Unit 1: Entrepreneurship - Revised

UNIT 1
Entrepreneur and Entrepreneurship
By: Mudit M. Saxena,

Dept. of Mech. Engg.
Indus University
Entrepreneur and Entrepreneurship
• An entrepreneur is an individual who starts and runs a business with limited
resources and planning, and is responsible for all the risks and rewards of his or
her business venture. The business idea usually encompasses a new product or
service rather than an existing business model.
• Such entrepreneurial ventures target high returns with an equally high level of
uncertainty.
• The entrepreneur is willing to risk his or her financial security and career,
spending time as well as capital on an uncertain venture, arranging for the
necessary capital, raw materials, manufacturing locations and skilled employees.
• Marketing, sales and distribution are other important aspects which are
controlled by the entrepreneur.
2
By: Mudit M. Saxena, Dept. of Mech. Engg.
Small Businesses vs. Entrepreneurial Ventures
• There is a fine line between being a small business (SB) owner and an entrepreneur—the
roles actually have a lot in common—but there are distinct differences that set them apart.
• Small businesses usually deal with known and established products and services, while
entrepreneurial ventures focus on new, innovative offerings. Because of this, small
business owners tend to deal with known risks and entrepreneurs face unknown risks.
• Limited growth with continued profitability is what is hoped for in most small businesses,
while entrepreneurial ventures target rapid growth and high returns.
• As a result, entrepreneurial ventures generally impact economies and communities in a

significant manner, which also results in a cascading effect on other sectors, like job
creation.
3
Myths About Entrepreneurs
• Entrepreneurs take uncalculated and unknown risks without any plans. This myth is
partially true; entrepreneurs do take uncalculated and unknown risks, but they keep
resources, and plan as much as they can for dealing with the unknown.
• Entrepreneurs start business with a revolutionary invention. This is also partially true; not
all entrepreneurial ventures are true breakthroughs. Most are identifying and capitalizing
on a mix-n-match approach. Google did not invent the internet, McDonald's did not invent
the cheeseburger, Starbucks did not invent coffee. It’s the identification and capitalization
of the idea and rapid growth rate that makes the venture entrepreneurial.
• Entrepreneurs venture out only after gaining significant experience in the industry. Most
entrepreneurs are young, inexperienced individuals who follow their passion.
4
Myths About Entrepreneurs
• Entrepreneurs complete extensive research before taking the first step. Unless an
existing business is setting up a new business line on a new concept,
entrepreneurs start with very limited or no research. However, they do have good
awareness about the potential of their offering, which gives them the confidence
to assume the risk.
• Entrepreneurs start with sufficient capital. Capital is the foremost requirement of

any entrepreneurial venture. Most entrepreneurs fail to secure sufficient capital
from outside sources unless they have somehow proven themselves or have a
marketable prototype.
• Hence, most entrepreneurs start out with insufficient capital with an aim to
secure more along the way.
5
A Successful Entrepreneur
What Does It Take to Be a Successful Entrepreneur?
• Entrepreneurship either originates from passion or from identifying suitable business opportunities.
• A person who is very passionate about developing electronic circuits may (accidently) develop a great
appliance. Such an individual may not necessarily have the business thoughts in mind, but he is
driven by pure passion. He doesn’t listen to anyone, goes with his gut and one day develops a highly
marketable product that offers extremely high returns. He fits into the first category of passionate
entrepreneurs.
• A businessman with sharp business acumen sensing a profit opportunity with a mix-n-match
approach fits into the latter category.
• Irrespective of the originating category, an entrepreneurial idea, if well nurtured and correctly driven,
can be transformed into a very profitable business venture.
6
Indian entrepreneurship
• The Indian state makes Indians entrepreneurial, as to overcome basic constraints and succeed with
what we have we have to innovate and improvise.
• Before 1991, Indian business success was a function of ambition, licenses, government contacts, and
an understanding of the bureaucratic system. Decisions were based on connections, rather than the
market or competition.
• Business goals reflected a continuation of the ‘Swadeshi’ movement, which promoted import
substitution to attain economic freedom from the West. Pre-1991 policies were inward looking and
geared towards the attainment of self-reliance. During this era, entrepreneurship was subdued,
capital was limited and India had very few success stories. As well, society was risk averse and the
individual looked primarily for employment stability.
• In 1991, the Indian government liberalized the economy, thus changing the competitive landscape.
Family businesses, which dominated Indian markets, now faced competition from multinationals that
had superior technology, financial strength and deeper managerial resources.
• Thus, Indian businesses had to change their focus and re-orient their outlook outward. A few existing
Indian business families adapted to the new economic policy while others struggled.
7
• Liberalization, changed the very nature of the joint family. If large Indian businesses were
to succeed, the family would have to re-orient itself to compete in a global, competitive
environment.
• Post liberalization, IT businesses succeeded because they were customer focused and
professionally managed.
• The old, family-managed businesses, which formed the backbone of the economy, needed
to evolve and become more institutional, if they were to extend their life cycle.
8
Top 10 Indian Entrepreneurs
1. Dhirubhai Ambani
• Dhirubhai Ambani (1932-2002) is an Indian

