1: Meaning and Concept of Entrepreneur, Entrepreneurship & Entrepreneurship Development
1. Learning Outcome
2. Introduction
3. Concept of Entrepreneur, Entrepreneurship and Entrepreneurship Development
3.1 Meaning of Entrepreneur
3.2 Types of Entrepreneur
4. Entrepreneurship and Entrepreneurship Development
4.1 Definitions of Entrepreneurship
4.2 Characteristics/Nature of Entrepreneurship
4.3 Role of Entrepreneurship in Economic Development
4.4 Factors responsible to the Success of Entrepreneurship
5. Summary
1. Learning Outcome
After completing this module students will be able to:
i. Understand the concept of entrepreneur.
ii. Various types of entrepreneurs.
iii. Know the concept of entrepreneurship.
iv. Understand the factors responsible for the growth of entrepreneurship
2
, MEANING AND CONCEPT OF ENTREPRENEUR, ENTREPRENEURSHIP &
ENTREPRENEURSHIP DEVELOPMENT
2. Introduction
The term „entrepreneur‟ has been defined differently by different writers and thinkers. It is relatively a new term
and concept used in economic sphere. Over the period, due to its increasing relevance in economic domain, it has
become the buzzword in the economic literature. With the advancement in technology, general trend towards
globalisation, change in industrial structure, deregulation and privatization etc, entrepreneurial activity is
increasing around the globe. Entrepreneurs have been recognised as an important source of economic growth.
They create jobs and play a pivotal role in the development country‟s economy.
Entrepreneurship is generally said to be the practice of starting new venture in response to perceived opportunities.
It helps in the establishment of small scale business which results into large organizations capable of creating
numerous job opportunities. Entrepreneurship has been identified as one of the major trends shaping business,
economy, and even society. The modern study of entrepreneurship owes a lot to the pioneering efforts of Joseph
Schumpeter and other Austrian economists. Later on Peter Drucker, Frank Wright and many others have
significantly contributed to the growth of entrepreneurship development and research.
In recent times, entrepreneurship and entrepreneurs have received a lot of attention from academicians, writers,
media and general public. The achievements and contributions of entrepreneurs have been acknowledged by
society and many entrepreneurs have been honoured and awarded for their services like Dhirubhai Ambani,
Lakshmi Mittal, Bill Gates etc.
3. Concept of Entrepreneur, Entrepreneurship and Entrepreneurship Development
3.1 Entrepreneur: The word „entrepreneur‟ is derived from the French word “entreprendre‟ which means „to
undertake‟. The term entrepreneur was first brought up by Richard Cantillon, a French baker in 18 th Century to
mean, “A person who is uncertainty bearer”. Richard Cantillon was the first person who used the termentrepreneur
for economic activities. J.B.Say another Frenchman, expanded Cantillon‟s ideas and said that entrepreneur is “an
organizer who combines various factors of production to produce a socially viable product”.
So, Entrepreneur is a person who launches his own venture. He organizes, manages and takes the risk of
developing those new products or processes for which the market demand exists but these are not currently being
supplied in the market. An entrepreneur bears the risk of a new venture if there is a chance to earn profits. He is a
front man who brings together various factors of production and creates value by developing a new product or
process. Thus, an entrepreneur may be described as a person who has the ability to explore the markets, identify
opportunities for growth, make best use of available resources and implement actions to maximize those
opportunities.
The word „entrepreneur‟ has been defined by many eminent entrepreneurs and economists starting from French
language to till date, which can be understood with the help of following definitions:
3
,▪ An entrepreneur is the agent who buys means of production at certain prices in order to combine into
a product that he is going to sell at prices that are uncertain at the moment at which he commits himself
to his costs.
-Richard Cantillon
▪ An entrepreneur is the economic agent who unites all means of production, the labour, the capital or
land and who finds the value of product which results from their employment, the reconstruction of
the entire capital that he utilises and the value of wages, the interest and the rent that he pays as well
as profit belonging to himself.
-J.B.Say
▪ Entrepreneur is one who seeks to reform or revolutionise the pattern of production by exploiting an
innovation or more generally, an untried technological possibility for producing a new commodity
or producing an old one in a new way, by opening up a new source of supply of material or a new
outlet of products.
