Entrepreneurship is the process of creating, managing, and growing a new business venture with the aim of making a profit. An entrepreneur is an individual who takes on the risks associated with starting and running a business with the goal of realizing a profit.
Entrepreneurship involves identifying a need or opportunity in the market, developing a product or service to meet that need, securing funding and resources to start and grow the business, and managing the day-to-day operations of the business. Successful entrepreneurs are often characterized by their ability to think creatively, take calculated risks, and adapt to changing market conditions.
Entrepreneurship is an important driver of economic growth, as new businesses create jobs, spur innovation, and bring new products and services to market. It is also a way for individuals to pursue their passions and build a career on their own terms. However, entrepreneurship can be a challenging and risky endeavor, and not all business ventures are successful.
Definition of Entrepreneurship
Entrepreneurship is the constitution of two basic French words “Entree” “To entre” and “Prendre” “To take” and in general, it refers to any person starting a new project or trying a new opportunity. In the early 16the century applied to those who were engaged in military expeditions. In 17the century it was expanded to cover civil engineering activities such as construction and fortification. Since then, the term entrepreneur is used in various ways (Shodh, Sarniksha & Mulyankan, 2009). An entrepreneur is a person who combines capital and labour for production. According to Cantillion, “entrepreneur is the agent who buys means of production at certain prices, in order to sell at prices that are certain at the moment at which he commits himself to his cost.”
According to P.F Drucker, an entrepreneur is one who always:
- Searches for change
- Responds to it
- Exploits it as an opportunity.
The Definition given by Govt. of India about women entrepreneurship “An enterprise owned and controlled by a Women and having a minimum financial interest of 51% of the capital & giving at least 51 % of the employment generated in the enterprise to Women”.
The ability and aspiration to do something different or making an addition into business world by developing, organizing, and managing a business venture aiming to earn more & more profit along with the risks associated with them.
In Economics, Entrepreneurship is meant to be summed up with land, labour, natural resources and capital which can produce profit. Entrepreneurial acumen is characterized by ability and strength to take risk and innovation and it has crucial role to play in the overall development of a nation and to get into forefront to compete in the global competitive market (www.businessdictionary.corn).
According to Professor Howard Stevenson, the godfather of entrepreneurship studies at Harvard Business School “entrepreneurship is the pursuit of opportunity beyond resources controlled.“
“Pursuit” refers to the sole single focus. Entrepreneurs often encounter a short span of time to grasp the short window opportunity. In the initial period of their business setup is to bring tangible progress to attract resources and to maintain a limited cash balance for the long-run establishment of an organisation.
“Opportunity” implies for a one or four ways of offering:
- Introducing totally innovative products.
- Making new business model.
- Producing a cheaper product of an existing one.
- Targeting an existing product to new group of consumers.
“Beyond resources controlled” means resource constraints. At the initial establishment stage of new business venture, the founder only concerned about eir own human, social, and financial capital. They just confine their association with the isolated shell of funding and resource control which is needed for the self sustaining the business. They must expand their ground of control for the better results because the venture will require more production facilities, working capital, distribution channels, etc.
In simple terms, Entrepreneurship is the process of setting up new businesses or other organization. In recent years, the term “entrepreneurship” deviated from its origin, which was earlier confined to business, and now started including social and political activity. Entrepreneurship, sometimes also referred as intrapreneurship, is an extension of business within an organisation or firm and may involve corporate ventures where large entities segregate into sub-organization (Shane, 2000). Entrepreneurs are the persons who are willing to take risks and have the acumen to take the initiative and ability to take advantage of prevailing market opportunities by planning, organizing, and employing resources (Deakins & Freel, 2012), often by innovating new or improving existing products (Johnson, 2005). Contemporarily, the term entrepreneurship has been associated with a specific psychological mindset consisting of entrepreneurial initiatives and the ability to take risks in the form of social entrepreneurship, political entrepreneurship, or knowledge entrepreneurship.
