CHAPTER 1 INTRODUCTION

1. RESEARCH BACKGROUND 1.1 INTRODUCTION The role of entrepreneurship in society has changed drastically over the last few decades. During the immediate post-World War II period, the importance of entrepreneurship seemed to have faded away; however, this situation has reversed completely in recent years. It is small entrepreneurial firms in the rural sector of the country that have brought about the dynamism, organizational capability, innovation and boldness that characterized the giant Indian corporations. Many started as smallscale industries in the village and flourished into large-scale industries.

The focus of entrepreneurship research over the past decade has also changed significantly. Today, entrepreneurship and the impact of entrepreneurship on society are the subjects of a growing body of research primarily in the disciplines of economics, management, finance, marketing and strategy. Entrepreneurship is not new to us. It has been here ever since man started to exchange food and goods for living. The barter trades or trading existed in early years of Egypt, Rome, England, Africa, America, China, India and all other ancient countries. Entrepreneurship has been existent since the emergence of migration of humanity from continent to

continent. It started as a trading business among the early settlers and later it transformed into entrepreneurship. Many opted for entrepreneurship as a source of self-employment, innovation oriented business application, self-financing, self-sustainability and incremental economic growth within their communities. Nevertheless, entrepreneurship has come to be perceived as an engine of economic and social development throughout the world. According to Edward Lazear at Stanford University (2002), the entrepreneur is the single most important player in a modern economy. David Hart at the Kennedy School of Government at Harvard University discussing the dot-com bubble in the late 1990s wrote: Entrepreneurship is an economic phenomenon worthy of attention from those who worry about economic growth and particularly from those charged with sustaining that growth.(Hart, 2003)

Even though researchers have advanced numerous theories regarding the evolution of entrepreneurs, several questions have been asked frequently on entrepreneurship and its role in the society-Who is an entrepreneur? What is entrepreneurship? What is an entrepreneurial career path? These frequently asked questions reflect the increasing national and international interest in entrepreneurs, who they are and how they influence the economy. The term entrepreneur is derived from the French verb entreprendre that means undertake. The original related words in English are Entry and Enterprise.

In the early 16th century, the Frenchmen who organized and led militant expeditions were referred to as entrepreneurs. Around 1700AD, Cochran who was a pioneer in civil engineering expanded the scope of the term entrepreneur and applied it to civil engineering activities such as construction, architecture and public works. Bernard Belidor (cited. Auyong Y S 2009) applied
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the concept to the function of buying labour and material at uncertain prices and selling the resultant product at contracted price. Franois Quesnay (cited John M. Hobson 2004) regarded a rich farmer who manages and makes his business profitable by his intelligence, skill and wealth as an entrepreneur. According to Petrin T (1994), entrepreneurship has an enormous employment potential; politicians see it as the key strategy to prevent rural unrest, farmers perceive it as an instrument for improving farm earnings; and women regard it as an employment possibility near their homes which provides autonomy and independence and reduces the need for social support. Entrepreneurship has been promoted as a central means of maintaining vitality in comparatively small-sized, dispersed and dependent populations, making the best use of the limited resources available (Nerys Fuller-Love et al, 2006). However, the studies made on entrepreneurship development at the global arena have addressed it as an instrument to overcome poverty and generate wealth.

India was predominantly a rural economy at the time of independence in 1947, with agriculture accounting for approximately 75 per cent of the workforce and 55 per cent of GDP. Development literature says that when there are unlimited supplies of labour in the early stages of development, the extra growth that an economy receives is due to the reallocation of labour from low productivity agricultural sector to high productivity non-agricultural (industrial) sector. With more than 52 per cent of the workforce still dependent on agriculture for their livelihood, agriculture in India has far reaching impact on poverty reduction as well as on rural development. Thus, it is meaningful to view agriculture not as farming alone but as a holistic value chain, which includes farming, wholesaling, warehousing (including logistics), processing, and retailing. Figure 1-1 shows the growth pattern of agriculture.

9
8 7 6 5 4 3 2 1 0 Food Grains Other Crops Fruits & Veg Livestock
Fig 1-1 Average Annual Growth Rate of Agriculture Source: National Accounts Statistics, CSO, GOI,2008

7.6

7.8

3.6

3.5

3.6

4.1 3

4.1 3.53.7

1992-1997 3.1 2.6 1997-2000 2002-2007

2.3 1.31.4

Fisheries

The average annual growth rate of food grains sector is much less than that of non-food grain sector which comprises of high value and commercial crops. Dairy in India has been a classic example of a sector that has witnessed exponential growth. India has achieved the number one position in milk production (more than 100 million tons). With the amendment of Milk and Milk Products Order (MMPO) in March 2002, the private sector participation in the industry has increased in a significant way. Aavin 1 Milk distributors can be seen in many of the towns. Even grocery shops have started selling milk in very small quantities for easy reach out to the customers. Many rural farmers have taken up milk production which has been a good source of generating income.

The Dairy Development Department was established in Tamil Nadu in the year 1958 to oversee and regulate milk production and commercial distribution in the state. The Dairy Development Department took over control of the milk cooperatives. It was replaced by the Tamil Nadu Cooperative Milk Producers Federation Limited in the year 1981. On February 1, 1981, the commercial activities of the cooperative were handed over to Tamilnadu Co-operative Milk Producers' Federation Limited which sold milk and milk products under the trademark "aavin". With many private companies entering the field of dairy, the Tamil Nadu government is giving high priority to improve the performance of the cooperatives.Tamil Nadu is one of the leading states in India in milk production with about 14.5 million litres per day. Dairy Development Department, Government of Tamilnadu. "Policy Notes". http://www.tn.gov.in/policynotes/archives/policy2002_03/diary2002-03-b.htm. Retrieved 16 July 2010

35
30 25 20 15

31.7 24.9

31.1 27.9 25.9 20.3 16.9 14.1 TE1982/3 TE 2007/8

10
5 0 Food Grains Other Crops Fruits & Veg Livestock
Fig 1-2 Output of Total Agriculture 1982 to 2008 Source: CSO, GOI, various issues.

2.7

4.4

Fisheries

The output of Fruits & Vegetables, Livestock and Fisheries has increased gradually so as to be able to meet the demand of the local markets. Rapid economic growth, rising income levels and changing demographics have triggered a significant change in demand patterns. Thus, in response to new demand patterns, developed markets and infrastructure and a change in approach from farming towards a new agro-system will be needed.