-Joseph Schumpeter
▪ Entrepreneurs are a specialised group of persons who undertake the risk and deal with uncertainty.
Entrepreneur is the economic functionary who undertakes responsibility which cannot be insured.
-F.H.Knight
▪ Entrepreneur is one who endowed with more than average capacities in the task of organising and co-
ordinating the factors of production i.e, land, labour, capital and enterprise. Entrepreneur is a pioneer,
a leader and captain of the firm. Hence, profit, the entrepreneur gets depends upon his efficiency and
superior talent.
-F.A. Walker
▪ An entrepreneur is one who always searches for change, responds to it and exploits it as anopportunity.
Innovation is considered as an instrument of entrepreneurship. An entrepreneur innovates and creates
resources because there is no such thing as resource until somebody finds ause for something and
endows economic value to it. Innovation is being presented as a discipline, capable of being learnt and
capable of being practised.
-Peter F.Drucker
“Entrepreneurs need to search purposefully for the sources of innovation, the changes and their
symptoms that indicate opportunities for successful innovation”.
Thus, Peter F. Drucker opines that
a) An entrepreneur must be an innovator as well as a leader.
b) He must be capable of analysing the opportunities and exploit them successfully.
c) He should innovate for the present period but not the future.
d) Innovation must be very simple to understand, otherwise, it may not give the desired results.
e) Entrepreneur must possess the knowledge, diligence, persistence and commitment to
innovation.
f) He need not be the owner of the business.
4
, g) He must mobilize resources and allocate them to make a commercial gain from the
opportunities identified.
On the basis of above definitions, the following are basic characteristics of an entrepreneur:
▪ Risk-bearer
▪ Organizer, and
▪ Innovator
3.2 Types of Entrepreneurs: The various types of entrepreneurs are classified as under:
1. According to the Type of Business
i) Business Entrepreneur: Business entrepreneurs are individuals who conceive an idea to introduce a new
product or service in the market and then start a business to materialize their idea into reality. They tap
various resources to produce and market their product in order to develop a new business opportunity.
They may set up a big establishment or a small business unit.
ii) Trading Entrepreneur: Trading entrepreneur is one who undertakes trading activities and is not
concerned with the manufacturing work of goods. He targets the potential markets, explores the
opportunities, stimulates demand for his product line and creates a desire and interest among buyers for
his product.
iii) Industrial Entrepreneur: An entrepreneur, who sets up his own industrial unit, is called Industrial
Entrepreneur. He explores the opportunities to set up his business, completes the necessary formalities of
getting statutory permissions, power connection, pollution control clearance (if the need be), arrange
capital, making payment of wages and supply necessary technical know-how. Such type of an
entrepreneur knows how to make the optimum use of resources and converts them into a profitable
venture.
iv) Corporate Entrepreneur: The Entrepreneur who shows his innovative skill in organizing and managing
the activities of corporate undertaking is termed as Corporate Entrepreneur. He manages the affairs of his
corporate body and develops it with his innovative skills. He complies with all formalities to get his
corporate body registered under the requisite Act which gives his company the status of separate legal
entity.
v) Agricultural Entrepreneur: These entrepreneurs raise the productivity of agriculture through
mechanization, irrigation and application of technologies for their agriculture land. They undertake such
agricultural activities as raising of money, marketing of crops, managing fertilizers etc.
2. According to the Use of Technology
i) Technical Entrepreneur: A technical entrepreneur is essentially an entrepreneur of “craftsman type.”
These entrepreneurs focus on production rather than marketing. Technical entrepreneur possesses
craftsman skill in himself which he applies to develop and improve the technical aspect of the product.
ii) Non-Technical Entrepreneur: An entrepreneur who is not concerned with the technical aspect of the
product is called non-technical entrepreneur. He develops alternative strategies of the marketing and
promotes his business. The objective of such entrepreneur is not to change the production techniques but
he stimulates the demand of the product.
iii) Professional Entrepreneur: An entrepreneur who is interested in floating a business but does not want
to manage or operate it. Once the business is established, he sells it out and catches on to float a new
business.