businessman who started out humbly by selling
traditional snacks to religious pilgrims. His business
soon grew, and he expanded and diversified into
industries including telecommunications, power
generation, information technology, consumer goods,
and logistics.
9
2. Jehangir Ratanji Dadabhoy Tata
• Jehangir Ratanji Dadabhoy Tata or JRD Tata (1904-1993) was born in Paris to
Indian and French parents. He was trained as an aviator in Europe and later
became India's first commercial airline pilot. Working for the family business,
TATA group, he set out on his own and built TATA Airlines, which ultimately
became the modern Air India
• By the time of JRD Tata's death, TATA owned nearly 100 different businesses
across many industries. Notably, his automobile venture, Tata Motors (TTM),
produces economical automobiles that nearly all working Indians can afford to
own. JRD Tata is descended from Jamsetji Tata who founded the TATA group of
companies in the mid-1800s.
10
3. Nagavara Ramarao Narayana Murthy
• Nagavara Ramarao Narayana Murthy, age 73, is an Indian entrepreneur who co-
founded IT giant Infosys (INFY) with an initial investment of 10,000 rupees, or just
a few hundred dollars in today's terms.
11
4. Shiv Nadar
• Shiv Nadar, 74, founded HCL Infosystems in 1976 with an
investment of a few thousand dollars, selling calculators and
microcomputers.
• HCL soon expanded to Singapore and the far east, generating over
1 million rupees in sales not long after its expansion. HCL has
continued to grow, making Nadar a billionaire worth over $12.4
billion.
12
5. Lakshmi Niwas Mittal
• Lakshmi Niwas Mittal, 69, is an Indian entrepreneur who began his career
working for his father's steel business. He later set out on his own, due to family
infighting and created what is now one of the largest steelmakers in the world,
ArcelorMittal (MT).
13
6. Ghanshyam Das Birla
• Ghanshyam Das Birla (1894-1983) is a well-known

Indian businessman who started his first company in
the early 1900s operating a cotton and textile mill.
• By 1919, Birla's businesses also included significant

paper and sugar production. By the time he died, Birla
Group was a multi-sector global conglomerate.
By: Mudit M. Saxena, Dept. of Mech. Engg. 14

7. Dilip Shanghvi
• Dilip Shanghvi, 64, started Sun Pharmaceuticals in 1982 with a meager 10,000
rupee investment, or approximately $200. As the son of a pharmaceutical
distributor, Shanghvi knew what he was doing.
15
8. Azim Premji
• Azim Premji, 74, is worth an estimated $6 billion and is the former

chairman of Wipro Industries (WIT), a diversified software and
technology company that many have compared to Microsoft.
• Premji is sometimes referred to as India's Bill Gates as a result,

alongside his informal title as "czar" of the Indian IT industry.
16
• 9. Mukesh Jagtiani
• Mukesh "Micky" Jagtiani, 68, is an Indian-Emirati businessman who has spent most of his
life outside of India. While he was educated in Mumbai and Beirut, he moved to London for
accounting school, before dropping out.
• Soon, starting his first company while driving a taxi, his company eventually grew into the
retail and real estate giant Landmark, now based out of Dubai.
17
10. Ardeshir Godrej
Ardeshir Godrej (1868-1936) co-founded the Godrej Group, a diversified
conglomerate with interests in real estate, consumer products, security, household
appliances, and industrial tools.
The company had modest beginnings—Ardeshir and his brother succeeded at

locksmithing after failed ventures into hand-fashioned medical devices.
• Godrej Group was founded in 1897, and the Godrej companies have revenues of
over $4.7 billion today.
18
The growth of entrepreneurship in India
• The growth of entrepreneurship in India is, therefore, presented into two sections, viz.
Entrepreneurship during Pre-Independence
• and Post- Independence.
• Entrepreneurship during Pre-Independence
• 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 came into contact with 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). The majority 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.
19
• 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’.
• On the whole, 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.
20
• Unfortunately, so much prestigious Indian handicraft industry, which was basically a

