Entrepreneurship

• Its role... development process ...

 Key Role in Taking Fast-growing Economies to Greater
Heights in the Global Markets

• Entrepreneurial mindset of a nation’s human

resources

Role of the entrepreneur would be to innovate and

create economic opportunities for others
Role of government and its partners would be to create a
dynamic enterprise environment and a well functioning
market
Industry to be Patent Literate
 Entrepreneurship and Wealth Creation
Economic Development

Entrepreneurship

Wealth Creation
Resources
Ever Changing Concept of Value Creation in the
Mind of Customer
Past Present Future
Key to Development—Spirit and Mindset of
Entrepreneurial Leadership

Opportunity Resource
Identification Organization

Value
Creation

Sustainable Development
Entrepreneurship and Economic Development

Development

Growth

Expansion

Entrepreneurship
Leads to Economic
Activities

Scientific Temper Innovation Technology Development

 Entrepreneurship Accelerates
Growth and Development

• Channelizing factors of production in areas wherein

they contribute the maximum possible value addition.

• In case it does not evolve from within, at a local, regional or

country level, then entrepreneurs from outside enter to
provide goods and services needed and demanded by the
people.
 Types of Innovations
• Innovation can be of 3 types, on the basis of extent of change they cause in

consumer’s existing habits.

– Discontinuous innovations

– Dynamically continuous innovations

– Continuous innovations.

• The classification of an innovation along the above lines is done on the basis of the

extent to which the innovation causes change in existing customer habits.

 Discontinuous Innovations
• Discontinuous innovations by their very nature are discontinuous to every

customer segment, since they comprise new-to-the-world products only.

• These new products are so fundamentally different from products that

already exist that they reshape markets and competition.

• For instance, mobile phone technology and the Internet drastically

changed the way people communicate.

 Dynamically Continuous Innovation
• The development of new products that are different from previously available products

but that do not strikingly change buying or usage patterns.

• Thus the company remains in the same product and markets but continues to improve the

products.

• This needs to be done dynamically (to save time and increase effectiveness), as well as

continuously, because of the effect of the product life cycle. Compare discontinuous innovation.

• Dynamically continuous innovation falls between the discontinuous and continuous innovation. The

changes in customer habits caused by such an innovation are not as large as in a discontinuous

innovation, and not as negligible as in a continuous innovation.

• For instance, the progression from a manual to an electronic typewriter, and the advent of cable

and satellite television are examples.

 Continuous Innovation
• Continuous innovation is the other extreme where an existing product undergoes

marginal changes, without altering customer habits.

• Sometimes the customer may not even perceive these products to be new though the company

may invested a lot of money to improve its existing products.

• For instance, a shampoo which is different from existing products only in its brand name,

fragrance, color, packaging is also a new product, though it is a continuous innovation.

• The continuous innovation should be above the perceptual threshold of the customer i.e. there

should be a ‘Just Noticeable Difference’ (jnd) between the continuous innovation and the

existing options for the customer to perceive this innovation as an improvement. The customer

should find the new product different from the existing options that he is aware of.
INNOVATION MATRIX
 Types of Innovations

Incremental Innovation
• Incremental Innovation is the most common form of

innovation. It utilizes existing technology and increases

value to the customer (features, design changes, etc.)

within the existing market.

• Almost all companies engage in incremental innovation

in one form or another.

 Types of Innovations
Disruptive Innovation

• Disruptive innovation, also known as stealth innovation, involves applying

new technology or processes to the company’s current market. It is
stealthy in nature since newer technology will often be inferior to existing
market technology, more expensive, has fewer features, is harder to use,
and is not as aesthetically pleasing.

• It is only after a few iterations that the newer technology surpasses the
old and disrupts all existing companies.

• Then, it might be too late for the established companies to quickly

compete with the newer technology.
 Types of Innovations
Architectural Innovation
• Architectural innovation is simply taking the lessons, skills and overall
technology and applying them within a different market. This innovation is
amazing at increasing new customers as long as the new market is
receptive. Most of the time, the risk involved in architectural innovation is
low due to the reliance and reintroduction of proven technology.
• In 1966, NASA’s Ames Research Center attempted to improve the safety of
aircraft cushions. They succeeded by creating a new type of foam.
• Originally it was commercially marketed as medical equipment table pads
and sports equipment, before having larger success as use in mattresses.
This “slow spring back foam” technology falls under architectural
innovation. It is commonly known as memory foam.
 Types of Innovations

Radical innovation
• Radical innovation is what we think of mostly when
considering innovation.
• It gives birth to new industries (or swallows existing
ones) and involves creating revolutionary
technology.
• The airplane, for example, was not the first mode of
transportation, but it is revolutionary as it allowed
commercialized air travel to develop and prosper.
 Different Types of Innovations

• Product innovation which results in creation of new products

or improvements in the existing products.

• Process innovation results from improvement in some part of

the process or introduction of a new process to provide
additional benefits.

• Positioning innovation involves creating a market for the

product or service through repositioning.

• Paradigm innovation involves major shift in thinking that

causes change
Entrepreneurship and Economy...
• Entrepreneurship is one of the most important inputs in

the economic development of a country.

• Entrepreneurs play a central role in the economy by

establishing firms, which in turn create markets and

organizations.

• It is an individual engages in entrepreneurial

activities before the firm is established and then
becomes an owner after the firm is established.
 Entrepreneurship and Economy...