3. According to Motivation
5
1. Learning Outcome
2. Introduction
3. Concept of Entrepreneur, Entrepreneurship and Entrepreneurship Development
3.1 Meaning of Entrepreneur
3.2 Types of Entrepreneur
4. Entrepreneurship and Entrepreneurship Development
4.1 Definitions of Entrepreneurship
4.2 Characteristics/Nature of Entrepreneurship
4.3 Role of Entrepreneurship in Economic Development
4.4 Factors responsible to the Success of Entrepreneurship
5. Summary
1. Learning Outcome
After completing this module students will be able to:
i. Understand the concept of entrepreneur.
ii. Various types of entrepreneurs.
iii. Know the concept of entrepreneurship.
iv. Understand the factors responsible for the growth of entrepreneurship
2
, MEANING AND CONCEPT OF ENTREPRENEUR, ENTREPRENEURSHIP &
ENTREPRENEURSHIP DEVELOPMENT
2. Introduction
The term „entrepreneur‟ has been defined differently by different writers and thinkers. It is relatively a new term
and concept used in economic sphere. Over the period, due to its increasing relevance in economic domain, it has
become the buzzword in the economic literature. With the advancement in technology, general trend towards
globalisation, change in industrial structure, deregulation and privatization etc, entrepreneurial activity is
increasing around the globe. Entrepreneurs have been recognised as an important source of economic growth.
They create jobs and play a pivotal role in the development country‟s economy.
Entrepreneurship is generally said to be the practice of starting new venture in response to perceived opportunities.
It helps in the establishment of small scale business which results into large organizations capable of creating
numerous job opportunities. Entrepreneurship has been identified as one of the major trends shaping business,
economy, and even society. The modern study of entrepreneurship owes a lot to the pioneering efforts of Joseph
Schumpeter and other Austrian economists. Later on Peter Drucker, Frank Wright and many others have
significantly contributed to the growth of entrepreneurship development and research.
In recent times, entrepreneurship and entrepreneurs have received a lot of attention from academicians, writers,
media and general public. The achievements and contributions of entrepreneurs have been acknowledged by
society and many entrepreneurs have been honoured and awarded for their services like Dhirubhai Ambani,
Lakshmi Mittal, Bill Gates etc.
3. Concept of Entrepreneur, Entrepreneurship and Entrepreneurship Development
3.1 Entrepreneur: The word „entrepreneur‟ is derived from the French word “entreprendre‟ which means „to
undertake‟. The term entrepreneur was first brought up by Richard Cantillon, a French baker in 18 th Century to
mean, “A person who is uncertainty bearer”. Richard Cantillon was the first person who used the termentrepreneur
for economic activities. J.B.Say another Frenchman, expanded Cantillon‟s ideas and said that entrepreneur is “an
organizer who combines various factors of production to produce a socially viable product”.
So, Entrepreneur is a person who launches his own venture. He organizes, manages and takes the risk of
developing those new products or processes for which the market demand exists but these are not currently being
supplied in the market. An entrepreneur bears the risk of a new venture if there is a chance to earn profits. He is a
front man who brings together various factors of production and creates value by developing a new product or
process. Thus, an entrepreneur may be described as a person who has the ability to explore the markets, identify
opportunities for growth, make best use of available resources and implement actions to maximize those
opportunities.
The word „entrepreneur‟ has been defined by many eminent entrepreneurs and economists starting from French
language to till date, which can be understood with the help of following definitions:
3
,▪ An entrepreneur is the agent who buys means of production at certain prices in order to combine into
a product that he is going to sell at prices that are uncertain at the moment at which he commits himself
to his costs.
-Richard Cantillon
▪ An entrepreneur is the economic agent who unites all means of production, the labour, the capital or
land and who finds the value of product which results from their employment, the reconstruction of
the entire capital that he utilises and the value of wages, the interest and the rent that he pays as well
as profit belonging to himself.
-J.B.Say
▪ Entrepreneur is one who seeks to reform or revolutionise the pattern of production by exploiting an
innovation or more generally, an untried technological possibility for producing a new commodity
or producing an old one in a new way, by opening up a new source of supply of material or a new
outlet of products.