cottage and small sector, declined at the end of the eighteenth century for various
reasons.7 These may be listed as:
• 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.
21
• 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.
• The Company established its first ship-building industry in Surat were from 1673 onwards the Parsis
built vessels for the Company. The most important was shipwright Lowjee-Nushirvaij, who migrated to
Bombay around 1935.
• He belonged to a Wadia family which gave birth to many leading shipbuilders of Bombay.8 9 In 1677,
Manjee 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. On the basis of these facts, it can be stated that the East India Company made
some contribution towards entrepreneurial growth in India.
22
• But, whether the company did it deliberately for the growth of entrepreneurship in India or it was just a coincidence that
people came in contact 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 by Muslims and 23 percent (22) by British citizens.
• 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.
23
• 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 Vaishyas
of Ahmedabad and Baroda, lagged behind in entrepreneurial initiatives throughout the nineteenth
century can be explained by two factors.
• 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.
• 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”.
24
Entrepreneurship during Pre-Independence
• The second wave of entrepreneurial growth in India began after the First World War.
• 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 Association.
25
• 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.
• And, 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.
• Before we skip our review of entrepreneurial growth to the post-Independence era, it will be in
the fitness of the things to shed some light on the effects of partition on India’s industrial
economy so as to depict Independent India’s industrial background.
26
Entrepreneurship during Post-Independence
• 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 interest.
• 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.
27
The Government took three important measures in her industrial resolutions:
1. to maintain a proper distribution of economic power between the private and public sector;
2. to encourage the tempo of industrialization by spreading entrepreneurship from the existing centers to other cities, towns and villages,
and
3. to disseminate the entrepreneurship acumen concentrated in a few dominant communities to a large number of industrially potential
people of varied social strata.
• To achieve these 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 interested people of varied social strata to enter the small-scale
manufacturing field.
• 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.
28
• 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.
29
• 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 also established new frontiers in business in this period.
• Notwithstanding, all this happened without the diversification of the entrepreneurial base so far as its
socio-economic ramification is concerned.
30
Top 5 trends in the Indian Entrepreneurship sector for 2020
• Be it the rise of technology enables systems and services or innovative

consumer engagement and millennial friendly business approach, to the
government and taxation policies, GST, improved access to FDI and ease of
getting investments etc., have all brought about unprecedented changes to
the sector, at an accelerated speed. As we embark into the next decade, here
are top 5 trends that will drive the sector:
1 Digitisation & Automation:
Going forward, digitisation and automation is going to become an indispensable

part of business operations. Even smaller players and boot-strapped
entrepreneurs will be embracing modern technologies in the coming year.
31
2 Business Collaborations:
• With the flexibility to access similar products and services on the online and
traditional platforms, entrepreneurs and start-up founders have been devising
methods to combat competition and thrive.
• This has led to a stronger focus on business collaborations. By adding relevant

expertise to the portfolio through collaborations, there is a greater business
opportunity for entrepreneurs.
32
3 Customer Service focus:
• While products and services do matter, customer service approach to

business has become vital to flourish and expand – a trend that is again
set to change the consumer buying patterns and drive growth
4 Diversification:
• This decade is going to see a new trend of diversification, where

entrepreneurs are increasingly opting for multiple businesses that are not
only diversified in nature but are also independent and even drastically
separate from the main business.
33
5 Focus on R&D/ Innovation:
• With access to the latest know-how using digital learning and global knowledge exchange platforms,
increasing number of businesses are waking up to the need of continuous learning and innovation.
• This trend is set to rise, with more and more businesses investing time and resources to study,
implement, and improve their product and service offerings, thereby enhancing their growth potential
and possibilities for international expansion.
34
Women Entrepreneurship
• The sixth economic census released by Ministry of Statistics and Programme
Implementation (MoSPI) highlights that women constitute around 14% of the
total entrepreneurship in India.
• Today’s women entrepreneurs do not come only from the established business
families or from the higher-income sections of the population, they come from all
walks of life and from all parts of the country.
35
Women Entrepreneurship
Women constitute 48.9% Indians
• Of all directors of startups 35% are women
• Women constitute 14% of total entrepreneurs in India
• About 58% women entrepreneurs started their business between ages of 20 and 30
• About 73% women entrepreneurs report revenue of under Rs.10 Lac in a financial year
• About 35% women entrepreneurs had a cofounder
• About 71% women employ around 5 or less people
• Top 5 Indian cities with women entrepreneurs: Bangalore, Delhi-NCR, Chennai, Mumbai, Hyderabad
36
Concept of Women Entrepreneurs
• Women entrepreneurs may be defined as a woman or group of

