Entrepreneurial Development

Lecture-1 Definition & Functions of entrepreneur

Definition of Entrepreneur
Defined in variety of ways. The concept various from country to country and from period to period & the level of economic development thought and perceptions Derived from French word enterprendre The term entrepreneur was applied by French economist, Cantillon in 18th century-a dealer who purchases the means of production for combining them into marketable products.

Definition of Entrepreneur
Bernard Belidor: buying labor and material at
uncertain prices & selling at contracted prices

Quesnay: regarded as rich farmer as an

entrepreneur who manages and makes his business profitable by his intelligence, skill and wealth Adam Smith: described entrepreneur as a person who only provides capital without taking part in the leading role in enterprise.

Definition of Entrepreneur
Schumpeter's The entrepreneur in advanced economy is an individual who introduces something new in the economy-a method of production not yet tested by experience in the branch of manufacture concerned, a product with which the consumers are not yet familiar, a new source of raw material or the new markets or like.

Definition of Entrepreneur
Schumpeter's He further states that the entrepreneur's function is to reform or revolutionize the pattern of production by exploiting an invention or more generally, an untried technological possibility for producing a new commodity

Definition of Entrepreneur
Peter Drucker: An entrepreneur searches for change, responds to it and exploits opportunities. Innovation is a specific tool of an entrepreneur hence an effective entrepreneur converts a source into a Resource. Kilby: Emphasizes the role of an imitator entrepreneur who does not innovate but imitates technologies innovated by others. Are very important in developing economies.

Definition of Entrepreneur
New Concept of Entrepreneur Perceives opportunities for profitable investments Explores the prospects of starting such a manufacturing enterprise. Obtains necessary industrial licenses Arranges initial capital Provides personal guarantees to the financial institutions Supplies technical know how

Functions of Entrepreneurs
Innovation: 1.The unexpected success or failure or any unexpected outside event,(e.g. when the IT bubble burst the ITES sector started growing.) 2. Innovation based on process need [e.g. plate based cameras, film based cameras, digital cameras] 3. Changes in industry and market structure [e.g. video cassette VCD,DVD, Blue ray disc] 4. Demographics changes (e.g. increasing number of working women and nuclear families in most metropolitan cities) 5.New knowledge (e.g. Pentium chip)

Functions of Entrepreneurs
Risk and uncertainty bearing Organization building Managerial functions Decision making functions

Functions of Entrepreneurs
I. Perception of market opportunities ii. Gaining command over scarce resources iii. Purchasing inputs iv. Marketing the products v. Dealing with bureaucrats vi. Managing human relations within the firm vii. Managing customer and supplier relations viii. Managing finance ix. Managing production x. Acquiring and overseeing assembly of the factory xi. Industrial engineering xii. Upgrading process and product xiii. Introducing new production techniques and products