-Joseph Schumpeter
▪ Entrepreneurs are a specialised group of persons who undertake the risk and deal with uncertainty.
Entrepreneur is the economic functionary who undertakes responsibility which cannot be insured.
-F.H.Knight
▪ Entrepreneur is one who endowed with more than average capacities in the task of organising and co-
ordinating the factors of production i.e, land, labour, capital and enterprise. Entrepreneur is a pioneer,
a leader and captain of the firm. Hence, profit, the entrepreneur gets depends upon his efficiency and
superior talent.
-F.A. Walker
▪ An entrepreneur is one who always searches for change, responds to it and exploits it as anopportunity.
Innovation is considered as an instrument of entrepreneurship. An entrepreneur innovates and creates
resources because there is no such thing as resource until somebody finds ause for something and
endows economic value to it. Innovation is being presented as a discipline, capable of being learnt and
capable of being practised.
-Peter F.Drucker
“Entrepreneurs need to search purposefully for the sources of innovation, the changes and their
symptoms that indicate opportunities for successful innovation”.
Thus, Peter F. Drucker opines that
a) An entrepreneur must be an innovator as well as a leader.
b) He must be capable of analysing the opportunities and exploit them successfully.
c) He should innovate for the present period but not the future.
d) Innovation must be very simple to understand, otherwise, it may not give the desired results.
e) Entrepreneur must possess the knowledge, diligence, persistence and commitment to
innovation.
f) He need not be the owner of the business.
4
, g) He must mobilize resources and allocate them to make a commercial gain from the
opportunities identified.
On the basis of above definitions, the following are basic characteristics of an entrepreneur:
▪ Risk-bearer
▪ Organizer, and
▪ Innovator
3.2 Types of Entrepreneurs: The various types of entrepreneurs are classified as under:
1. According to the Type of Business
i) Business Entrepreneur: Business entrepreneurs are individuals who conceive an idea to introduce a new
product or service in the market and then start a business to materialize their idea into reality. They tap
various resources to produce and market their product in order to develop a new business opportunity.
They may set up a big establishment or a small business unit.
ii) Trading Entrepreneur: Trading entrepreneur is one who undertakes trading activities and is not
concerned with the manufacturing work of goods. He targets the potential markets, explores the
opportunities, stimulates demand for his product line and creates a desire and interest among buyers for
his product.
iii) Industrial Entrepreneur: An entrepreneur, who sets up his own industrial unit, is called Industrial
Entrepreneur. He explores the opportunities to set up his business, completes the necessary formalities of
getting statutory permissions, power connection, pollution control clearance (if the need be), arrange
capital, making payment of wages and supply necessary technical know-how. Such type of an
entrepreneur knows how to make the optimum use of resources and converts them into a profitable
venture.
iv) Corporate Entrepreneur: The Entrepreneur who shows his innovative skill in organizing and managing
the activities of corporate undertaking is termed as Corporate Entrepreneur. He manages the affairs of his
corporate body and develops it with his innovative skills. He complies with all formalities to get his
corporate body registered under the requisite Act which gives his company the status of separate legal
entity.
v) Agricultural Entrepreneur: These entrepreneurs raise the productivity of agriculture through
mechanization, irrigation and application of technologies for their agriculture land. They undertake such
agricultural activities as raising of money, marketing of crops, managing fertilizers etc.
2. According to the Use of Technology
i) Technical Entrepreneur: A technical entrepreneur is essentially an entrepreneur of “craftsman type.”
These entrepreneurs focus on production rather than marketing. Technical entrepreneur possesses
craftsman skill in himself which he applies to develop and improve the technical aspect of the product.
ii) Non-Technical Entrepreneur: An entrepreneur who is not concerned with the technical aspect of the
product is called non-technical entrepreneur. He develops alternative strategies of the marketing and
promotes his business. The objective of such entrepreneur is not to change the production techniques but
he stimulates the demand of the product.
iii) Professional Entrepreneur: An entrepreneur who is interested in floating a business but does not want
to manage or operate it. Once the business is established, he sells it out and catches on to float a new
business.
3. According to Motivation
5
