1. Introduction

2. Definition - An entrepreneur is an innovator or developer who recognizes and seizes opportunities: converts those opportunities into workable/marketable ideas: adds value, through time, effort, money, or skills; assumes the risks of the competitive market place to implement these ideas; and realizes the rewards from these efforts

3. Schumpeter A creative and an innovative activity -Introduction of new product -New method of production -Opening a new market -New source of raw materials -New organization of an industry

4. Myths Entrepreneurs are born – not made Are doers, not thinkers Always innovators Academic and social misfits Must fit the profile Need money Need luck Unstructured

5. Contd Most initiatives fail Extreme risk takers

6. Theories of entrepreneurship Economic Sociological Psychological Cultural

7. Economic Theory Entrepreneurship and economic growth take place when the economic conditions are favourable Economic incentives are the main motivators for entrepreneurial activities Economic incentives include taxation policy, industrial policy, sources of finance and raw material, infrastructure availability, investment and marketing opportunities, access to information about market conditions, technology etc

8. Sociological Theory Entrepreneurship is likely to get a boost in a particular social culture Society’s values, religious beliefs, customs, taboos influence the behaviour of individuals in a society The entrepreneur is a role performer according to the role expectations by the society

9. Psychological Theory Entrepreneurship gets a boost when society has sufficient supply of individuals with necessary psychological characteristics The psychological characteristics include need for high achievement, a vision or foresight, ability to face opposition These characteristics are formed during the individual’s up bringing which stress on standards of excellence, self reliance and low father dominance

10. Entrepreneurship Innovation theory Theory by Joseph Schumpeter who believes that entrepreneur helps the process of development in an economy He says that an entrepreneur is the one who is innovative, creative and has a foresight According to him, innovation occurs when the entrepreneur - Introduces a new product– Introduces a new production method–Opens up a new market–Finds out a new source of raw material supply–Introduces new organisation in any industry

11. Contd The theory emphasises on innovation, ignoring the risk taking and organising abilities of an entrepreneur Schumpeter’s entrepreneur is a large scale businessman, who is rarely found in developing countries, where entrepreneurs are small scale businessmen who need to imitate rather than innovate

12. Theory of High Achievement/Theory of Achievement Motivation McClelland identified 2 characteristics of entrepreneurship–Doing things in a new and better way–Decision making under uncertainty He stressed that people with high achievement orientation (need to succeed) were more likely to become entrepreneurs Such people are not influenced by money or external incentives They consider profit to be a measure of success and competency

13. Motivation theory by McClelland (Acquired Needs theory) According to McClelland, a person has three types of needs at any given time, which are:– Need for achievement (get success with one’s own efforts)–Need for power (to dominate, influence others)–Need for affiliation (maintain friendly relations with others) The need for achievement is the highest for entrepreneurs

14. The Kakinada Experiment Conducted by McClelland in America, Mexico and Mumbai Under this experiment, young adults were selected and put through a three month training programme The training aimed at inducing the achievement motivation The course contents were–Trainees were asked to control their thinking and talk to themselves, positively–They imagined themselves in need of challenges and success for which they had to set planned and achievable goals– They strived to get concrete and frequent feedback–They tried to imitate their role models/those who performed well

15. Contd Conclusions of the experiment:–Traditional beliefs do not inhibit an entrepreneur–Suitable training can provide necessary motivation to an entrepreneur–The achievement motivation had a positive impact on the performance of the participants It was the Kakinada experiment that made people realise the importance of EDP (Entrepreneurial Development Programme) to induce motivation and competence in young, prospective entrepreneurs

16. Characteristics Commitment and determination Leadership Opportunity obsession Tolerance of risk, ambiguity and uncertainty Creativity, self-reliance and ability to adapt Motivation to excel

17. Skills Creativity Real-time strategy and decision making Comfort with change and chaos Team work Negotiation and motivation Oral and written communication Basics of start-up finance, accounting and law

18. Attitudinal Adjustments Comfortable with lifestyle changes Patience to start from scratch Prepared to make enemies Comfortable with confrontations Dealing with failure Willingness to learn

19. ED in India Bureaucracy Corruption Labour Regional sentiment Grey market Social capital Income tax, sales tax, profession tax Central excise

20. Contd Company law Labour laws Pollution control

21. Types of Entrepreneurs Early Starters Experienced Mature First-generation entrepreneurs Entrepreneurs from business family Women entrepreneurs Serial entrepreneurs Portfolio entrepreneurs

22. Contd Social entrepreneur Intrapreneur