Concept of Entrepreneurship
Entrepreneurship is the process of creating new enterprises. It involves purposeful and systematic innovation. Innovation is doing something new or different. Innovation is essential to address the changing demands of the customers and grab opportunities. Risk bearing is another basic element of entrepreneurship. Risk is the degree of uncertainty involved in a particular work or activity. Risk arises due to changes in organizational and market conditions. Innovation is always risky. Entrepreneurship involves bearing the risk involved in the enterprise. It also involves the exploration of opportunity. For this, resources are acquired and managed. They may be capital, men, material, technology, equipment, etc.
Entrepreneurship is important for economic and social development. Entrepreneurs develop new products and technology which eventually increase the productivity of all sectors of society.
The following are some of the notable definitions of entrepreneurship.
* Hisrich et al__
Entrepreneurship is the process of creating something new with value by devoting the necessary time and effort; assuming the accompanying financial, psychic, and social risks and uncertainties; and receiving the resulting rewards of monetary and personal satisfaction.
* Schumpeter__
Entrepreneurship is based on purposeful and systematic innovation, It essentially consists of doing things that are not generally done in the ordinary course of business routine.
* Holt__
An entrepreneur is a person who starts a new venture, taking the initiation and risk associated with it and does so by creating something new to provide value to the customers.
* Drucker__
Entrepreneurship is gathering and using resources to produce results, It is allocating resources to opportunities rather than problems.
From the above discussion and definitions, it may be concluded that entrepreneurship is a creative process of starting and managing a venture for seeking opportunities.
Entrepreneurship Importance/ Significance
Entrepreneurship is regarded as the engine of economic development Of a country. It is important for individual, social and national development. This is especially true in the developing world, Where SUccessful small businesses are the primary engines of job creation and reduction. The importance/ significance of POverty entrepreneurship may further be mentioned through the following points.
1. Formation of capital:
Capital is the most important prerequisite for the economic development of a country. It involves physical human and intellectual capital. Entrepreneurship promotes capital formation by mobilizing the savings of the people. The abundance of capital promotes economic activities.
2. Employment generation:
Entrepreneurship involves starting new ventures by setting up a new enterprise. Entrepreneurs create employment for themselves as well as others. Employment enhances the living standard of the people. It eventually helps to uplift the economic development of the country.
3. Balanced regional development:
Entrepreneurship is one of the key factors for the balanced regional development of a country. Entrepreneurs set up ventures in different parts of the country to exploit the factors of production, capture larger markets, enjoy better facilities granted by the government, etc. This leads to the balanced regional development of the country.
4. Resource mobilization:
Entrepreneurship involves the identification and exploitation of opportunity. For this, they bring resources together and manage them to create utilities in form of goods and services. Effective resource mobilization enhances both production and productivity. The use of technology is promoted to enhance resource efficiency.
5. Promotion of export:
Entrepreneurship is important for the promotion of export. It promotes the development of trade and industry. Entrepreneurs constantly search for the development of new products as well as markets. They even attempt to serve foreign markets by exporting their products. Export helps in earning foreign currency. It also helps to maintain the balance of payment. It further promotes the economic development of the country.
6. Enhancement of productivity:
Productivity is the ratio between input and output. Entrepreneurship promotes innovation for the opportunity and effective utilization of resources. It also encourages the use of modern technology. Quality of the products and services is ensured. It eventually helps to achieve production as well as productivity.
7. Equitable distribution of wealth:
Entrepreneurship promotes the equitable distribution of wealth. It promotes employment opportunities to all sectors of society. Similarly, it encourages setting up ventures in all areas of the country. It reduces economic concentration from corporate sectors. Self-employment is promoted. All these help to have equita>le distribution of wealth.
8. Backward and forward integration:
Entrepreneurship induces backward and forwards linkages. It stimulates the process of economic development in a country. A backward linkage is a form of vertical linkage that involves the purchase of suppliers. It results in improved efficiency and cost savings. In contrast, forward linkage involves linkage with distributors.
9. Political stability:
Entrepreneurship promotes economic Opportunity to the people. It further strengthens democracy which eventually results in greater political stability. All these help to bring prosperity to a country.
