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Entrepreneurship: Concept & Its Relevance in Indian Society

Entrepreneurship is often seen as an innovative field. Entrepreneurs identify opportunities for innovation, apply skills, or hire skilled persons, creating goods and services that meet people’s needs and bring huge profits. Because entrepreneurs’ lifestyles and operations in various technical fields have improved. Entrepreneurs are risk-takers for profit and also problem solvers in society.

India is a country of diversity in every respect. The landforms, the people, the cultures, and everything else are different. There are diverse resources available for an Indian entrepreneur in India itself. There are diverse needs in a diverse population. With India’s huge population comes a number of problems that need to be solved in day-to-day operations.

Several technical fields also need the help of innovation to simplify their tasks. Though India has entrepreneurs mostly in MSMEs, particularly at the micro level, Indian startups have grown because of several encouraging schemes. However, it is important to note that India has few entrepreneurs who have scaled their businesses.

Harness India’s diversity and drive your business forward with MSME Registration to transform innovative ideas into impactful solutions and thrive in the vibrant Indian market.

What is the Definition of Entrepreneurship?

There are several definitions from many scholars that define “Entrepreneurship”. Some are as follows:

• Joseph Schumpeter, the former Finance Minister of German-Austria, says, “The entrepreneur, in an 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 manufacturing, a product with which consumers are not yet familiar, a new source of raw material or new markets and the like”.
• Adam Smith, a well-known Scottish economist and philosopher, said, “The entrepreneur is an individual who forms an organization for commercial purposes. They are a proprietary capitalist, a supplier of capital, and at the same time a manager who intervenes between the labour and the consumer.” “Entrepreneur is an employer, master, merchant but explicitly considered as a capitalist”.
• Peter Ferdinand Drucker, an Austrian-American consultant and educator, has contributed widely to modern management theory. According to him, “An entrepreneur is the one who always searches for change, responds to it, and exploits it as an opportunity. Innovation is entrepreneurs’ specific tool, exploiting changes as an opportunity for a different business or service.”

Glimpse about Entrepreneurship

The word “Entrepreneur” originated from the French word “entrepreneur”, which means “to undertake”. From the above definitions, the following features of Entrepreneurship can be figured out:

Problem Solving

An entrepreneur identifies problems. He may identify a problem in some technical fields where more convenience can be provided to professionals and help resolve it or offer a new product to enhance their outcome. People’s general issues can be solved, easing their day-to-day lives, or luxurious products can also be provided that enhance their pleasure. An entrepreneur may also come up with ways to resolve the issues of other entrepreneurs.

Organization

The main feature of entrepreneurship is that it involves organization. The entrepreneur organizes and assembles all the factors needed to provide a product or a service. This can include a smooth supply of sources that are convenient for him in all aspects, like the price and the quality, or a source of professionals or experts who can offer the smooth, efficient service that he purports to innovate and provide.

It also has to organize the channels for supplying its goods or services, such as transport facilities or mediums for delivering the service, which may include an online portal or a shop or centre. Organization and management of all the factors involved in entrepreneurship are among its main features.

Capital Investment

Entrepreneurship involves capital investment. The capital requirement is the biggest barrier for anyone considering entrepreneurship. One needs a good capital fund to raise all the factors mentioned above. An entrepreneur may gather capital with the help of angel investors, loans, or savings. Also, one can go ahead with fundraising services for startups.

Undertaking Risk

Capital investment naturally comes with a considerable risk. The vision and management of the entrepreneur determine how he makes the investment less risky by ensuring a market for his products and services. An entrepreneur with a clear business plan who ensures a market for his products or services before investment lessens the risk factor in his business.

Motive of Profit

The main motive in entrepreneurship is to earn profits. Hence, the areas that entrepreneurs usually seek for innovation and business are the ones that solve a problem, as they enjoy the benefit of being the first mover in such cases and monopoly. Seeking opportunities where there is a high demand and less supply, providing the supply, and maximizing profits are some of the usual practices of entrepreneurs.

Bridge between the Labour and the Consumer

Entrepreneurship is a bridge between labourers’ labour and the consumer. Craftsmen, other professionals, or skilled persons supply their products or make their services available to the entrepreneur, and the entrepreneur finds a market and enables a better reach of the product with his innovative business model.

Innovation

Innovation doesn’t necessarily mean a new product, but in the sense of an entrepreneur, it means an innovation of a business model. Though he may not be introducing anything new, his skills in identifying the market and supply and planning the business to reduce the risk factor and maximize profit bring him value.

What are the Types of Entrepreneurs?

There are different ways to classify entrepreneurs based on different categories. They are as follows:

Based on Business Type

• Trading Entrepreneur

A trading entrepreneur buys products in bulk from the manufacturer and steals them from the consumer or the retailer. Such entrepreneurs include retailers, wholesalers, dealers, etc.

• Manufacturing Entrepreneurs

These entrepreneurs often use innovation to meet the market’s needs and manufacture products accordingly. They turn raw materials into products that can be consumed. They are the value adders.

• Agricultural Entrepreneurs

Agricultural Entrepreneurs engage in agricultural activities, gathering all the resources to implement them and produce agricultural products.

Based on Technology

• Technical Entrepreneurs

These entrepreneurs carry out businesses that are primarily based on science and technology. Their main aim is to use science and technology for innovation and invention to help other industries or the general people.

