EMERGENCE OF

ENTREPRENEURIAL CLASS
AND ROLE OF
ENTREPRENEURSHIP IN
ECONOMIC
DEVELOPMENT

T.N. Chhabra BBA 312: Entrepreneurship Development

 LEARNING OUTCOME

T.N. Chhabra BBA 312: Entrepreneurship Development

 OUTLINE
Recapitulation
Entrepreneurship
Snapshot
Emergence of
Entrepreneurial Class
Conclusion
Suggested Readings

T.N. Chhabra BBA 312: Entrepreneurship Development

 RECAPITULATION

Entrepreneurship is a composite skill, which include

imagination, readiness to take risks, ability to bring
together and put to user other factors of production,
capital, labor, land, as also intangible factors such as
the ability to mobilize scientific and technological
advances.
One of the qualities of entrepreneurship is the ability to
discover an investment opportunity and to organize an
enterprise, thereby contributing to real economic growth.
It involves taking of risks and making the necessary
investments under conditions of uncertainty and
innovating, planning and taking decisions.

T.N. Chhabra BBA 312: Entrepreneurship Development

 ENTERPRENEURSHIP SNAPSHOT

T.N. Chhabra BBA 312: Entrepreneurship Development

 EMERGENCE OF ENTREPRENEURIAL CLASS
Upto 19th century, entrepreneurs inclided those
persons who bore risks of future certainty of profits
in new ventures.
They were thought a class who contributed to higher
productivity and greater yield by efficiency using
the economic resources of the society.
An important difference was made between
entrepreneurs and capital suppliers. Those who
earned profits from taking risk of forming a new
venture were called entrepreneurs and the class was
differentiated from those people who earned profits
by supplying capital.

T.N. Chhabra BBA 312: Entrepreneurship Development

 EMERGENCE OF ENTREPRENEURIAL CLASS
Upto 20th century, entrepreneurship flourished which consisted a
class of those people who not only take risk of creating a new
venture but also innovate new useful products, technologies,
markets etc.
They create something different and useful by devoting
necessary time and effort. They are seen as different class from
the venture capitalists who make available investment funds and
charge interest thereon.
They maximise opportunities by innovating new things, taking
initiatives and accepting risk of failure.
T.N. Chhabra BBA 312: Entrepreneurship Development
 EMERGENCE OF ENTREPRENEURIAL CLASS
Another class of entrepreneurs is emerging since 1980s which is called
"intrapreneurs" or "corporate entrepreneurs". This class includes those
entrepreneurs who are executive or managers in big enterprises and
who create innovative or new products or services by combining the
resources of such an enterprise in some unusual ways.
They do not take the risk of personal investment in such innovative
ideas.
This class of entreprenerus has become popular especially in
developed countries like US, Canada, England etc.

T.N. Chhabra BBA 312: Entrepreneurship Development

 HISTORY OF INDIAN ENTREPRENEURSHIP
Indian entrepreneurial history takes us back and reminds
us of colonial rule in the country. The idea of starting an
enterprise of one's own was borrowed from foreigners.
In older days, the Parsis, Gujaratis, and Marwaris started
business concerns and engaged in trade and commerce.
In the true sense of the term entrepreneurship, originated
in the latter part of the 19th century.
Entrepreneurship in the Indian manufacturing sector as
the latent and manifest consequence of East India
Company's advent in India.
The company injected various changes in the Indian
economy through export of raw materials from India and
import of finished goods to India.

T.N. Chhabra BBA 312: Entrepreneurship Development

 HISTORY OF INDIAN ENTREPRENEURSHIP
The Swadeshi movement was inculcated the spirit of nationalism in the
country and the idea of manufacturing entrepreneruship developed. It
was the influence of Swadeshi that Jamshedji Tata even named his first
mill as "Swadeshi Mill".
The second phase of entrepreneurial growth in India is seen after the
First World War, when the Government of India provide discriminating
protection to certain industries. The government policy did help in
establishing and extending the manufacturing in India, the first half of
20th century.
During this period, along with Parsis, Gujaratis, Marwaris and Vaishyas
gained their presence in the entrepeneurisl scene of India.

T.N. Chhabra BBA 312: Entrepreneurship Development

 GROWTH OF ENTREPRENEURSHIPS SINCE INDEPENDENCE
The Industrial Policy of the Central Government since
Independence has encouraged entrepreneurs to increase the
tempo of industrialization.
For the development of small scale industries, the government
provides various incentives and concessions in the form of capital
subsidy, technical know-how, market and infrastructural facilities.
Several institutions like State Finance Corporations, Small Scale
Industries Corporation, Small Scale Industry Development
Organization, Small Industries Service Institutes, District
Industries Centres and Small Industry Development Bank of India
have been set up to help the small entrepreneurs for their pursuit.
The central government and the state governments have also
been encouraging Entrepreneurship Development programs
(EDPs) for the young entrepreneurs.