women who initiate, organize and run a business enterprise.
• Women who innovate, imitate or adopt a business activity are

called “women entrepreneurs’’.
37
• Accordingly, a women entrepreneur is defined as “an enterprise owned and

controlled by women having a minimum financial interest of 51 per cent-bf the
capital and giving at least 51 percent of the employment generated in the
enterprise to women”.
• However, this definition is subject to criticism mainly on the condition Of

employing more than 50 percent of women workers in the enterprises owned and
run by the women.
• In nutshell, women entrepreneurs are those women who think of a business

enterprise, initiate it, organize and combine the factors of production, operate
the enterprise and undertake risks and handle economic uncertainty involved in
running a business enterprise.
38
Functions of Women Entrepreneurs
• As an entrepreneur, a woman entrepreneur has also to perform all the functions involved in
establishing an enterprise.
• These include idea generation and screening, determination of objectives, project preparation,
product analysis, determination of forms of business organization, completion of promotional
formalities, raising funds, procuring men, machine and materials and operation of a business.
Frederick Harbison has enumerated the following five functions of a women entrepreneur:
• Exploration of the prospects of starting a new business enterprise.
• The undertaking of risks and the handling of economic uncertainties involved in the business.
• Introduction of innovations or imitation of innovations.
• Coordination, administration and control.
• Supervision and leadership.
39
All entrepreneurial functions can be classified broadly into 3 categories;
• Risk-bearing.
• Organization.
• Innovations.
Growth of Women Entrepreneurship
• Women in India constitute around half of the country’s population. Hence, they are
regarded as the “better half of society”. In the official proclamation, they are on par with
men.
40
Negative factors
• But, in real life, the truth prevails otherwise. Our society is still male-dominated and
women are not treated as equal partners both inside and outside four walls of the house.
• They are treated as weak and dependent on men. As such, the Indian women enjoy a
disadvantageous status in the Society. Let some facts be given.
• The low literacy rate (40%), low work participation rate (28%) and low urban population
share (10%) of women as compared to 60%, 52%, and 18% respectively of their male
counterparts well confirm their disadvantageous position in the society.
• Given these unfavorable conditions, the development of women entrepreneurship is

expectedly low in the country.
41
Push factors
• Push factors refer to those factors which compel women to take up their own
business to tide over their economic difficulties and responsibilities.
• With growing awareness about a business and the spread of education among women
over the period, women have started shifting from 3 Ps to engross to 3 modem Es,
viz., Engineering, Electronics, and Energy.
• Women entrepreneurs manufacturing solar cookers in Gujarat, small foundries in

Maharashtra and T.V. capacitors in Orissa have proved beyond doubt that given the
opportunities, they can excel their male counterparts.
• Smt. Sumati Morarji (Shipping Corporation), Smt. Kirloskar (Mahila Udyog Limited),
Smt. Neena Malhotra (Exports) and Smt Shahnaz Hussain (Beauty Clinic) are some
exemplary names of successful and accomplished women entrepreneurs in our
country.
42
Push factors
• In India, Kerala is a state, with the highest literacy (including women literacy) reflecting a congenial
atmosphere for the emergence and development of women entrepreneurship in the State.
• On the whole, the proper education of women in Kerala resulted in high motivation among them to
enter into business.
• The financial, marketing and training assistance provided by the State Government also helped
motivate women to assume an entrepreneurial career.
• Women’s desire to work at the place of residence, the difficulty of getting jobs in the public and
private sectors and the desire for social recognition also motivated women in Kerala for seif-
employment. Like Kerala, an increasing number of women are entering the business in the State of
Maharashtra also.
43
Problems of Women Entrepreneurs
• Women entrepreneurs encounter two sets of problems, viz., general problems of
entrepreneurs and problems specific to women entrepreneurs. These are discussed as
follows:
• The problem of Finance: Finance is regarded as “life-blood” for any enterprise, be it big
car small. However, women entrepreneurs suffer from a shortage of finance on two counts.
Firstly, women do not generally have property on their names to use them as collateral for
obtaining funds from external sources. Thus, their access to the external sources of funds
is limited. Secondly, the banks also consider women less credit-worthy and discourage
women borrowers on the belief that they can at any time leave their business.
• Given such a situation, women entrepreneurs are bound to rely on their savings, if any,
and loans from friends and relatives which are expectedly meager and negligible. Thus,
women enterprises fail due to the shortage of finance.
44
• Scarcity of Raw Material: Most of the women enterprises are plagued by the scarcity of
raw material and necessary inputs. Added to this is the high prices of raw material, on the
one hand, and getting raw material at the minimum of discount, on the other. The failure
of many women co-operatives in 1971 engaged in basket-making is an example of how
the scarcity of raw material sounds the death-knell of enterprises run by women.
• Stiff Competition: Women entrepreneurs do not have organizational set-up to pump in a

