Entrepreneurship is defined as an ability and readiness to build, organize and operate business organization, along with any of its uncertainties for making profits. In simple term, the starting of new business can be categorized as entrepreneurship. The entrepreneurship associated with land, labour, capital and natural resources can generate profits. It is an integral resource to production, and the other three being land/natural resources, labour and capital. The first three resources are combined by entrepreneur for producing good and services. Typically, they develop a business plan, hire labour, obtain resources and finance, and offers leadership and management for business enterprise.
Entrepreneurs are the person who carries ability and desire to set up, manage and succeed in start-up ventures along with the risks entitled to it, for earning profits. These are the individuals who creates new ventures, bears majority of their risks and enjoys most of their rewards. They are action-oriented highly motivated people taking risk for attaining their set of goals. Entrepreneurs plays a crucial role in every economy, utilizing the skill and initiatives required for anticipating needs and bring in new good ideas to market. Overall, entrepreneurship can be considered as national asset and entrepreneurs the national drivers of those asset for any country. This is a dynamic process that not only raises wealth but also creates value resulting in improving the well-being.
Characteristics of Entrepreneurship
The characteristics of entrepreneurship are well-discussed in points given below: –
Ability to take on risk: Starting up of new business venture carries high amount of failure risk. Therefore, an entrepreneur should be courageous enough to be able to evaluate and take risks, that form essential part of being an entrepreneur.
Innovation: It should be highly innovative in order to generate new ideas, start company and make profits out of it. A change could be bringing in innovative product that is new to market or a process that performs same thing in more efficient and economical way.
Open minded: In business organization, every circumstance it goes through can be an opportunity for it and utilized for its benefit.
Visionary and Leadership quality: An entrepreneur need to have a clear vision of his/her new venture in order to succeed. However, a lot of resources and employees are needed in order to turn the idea into reality. Again, leadership quality is of paramount importance here as leaders are the one who impart and guide employees towards the right path of success.
Flexible: An entrepreneur needs to be flexible and open to changes as per the situation arises. In order to be on the top, businessmen should be equipped to embrace change in product and service, as and when required.
Knowing the product: Business owner need to have complete details about product offerings and also about latest trends in the market. It is must to have up-to-date information regarding available product, if it is able to meet demand for current market or needs a little tweak this time for becoming compatible.
Types of Entrepreneurships
Entrepreneurship is generally classified into the following types: –
Small Business Entrepreneurship
Small business entrepreneurship refers to an idea of opening venture without turning it into large conglomerate or opening multiple branches. A grocery shop, retail shop, travel agent, hairdresser and small restaurant would be an ideal example of small business entrepreneurship. These individuals generally put in their own money and succeed if their venture turns out to be profitable.
Scalable Startup Entrepreneurship
Start-up entrepreneurs are the one who start business with a vision to bring changes in world. They attract and encourage peoples who think out of the box. These are the companies that begin with unique idea, think about Silicon Valley. The hopes are to bring innovation with unique product or services and continue growing the company as the times move on. Scalable startups are in need of investors and large capital amount in order to grow their idea and reach multiple markets.
Large Company Entrepreneurship
A large company entrepreneurship is a newer business division developed within the existing company. Existing company may be in good position to branch out into other sectors or may be well placed to get involved into newer technology. Either the CEOs of such companies anticipates new market for company or individuals working within the company generate new ideas which they put in front of senior management to begin with process.
Social entrepreneurship focuses on bringing the benefits to society and humankind. These entrepreneurships produce product or services aimed at resolving the social need and problems. Social entrepreneurships are not profit driven but instead pays attention on helping the world around them.
Role of Entrepreneurship in Economic Development
Various role played by entrepreneurship in economic development of country is as discussed below: –
Entrepreneurs helps in capital formation via mobilizing the idle lying savings of public. They inject their own as well as the borrowed resources in order to set up new business enterprises. When savings of public are invested in industry, it leads to productive utilisation of national resources. These type of entrepreneurship activities leads to wealth creation and value addition that are crucial for the economic and industrial development of country.
Generation of employment opportunities
The entrepreneurs generate large number of employment opportunities both directly and indirectly. It offers employment on large-scale to the unemployed peoples that is a chronic problem of every underdeveloped nation. When entrepreneurs set up more and more business units on both small and large scale, numerous jobs get created for others.
Improvement in living standards
Entrepreneurship plays a key role in improving the living standards of people. The industries set up by entrepreneurs ultimately helps in removing the shortage of essential commodities and introduce innovative products. They carry out production of large variety of products on mass scale using the latest innovative technique that too at lower cost. Ultimately, this enables people to avail high quality goods at economical prices, thereby enhancing their living standards
Promotes balanced regional development
Entrepreneurs helps a lot in removing the regional disparities from nation via setting up industrial units in undeveloped and backward areas. The growth of business and industries in such areas bring better infrastructural facilities such as stable electricity and water supply, schools, hospitals, better road and rail links, shopping malls, entertainment, and several other private as well as public services that would otherwise not be available. Also, new businesses when get located is less developed areas provide plenty of jobs that assist in lifting the regional economies in multiple ways. This way setting up of industries result in development of backward regions, thereby promoting the balanced regional development.
Improves per capital income
The entrepreneurs always look for better opportunities and utilizes them efficiently for attaining growth. They explore and exploit opportunities, encourage proper utilization of capital and skill, introduce innovative product and services, and develop markets for economical growth. This way, they help in increasing the gross national product as well as per capita income of peoples in country. Rise in GDP and per capita income of country’s people is a sign of economic growth.
Promotes country’s export trade
It assist in promoting the export trade of country that is key indicator of economic development. Export trade brings in large foreign currency reserve for country thereby making its position strong in international trade. Both good and services are produced on large scale for earning huge amount of foreign reserve via export in order to combat the import due requirements. Hence, substitution of import and promotion of export ensures economic independence and development of country.
Facilitates overall development
The entrepreneurs act as change catalyst that results in chain reaction. Process of industrialized is set in motion, once an enterprise is established. One enterprise unit will create demand for various other units for its inputs, and there will be several other units as well who require the output of this enterprise unit. This will result in overall development of region due to the increase in demand and establishment of more and more business units.