BY PROF. R.V. BADI & PROF. N. V.

BADI
CHAPTER 1
NATURE AND IMPORTANCE OF
ENTREPRENURSHIP
1.1 Introduction
1.2 Nature of Entrepreneurship
1.3 Entrepreneurship concept and Industrial backdrop
1.4 Developments in early period
1.5 Developments in middle age
1.6 Developments in Industrial period
1.7 Modern period
1.8 Definitions
1.9 Importance of Entrepreneurship
Business and manufacturing have evolved over the
centuries
A king, used to fund and initiate new ventures.
The chances of success are few and the process is full
of problems and uncertainties.
Having entered once, it is not easy to retrace.
Change is the law of nature.
Who is an entrepreneur ?
AN ENTERPRISE IS IMPACTED BY ;
Government
Market Competition
Variety
Globalisation
Large size
I.T.&Communication
Rapid Changes
R&D & Technology
All Stakeholders
Finance & scarce resource
 Nature of Entrepreneurship are:

Function of achievement.

Innovation changes initiated by entrepreneurship.

Group leadership and managerial skills.

Organisation skills.

A function of economical, social and political structure.

A function of religious believes.

An entrepreneur is an important segment of economic growth.

Some of the aspects of industrial backdrop of India are :

Meaning of industrialisation,

Different arms of industrialisation,

Natural resources available in India,

Pattern of industrialisation,

Problems of industrialisation.
Man invented hand made axe and wheel
The development of Indian entrepreneurship is as old
as Harapan culture.
The entrepreneurship to make handicraft items
existed in India around 2500 B.C.
The artisan in different parts of India grouped
together
The cities like Benaras, Gaya, Puri, Alahabad,
Mirzapur i.e., cities on the banks of the river Ganga
etc. developed their own Industries.
 Cottage based industries for consumption
 Development of agricultural product like spices,
ayurvedic medicines
 Parts of U.P. were famous for Brass ware and Bidri ware,
Nagpur for Silk cloth, Silk yarn from Mysore, Carpets from
U.P.,
The Indian craftsmen did not changed their production
style
The quantities produced were too small.
Steam engine by Robert Fulton
Invention of diesel engine
Work in communication by Samuel Morse
Whitney’s cotton gin
The Telegraph invention by Morse revolutionised the
technology of communication.
Andrew Carnegie who started large steel industries
Henry Ford started manufacture of automobiles
Rockefeller started new oil industries.
New items like bicycle, typewriter and electrical gadgets
were invented
 First Phase:
large manufacturing industries such as steel, aluminium,
fabrication, copper, zinc, automobiles, locomotives and host of
industries
steel plant by Jamsetji Tata at Jamsedpur in India
Second Phase:
The second phase is Information Technology Era which started
in 1970’s
The age of macro-electronics was introduced by Intel
Corporation and Data General Corporation
Soft-ware development work
. The new top rated entrepreneurship opportunities arose such
as communication, food services, entertainment, merchandising,
cosmetic, apparel
17th century Person bearing risks of profits (loss) in a
fixed price contract with government.
1725 : Richard Cantillon Person bearing risks in different from one
supplying capital.
1797 : Beaudeau Person bearing risks, planning,
supervising, organising and owning.
1803 : Jean Baptiste Say Separated profits of entrepreneur from
profits of capital.
1876 : Francis Walker Distinguished between those who supplied
funds and received interest and those
who received profit from managerial
capabilities.
1934 : Joseph An entrepreneur is an innovator and
Schumpeter develops untried technology.
1958 : Haggen An entrepreneur is an economic man who
tries to maximise his profits by innovations.

1961 : David McClelland Entrepreneur is an energetic moderate risk

taker.

1964 : Peter Drucker Entrepreneur maximises opportunities

through systematic innovations.

1975 : Albert Shapero Entrepreneur takes initiative, organises some

socio-economic mechanisms, and accepts risk
of failure.

1980 : Karl Vesper Entrepreneur seen differently by economists,

psychologists, business persons, and
politicians.

1983 : Gifford Pinchot Intrapreneur is an entrepreneur within an

already established organisation.
1985 : Robert Hisrich Entrepreneur is the process of creating
something different with value by devoting the
necessary time and effort, assuming the
accompanying financial, psychological, and
social risks and receiving the results – rewards
of monetary and personal satisfaction.

1990 : Vasant Desai The entrepreneur brings in overall change

through innovation for the maximum social
good. Human values remain sacred and inspire
him to serve society. He has firm belief in social
betterment and he carries out this responsibility
with conviction. He always works for the well-
being of the society. The entrepreneurial
activities encompasses all fields/sectors and
fosters a spirit of enterprise for the welfare of
mankind.
 Definition :
Higgins defines entrepreneurship as function of
seeking investment, production opportunity,
organising an enterprise to undertake new production
process, raising capital, hiring labour, arranging
resources and introducing new organisation.
 Entrepreneurship is the life blood of any economy
1) Taking to higher rate of economic growth by creation of value.
2) Speed up the process of industrial use of the factors of production.
3) Creation of employment opportunities.
4) Dispersal of economic activities to different sectors of economy and
identifying new avenues of growth.
5) Development of backward and tribal areas.
6) Better social changes.
7) Improvement of the standard of living of different weaker sections
in the society.
8) Bring socio political change in the society.
9) Develop technological know-how.
10) Improve culture of business and expand commercial activities.
11) Entrepreneurship act as a change agent to meet the requirements of
the changing
12) markets and customer preferences.
13) Develop a culture of achievement orientation.