MEANING AND INTRODUCTION OF ENTREPRENEURSHIP DEVELOPMENT
• Entrepreneurship
development is basically the process of improving the skill set as well as the
knowledge of the entrepreneurs.
•
This can be done
through various methods such as classroom sessions or training programmer
specially designed to increase the entrepreneurial acumen.
• Another definition of this term could be the process of enhancing the capacity to develop, manage and organize a business venture while keeping in mind the risks associated with it.
OBJECTIVES OF
ENTREPRENEURSHIP DEVELOPMENT
i)
To develop
entrepreneurial attitude among the youth of the nation.
ii) To develop
entrepreneurial qualities and to search for new business ideas.
iii) To motivate and
guide the youth for undertaking new business opportunities.
iv) To conduct new
entrepreneurship development programmers for inspiring new undertakings.
v) To provide
information regarding different facilities, concession and schemes sponsored by
the government for promoting entrepreneurship.
vi) To contribute
for economic and industrial development of the country.
BASIS
FOR ENTREPRENEURSHIP DEVELOPMENT
1. Incubator facilities.
2. Research and development.
3.
Cultural manners.
4. Difficult formalities and other obstacles.
ENTREPRENEURSHIP
DEVELOPMENT PROCESS
1.
Identification of the prospective candidates.
2. Selection of
the prospective candidates.
3. Development
of entrepreneurial capabilities among selecting candidates.
4. Matching the
potential entrepreneur with viable industrial project.
5. Providing
motivation and financial assistance to the entrepreneurs.
FACTORS AFFECTING
ENTREPRENEURSHIP DEVELOPMENT
I)
Economic Factors
• Economic
environment exercises the most direct and immediate influence on
entrepreneurship.
• This is likely
because people become entrepreneurs due to necessity when there are no other
jobs or because of opportunity.
The economic factors that affect the growth of
entrepreneurship are the following:
1.
Capital:
• Capital is one
of the most important factors of production for the establishment of an
enterprise. Increase in capital investment in viable projects results in
increase in profits which help in accelerating the process of capital
formation.
• Entrepreneurship
activity too gets a boost with the easy availability of funds for investment.
2. Labor:
•
Easy
availability of right type of workers also effect entrepreneurship. The quality
rather than quantity of labor influences the emergence and growth of
entrepreneurship.
• The problem of
labor immobility can be solved by providing infrastructural facilities
including efficient transportation.
3.
Raw Material:
• The necessity of
raw materials hardly needs any emphasis for establishing any industrial
activity and its influence in the emergence of entrepreneurship.
• In the absence
of raw materials, neither any enterprise can be established nor can an
entrepreneur be emerged
4. Market:
•
The role and
importance of market and marketing is very important for the growth of
entrepreneurship.
•
In modern
competitive world no entrepreneur can think of surviving in the absence of
latest knowledge about market and various marketing techniques.
5. Infrastructure:
• Expansion of
entrepreneurship presupposes properly developed communication and
transportation facilities.
•
It not only
helps to enlarge the market, but expand the horizons of business too.
II)
Social Factors:
1.
Caste Factor
•
There are
certain cultural practices and values in every society which influence the’
actions of individuals. These practices and value have evolved over hundreds of
years.
• For instance,
consider the caste system (the varna system) among the Hindus in India. It has
divided the population on the basis of caste into four divisions. The Brahmana
(priest), the Kshatriya (warrior), the Vaishya (trade) and the Shudra
(artisan): It has also defined limits to the social mobility of individuals.
2.
Family
Background
•
This factor
includes size of family, type of family and economic status of family.
•
In a study by
Hadimani, it has been revealed that Zamindar family helped to gain access to
political power and exhibit higher level of entrepreneurship.
3.
Education
• Education
enables one to understand the outside world and equips him with the basic
knowledge and skills to deal with day-to-day problems.
• In any society,
the system of education has a significant role to play in inculcating
entrepreneurial values.
4.
Attitude of the
Society
• A related aspect
to these is the attitude of the society towards entrepreneurship. Certain
societies encourage innovations and novelties, and thus approve entrepreneurs’
actions and rewards like profits.
5.
Cultural Value
• Motives impel
men to action. Entrepreneurial growth requires proper motives like profit
making, acquisition of prestige and attainment of social status.
•
Ambitious and
talented men would take risks and innovate if these motives are strong.
III)
Psychological
Factors
1.
Need Achievement
• The most
important psychological theories of entrepreneurship was put forward in the
early) 960s by David McClelland.
• According to McClelland
‘need achievement’ is social motive to excel that tends to characterize
successful entrepreneurs, especially when reinforced by cultural factors.
•
He found that
certain kinds of people, especially those who became entrepreneurs, had this
characteristic.
2.
Withdrawal of
Status Respect
•
There are
several other researchers who have tried to understand the psychological roots
of entrepreneurship.
• One such
individual is Everett Hagen who stresses the-psychological consequences of
social change. Hagen says, at some point many social groups experience a
radical loss of status.
• Hagen attributed
the withdrawal of status respect of a group to the genesis of entrepreneurship.
3.
Motives
• Other
psychological theories of entrepreneurship stress the motives or goals of the
entrepreneur.
•
Cole is of the
opinion that besides wealth, entrepreneurs seek power, prestige, security and
service to society.
John Kao’s Model of
Entrepreneurship
• John J. Kao has
developed a conceptual model of entrepreneurship. This model is explained in
his article titled ‘entrepreneurship, creativity and organization’.
• This article was
written in the year 1989. This model is also known as the ECO entrepreneurship,
creativity, organization model.
•
According to
John Kao, entrepreneurship and creativity results from the interrelationship of
the following three elements as shown in the figure.
These three elements
are the person, the task and the organization.
1. Entrepreneurial Personality: The overall success of a new venture largely depends
upon the skill, qualities, traits and determination of the entrepreneur.
2. Entrepreneurial Task: It is a role played by entrepreneur in an
enterprise. The major task of the entrepreneur is to recognize and exploit
opportunities.
3. Entrepreneurial Environment: It involves the availability of resources,
infrastructure, competitive pressures, social values, rules and regulations,
stage of technology etc.
4. Organizational Context: It is the immediate setting in which creative and
entrepreneurial work takes place. It involves the structure, rules, policies,
culture, human resource system, communication system.
• The entire three
elements exists in the external environment which includes resources,
infrastructure, competition, society, laws and technology.
• The factors
prevailing in the external environment can facilitate or impede the creative
entrepreneurship development
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