Fruits & Nuts, 2% Other Food Items, 27% Cereals & Pulses, 36% Vegtables, 1%

Other Food Items, 21%

Fruits & Nuts, 4% Vegtables, 11%

Egg, Fish, 2004/ &1-3 Meat, Fig. Rural and urban population consumption of cereals for 2004/5and 1983 respectively 5 Source National Sample Survey Organisation (NSSO), GOI, 2006a 6%

Milk & Products, 16%

Egg, Fish, & Meat, 5%

Milk & Products, 20%

Cereals & Pulses, 51%

1983

The growth of Indian economy has gone up to 8.5 per cent with the help of the farm sector, which shows the agriculture sectors support to economic growth (CSO, 2011) Table 1-1 Growth Indian Economy

Growth of Indian Economy Growth in per cent at 2004-2005 Prices GDP at Factor Cost Agriculture, Forestry & Fishing Manufacturing
Source: CSO, 2011

Q4 2009-2010

Q4 2010-2011

8.0 1.1 15.2

8.5 7.5 5.5

The future source of growth in agriculture will be increasingly coming from the so-called high value segment (fruit and vegetables, livestock and fishery). The rural entrepreneur plays an important role in supporting the demand of the market. Government of India had anticipated the change and eventually changed the concept of rural enterprises in order to meet the requirement.
Emerging linkages
Retailers

Input Suppliers

Emerging linkages

Agro Processors

Wholesaler & Logistics Suppliers

Farmers

Fig 1-4 Agri-system and the linkages progress chart Source: Shanker A. And Rakash Mohan (2010) p.235

Likewise, Rural entrepreneurship in India has geared up to meet the challenge by investing in modernized equipment, taking-up training pertaining to agriculture activities and using information technology adequately to have the latest information around the globe. The approach towards agro-system farm-firm linkages was introduced [see Fig 1-4]. Farmers in the village now could sell their products to the firms which in turn their get support from the farmers as raw material supply. The linking of small and fragmented farms with large-scale processors and retailers has helped the farmers in emerging as independent institutions.

Input
Input Suppliers, Processors and Retailers

Output

Informal Markets Rural Business Hubs

Mandi

Farmers

Ext Services

Banks & Insurance

Money Lenders
Source:Shanker A.and Rakash M. (2010) p 237 Fig 1-5 Rural /Agriculture Business Hubs reaching Agri-services to the Farmers

Government of India has taken several initiatives during the Ninth Plan period. Several anti-poverty programmes have been restructured to enhance the efficiency of these programmes in providing increased benefits to the rural entrepreneurs. Programmes introduced/restructuring effected were:

Self Employment Programmes have been revamped by merging the Integrated Rural Development Programme (IRDP);

Development of Women and Children in Rural Areas (DWCRA); Supply of Improved Tool-Kits to Rural Artisans (SITRA), Training of Rural Youth for Self Employment (TRYSEM), Ganga Kalyan Yojana (GKY) and the Million Wells Scheme (MWS) into a holistic self-employment scheme called Swarnjayanti Gram Swarozgar Yojana (SGSY).

Similarly, Government of Tamil Nadu has also introduced numerous programmes that enable the entrepreneurs in the rural sector to emerge as economic contributors and become a trade source for rural businesses. The Rural Development and Panchayat Raj Department Policy Note 2010-2011 lists the various policies designed to overcome the problems associated with rural development thereby providing the people in the village a better livelihood. The policy addresses the issues of employment for youth, men and women, enhancement of transportation, upgrading of houses, empowerment of women and enormous fund subsides.

1.2 DEFINITIONS OF ENTREPRENEUR AND ENTREPRENEURSHIP

Richard Cantillon, Irish-French economist during the 1800s, stated that entrepreneur is a dealer who purchases the means of production for combining them into marketable products (Michael O.,1985). Another French economist and busiessman, Jean- Baptiste Say, expanded Richard Cantillons ideas and defined the entrepreneur as an Organiser of a business (Hollander, Samuel, 2005). Adam Smith a Scottish Social Philosopher and a pioneer of Political Economy described an entrepreneur as a person who only provides capital without taking active part in the leading role in an enterprise (Hollander Singh, 1973). Joseph A Schumpeter who has expanded the theory of entrepreneurship, recognized a person who introduced innovations as an entrepreneur (Swedberg, Richard, 1992). Frank Knight describes entrepreneur as a change agent. Noah Webster thinks entrepreneur as one who assumes the responsibility of risk and management of business (Vincent P. Bynack ,1984). Peter F Drucker defines an entrepreneur as one who always searches for change, responds to it and exploits it as an opportunity. Innovation is the specific tool of entrepreneur , the means by which the exploits change as an opportunity for a different business or service. (Peter F Drucker, 1954)

A vast literature has emerged over the last two decades providing insights into the many facets of entrepreneurship. Lazear (2002) and Parker (2004) offer a comprehensive understanding of the entrepreneurial choice, new firm formation and the role of the entrepreneurship in growth, reflecting a broad consensus that has emerged in recent times. Defining entrepreneurship is not an easy task. There are almost as many definitions of entrepreneurship as there are scholarly books on the subjects (Byrd W.A., 1987, p. 3). In fact after 200 years, a commonly accepted definition of entrepreneurship has failed to emerge. One of
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the earliest definitions was given in 1734 where entrepreneurship was said to be selfemployment with an uncertain return (Sharma and Chrisman, 1999).

Two hundred years later, the importance of innovation was highlighted as entrepreneurship was described as the process of creating new combinations of products,

processes, markets, or organizational forms (Schumpeter, 1934). Entrepreneurship has also been defined as simply the creation of an organization (Hoy 1987; Gartner 1988). Recent research analyzing the impact of entrepreneurship on economic growth at the regional level has used measures of entrepreneurship based on new business starts.(Acs and Armington 2004, Camp 2005; Audretsch and Kielbach 2005)

1.3 THE RECORD OF ENTREPRENEURIAL ACTIVITIES

There have been as many definitions of entrepreneurship as there have been writers on the subject. Entrepreneurship is not new but it is an ancient trade, which can be traced to the expedition of the Marco Polo, who attempted to establish trade routes to the Far East. (Lanstorm B., 1967) In the era of Marco Polo, the traders were known as merchant adventurers, who took an active role in trading. It can be assumed that the term enterprise was in relatively common use by 1492 because Christopher Columbus used it. ( Crosby, A. W., 1987) In the journal of his first voyage to the New World he wrote, I declared to Your Highness that all the gain of this my enterprise should be spent in the conquest of Jerusalem . . . (Bartlett, 1968).

The definition of entrepreneurship has been traditionally concerned with the roles and functions of the entrepreneur (Jin-Ichiro Yamada, 2004). Entrepreneurship is defined as the set of activities to promote socio-economic stablisation and effective utilization of resources by
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stimulating socio-economic progress, creating new values, and providing employment opportunities (Shane and Venkataraman, 2000).