lot of money for canvassing and advertisement. Thus, they have to face stiff competition
for marketing their products with both the organized sector and their male counterparts.
Such a competition ultimately results in the liquidation of women enterprises.
• Limited Mobility: Unlike men, women’s mobility in India is highly limited due to various
reasons. A single woman asking for a room is still looked upon suspicion. The cumbersome
exercise involved in starting an enterprise coupled with the officials’ humiliating attitude
towards women compels them to give up the idea of starting an enterprise.

• Family Ties: In India, a woman mainly must look after the children and other members of the family.
Man plays a secondary role only. In the case of married women, she has to strike a fine balance
between her business and family. Her total involvement in the family leaves little or no energy and
time to devote to the business. Support and approval of husbands seem a necessary condition for
women’s entry into the business.
• Lack of Education: In India, around three-fifths (60%) of women are still illiterate. Illiteracy is the
root cause of socio-economic problems. Due to the lack of education and that too qualitative
education, women are not aware of a business, technology, and market knowledge. Also, a lack of
education causes low achievement motivation among women.
• Male-Dominated Society: in practice, women are looked-upon, i.e. weak in all respects. Women
suffer from male reservations about a woman’s role, ability and capacity and are treated accordingly.
In nutshell, in the male-dominated Indian society, women are not treated equally to men. This, in turn,
serves as a barrier to women’s entry into the business.
• Low Risk-Bearing Ability: Women in India lead a protected life. They are less educated and
economically not self-dependent. All these reduce their ability to bear risk involved in running an
enterprise. Risk-bearing is an essential requisite of a successful entrepreneur.

Development of Women Entrepreneurs
Recent Trends
• Now, they are increasingly participating in all spheres of activities. The fact remains that
the citadels of excellence in academics, politics, administration, business, and industry are
no longer the prerogatives of men in India
• The consensus that is emerging in all discussions relating to the development of women is
that the promotion of women entrepreneurs should form an integral part of all
development efforts.
• Tire experience of the United States where the share of women-owned enterprises is
continuously on increase strengthens the view that the future of small-scale industries
depends very much on the entry of women into the industry.
47
Development of Women Entrepreneurs
Recent Trends
• To develop better half of the society, the United Nations declared the decade 1975–85 as
the Decade for Women.
• The Conference of Women Entrepreneurs held at New Delhi in November 1981 advocated
the need for developing women entrepreneurs for the overall development of the country,
it called for priority to women in allotment of land, sheds, a sanction of power, licensing,
etc.
48
Development of women entrepreneurs
• The Government of India has been assigning increasing importance to the development of women
entrepreneurs in country in recent years.
• The Sixth Five Year Plan, for example, proposed for promoting female employment in women-owned
industries. The Government moved a step forward in the Seventh Five Year Plan by including a special
chapter on the Integration of Women in Development. The chapter suggested:
• To treat women as specific target groups in all development programs.

• To devise and diversify vocational training facilities for women to suit their varied needs and skills.
• To promote appropriate technologies to improve their efficiency and productivity.
• To assist in marketing their products
• To involve women in the decision-making process.
49
Development of women entrepreneurs
• In her recent Industrial Policy 1991, the Government of India further stressed the need for
conducting special entrepreneurship development programs for women to encourage
women to enter the industry. Product and process,-oriented courses enabling women to
start small scale industries are also recommended in the Policy Statement.
• There are several institutional arrangements both at the centre and the state levels like
nationalised banks, state financial corporations, state industrial corporations, district
industry centres and voluntary agencies like FICCI’s Ladies Organisation (FLO), National
Alliance of Young Entrepreneurs (NAYE) Which have been engaged in protecting and
developing women entrepreneurs in the country.
• Added to these are national and international women associations set up with a purpose
to create a congenial environment for developing women entrepreneurship in rural and
urban areas.
50
Summary of women enterpreneurship
• A women entrepreneur is one who owns and contrails an enterprise having a share capital
of not less than 51 percent as partners/shareholders/directors of private limited
company/members of the co-operative society. The functions performed by a women
entrepreneur are categorized as risk-bearing, organization, and innovation.
• Women’s entry into business is a recent phenomenon. It is traced out as an extension of

