Entrepreneurs have a vital role in promoting industrial development, resulting in more job opportunities for unemployed young people and higher per capita income. This ultimately improves the quality of life and promotes personal savings. Moreover, entrepreneurs generate government revenue through different channels like income tax, sales tax, export duties, and import duties. Additionally, they contribute to achieving balanced regional development. The term entrepreneurship originates from the French verb entrepreneur meaning ‘to undertake’.
Entrepreneurship refers to individuals who take on the risk of new ventures. An entrepreneur creates an enterprise and undergoes the process of entrepreneurship. This process involves actions taken by an entrepreneur who constantly seeks new opportunities and transforms innovative ideas into profitable ventures, despite the associated risk and uncertainty. The characteristics of entrepreneurship can be summarized as follows:
Economics and dynamism: Entrepreneurship is an economic activity that involves creating and operating an enterprise to generate value or wealth by utilizing scarce resources efficiently. This ongoing value creation occurs within an uncertain business environment, making entrepreneurship a dynamic force.
Related to innovation: Entrepreneurship entails a continuous exploration for fresh ideas.
Entrepreneurship involves continuous evaluation of existing business operations to develop more efficient and effective systems. It is a constant effort to optimize performance in organizations. Profit potential is the level of return or compensation for entrepreneurs taking on the risk of developing an idea into a business venture. Without profit potential, entrepreneurship would remain a leisure activity. Risk bearing is essential in entrepreneurship as it involves the willingness to take on the risks associated with implementing new ideas. Entrepreneurship requires patience during the time gap between conception and implementation of ideas, where risk must be assumed for success.
Entrepreneurship is a process, not an end result. Successful entrepreneurs like Bill Gates (Microsoft), Warren Buffet (Hathaway), Gordon Moore (Intel), Steve Jobs (Apple Computers), Jack Welch (GE), GO Barilla, Smashed Data, and others have all gone through this process. The process of establishing and running an enterprise is divided into three parts – the entrepreneurial job, the promotion, and the operation. The entrepreneurial job consists of two steps: generating an idea and preparing a feasibility report. This chapter focuses on these two aspects of the entrepreneurial process. In order to generate an idea, the process goes through three stages: germination, which is similar to the seeding process; most creative ideas are linked to an individual’s interest or curiosity about a specific problem or area of study.
Preparation includes conducting a feasibility study to determine the commercial potential of an idea, as well as searching for solutions to problems that have derived from initial curiosity. This can involve establishing laboratories, brainstorming new product ideas, and analyzing consumer buying habits.
During the incubation stage, the idea enters the subconscious mind and combines unrelated concepts in order to discover a resolution.
The process of idea development involves two steps. First, there is the stage of Illumination, where the idea is considered a feasible creation. This is a crucial stage because ideas alone lack significance. The second step is Verification, which ensures that the idea is both realistic and applicable. Verification evaluates the practicality of implementing an idea and examines its potential usefulness to the entrepreneur and society.
Entrepreneurship provides several advantages. It benefits organizations in the following ways:
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The development of managerial capabilities is a critical aspect of entrepreneurship. Entrepreneurs can enhance their decision-making abilities by studying problems, exploring alternative solutions, comparing costs and benefits, and ultimately making decisions. This process helps improve performance. Additionally, entrepreneurship leads to the creation of organizations by assembling and coordinating resources such as physical, human, and financial assets through the use of managerial skills.
Furthermore, entrepreneurship plays a vital role in enhancing living standards by providing a wide range of goods and services to society. This is evident through the ownership of luxury cars, computers, mobile phones, and the rapid growth of shopping malls. All these improvements can be attributed to entrepreneurial efforts.
Lastly, entrepreneurship serves as a means for economic development through generating and implementing innovative ideas while maximizing output from available resources. Developing managerial skills also contributes to economic development. It is important to acknowledge the significance of these factors in promoting entrepreneurship since they play a significant role in overall economic growth and development. The interplay of multiple factors is essential in this intricate phenomenon.
Here are some important factors that should be considered: 1.
Personality Factors: The personal factors that become core competencies of entrepreneurs include:
- (a) Initiative: performing tasks without being asked.
- (b) Proactive: recognizing and taking advantage of opportunities.
- (c) Perseverance: persistently working to overcome obstacles and never becoming complacent with success.
- (d) Problem-solver: generating new ideas and achieving innovative solutions.
- (e) Persuasion: convincing customers and financiers to support their business and building and maintaining relationships.
- (f) Self-confidence: making decisions confidently and sticking to them.
- (g) Self-critical: learning from mistakes, as well as the experiences of others.
- (h) A Planner: gathering information, creating plans, and monitoring performance.
- (i) Risk-taker: an essential quality for entrepreneurs.
Environmental factors:The conditions in which an entrepreneur operates, such as political climate, legal system, economic and social conditions, market situations, etc., are significant contributors to the growth of entrepreneurship.
