20MS2003 Concept of Entrepreneurship Module 1

Evolution, Characteristics
Role of Entrepreneurship in Economic Development, Models of
Entrepreneurship, Success Stories

Concepts of Entrepreneurship AW 1
History of Entrepreneurship in India

❑ Marco Polo, the Venetian merchant, arrived in China

in the thirteenth century
❑ He was one of the first entrepreneurs who got venture
capital. He convinced several wealthy Venetians to
finance his commercial expedition to Asia.
❑ Marco Polo promised that he would share his profits
from this risky venture with them.

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Evolution of Entrepreneurship

Middle-Ages : In the Middle-Ages, the term entrepreneur was referred to a person who
was managing a large number of projects using the resources provided. An example is a
person who is in charge of great architectural works such as castles, public buildings,
cathedrals etc.
th
16 century: During the early 16th century, the term was used for the persons engaged in
military expeditions.
17th century: In the 17th century, an entrepreneur was a person who used to have a
contractual arrangement with the government to perform a service or to supply some
goods. The profit or loss was borne by the entrepreneur. The term was extended to cover
construction and civil engineering works
18th century: It was Richard Cantillon, a French Economist, who applied the term
entrepreneur to business for the first time. He is regarded, by some, as the founder of the
concept of entrepreneurship. He defined an entrepreneur as a person who buys services at
certain prices with a view to selling them at uncertain prices in the future; As a person who
takes the risk
Concepts of Entrepreneurship AW 3
 19th century: In the 19th century, entrepreneurs were not distinguished from
managers. They were viewed mostly from the economic perspective. An
entrepreneur was the one who assumes the risk, contributes his own initiative
and skills, plans organizes and leads his enterprise.
20th century: Entrepreneur was considered as a business promoter, as the
one who transformed ideas into a profitable venture. It was Joseph
Schumpeter who described that an entrepreneur is an innovator who develops
untried technology.
21st century: Scientists like Live De Bone stated that to be an entrepreneur it
was not necessary that an individual generates an entirely new idea, but if he
is adding incremental value to the current product or service, he can rightly
be called an entrepreneur.

Concepts of Entrepreneurship AW 4
History of Entrepreneurship in India

The history of entrepreneurship in India started in the era of Indus Valley

Civilization.
• Apart from agriculture and hunting, the Indus people supported
themselves by trading goods like exchange of Potteries, ornaments,
exchanges of animals etc…

• The early years (1000 B.C-500 B.C): Indian traders introduced re-exporting silk
bought from the Chinese and sold to central Asia. They bought horses from west
Asians and sold them to the Chinese.
• The Maurya Era: In modern times the Maurya Empire is remembered as one of the
golden ages of Indian history, a time when the country was united and independent. •
Vast territory, better trade. Widespread use of metallic money, Missions to Sri Lanka
and Southeast Asia increase trade.

Concepts of Entrepreneurship AW 5
• • The Mughal age (1500 A.D-1600 A.D): Dominated world
commerce, large quantities of gold and silver came into the country.
• The Mughal Era II (1600 A.D-1700 A.D): British arrived in this
era. The person named Surat merchant Virji Vora among first
entrepreneurs.
• The colonial-era I (1700 A.D-1850 A.D): Europe was then the
hotbed of technological innovation. The traders brought with them
plenty of new ways of doing business. Seizing the opportunities that
emerged, many Indians became entrepreneurs.
• Dwarkanath Tagore, who formed India‘s first Joint Venture with a
foreigner, Carr Tagore Nanabhai Davar, who put up the country’s
first textile mill in 1854.

Concepts of Entrepreneurship AW 6
The colonial ERA II (1850 A.D-1900A.D): Railways set up (1853).
Nanabhai Davar’s first cotton mill in Bombay. Sir J.N Tata founded
Jamshedpur steelworks. Foundations of jute mills, the pharmaceutical
industry were laid.
• The colonial-era III (1900 A.D-1947A.D): Changemakers like JRD
Tata, MS Oberai, Jamuna Lal Bajaj lead the way for Indian
entrepreneurs.

• After Independence: Entrepreneurs like Dirubai Ambani emerged.

Globalization took place, and over the last 68 years, India has seen
entrepreneurs evolve in a different role.

• The modern entrepreneurs are wealth creators, communicators,

change agents, entertainers etc. Tata Steel

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Characteristics of Entrepreneurs

Initiative- An entrepreneur takes actions that go beyond job requirements or the demand
of the situation.

Opportunity seeking- An entrepreneur is quick to see and seize opportunities. He/she does things
before he/she is asked to work by people or forced by the situation

Persistence - An entrepreneur is not discouraged by difficulties and problems that come up in the
business or his/her personal life. Once he / she sets a goal he/she is committed to the goal

Information seeking - An entrepreneur undertakes personal research on how to satisfy customers

and solve problems. He/she knows that different people have different capabilities that can be of
help to them. He/she seeks relevant information from his/her clients, suppliers, competitors and
others. He/she always wants to learn things which will help the business to grow.