their kitchen activities to three Ps, i.e., pickles, powder (masala) and pappad
manufacturing.
• With growing awareness and spread of-education over the years, women have started
engrossing modern activities like engineering, electronics, and energy popularly known as
3Es.
• In certain businesses, women entrepreneurs are doing exceedingly well and excelling their
male counterparts. Women entrepreneurs account for about 10 percent of total
entrepreneurs in the country.
51
Summary of women enterpreneurship
• Women entrepreneurs face two types of problems, one, general problems faced
by all entrepreneurs and, second, problems specific to women. Male dominating
society, family ties, lack of ne&Tachievement, education and risk-bearing abilities
are examples of problems specific to women entrepreneurs.
• Women in India are no longer able and remain confined to within four walls of the
house. They are participating and performing well in all spheres of activities such
as academics, politics, administration, space, and industry.
• Efforts are on at the Government and voluntary agencies levels to tap the
hitherto unrecognized and unaccounted for the strength of women to integrate
them in the process of industrial development, more especially small-scale
industry development in the country.
52
Assignent - 1
Q 1. Explain entrepreneur and Enterpreneurship. Explain small business v/s
enterpreneurship.
Q 2. What are the Myths About Entrepreneurs
Q 3. What Does It Take to Be a Successful Entrepreneur?
Q 4. Write a note on Indian Entrepreneurship. Name the top 10 entrepreneurs of
India.
Q 5. Explain Top 5 trends in the Indian Entrepreneurship sector for 2020.
Q 6. Explain the Concept of Women Entrepreneurs.
Q 7. Explain the Problems of Women Entrepreneurs
53

Unit 1: Entrepreneurship - Revised

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Unit 1: Entrepreneurship - Revised

Uploaded by

Copyright:

Available Formats

UNIT 1

Entrepreneur and Entrepreneurship

By: Mudit M. Saxena,

• As a result, entrepreneurial ventures generally impact economies and communities in a

• Entrepreneurs start with sufficient capital. Capital is the foremost requirement of

• Dhirubhai Ambani (1932-2002) is an Indian

• Ghanshyam Das Birla (1894-1983) is a well-known

• By 1919, Birla's businesses also included significant

By: Mudit M. Saxena, Dept. of Mech. Engg. 14

• Azim Premji, 74, is worth an estimated $6 billion and is the former

• Premji is sometimes referred to as India's Bill Gates as a result,

The company had modest beginnings—Ardeshir and his brother succeeded at

• Entrepreneurship during Pre-Independence

• Unfortunately, so much prestigious Indian handicraft industry, which was basically a

Entrepreneurship during Post-Independence

• Be it the rise of technology enables systems and services or innovative

1 Digitisation & Automation:

Going forward, digitisation and automation is going to become an indispensable

• This has led to a stronger focus on business collaborations. By adding relevant

3 Customer Service focus:

• While products and services do matter, customer service approach to

• This decade is going to see a new trend of diversification, where

5 Focus on R&D/ Innovation:

• Of all directors of startups 35% are women

• Women constitute 14% of total entrepreneurs in India

• About 35% women entrepreneurs had a cofounder

• About 71% women employ around 5 or less people

• Women entrepreneurs may be defined as a woman or group of

• Women who innovate, imitate or adopt a business activity are

• Accordingly, a women entrepreneur is defined as “an enterprise owned and

• However, this definition is subject to criticism mainly on the condition Of

• In nutshell, women entrepreneurs are those women who think of a business

Growth of Women Entrepreneurship

• Given these unfavorable conditions, the development of women entrepreneurship is

• Women entrepreneurs manufacturing solar cookers in Gujarat, small foundries in

• Stiff Competition: Women entrepreneurs do not have organizational set-up to pump in a

By: Mudit M. Saxena, Dept. of Mech. Engg. 45

By: Mudit M. Saxena, Dept. of Mech. Engg. 46

• To treat women as specific target groups in all development programs.

• Women’s entry into business is a recent phenomenon. It is traced out as an extension of

You might also like