Entrepreneurship is often said to be a network activity (Birley, 1984). Much of the difference in definition and approach to entrepreneurship is related to viewing the entrepreneur as a person recognizing opportunities or creating opportunities (Arson S. Spencer et al, 2008). Entrepreneur and Entrepreneurship have become buzzwords both in academia and in the popular press, and have been used in wide variety of contacts (Drakopoulou Dodd and Anderson, 2007). Table 1-1 provides a short selection of definitions that have been offered. An

examination of the common elements in these definitions reveals the following characteristics of entrepreneurship

Creativity and innovation Resource gathering and the founding of an economic organisation The chance for gain(or increase) under risk and uncertainty

Entrepreneurship, then is the creation of an innovative economic organization (or network of organisations) for the purpose of gain or growth under conditions of risk and certainty. TABLE 1-1 DEVELOPMENT OF ENTREPRENEURSHIP THEORY AND THE TERM ENTREPRENEUR YEAR AUTHORS CONCEPTS Actor and person in charge of large scale Middle production projects Age th Person bearing risks of profits (loss) in a fixed17 price contract with government Century Richard Cantillon Person bearing risks is different from one 1725 supplying capital Jean Baptiste Say Separated profits of entrepreneur from profits of 1803
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1876

Francis Walker

1934 1961 1964 1975

Joseph Schumpeter David McClelland Peter Ducker Albert Shapiro

1980 1983 1985

Karl Vesper Clifford Pinchot Robert Hisrich

capital Distinguished between those who supplied funds and received interest and those who received profits from managerial capabilities Enterpreneur is an innovator and develops untried technology Entrepreneur is an energetic, moderate risk taker Entrepreneur maximizes opportunities Entrepreneur tales initiative, organizes some social and economic mechanism, and accepts risks of failure Entrepreneur seen differently by economists, psychologists, businesspersons, and politicians Intrapreneur is an entrepreneur within an already established organisation Entrepreneurship is the process of creating something different with value by devoting the necessary time and effort, assuming the accompanying financial, psychological, and social risk; and receiving the resulting rewards of monetary and personal satisfaction

Source: Robert D. Hisrich, Entrepreneurship and Intrapreneurship Methods for Creating New Companies That Have an Impact on t he Economic Renaissance of an Area In Entrepreneurship Intrapreneurship and venture Capital ed. Robert D Hisrich (Lexington, MA Lexington Books 1986) p. 86

1.3.1 ENTREPRENEURSHIP: THE PAST, THE PRESENT, THE FUTURE

Entrepreneurship, as an academic field of study, is quite young. Myles Mace apparently offered the first course in entrepreneurship at the Harvard Business School in 1947. Peter Drucker started a course in entrepreneurship and innovation at New York University in 1953. The current condition of entrepreneurship reflects tremendous growth in almost all dimensions of the field. The number of universities with entrepreneurship courses has increased from fewer

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than 10 in 1967 to a large number today. In fact entrepreneurship has become part of the curriculum in all universities in India, when the University Grant Commission had directed the universities to teach the entrepreneurship to every third year student of engineering in India. This indicates that government has been preparing the student to know the entrepreneurial development and know its benefits. Recent research on entrepreneurship around the world indicates that the cultural characteristics that can foster successful entrepreneurial activities and its related economic benefits are a strong education base, the necessary financial support, opportunities for networking among entrepreneurs and a well-defined, minimal role for the government.

The future trend for entrepreneurship seems to favor new firm formation with continued high rates of revenue. According to Cooper A. (1995) the wealth and job creation associated with new firms in recent years is likely to be continued. The capital city of Tamil Nadu, Chennai was once a fishing village and today it has become one of the growing metropolitan cities and well established municipality which has earned an icon in the world map. This is due the opening up of business ventures, many from village have gone to Chennai and started a business and become business tycoons. The pioneers of entrepreneurship in India are shown in the table below:-

Table 1-2 Successful Entrepreneurs in India Year 1877 1894 1900 1910 1923 1933 1939 Founder T V Sundram Iyer Ghanshyam Das Birla Dewan Bahadur A.M Murugappa Chettiar G Kuppuswamy Naidu Brijmohan Lall Munjal Dhirubhai Ambani Jamsetji Tata Company Name TVS Group Birla Group Murugappa Group Lakshmi Mills The Hero Group (Hero Motors) Reliance Industries Tata Group
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1946 1947 1950 1953 1978 2003

N R Narayana Murthy J C Mahindra Subhash Chandra Kiran Mazwindar Shaw P Ponnudurai Capt G R Gopinath

Infosys Technologies Mahindra Group Zee T V Biocon (First biotechnology company in India) Lion Dates Impex Private Ltd. Air Deccan

Source: India Entrepreneurs, 2010, The Year denotes the start of business

1.4 NEED FOR THE STUDY There have been several important developments in entrepreneurship research over past decade that call for distinctive attention. While traditionally research in entrepreneurship focused on the study of entrepreneurship itself, today it has shifted towards traits and personality. However, very little research has been done on the entrepreneurship development in rural area, especially in India.

Former President of India, Dr A P J Abdul Kalam, in his address to the parliament at the farewell function hosted by the speaker of Lok Sabha in the Central hall of Parliament House, New Delhi on 3rd July 2007 said: We are happy that our economy is in the ascent phase and our GDP is growing at nearly 9% per annum. It is evident that economic growth is not fully reflected in the quality of life of a large number of people, particularly in rural areas, (National Information Centre, 2007)

The speech of Ex-President Dr A P J Abdul Kalam has indeed inspired us to embark on a study of rural sector to know its economic growth and the status of the quality of life of the rural people. Government of India has introduced many schemes for the rural sector to lift up the villagers below the poverty line and also to provide an opportunity to them to start business on

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their own. One of the schemes that was introduced to the rural sectors, was known as PURA Providing Urbanised amenities to Rural Area. A similar type of scheme was introduced in Thanjavur District. This is known as Periyar PURA which was named after the great social reformer, Thanthai Periyar. His vision was to introduce self-sustainable jobs (entrepreneurship) to the villagers using the natural resources within their villages. He wanted women to be educated and be self reliant through entrepreneurship development. Periyar Maniammai University, situated at Vallam, Thanjavur has been providing continuous support to the PURA villages as the supporting institution for Entrepreneurship Development. Even though the PURA Scheme has been operating for the past eight years, no study has yet been made on the progress in entrepreneurial activities. In order to align with the aspiration of our former President we chose to study PURA scheme in Villages of Thanjavur to know the determinants of entrepreneurship and the role of supporting institutions in facilitating entrepreneurship development.

Shane and Venkataraman (2000) say that researchers were emphasizing on the individuals behavior and cognitive issues rather than focusing on the discovery and exploitation of opportunities.. Evans and Jovanovic (1999) emphasised on those entrepreneurial activities that bring economic growth, which were not fully exposed by the researchers. Based on the judgment of Shane and Venkataraman (2000) and Evans and Jovanovic (1999, we have attempted to conduct our study on entrepreneurship development in rural sector and to expose the economic growth in that area.