In recent scenarios, entrepreneurship has been witnessed as a major economic growth driver in both U.S. and Western Europe. In the U.S., it’s a common activity; half of all working men used to get engaged in self-employment or business venture after their retirement (Paul, 2007). An entrepreneurial activity varies according to the type of organization and creativity involved in setting up business. It ranges in scale from single-owned projects, part-time jobs, and large-scale undertakings that create many jobs. Many business ventures need a lump sum of financial support in order to set up large business organizations (Mark & Robert, 2000). According to Schumpeter, an Entrepreneur is willing and has the ability to convert a new idea or invention into a successful innovation. Entrepreneurship is an ideology based on the ability and zeal to take risks (Knight, 2005). The entrepreneur who wants to pursue entrepreneurship as his/her career and is ready to give up all their financial assets, time & capital for the sake of a new idea without knowing the pros and cons of an uncertain venture.
Role of Entrepreneurship in the Economic Growth of an Economy
Entrepreneurship has a very important role to play in the economic development of a country. It relates to the range of activities of setting up a new business or reviving an existing venture so as to extract advantages from new opportunities. This reflects that entrepreneurs have a very important role to play in shaping an economy by creating new wealth, new opportunities, and new jobs by inventing new products and services. Entrepreneurship is an ideology that deals with a state of mind which develops naturally, based on ones surrounding and experiences, which makes him/her to think about life and career in a given way. It is not only about the money-making notion, knowing to play with the best sales pitch, and applying the best marketing strategy. But in reality, it’s an attitude to create a new activity which creates value in the entire social fraternity of the planet.
The other side of the coin, entrepreneurship is the second name of innovation; it’s the submergence of idea, creation, risk, and addition into productive – socially, economically, and politically. Entrepreneurs help the economy to move forth towards development by creating opportunities for employment, production, generation of income, and an increase in the better standard of living, leading to an overall increase in the GDP of a country. In short, entrepreneurship has a very crucial role to play in the economic development of a country.
The turning wheel of an era, the world is stepping into a period where entrepreneurship has been upsurging to play a more important role. The three reasons signifying for this change, depending on the type of country, are:
Firstly, the picture of western countries, the development of an economy from the 1970s to 2000, is just due to successful establishments of big business and mass production, which has given way to a so-called entrepreneurial economy.
Secondly, the case of anchoring economy, per say the BRICS- Brazil, Russia, India, China, and Sri Lanka – tremendously marked the booming economic growth by comprising a number of entrepreneurial revolutions. The only thing of concern in this economy is to stabilize growth through appropriate accessibility to resources, knowledge, and markets stand to keep pace balancing on innovative entrepreneurship.
Lastly, the less developed countries, which are dependent on aid and grants for their developmental projects shifting their focus on making more investments in private sector development. In most of these countries, the population belongs to the younger generation and lacking in getting jobs with decent wages. In this case promotion of entrepreneurship for youths has become an essential policy objective for many developmental organizations.
Entrepreneurship is very essential for the development of both devel nations and developing nations. It is instrumental in balancing the circular flo’1 economic development. Every country wants to attain economic development prosperity and better standard of living of people. This signifies that- participatio both men and women is important in economic activities for the overall developr. of a nation. But, the women in India have to undergo many struggles against equality and acceptance in carrying out economic activities or undertaking entrepreneurship work.
Functions of Entrepreneurship
The functions of entrepreneurship can be broadly categorized into three main areas:
- Innovation: Entrepreneurship involves creating something new or finding a better way of doing something. This can be a new product or service, a new production process, or a new way of organizing resources. Entrepreneurs identify unmet needs in the market and create innovative solutions to address them.
- Risk-taking: Entrepreneurs take on risks by investing time and resources into a new venture. They may need to invest personal funds, borrow money, or seek out investors to get their business off the ground. There is always the risk of failure, but successful entrepreneurs are willing to take calculated risks in order to achieve their goals.
- Management: Entrepreneurs are responsible for managing all aspects of their business, including finances, operations, marketing, and personnel. They need to be skilled in organizing resources, building teams, and making strategic decisions to ensure the success of their venture.
Overall, entrepreneurship plays a vital role in the economy by creating new jobs, promoting innovation, and driving economic growth. Successful entrepreneurs are often characterized by their ability to innovate, take calculated risks, and manage resources effectively.
For citing this article, use:
- Khan, R. I. (2014). Role of women entrepreneurs in creation of employment a case study of Delhi state.