal factors and (b) External factors
Internal factors
Entrepreneurial Traits and Characteristics: Personal attributes and qualities such as creativity, risk tolerance, self-confidence, determination, and a strong work ethic are internal factors that drive individuals to pursue entrepreneurship.
Educational Background: An individual's education and knowledge, especially in business-related fields, can provide them with the skills and confidence needed to start and manage a business effectively.
Experience: Prior work experience, particularly in relevant industries or roles, can contribute to an entrepreneur's understanding of the market, industry, and business operations.
Motivation and Passion: A genuine passion for a particular idea, product, or service can be a powerful internal motivator for entrepreneurs.
Resilience: The ability to bounce back from failures and setbacks is crucial for entrepreneurs, and it often depends on personal resilience and determination.
Networking Skills: An individual's ability to build and leverage personal and professional networks can impact their access to resources, information, and opportunities.
Vision and Innovation: Entrepreneurs often possess a clear vision for their business and an innovative mindset, allowing them to identify market gaps and create unique solutions.
External factors
Economic Factors:
Access to Capital: Availability of funding sources, such as personal savings, loans, venture capital, or angel investors, can significantly impact an individual's ability to start and grow a business.
Market Conditions: Economic conditions, market size, demand for goods or services, and industry trends influence the feasibility and success of entrepreneurial ventures.
Social and Cultural Factors:
Cultural Norms: Societal attitudes toward entrepreneurship and risk-taking can affect an individual's decision to become an entrepreneur.
Role Models: The presence of successful entrepreneurs as role models can inspire and encourage others to pursue entrepreneurial paths.
Social Networks: Access to supportive networks, including mentors, business associations, and industry connections, can provide valuable resources and guidance.
Government and Policy Environment:
Regulations: Government regulations and policies related to business registration, taxation, intellectual property, and industry-specific regulations can impact the ease of doing business.
Incentives: Government incentives, grants, subsidies, and programs aimed at supporting entrepreneurs can influence entrepreneurial activity.
Technological Advancements:
Access to Technology: Advances in technology, such as the internet and mobile devices, have made it easier for individuals to start and operate businesses, particularly in e-commerce and tech-related fields.
Market Opportunities:
Identified Needs: Identifying unmet needs or gaps in the market can provide strong incentives for entrepreneurial endeavors.
Innovation: Opportunities for innovation, disruption, and the introduction of new products or services can drive entrepreneurial activity.
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