According to Saraswathy (2002), the entrepreneurial opportunity is set up based on: New ideas or inventions that may or may not lead to the achievement of one or more economic ends that become possible through those ideas or inventions;
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Beliefs about things favorable to achievement of possible valuable ends; and Actions that generate and implement those ends through specific (imagined) new economic artifacts (the artifacts may be goods such as products and services and/or entities such as firms and markets, and/or institutions such as standards and norms)

The economic development through entrepreneurship in India depended upon the entrepreneurs activities (Shivaram V, 2003). Rural entrepreneurship is an industrial route to development through non-farm entrepreneurship for rural economic development. (Subrata Dutt, 2004). Rural development is more than ever before linked to entrepreneurship. Institutions and individuals promoting rural development now see entrepreneurship as a strategic development intervention that could accelerate the rural development process. (T. Petrin, 1994).

Mr Suren Dutia, the former CEO of TiE Global2 in his speech on Entrepreneurship is hidden ingredient of Indias success, TiE Coimbatore, Tamil Nadu-India said

Entrepreneurs have played an enormous role in shaping the Indian economy since the country became independent; Entrepreneurship is hidden ingredient of Indias success. (The Hindu, 2010)

Table 1-3, Rural Development and Projection( for Tamil Nadu) Unit Per farmer income
2

1991 5300

Rupees

Current (2008) 9000

Vision 2025 45000

The Indus Entrepreneurs (TiE), was founded in 1992 in Silicon Valley by a group of successful entrepreneurs, corporate execut ives, and senior professionals with roots in the Indus region. There are currently 13,000 members, including over 2,500 charter members in 57 chapters across 14 countries. TiEs mission is to foster entrepreneurship globally through mentoring, networking, and education. Dedicated to the virtuous cycle of wealth creation and giving back to the community, TiEs f ocus is on generating and nurturing our next generation of entrepreneurs.

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Population dependent (directly and indirectly) on Agriculture

Crores

3.5

3.6

1.8

Source: Tamil Nadu Vision 2025, Confederation of Indian Industry Report 2008

Tamil Nadus rural areas will have well developed infrastructure and will be well connected to the urban hubs. The per capita income of rural household will grow five fold through improved agricultural practices and strong growth in manufacturing and services. Table 1-2 shows the Tamil Nadu Vision, 2025 (CII Report, 2008). This shows the importance of entrepreneurial development in rural areas and its contribution to economic growth as a field of study. The transformation of rural communities through entrepreneurial activities i.e. self-employment, small business owners, small scale industries, family business gives rise to certain questions such as:

What drives these entrepreneurial activities in rural area? How does entrepreneurship affect the growth of the rural area? Is entrepreneurship a means of employability? What support does the rural community get from Institutions? Why does the rural community choose entrepreneurship?

The intricate trend of entrepreneurship effects in rural area has engrossed the interest and attention of management disciplines covering human resources, marketing and finance aspects of this challenging and risky activity. A number of studies on entrepreneurship development have been conducted in the East and West. The studies on entrepreneurship development in India especially those relating to rural areas are very few. Hence, there is a need for more research on entrepreneurship development rural areas in India.
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The economic reforms of the early 1990s set the stage for substantial improvements in the Indian economy. Indias economy grew at an average of 3.5 per cent in 1991-2001 to 9 per cent 2003-2008 (Acharya and Mohan, 2010). Further, its rate of inflation and fiscal deficit both decreased substantially (Bhalla, 2000). The progress of Indian economic development from 1947 to the present provides further evidence that individuals do respond to incentives in their pursuit of self-survival and accumulation of wealth. (Anil K. Lal and Ronald W. Clement, 2005).Entrepreneurial efforts were found to generate a wide range of economic benefits, including new businesses, new jobs, innovative products and services, and increased wealth for future community investment (Kayne, 1999).

The entrepreneurship activities in India have been increasing gradually after the liberation of trades and business opportunities that followed the independence. The restructuring of business and trades has driven many entrepreneurs to venture into new area of operation as mentioned by Kayne (1999). Companies like Reliance, Tata, TVS, MRF, Infosys Technologies, Wipro, TCS, Maruti Suzuki etc. have used the opportunities to enter into businesses and become well known business leaders around the globe. Home based businesses, have been popular among the people living in rural areas where the investment was within the capability and people were able to attain the expected small income. In Thanjavur District, there were 92 Self-Help Groups in the year 2001 and the number has grown to 365 Self-help Groups in the year 2008 and 1365 in the year 2011(Annual Report 2007 of Centre for Rural development-PMU). Increasingly, rural entrepreneurship and small business ventures have been seen as a strategy for rural development (Hoy, 1996). Rural entrepreneurship is defined by Wortman as the creation of a new organization that introduces a new product, serves or creates a new market, or utilizes a new technology in a rural environment.
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Wortman (1990)

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Despite the consolidation, much of the related issues of Entrepreneurial Activity remains fragmented and there is no indication that a study has been carried out on rural development based on Entrepreneurship activities. Hence, there is a need to study the Entrepreneurial Activity in rural area of India and its development.

1.5 ENTREPRENEURSHIP AND DEVELOPMENT Asias success in economic development and poverty reduction has inspired governments and development organizations to increase their support for SMEs (Small-Medium Enterprise) and entrepreneurial activity.(James Richardson, 2004). In the 1980s, emphasis on creating new economic activities for self-generating growth began to take hold in the development community (Sweeney,1987). According to Cecorra (1999), these themes have been reflected in the numerous policies and programs supporting entrepreneurial activity in less developed regions. However, in spite of all the policies and programs, there has been little empirical research in this area to assess the effects of increased entrepreneurial activities in rural regions. A number of studies have looked at the effects of specific programs with generally positive conclusions. (e.g., Andersn, 2002; Dumas, 2001; Graham & Manning,2000; Mariottis 1999; Owuala, 1999; Fadahunsi, 1991). These positive reports have probably helped to fuel the interest in entrepreneurship support programs among the development community.

Hence, East Asia has experienced economic growth for more than a decade but the region remains in the underdeveloped or less developed category. Overall 60 per cent of the population lives in rural area and agriculture is still the largest sector (ADB, 2001). Asian countries have been receiving considerable attention from international development organizations such as

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Asian Development Bank, World Bank and United Nations Development Program. Development economists have shown interest in entrepreneurship. China has been very much successful in reducing poverty rates with recent statistics showing poverty rates in the low single digits (ADB, 2002a). Table 1-4 Selected Asian Statistics Country Thailand India Korea China Singapore Hong Kong Japan
1

TEA1

GDP/capita (ppp)2 6402 2358 17380 3976 23356 25153 26755

HDI3 0.762 0.577 0.882 0.726 0.885 0.888 0.933

GDP Growth4 86-96 avg 9.1 5.9 8.6 9.9 8.4 6.3 2.9

18.4 17.9 14.5 12.3 5.9 3.4 1.8

Source: Reynolds et al., 2002, 2Source: ADB, 2002, 3Source: UNDP,2002 ,4Source IMF, 2002