Concepts of Entrepreneurship AW 8
Characteristics of Entrepreneurs

Demand for quality and efficiency - An entrepreneur is always competing with others to
do things better, faster, and at less cost, he/she strives to achieve excellence.
Risk-taking - Entrepreneurs are not gamblers, but they calculate their risks before taking
action. They place themselves in situations involving moderate risk such that they can
achieve what they aim
Goal setting - An entrepreneur does not just dream. He or she sets meaningful and
challenging goals for him/herself.
Commitment to work. An entrepreneur will work long hours after into the night just to be
able to keep his/her promise to his/her client. The entrepreneur ensure that the work is
done according to the goals set

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Characteristics of Entrepreneurs

Systematic planning and monitoring - An entrepreneur plans for whatever he/she

expects in the business. He/she does not leave things to luck. He/she plans by breaking
large tasks down into small ones
Persuasion and networking – An entrepreneur acts to develop and maintain business
contacts by establishing a good working relationship.
Independence and self-confidence. Most entrepreneurs start a business because they like
to be their own boss. They are responsible for their own decisions and they are confident
of winning.

http://www.nevillewadia.com/images/Cronicle2012/DR.-A.-B.-DADAS12.pdf

Concepts of Entrepreneurship AW 10
Skills of Entrepreneurs

https://twitter.com/TechtitudeT/status/1421867242682130433/photo/1

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Skills of Entrepreneurs

https://www.oecd.org/cfe/leed/cooney_entrepreneurship_skills_HGF.pdf
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Role of Entrepreneurship in Economic Development

1. Employment opportunities -Entrepreneurs employ labor for managing their business

activities and therefore provide employment opportunities to a large number of people.
2. Balanced Regional Development- Entrepreneurs establish industries in backward and
rural areas. They remove regional disparities and bring balanced regional development.
They also help to reduce the problems of congestion, slums, sanitation, and pollution in
cities by providing employment and income to people living in rural areas. They help in
improving the standard of living of the people residing in suburban and rural areas.
3. Mobilization Of Local Resources – Entrepreneurs help to mobilize and utilize local
resources like small savings and talents of relatives and friends, which might otherwise
remain idle and unutilized. Thus they help in the effective utilization of resources.
4. Optimization Of Capital – Entrepreneurs aim to get a quick return on investment.
5. Promotion of Exports - Entrepreneurs earn valuable foreign exchange through exports.

13
Concepts of Entrepreneurship AW
Role of Entrepreneurship in Economic Development

6. Consumer Demands - Entrepreneurs produce a wide range of products required

by consumers. They meet the demand of the consumers without creating a
shortage of goods.
7. Increase per capita income - Entrepreneurs help to increase the per capita
income of the country in various ways and facilitate the development of backward
areas and weaker sections of the society
8. Economic Integration - Entrepreneurs reduce the concentration of power in a
few hands by creating employment opportunities and through equitable
distribution of income.
9. They help in effective resource mobilization of capital and skill which might
otherwise remain unutilized and idle
10. They promote the country's export trade i.e., an important ingredient to
economic development.

https://www.youtube.com/watch?v=KEuTpRkZqiY
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Models of Entrepreneurship

Two dimensions under the direct control

of management differentiate how
companies approach corporate
entrepreneurship.
1. Organizational ownership: Who
within the company has primary
ownership for the creation of new
businesses? This responsibility can be
focused in a designated group, or it
can be diffused across the
organization.
2. Resource authority: Are projects
funded from a dedicated corporate
pool of money or in an ad hoc
manner? Together the two dimensions
generate a matrix with four dominant
models: opportunist, enabler, Robert C. Wolcott and Michael J. Lippitz
advocate, and producer.
Source - https://sloanreview.mit.edu/article/the-four-models-of-corporate-entrepreneurship/
Concepts of Entrepreneurship AW 15
Models of Entrepreneurship

The Opportunist Model

• All companies begin as opportunists. There is no designated organizational

ownership or resources. There is only diffused ownership and ad hoc resource
allocation. In this model, efforts are made by intrepid “project champions”.

• The opportunist model works well only in trusting corporate cultures that are open
to experimentation and have diverse social networks behind the official hierarchy.

• However, the opportunist approach is undependable for many companies. When

organizations get serious about organic growth, executives realize they need more
than a diffused, ad hoc approach

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Models of Entrepreneurship

The Enabler Model

• In this model, the employees across an organization will be willing to develop new
concepts if they are given adequate support.
• Dedicating resources and processes (but without any formal organizational
ownership) enable teams to pursue opportunities on their own insofar as they fit the
organization’s strategic frame.
• In certain established companies, this model provides clear criteria for selecting
which opportunities to pursue, application guidelines for funding, decision-making
transparency, both recruitment and retention of entrepreneurially-minded employees,
and, active support from senior management.
• This model stresses personnel development and executive engagement also.

Concepts of Entrepreneurship AW 17
Models of Entrepreneurship

The Advocate Model

• In this model, a company assigns organizational ownership for the creation of new
businesses, but it intentionally provides the group with only a modest budget.

• Advocate organizations act as evangelists and innovation experts, facilitating

corporate entrepreneurship in conjunction with business units, which must
demonstrate their commitment to new business development by paying most of the
bills, as the authors note.

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Models of Entrepreneurship

The Producer Model

• In this model, the producer, with focused ownership and dedicated resources, aims
to protect emerging projects from turf battles, encourages cross-unit
collaboration, builds potentially disruptive businesses, and creates pathways for
executives to pursue careers outside their business units

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Success Stories of Entrepreneurs - Task

Group Task – Discussion in break-out rooms

Share stories of successful entrepreneurs (India and Global) – Humble

beginnings, creativity, growth etc.

Team leader to present the group’s inputs

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Reference

http://www.nevillewadia.com/images/Cronicle2012/DR.-A.-B.-DADAS12.pdf

https://twitter.com/TechtitudeT/status/1421867242682130433/photo/1

https://www.oecd.org/cfe/leed/cooney_entrepreneurship_skills_HGF.pdf

https://sloanreview.mit.edu/article/the-four-models-of-corporate-entrepreneurship/

Concepts of Entrepreneurship AW 21