• In India, Entrepreneurs have performed below

expectations due to different problems like,

– environmental related factors,

– lack of focus on entrepreneurial activities by

governments,
– frequent government policy changes
 Entrepreneurship and Economy...

• Entrepreneurship Promotions should thus ensure:

– The availability or possession of managerial

capacity

– And the acumen before pursuing financial resources

for the development of the respective enterprise.

 Role of Entrepreneurs in
Economic Development...

• An entrepreneur takes more risk for the organizational development.

• Entrepreneur gives innovation to the industry.

• This in turn bring innovation in terms of new products, services,

and ideas which ultimately brings economic development of the

country.
 Role of Entrepreneurs in
Economic Development...

• The entrepreneurs with their ability to scan and analyze, identify

opportunities in the environment to transform them into business

proposition through creation of economic entities.

• They channelize the resources from less productive to more

productive use and create wealth.

 Role of Entrepreneurs in
Economic Development...

• Through the efficient and effective utilization of

national resources, they act as catalysts for economic

development.

• They are the agents of social transformation and

change.
 Role of Entrepreneurs in
Economic Development...

• Computers, mobile phones, washing machines, ATMs,

Credit Cards, Courier Services, Ready to eat Foods,

Mobile Banking, Money Transfers, etc. are all examples

of entrepreneurial ideas that got converted into

products or services of today.

 Role of Entrepreneurs in
Economic Development...

• Entrepreneurship is basically concerned with creating wealth

through production of goods and services.

• This results in a process of upward change whereby the real

per capita income of a country rises overtime or in other

words economic development takes place.

 Role of Entrepreneurs in
Economic Development...

• The sociologists feel that certain communities and

cultures promote entrepreneurship

• E.g., in India we say that Baniyas, Gujaratis and

Sindhis are very enterprising.

 Role of Entrepreneurs in
Economic Development...

• It speeds up the process of activating factors of

production,

• leading to a higher rate of economic growth,

• dispersal of economic activities, and

• development of backward regions.

 Impact of Entrepreneurship in the
Economic Development of India

1. Capital Formation
• Entrepreneurs by placing profitable business proposition attract
investment to ensure private participation in the industrialization
process.
• Entrepreneurs promote capital formation by mobilizing the idle savings
of public.
• They employ their own as well as borrowed resources for setting-up their
enterprises.

• Entrepreneurial activities create wealth and thereby industrial and

economic development of the country takes place.
 Impact of Entrepreneurship in the
Economic Development of India
2. Generate Employment

• Entrepreneur is not the job seekers but job creators and job providers.
• With the globalization process the government jobs are shrinking leaving
many unemployed, therefore, entrepreneurs are the only hope and source
of direct and indirect employment generation.
• Entrepreneurs provide immediate large-scale employment to the
unemployed which is a chronic problem of underdeveloped nations.
• With the setting up of more and more units by entrepreneurs, both on
small and large-scale, numerous job opportunities are created.
 Impact of Entrepreneurship in the
Economic Development of India

3. Improve Standard of Living

• Increased demand for goods and services boost up

industrial activity.

• Large scale production will result in economies of

scale and low cost of production

 Impact of Entrepreneurship in the
Economic Development of India

4. Wealth Creation and Distribution

• It stimulates equitable redistribution of wealth and income in

the interest of the country to more people and geographic areas,

thus giving benefit to larger sections of the society.

• Entrepreneurial activities also generate more activities and give a

multiplier effect in the economy.

 Impact of Entrepreneurship in the
Economic Development of India

5. Increasing Gross National Product & Per Capita

Income
• Entrepreneurs convert the latent and idle resources like land, labor and

capital into goods and services resulting in increase in the national income
and wealth.

• The increase in national income is the indication of increase in net national

product and per capita income of the country.
• They explore and exploit opportunities, encourage effective mobilization of capital and
skills, bring in new products & services, and thereby develops markets for growth of the
economy.
 Impact of Entrepreneurship in the
Economic Development of India

6. Promotes Country's Export Trade

• Entrepreneurs help in promoting a country's export-trade, which is
an important ingredient of economy.

• They produce goods and services in large scale for the purpose of earning
foreign exchange from export in order to combat the import dues
requirements.

• Hence import substitution and export promotion ensure economic

independence, development and equilibrium in B-O-P.

 Impact of Entrepreneurship in the
Economic Development of India

7. Facilitates Overall Development

• Entrepreneurs act as catalytic agent for change which results in
chain reaction.

• Once an enterprise is established, the process of industrialization is

set in motion, this generates demand for various types of
ancillary and support services units and thereby creates multiplier
effect.
 Difference in
Entrepreneur and Intrapreneur

Basis Entrepreneur Intrapreneur

• Capacity — Owner — An manager
• Status — Own boss — Salaried employee
• Decisions — Takes own — Executes decisions
decisions with the concurrence
— Uncertain and of owner
• Reward
unlimited — Fixed rewards and
salary
 Difference in
Entrepreneur and Promoter
Basis Entrepreneur Promoter
• Stage of business — From conception to — To bring a business into
continuation existence

• Owning business —Owns the enterprise — May or may not own

• Nature of job — Includes everything — Highly specialised

• Example — Any business — A consultant or a chartered

account and offering services
Thank You,
All!