Table 1-3, shows that India stands second to Thailand in entrepreneurial activities. The emphasis on entrepreneur development programs and policies has stimulated Indias growth in entrepreneurial activities. Support for SMEs is a common theme beca use it is recognized that SMEs generate most new jobs. The belief is that entrepreneurs are an important part of job creation and economic growth. (OECD, 2000)

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1.6 ENTREPRENEURSHIP IN INDIA

In India, the history of traders can be traced to the period of King Rajendra Cholan, who initiated expedition across the Indian Ocean to seek new ventures. (Majumdar R C, 1961) He then joined the Pallava3 Kings of Sumatra to have a commercial connection with China. He went on to establish trades between India and South East Asia which later became a trading area for ancient Indians. ( Avari, Burjor, 2007). In 1818, Indians began to travel to many other part of South East Asia4, whereby their presence has become a historical event. According to Rajeswary Brown (1993), Indians arrived in Singapore during the 18th & 19th century as textile traders, spice traders or Chettiars 5who lent money to Indians to set up business, hoteliers, popular restaurant owners and owners of many sundry shops. As trading flourished , people began to set-up businesses within the country. Today, there are more than 1000 shops in Singapores Little India 6 which is owned by people of Indian origin. Needless to say, Indians can be found in many part of South East Asia, where they have established their entrepreneurial activities, and became successful entrepreneurs in various fields of business. Almost four decade ago, Baumol (1968) proclaimed that encouragement of the entrepreneur is

The Pallava dynasty was a Tamil dynasty of South India which ruled the northern Tamil Nadu region and the southern Andhra Pradesh region with their capital at Kanchipuram. The word Pallava in Sanskrit means branch. The Pallavas were from the Kuruba/Kurumba community. They originally belonged to the Guntur region of Andhra Pradesh. This area is still referred to as Palnadu or Pallava Nadu. Pallavas gained prominence after the eclipse of Satavahanas of Andhra and decline of Cholas in Tamil Nadu. The Pallavas patronized Tamil, Telugu and Sanskrit. Some of the most illustrious Sanskrit poets like Bharavi and Dandin and the seashore rock-cut temples of Mahabalipuram belongs to the Pallavan era. (Hermann, Kulke; Rothermund D (2001) [2000]. A History of India. Routledge).
4

Southeast Asia consists of two geographic regions: Mainland Southeast Asia, also known as Indochina, comprises Cambodia, Laos, Myanmar (formerly Burma) , Thailand, Vietnam and Peninsular Malaysia, and Maritime Southeast Asia, which is analogous to the Malay Archipelago, comprises Brunei, East Malaysia, East Timor, Indonesia, the Philippines, and Singapore. Hitchcock, Michael, et al. Tourism in South-East Asia. New York: Routledge, 1993 5 Chettiar, commonly used by people of South Indian origin in India and abroad. Chettiar is the 3rd dominant clan and Surname by majority in Tamil Nadu. This community is known for its trade in spices, for its role in the hotel industry . David Rudner (1989) Banker's Trust and the Culture of Banking among the Nattukottai Chettiars of Colonial South India. Modern Asian Studies 23 (3), 417-458. 6 The Little India area in Singapore was reported to have developed around a former settlement for Tamil convicts. Its location along the Serangoon River originally made it attractive for raising cattle, and trade in livestock was once prominent in the area. Eventually, other economic activity developed, and by the turn of the 20th century, the area began to look like a Tamil ethnic neighbourhood. wwwsingapore.com/little-india-singapore.htm

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the key to the stimulation of growth. This has been corroborated by the growth of entrepreneurship development spreading across the South East Asia.

The spirit of enterprise is much prevalent in India. Rural entrepreneurship helps to reduce poverty while enhancing the numbers of middle class people within the country. Increasingly, everyday individual with a bit of money, a dollop of resourcefulness and plenty of ambition was feeling emboldened to become an entrepreneur (Gupte, 2004). India was ranked second among all nations in Total Entrepreneurship Activity according to the Global Entrepreneurship Monitor (GEM) Report of 2002. But after several years, India appears to have a Total Entrepreneurship Activity (TEA) level rather close to the world average. TEA average per year from 2001 to 2009 was 12.1per cent whereas the Worlds average was 10.6 per cent. This shows Indias continuous improvement in entrepreneurial activities and its involvement in enhancing the entrepreneurial commitment (GEM report, 2009). The Global Entrepreneurship Monitor (GEM) report also identifies whether its respondents are starting new business to take advantage of attractive opportunities. GEM report 2004-2009 shows that 20 per cent of Early-Stage Entrepreneurs in India have International Orientation.

The Prime Minister of India, Dr Manmohan Singh in his Convocation address at 29th Convocation of Sri Sathya Sai Institute of Higher Learning at Puttaparthi University, India, emphasised on entrepreneurship as follows:

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."As India modernizes, grows and plays a larger role in world affairs, we will need an everexpanding pool of human resources, the quality of which will have to be second to none. We need global leaders in education, entrepreneurship, technology and management," (Economist Times, 2010)

In his speech, he addresses the need for entrepreneurs and their contribution to Indias global market entry and economic growth. This apart, when we look at entrepreneurship in India, we can see Indias entrepreneurs globally competing in almost all the fieldsbe it telecom, power, technology, biotech or manufacturing. In the recent days, we are seeing substantial activities in the social sector as well. In spite of working towards business excellence, about 72 per cent of Indias population continues to reside in rural area (GOI, 2010). The government has vital role to play in bringing the urbanized activities into rural areas and providing the rural community with the opportunities to progress with the national growth. Nevertheless, about 19 per cent of the rural community are self-employed who are running their family business or small scale business. Yet, the rural economy has not shown sufficient growth.

1.7

ENTREPRENEURSHIP IN TAMIL NADU Tamil Nadu is one of the states in India, covers an area of 130,058 square kilometres

(50,216 sq miles). It is the eleventh largest state in India. Tamil Nadu consists of 32 districts (See Fig 1.1), which provide spectrum of agricultural products and non-agricultural products. Each district has its own distinctive business involvement and has its fair share in promoting entrepreneurship in rural area so as to provide a livelihood to the families in the rural communities in that district. Tamil Nadu has grown fairly fast during the 1990s and forged
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ahead in almost all the economic sectors. Tamil Nadu has also done well in terms of human development. The total population of Tamil Nadu is 72,138,958 as per the provisional results of the Census of India 2011. In terms of population it holds the sixth position among the States in the country. Tamil Nadus decadal growth rate was 11.7 per cent during 1991 -2000. It has improved to 15.60 per cent as per 2001 -2011 Decadal Growth (Census, 2011). The literacy rate in the State has shown remarkable improvement 73.47 per cent as per 2011 census when compared to 62.66 per cent ten years back during 1991 Census. Table 1-5 Comparison of Population, Decadal Growth & literates between Yr 2001 and Yr 2011 Year 2001 2011
Source: Census of 2011

Population 62,110,839 72,138,958

Decadal growth 11.7% 15.60 %

No. of Literates 73.47% 86.6%

Tamil Nadu is not only one of the most populous states of India but also densely populated. Density of population in Tamil Nadu is 478 persons per sq. km. whereas the national average is 324 persons per sq. km., and is the sixth highest among the major states of India (Table 1.6). Table 1.6 Density of Population in Tamil Nadu and India States Tamil Nadu All India Density of Pop / sq. km 2001 2011 429 478 267 324

Source: Census of India 2011

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Tamil Nadu is also relatively more urbanised than the other major states of India. According to the 2001 Census, 43.86 percent of the population of Tamil Nadu lives in urban areas whereas the level of urbanization at the national level is 27.78 per cent. According to 2011 census the level of urbanization of Tamil Nadu has decreased to 34.15 per cent.