The importance of political stability cannot be overstated when it comes to facilitating the smooth functioning of an economy within a country. Instances of political protests, strikes, and other disruptive events have a detrimental impact on economic activity and hinder the growth of entrepreneurship. Similarly, unfair trade practices and irrational monetary and fiscal policies also impede entrepreneurial development. Conversely, factors such as higher income levels, increased demand for innovative products and technology, as well as the necessity for enhanced transportation and communication systems serve as catalysts in driving entrepreneurship forward. Consequently, both personal characteristics and external circumstances contribute to shaping entrepreneurship while yielding positive outcomes for individuals, organizations, and society at large.
There are different types of entrepreneurs, categorized based on their willingness to generate innovative ideas. The following are the various types:
1. Innovative entrepreneurs: These entrepreneurs possess the ability to create new and improved concepts for business organization and management that are also cost-effective. They play a leadership role in the business world and make significant contributions to a nation’s economic growth. Examples of their accomplishments include Rattan Data’s introduction of a compact car named ‘Anna’, Shore Banyan’s implementation of structured retailing, and Nail Mambas’ provision of affordable mobile phones to the general public.
2. Imitating entrepreneurs: These individuals imitate the strategies developed by innovative entrepreneurs.
The text highlights the presence of imitating entrepreneurs who imitate innovative entrepreneurs due to their inability to generate creative and innovative ideas in their operating environment. These imitating entrepreneurs are prevalent in countries and situations characterized by a weak industrial and institutional base, which hinders the initiation of innovative ideas. Similarly, in our country, numerous entrepreneurs in various business fields fulfill their need for achievement by imitating ideas introduced by innovative entrepreneurs. An example of the work of imitating entrepreneurs is the development of small shopping complexes. Additionally, all current small car manufacturers can be classified as imitating entrepreneurs. Lastly, there are Fabian entrepreneurs.
The term ‘Fabian’ refers to a person who seeks victory through delay rather than decisive action. Fabian entrepreneurs are individuals who lack initiative in visualizing and implementing new ideas and innovations. They prefer to wait for external developments or imminent threats before taking action, unless their very existence is at stake.
Similarly, the term ‘drone’ describes a person who lives off the labor of others. Drone entrepreneurs are content with the current mode and pace of business activity and show no inclination towards achieving market leadership. In other words, they are die-hard conservatives and are even willing to endure business losses.
Social entrepreneurs are individuals who lead social innovation and transformation in various areas such as education, health, human rights, workers’ rights, environment, and enterprise development. They pursue poverty alleviation goals with the determination of an entrepreneur, utilizing business practices and challenging traditional methods through innovation. One example of a social entrepreneur is Dry Mohammed Yuan from Bangladesh, who established the Grain Bank.
Functions of an Entrepreneur: An entrepreneur carries out several important functions:
- Innovation: Entrepreneurs primarily serve as innovators striving to create new technology, products, markets, and more.
Innovation involves the exploration of new ideas and the reimagining of existing practices. Entrepreneurs leverage these opportunities to introduce fresh concepts and capitalize on market potential. They are not satisfied with the ordinary and constantly seek change. One defining characteristic of entrepreneurs is their willingness to take risks and accept any consequences that may arise from pursuing new ideas and ventures. This boldness enables them to initiate groundbreaking endeavors and move forward in their pursuits. Additionally, entrepreneurs are practical dreamers who conduct thorough research before starting their entrepreneurial journeys.
In simpler terms, an entrepreneur completes the process of selecting an idea by examining different options, assessing their strengths and weaknesses using analytical techniques, testing their feasibility, incorporating empirical evidence, and ultimately selecting the most favorable option. It is at this point that the entrepreneur puts the chosen idea into action. Therefore, the selection of an idea requires the implementation of research methodology by the entrepreneur. Moreover, the role of an entrepreneur encompasses the utilization of managerial skills, which are acquired during activities such as planning, organizing, staffing, directing, controlling, and coordinating business operations.
His managerial skills are enhanced when he balances his organization with its environment. However, as a business grows, an entrepreneur may hire professional managers to effectively handle operations. 5. Overcoming Resistance to Change: People typically resist new innovations as they require changing established behaviors. An entrepreneur initially tests new ideas and only shares them with others after successful implementation, allowing for their acceptance by others.
In this paragraph, the focus is on analyzing the qualities and effects of an entrepreneur who shows determination, passion, and vitality in overcoming societal resistance to new ideas. The importance of distinguishing between an entrepreneur and a promoter is stressed for a comprehensive understanding. Table 4.1 presents a breakdown of the differences between entrepreneurs and an entrepreneur, while Table 4.2 highlights notable contrasts between an entrepreneur and a promoter.
Entrepreneurship involves the ability to make decisions and take risks, which can lead to uncertain and unlimited rewards. The entrepreneur is the owner and has autonomy in decision-making, while the manager is a salaried employee who carries out decisions with the approval of the owner and receives a fixed salary. Table 4.2 outlines the differences between entrepreneurs and promoters based on factors like business ownership stage and job nature. For instance, an entrepreneur is involved in all aspects of the business, from inception to continuation, whereas a promoter focuses on bringing a business into existence and may or may not be the owner. Over time, some myths regarding entrepreneurship have emerged.