• Non-Technical Entrepreneurs

These are entrepreneurs whose businesses are not based on science and technology. They develop an alternative strategy for their business and use traditional methods.

Based on Ownership

• Private Entrepreneurs

Private entrepreneurs are general citizens who start businesses and are sole proprietors. The term also refers to persons in positions in a company performing entrepreneurial functions.

• State Entrepreneur

When the state or central government carries out business, it is called state entrepreneurs. In this case, the government wholly owns the business, enjoying its profits and bearing its losses.

• Joint Entrepreneur

When private and state entrepreneurs jointly run a business, it is called joint entrepreneurship. In a joint entrepreneurship, both entities may have shares in differing proportions.

Based on Gender

• Men Entrepreneurs

When a business is formed, operated and managed by men, it is called men’s entrepreneurship.

• Women Entrepreneur

When a business is formed, operated, and managed by women, it is called women’s entrepreneurship. Moreover, if women hold 51% or more of the capital, it can even be called women’s entrepreneurship.

Based on the Size of the Business

• Small Scale Entrepreneur

If an entrepreneur’s investment in starting a business is less than 1 crore, including plant and machinery, then it is a small-scale entrepreneurship.

• Medium Size Entrepreneur

Suppose an entrepreneur’s investment in starting a business is more than 1 crore but less than 5 crores, including the required plant and machinery. In that case, it is a medium-scale entrepreneurship.

• Large Scale Entrepreneur

If an entrepreneur invests more than 5 crores in starting a business, including the plant and machinery required, then he is a large-scale entrepreneur.

Classification of Clarence Danhof

Clarence has classified entrepreneurs into 4 categories. They are as follows:

• Innovative Entrepreneurs

These are the entrepreneurs who are innovative and experimental. They come into the market with new products and solutions, restructure it, and create a new market. They are inclined to research and attract business by providing innovative solutions.

• Imitative Entrepreneurs

These entrepreneurs copy innovative entrepreneurs and try to bring the same product or service to market as an alternative to the original one. They often help improve the innovative product or suggest more uses for it.

• Fabian Entrepreneurs

These are the entrepreneurs who rarely change their business practices. They are often seen making decisions with deep contemplation. They examine, contemplate and then act.

• Drone Entrepreneurs

These entrepreneurs traditionally do business and are sceptical about changing their practices. They do not change their business practices and often suffer more losses than any other entrepreneur.

All types of entrepreneurs need a solid foundation, from innovative to traditional. However, you can start your business journey with ease by registering your company in India and turning your entrepreneurial vision into a reality.

Know about Entrepreneurship in India

Entrepreneurship in India was far less than before the 1990s. India operated on a socialist model and had protectionist policies regarding foreign investment. The financial crisis and the recommendations of international financial organizations led to the adoption of a policy of liberalisation in the 1990s, which attracted many foreign investments. However, India still has only a few industrialists and businessmen.

As per the SOIL report 2023, the micro sector alone occupies 90% of the micro sector in MSMEs. Entrepreneurship in the village economy is at the micro level and lacks scalability. The Farmer-Producer Companies, however, seem to be a successful model that helps solve the problem of fragmented farming and is scalable.

It is pertinent to note that India has emerged as the third-largest ecosystem for startups. With just 450 startups in 2016, there are over 1.28 lakh startups. This is because of the government’s several initiatives, like the SETU scheme and the Startup India portal, which connect entrepreneurs with investors. However, it has been observed that only a few startups survive this wave.

India is quite successful in its export endeavours, with various councils and government organizations helping exporters carry out exports smoothly. Organizations like FIEO become the voice of the exporters before the government to bring favourable policies and help the exporters showcase their products in the global markets. Councils like the Engineering Export Promotion Council, CHEMEXCIL, etc., support their respective industries to flourish. This has helped Indian exports, which is why they are increasing.

However, several hurdles, mainly the complex regulatory work and exhausting compliances, make business difficult in India. It is also pertinent to note that the savings of the Indian population have reached a 5-year low point. Entrepreneurship involves risk factors, less disposable income, and less savings, which only discourages the population from entrepreneurship. Angel Investors, Incubators and government initiatives like the Mudra Yojana scheme are available. Still, more disposable income, more knowledge of entrepreneurship and working on the ease of doing business are essential for the success of entrepreneurship in India.

Conclusion

Entrepreneurship is an adventurous profession involving risks. One has to identify business opportunities, find a market, make a business model based on a statistical study and then invest. Loans, angel investors, savings, and incubators are many such sources that can help any business grow. Understanding the saturation point of any business, as well as being able to identify unexplored business opportunities, is an important skill an entrepreneur must have. Flexibility in handling the dynamic market and being open to change are essential qualities. Great organizational skill is the core of entrepreneurship.

The Indian entrepreneurship ecosystem is backed by several government initiatives and organizations as well as some non-governmental organizations. However, much work remains to create many startups and many surviving startups. It is important to bring scalability to the MSME sector. The lack of ease in doing business still stands as a big hurdle. However, the success of Indian exports is noteworthy.

Ready to turn your dreams of becoming a successful entrepreneur into reality? Visit our website, Enterslice, to discover how to register your company and seize opportunities with expert support. Start your journey in the entrepreneur world today.