Table 1.7 Level of Urbanization in Tamil Nadu and All-India

States Total Population (in crore) Tamil Nadu 6.21 All India 102.70 Source: Census of India 2011 2001 Urban Population (in crore) 2.7 28.5 % Urban Population 43.86 27.78 Total Population (in crore) 7.21 121 2011 Urban Population. (in crore) 1.9 21.8 % Urban Population 34.15 25.71

The comparison of the population shows the Tamil Nadus population has been shifting towards urbanization, that is, rural area being transformed into modernized vicinity. Rural is identified as countryside, agriculture, traditional culture and geographic peripherality. (Sarah et al, 2004) The increase in level of urbanisation in Tamil Nadu over the period 2001-2011 is related to the emergence of a large number of statutory towns. In the 2011 census, all statutory towns and places that satisfy certain demographic and economic criteria are treated as urban. However, let us look at the rural area and their working persons by broad industry categorisation. The comparison of the result in Table 1.8, shows that people are shifting towards industrial sector to seek jobs thus resulting in reduction in agriculture related jobs. People seek job in manufacturing and wholesale/retailing sector which is related to Entrepreneurial Development. The creation of a countrys wealth and dynamism depends upon the c ompetitiveness of its firms and this, in turn, relies fundamentally on the capabilities of its entrepreneurs and managers (lvaro Cuervo et al, 2007).

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Table 1.8 Distribution of usually working persons by broad industry division in Rural Area

Sectors 1999-2000 TN India 705 784 4 6 126 2 23 48 70 2 24 43

Rural 1999-2010 TN 679 5 139 2 40 56 India 763 5 74 2 33 51

Agriculture Mining & Quarrying Manufacturing Electricity Construction Wholesale Retail Trade etc. Transport Storage etc Financial Insurance Community services

20 8 62

14 3 54

26 6 47

21 3 49

Source: NSSO 50th Round (1993-94) and 55th (1999-2000) Round

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Source: www.tn.gov.in, Nov 2010

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Fig.1.1-Tamil Nadu and Districts

Table 1-9 Activities in each district and the production for business in Tamil Nadu District 1. Ariyalur 2. Coimbatore Activities in Each Districts This district is well known for its sugar cane and cashew nut supply. This district is well known for its textile industries. There are more than 25,000 small, medium, large-scale industries and textile mill present in the city. Coimbatore is also famous for the manufacturing of motor pump sets and varied engineering goods.. This district is located in the northeast of Tamil Nadu and considered as the capital for Tamil Nadu. Chennai`s economy is equipped with a panoptic industrial base in the automobile, technology, hardware, manufacturing and healthcare sectors. The city is home to major India`s automobile industry and is the country`s second-largest exporter of software, information technology (IT) and information-technology-enabled services (ITES), just behind Bangalore. Chennai Zone contributes 39 per cent of the State`s GDP (gross domestic product). The city is responsible for 60 per cent of the country`s automotive exports and is sometimes lovingly referred to as "the Detroit of India". This district produces crops like millets, pulses, sugarcane, groundnut, cotton, etc. There are number of fisheries present in this locality. The district has several industries including small scale cottage industries. The district has been also the largest producer of mango and accounts for one half of the mango yield in the state. Dharmapuri District is the second largest producer of tomato and accounts for 22 percent of the total area of the state. This district has a flourishing economy well known for its iron locks, tobacco and handloom industry. The main occupation of the people living in the district is agriculture and the district has more than 200,000 hectare of cultivable area. Rice, pulses, sugarcane, groundnut, gingelly, cotton and millets are the main crops that are grown here. Small Scale industries like lock manufacturing, leather products and handloom industries. This district has a number of powerloom textile industries. The other major industries of the district are screen printing and vanaspati manufacturing.. This district has been famous for its silk sarees and weaving and agriculture are the main occupations of the people living in the
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3. Chennai

4. Cuddalore

5. Dharmapuri

6. Dindigul

7. Erode

8. Kanchipuram

9. Kanyakumari

10. Karur

11. Krishnagiri

12. Madurai

13. Nagapattinam

14. Namakkal

15. Nilgiris

district. Kanchipuram district is popular for its renowned crafted world famous silk sarees, a traditional home industry. It is proud to be the home of vital production bases of international industrial groups including Ford, Saint Gobain, Hyundai as well as a number of export houses in and around the Madras Export Processing Zone. The product range from factories in this district include cars, auto parts, phones, float glass, air conditioners, Sugar industry, fashion garments, etc.. This district is a tourist paradise with Kanyakumari beach, Kumari Amman Temple, Swami Vivekananda Rock Memorial, Gandhi Mandapam, Kalakadu Wildlife Sanctuary and Olakkay Aruvi Waterfalls. This district is a agriculture based region and people have good sense of artistic infrastructure which is unique throughout the Tamil Nadu. This district is famous for its mulberry cultivation. The district has a favourable cultivation which favours the cultivation of crops like paddy, maize, ragi, banana, sugarcane, cotton, tamarind, coconut, mango and groundnut. A major hill range of the district is Melagiri This district is a major industrial and commercial district of Tamil Nadu and houses many textile industries, dairy farms and engineering industries. The district is famous for Jasmine flowers. Jasmine flowers from the district of Madurai are transported to other cities of India as well as to other countries i.e Singapore, Malaysia. The District has a very few reputed organizations in the private sector like T.V.Sundaram Iyengar & Sons, Madura Coats, Fenner (I) Ltd., George Oaks Ltd. etc. which are engaged in the production of variety of goods like tyres and tubes, machineries, textile, conveyor belts etc. and also provided employment opportunities. The District offers ample scope for the field of textiles, readymade garments, bakery units, and floriculture, dairy and cold storage units, Agro and Herbal products, Granite stones, Blue metal jelly, Chamber bricks, Rubber and plastic based industries. There is also a very good scope for starting food processing and agro based industries. This district has a rich cultural heritage and the major tourist destination in the district are Kodikkarai, Nagore, Sikkal, Thirukandiyur and Velankanni. This district has traditionally been referred to as East Thanjavur and Paddy granary of South India. This district is an industrial district of the state and some of the major industries are textile industry, transport industry, poultry units and sago and starch industry. This district is the most beautiful district of Tamil Nadu with its dense forests, gushing streams and undulating peaks The district is mainly a Horticulture area and the entire economy of the
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16. Perambalur 17. Pudukottai