T.N. Chhabra BBA 312: Entrepreneurship Development

 EMERGENCE OF WOMEN ENTREPRENEURS
The non-government organizations who are willing to encourage
women to be self-employed and succeed, by offering training
programs, consultancy services, and guidance.
The Biotech Park for women promoted by the Central and State
Governments and M.s. Swaminathan Research Foundation
established in Siruseri provide opportunities " for professionally
qualified women to take up enterprises that are eco-friendly as
well as profitable.
FICCI Ladies Organisation (FLO) was constituted in 1986 as a
wing of the Federation of Indian Chambers of Commerce and
Industry (FICCI). FLO has around 900 members from all over the
India comprising entrepreneurs, professionals, executives, and
housewives. FLO believes that the resources and strengths of the
women to be channelised for the development of the country.

T.N. Chhabra BBA 312: Entrepreneurship Development

 CAUSES OF SLOW GROWTH OF ENTREPRENEURSHIP

Shortage of Raw materials and Power

Inadequate Financial Resources
Old techniques of production and lack of latest
technical knowledge
Lack of trained personnel
Difficulties in Marketing
Imperfect Management

T.N. Chhabra BBA 312: Entrepreneurship Development

 FACTORS FAVORING ENTREPRENEURSHIP
Independent way of life
Achievement Orientation
Implementation of Ideas
Insecurity of Job
family Business
Risk Taking
Government economic policy
Life Path circumstances
a) Work Environment
b) Negative displacement
c) Career Transitions
Environmental Factors

T.N. Chhabra BBA 312: Entrepreneurship Development

 ROLE OF ENTREPRENEURSHIP IN ECONOMIC
DEVELOPMENT
1) Promotes Capital Formation:
Entrepreneurs promote capital formation by mobilising the
idle savings of public. They employ their own as well as
borrowed resources for setting up their enterprises. Such
type of entrepreneurial activities lead to value addition and
creation of wealth, which is very essential for the industrial
and economic development of the country.

(2) Creates Large-Scale Employment Opportunities:

Entrepreneurs provide immediate large-scale employment to
the unemployed which is a chronic problem of
underdeveloped nations. With the setting up.of more and
more units by entrepreneurs, both on small and large-scale
numerous job opportunities are created
for others.

T.N. Chhabra BBA 312: Entrepreneurship Development

 ROLE OF ENTREPRENEURSHIP IN ECONOMIC
DEVELOPMENT
(3) Promotes Balanced Regional Development:
Entrepreneurs help to remove regional disparities through setting
up of industries in less developed and backward areas. The growth
of industries and business in these areas lead to a large number of
public benefits like road transport, health, education,
entertainment,
etc. Setting up of more industries lead to more development of
backward regions and thereby promotes balanced regional
development.

(4) Reduces Concentration of Economic Power:

Economic power is the natural outcome of industrial and business
activity. Industrial development normally lead to concentration of
economic power in the hands of a few individuals which results in
the growth of monopolies. In order to redress this problem a large
number of entrepreneurs need to be developed, which will help
reduce the concentration of economic power amongst the
population.

T.N. Chhabra BBA 312: Entrepreneurship Development

 ROLE OF ENTREPRENEURSHIP IN ECONOMIC
DEVELOPMENT
(5) Wealth Creation and Distribution
It stimulates equitable redistribution of wealth and income in the
interest of the country to more people and geographic areas, thus
giving benefit to larger sections of the society. Entrepreneurial
activities also generate more activities and give a multiplier effect
in the economy.

(6) Increasing Gross National Product and Per Capita Income:

Entrepreneurs are always on the look out for opportunities. They
explore and exploit opportunities,, encourage effective resource
mobilisation of capital and skill, bring in new products and services
and develops markets for growth of the economy. In this way, they
help increasing gross national product as well as per capita income
of the people in a country. Increase in gross national product and
per capita income of the people in a country, is a sign of economic
growth.

T.N. Chhabra BBA 312: Entrepreneurship Development

 CASE STUDY ANALYSIS

Economic Times BBA 312: Entrepreneurship Development

 CONCLUSION
Upto 19th century, entrepreneurs included those persons
who bore risks of future certainty of profits in new
ventures.
They were thought a class who contributed to higher
productivity and greater yield by efficiency using the
economic resources of the society.
An important difference was made between
entrepreneurs and capital suppliers. Those who earned
profits from taking risk of forming a new venture were
called entrepreneurs and the class was differentiated
from those people who earned profits by supplying
capital.

T.N. Chhabra BBA 312: Entrepreneurship Development

 SUGGESTED READINGS

Charantimath, Entrepreneurship Development and Small

Business, Pearson Education Enterprise
Chhabra, T.N., Entrepreneurship Development, Sun India
Kaulgud, Aruna, Entrepreneurship Management, Vikas
Publishing House, Delhi
David Otes, A guide to entrepreneurship, Jaico Books
Publishing House, Delhi

T.N. Chhabra BBA 312: Entrepreneurship Development

 THANK
YOU

T.N. Chhabra BBA 312: Entrepreneurship Development