district depends upon the success and failure of Horticultural crops like Carrot, Potato, Cabbage, Coffee, Tea, Spices and Fruits. Coonoor is a taluk of Nilgiris which is an important trade centre for tea and the Tea Board of India has a branch office at this place. This district favours the cultivation of paddy, groundnut, sugarcane, millets and cashew. This district is famous for its cashew nuts and ancient cave temples. This district is situated in the south eastern part of Tamil Nadu. The mainstay of the district is agriculture and the major crops grown here are paddy, corn, cottons, groundnut, gingelly and chillies. This district has a rich mineral deposit and the minerals found here are magnetite, bauxite, quartz, limestone, soapstone, rough stone and granite. The production of un-bleached sugar-vellam is one of the major cottage industries in the district of Salem. Another prominent cottage industry of this district is rope making. Both cotton and silk fabrics woven in the district of Salem find popular market throughout the state of Tamil Nadu The `Kurunji` flowers which blossom once in twelve years also attract tourists. Coffee, spices like pepper, cardomom, fruits like orange, butter fruit, jack fruit are grown in Yercaud. This district has rich cultural heritage which has been major attraction for the locals. This district is dotted with numerous temples and is also known for its arts and crafts. The total area under cultivation in the district of Thanjavur is 241292 hectares and the major crops grown in this district are rice, millets, groundnut, pulses, cotton, sugarcane, etc. Thanjavur district is also known as rice bowl of Tamil Nadu. This district is surrounded by vast stretches of fertile lands and tea gardens. It is a major tourist destination with its cascading waterfalls and countless pilgrim centers. Kumbakarai Falls, Suruli Falls and Sri Kamatchi Amman Temple are the major tourist destination. The major food crops grown in this district include Paddy, Bajra, Jowar, Ragi, Samai, Maize, Redgram, Blackgram, Cowpea, Greengram, Lablab and Kollu. The cash crops grown in the Theni district include Cardamom, Chillies, Arecanut, Pepper, Tamarind, Sugarcane, Coriander, Banana, Mango, Guava, Grapes, Jackfruit, Sappotta, Onion, Brinjal, Beetroot, Ladies Finger, Cotton, Tomatoes, Silk Cotton, Coconut, Groundnut, Sunflower, Coffee seeds, Betel Leaves, Tea, This district is largely dependent on agriculture. The chief crops cultivated in the district are rice, millets, pulses, sugarcane,
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18. Ramanathapuram

19. Salem

20. Sivagangai 21. Thanjavur

22. Theni

23. Tiruchirapalli

24. Tirunelveli

25. Thiruppur

26. Thiruvannamalai

27. Tiruvallur

28. Thiruvarur

gingelly, groundnut and cotton Some of the major crops grown in this district are rice, pulses, millets and other cereals, groundnut, sugarcane, cotton, gingelly, etc. Sericulture was introduced in Tiruchirappalli District in the late 70`s and the progress is slowly picking up. At present, it has got mulberry cultivation which is about 217.00 acres involving about three hundred and eight sericulturists in silkworm rearing. This district is an idyllic tourist destination. The tourist attraction of this district are Mundanthurai Wildlife Sanctuary, Kunthakulam Bird Sanctuary and the Manjolai Hill Station. The district is also dotted with numerous temples Krishnapuram Temple, Swamy Nellaiappar Temple and Kanthimathi Ambal Temple. This district contributes more than 25% of the Indian leather exports. There is also a fair amount of growth and progress of small scale industries and tanneries in this district. Thus, these industrial activities have not only generated employment opportunities, but also contributed to the overall economic growth of this district. The innovative self help groups 7of woman in this district are also playing a major role in shaping the rural economy and helping rural women to be self reliant. This district is one of the most venerated places in Tamil Nadu. Thiruvannamalai District is known for its two major businesses, agriculture and silk saree weaving. Rice cultivation and processing is the one of the biggest business in this district. The district started to industrialize following the establishment of the industrial complex near Cheyyar by the State Industries Promotion Corporation of Tamil Nadu (SIPCOT). This has initiated many automoble industries to setup their operation in producing spare parts for automobile. i.e. Mahindara & Mahindra, Ashok Leyland, etc One of the largest sugar mills in the country Cheyyar co-operative sugars - is situated near Cheyyar This district is largely an industrial along with agriculture. Some of the major industries located here are Madras Refineries, Madras Fertilizers, Manali Petro Chemicals, MRF, Ashok Leyland, TI Cycles, Britannia India Ltd. Basically an agriculture based district, it mainly contains village population with a few towns and some influence from the Chennai city. The district lies between Nagapattinam district on the east and Thanjavur district on the west, and is bounded by the Palk Strait on the south. The district produces rice, pulses, sugarcane, groundnut, gingerly oil and cotton. There are medium scale industries and small scale industries which supports and supply

Self Help Group (SHG) is group of females with the size of 10 to 15 members who will be selling their product which is processed or manufactured by the group

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29. Thoothukkudi

30. Vellur

31. Villupuram

32. Viruthunagar

materials for local consumption. This district also well known for it Khadi8 production. This district, also known as Tuticorin District, has been a district of Tamil Nadu state in southern India.. It is also known for Pearl cultivation with abundance of pearls found in the seas of Thoothukudi. This district has been famous for banana tree and most banana leaf is delivered to various district and the main exporter of banana leaves in Tamil Nadu. . Tuticorin has been the second largest producer of Salt in India next to Gujarat. Jaggery is produced from palmyrah juice; the production of jaggery is the main occupation of the people. The district produces rice, pulses, sugarcane, groundnut, gingerly oil and cotton. There are large scale industries, medium scale industries and small scale industries which supports and supply materials for local consumption. The innovative self help groups of woman are also playing a very useful role in building rural economy and helping rural women to be self reliant. Industries like Bharat Heavy Electricals Ltd Ranipet, Tamil Nadu Explosives Ltd., Katpadi. Have been set up. Besides there has been marked growth of small scale industries and Tanneries in the district This district enriched with black granites, blue metals and rivers and minerals is situated in the northeastern part of Tamil Nadu. The district of Viluppuram is developing in the industrial sector which also contributes significantly to the economy of the district. The Sugar industry is a major industry in the district with four sugar factories at Mundiyampakkam, Periasevalai, Kacharapalliyam and Mungailthuraipattu. The small scale industries include sixty seven rice mills, seventeen Sago factories, five rice bran oil extracting units and eight cotton ginning mills. The major food crops of the district of Viluppuram are paddy, ragi, cholam, cumbu, blackgram, redgram, varage and horsegram. The chief cash crops are sugarcane, groundnut, cotton, casuarina This district is bounded by Tirunelveli District to the southwest, Kerala state to the west, and Theni district to the northwest. Virudhunagar is famous for oil and cotton industry. Sivakasi, 20 km from Virudhunagar, is famous for its fireworks and printing presses. Srivilliputtur is very famous for Temples and Palkova.Aruppukottai is famous for spinning mills

Source: Government of Tamil Nadu, District, 2010

The term Khadi means cotton. Khadi is Indian handspun and hand-woven cloth. The raw materials may be cotton, silk, or wool, which are spun into threads on a spinning wheel called a charkha. It is a versatile fabric, cool in the summer and warm in the winter.Source: Kkadi and Village Industries Commission, 2011.

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The table 1.8 shows the various agricultural related businesses, manufacturing, industries and small-scale industries of Tamil Nadu. Tamil Nadu was the third largest economy (2007

2008, 2008-2009, 2009-2010) consecutively among all states in India, and also the most industrialised state in India. We can deem that Tamil Nadu itself has been an entrepreneurship hub for many business people. Natural resources available in Tamil Nadu offer opportunity for many entrepreneurs. Besides agriculture, Tamil Nadu has the major global automobile

companies and accessories manufacturing including BMW, Ford, Renault-Nissan, Caterpillar, Hyundai, Mitsubishi Motors and Michelin as well as local automobile majors like Ashok Leyland, Hindustan Motors, TVS Motors, Royal Enfield, MRF, Apollo Tyres and TAFE Tractors. Tamil Nadu has historically been an agricultural state and is a leading producer of agricultural products in India. In 2008, Tamil Nadu was India's fifth largest producer of Rice. The total cultivated area in the State was 56.10 million hectares in 2007 08. The Cauvery delta region of the Thanjavur district has been known as the Rice Bowl of South India. 1.8 ENTREPRENEURIAL DEVELOPMENT IN THANJAVUR DISTRICT Thanjavur District is one of the districts in Tamil Nadu which is well known for the production of rice . The district has been called as the rice bowl of Tamil Nadu since the major supply of varieties of rice comes from this district. The district is made of 8 Taluks namely Thanjavur, Papanasam, Kumbakonam, Thiruvaiyaru, Orathanadu, Thrupunandal, Pattukottai and Peravurani. Table 1-10 Thanjavur District Profile Area ( Sq.Km. ) POPULATION 3396.57

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Male Population Female Population Rural Population Urban Population TOTAL WORKERS Male Workers Female Workers Rural Workers Urban Workers Cultivators Agricultural Labourers Household Industry Other Workers

1096638 1119500 1467577 748561 897123 618471 278652 648453 248670 144942 410718 37986 303477

Table 1-9, Thanjavur District Profile Source: Thanjavur District, National Informatics Centre, District Collectorate, Thanjavur

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Table 1-11, Industries in Thanjavur District Types of Industries Medium Scale Industries Small Scale Industries Cottage Scale Industries Quantity (2001) 10 357 85 Quantity (2010) 18 428 85

Source: Thanjavur District, National Informatics Centre, District Collectorate, Thanjavur

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This district lies in the Kaveri delta region, the most fertile region in the State. Besides paddy, coconut and sugarcane are the major products. It is the largest producer of Coconut in Tamil Nadu. Even though the district is agriculture oriented, there are large number of small business owners in every corner of the village towns and city (Thanjavur Town). Many of them start-up their own business such as vegetarian hotels, restaurants, coffee & tea stalls, silk saree 9 store, Thanjavur Paintings and famous dancing dolls of Thanjavur etc. This is an indication of entrepreneurial activities among the people living in this district. Among the population, 14.4 lakhs of the population are residing in the rural area.(see Table 1-10). Majority of them are famers involved in agriculture. Besides farming, many of them do engage in non-agriculture business as shown in Table 1-10.

1.9 IMPROTANCE AND CONTRIBUTION OF THE RESEARCH

The role of the state in economic development began to change dramatically with the advent of the Industrial Revolution . Hence, the resulting industrialization and economic development were based on the establishment of individual property rights that encouraged the growth of private capital. Competition and individual enterprise thrive in this environment because individuals pursue their self-interest of survival and wealth accumulation. The instinct to survive under competitive pressures yields innovation and productivity increases, which eventually lead to entrepreneurial activities that give the individual an opportunity to explore. India is no exception to this trend. India was dragged into the industrial era. Many of the technological developments that have since taken place in India have been geared more towards

A traditional attire for Indian women which is made from silk which comes in a variety of colours and /or in even made from gold thread.

37

the export market than bringing about all-round improvements in the quality of life for the Indian masses.

The Indian economy has experienced a major restructuring through entrepreneurship development with the changes brought about by the Industrial Policy Resolution of June 1991. The deregulation of Indian economy provided the private sector with numerous opportunities to exploit the emerging demands in this huge market. Industries are moving from fragmented phases to consolidated ones. Entrepreneurship has become the major means of income in the rural industries.

Indian Entrepreneurial Activities also have been undergoing unprecedented change since the liberalisation era. The industries in rural area have been undergoing a profound restructuring since the mid-1990s. This restructuring has been driven by substantial changes in regulatory affairs, increased financial assistance and encouragement for economic performance that support rural entrepreneurship. Some of these factors include licensing, insurance, royalties, shareholder return, patent and generic competition, extremely high risk and costly research and development, clinical trial issues, international regulation and marketing distributions. The introduction of a system of product patents on January 1, 2005 has profound implications for the entrepreneur inventors which has brought innovative products that can be marketed in the open market. Products that are most popular among the rural communities are solar powered lamps, solar powered stove and ploughing machine using a two wheeler engine. Many more products have been introduced to meet the needs of the growing population for their pleasant livelihood.

The new patent regime has also led to the multinationals from other countries, to look at India not only for its traditional strengths in contract manufacturing but also as a highly attractive
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location for research and development (R&D). The International Crops Research Institute for the Semi-Arid-Tropics (ICRISAT) is a non-profit, non-political organization that conducts agricultural research for development in Asia and sub-Saharan Africa with a wide array of partners throughout the world. This research center is situated in Hyderabad. This is an indication of Indias role in providing better source of income for the farmers by using technology based agriculture methods.

The findings of the study are relevant to entrepreneurship development in rural area mainly for the following reasons:

(1) It identifies the entrepreneurship development activities in rural area, (2) Its highlights the role of support from institutions for entrepreneurship development in rural area. (3) It shows the motive of the villagers choosing entrepreneurship. (4) It identifies factors promoting sustainability of entrepreneurial activities in rural sector (5) It highlights the need for Training of rural communities in entrepreneurship development

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1.10 ORGANISATION OF THE DISSERTATION The study is organised into chapters as mentioned below CHAPTERS Chapter One Chapter Two Chapter Three Chapter Four Chapter Five TITTLE/CONTENTS Introduction Review of Literature Research Methodology Data Analysis and Interpretation Results and Discussion Bibliography Annexure

40