Like other economic concepts, entrepreneurship has long been debated and discussed. It has been used in various ways and in various senses, while some call entrepreneurship as ‘risk-bearing’ others view it innovating and yet others consider it ‘thrill-seeking’.

According to Higgins, “Entrepreneurship is meant to be the function of seeking investment and production opportunity, organising an enterprise to undertake a new production process, raising capital hiring labour, arranging the supply of raw materials, finding site, introducing a new technique and commodities, discovering new sources of raw materials and selecting top managers of day-to-day operations of the enterprise”. In this definition entrepreneurship is described as the function of handling economic activity, undertaking risk, creating something new and organising and coordinating resources.

At a conference on entrepreneurship in the United States, entrepreneurship was defined as an attempt to create value through recognition of business opportunity, the management of risk-taking appropriate to the opportunity, and through the communicative and management skills to mobilize human, financial, and material resources necessary to bring a project to fruition. This definition recognizes that entrepreneurship is both an art as well as a science which involves the fusion of capital, technology and human talent and is a dynamic and risky process.

However, it is a young or immature science. In order to build the body of knowledge that underlies the art of entrepreneurship, we must create academic models that can successfully be applied in industry. The art and science of entrepreneurship are complementary to each other and, therefore, require simultaneous advances in both theory as well as practice.

According to Diamond, “Entrepreneurship is equivalent to enterprise which involves the willingness to assume risks in undertaking an economic activity particularly a new one ____. It may involve an innovation but not necessarily so. It always involves risk-taking and decision-making, although neither risk nor decision-making may be great significance”. In this definition, entrepreneurship is used to refer to the qualities required to innovate, start a new enterprise, accept the challenge and bear the risk. Few individuals have these qualities and, therefore, entrepreneurs are found in limited numbers in any society.

According to A.H. Cole “Entrepreneurship is the purposeful activity of an individual or a group of associated individuals, undertaken to initiate, maintain or aggrandize profit by production or distribution of economic goods and services”.

Jaffrey A. Timmons defined entrepreneurship as “the ability to create and build something from practically nothing. Fundamentally, a human creative activity, it is finding personal energy by initiating, building and achieving an enterprise or organisation rather than by just watching, analyzing or describing one. It requires the ability to take calculated risk and to reduce the chance of failure. It is the ability to build a founding team to complement the entrepreneur’s skills and talents. It is the knack for sensing an opportunity where others see chaos, contradiction and confusion. It is the know-how to find, Marshall, and control resources and to make sure the venture does not run out of money when it is needed most”.

According to Peter F. Drucker, “Entrepreneurship is neither a science nor an art. It has a knowledge base. Knowledge in entrepreneurship is a means to an end. Indeed, what contributes knowledge in practice is largely defined by the ends, that is, by the practice”. In Drucker’s view, entrepreneurship is considered less risky, if the entrepreneur is methodical and does not violate elementary and well-known rules.

In all above definitions, entrepreneurship refers to the functions performed by an entrepreneur in establishing an enterprise. Just as management is regarded as what managers do, entrepreneurship may be regarded as what entrepreneurs do. In other words, entrepreneurship is the act of being an entrepreneur. Entrepreneurship is a process involving various actions to be undertaken to establish an enterprise. It is, thus, process of giving birth to a new enterprise. Innovation and risk-bearing are regarded as the two basic elements involved in entrepreneurship.

Though the term entrepreneur is often used interchangeably with entrepreneurs, yet they are conceptually different. The relationship between the two is just like the two sides of the same coin as depicted in the following table.

Thus, entrepreneurship is concerned with the performance and coordination of the entrepreneurial functions. This also means that entrepreneur precedes entrepreneurship.

What entrepreneurship involves?

Entrepreneurship involves the following :

– Confidence in an idea and a willingness to accept the hard work necessary for turning the creativity of dreams into reality.

– Seeing the opportunity presented by change that others have not had the courage to act on.

– Taking controllable risks rather than gambling or relying on sheer luck.

– Costs other than money; time, energy, reputation, emotional drains.

– Reality testing : recognizing realistic limits imposed by the economy or physical resources available.

– Knowing and understanding customers and their needs.

– A basic understanding of business and products or services.

– Keeping and interpreting business records.

– Careful planning to reduce risks.

– Knowing the actions, strengths and weaknesses of competitors.

– Having right location, and also right size and right price: or lease rate for that location.

– Building a team of people with complementary skills and talents.

– Sensing opportunities, while others see chaos, contradiction, and confusion.

– Finding and controlling resource (often owned by others) to pursue the opportunity.

– Having a vision and then having the passion, commitment, and motivation to transmit this.

– Vision to others (employees, partners, suppliers and customers).

– A willingness to take responsibility and ability to put mind to task and see it through from inception to completion.

Nature and Characteristics of Entrepreneurship :

Entrepreneurship is a multi-dimensional concept and it is unnecessary to consider many factors and perspectives. The distinctive features of entrepreneurship are as follows :

1. Innovation: The process of commercialising an invention is innovation. For example, Stearn as an alternative source of energy was invented as early as AD 100. Later, in 1712, when it was used to run engines then the process was called innovative. In simple words, in business activity, novelty may take any one or a combination of the following :

a) new products ;
b) new methods of production ;
c) new markets ;
d) new sources of raw material ; or
e) new forms of organisation.

Innovation is a critical aspect of entrepreneurship. Entrepreneurs always try to create new and different values and get satisfaction in doing so. They try to convert a material into a resource or, combine the existing resources in a new and more productive manner. The act of innovation thus provides resources with a new capacity to create wealth.

2. Motivation : Motivation comes from the word ‘motive’ (or goal). It means the urge in an individual to achieve a particular goal. In other words, it is the need to achieve that motivates a person. You may find many people with sufficient financial resources and. family support who are interested in independent ventures. Yet, very few actually start their business. Why is it so? Because they are comfortable in doing routine jobs and have no higher goals in life. They lack ‘motivation’. Entrepreneurs generally are highly active. They struggle constantly to achieve something better than what-they already have. They like to be different from others and are ready to work hard to reach their goal.

Persons experiencing constant need to achieve always try to understand their strengths and weaknesses. This enables them to seek external help whenever needed.

Let us take a look at the ‘Vadilal’ group which is household name today in Gujarat. ‘Vadialal Ice Cream’ is a premier brand in the consumer market. You may. be surprised to know that Ramachandra Gandhi and Laxman Gandhi, the two brothers who founded the Vadilal empire, could not even complete their school education. They started in a small way by selling homemade ice cream in the city of Ahmedabad. Now, Vadilal is the largest ice cream company in the country.

How did they do it? They did not stop thinking big. They had the courage to do what they wanted to. Entrepreneurial persons seek rewards or returns earned through their own efforts and do not depend upon ‘luck’. They do not like to be idle.

3. Risk Taking : Risk-taking implies taking decisions under conditions where the reward on a certain action is known, but the occurrence of the event is uncertain. While doing so, an entrepreneur becomes responsible for the result of the decision. This responsibility however cannot be insured against failure.

Imagine that you are a qualified pharmacist and that you have got a large sum of money from your parents. Which of the following options would you choose?

a) Invest in a bank deposit with 8 per cent annual interest;

b) Invest in a company with a possible return of 15 per cent;

c) Start a medical shop in your locality (because people there have to travel a long distance to get medicines) with a fairly good chance of marking an immediate return of around 10 percent. (You are also aware that the business is sustainable and can bring in more returns say 20,30 or 50% in future if you put in your time and effort);

d) Try your hick in the share market. Clearly, option ‘c’ calls for an entrepreneurial quality. Remember that successful entrepreneurs usually choose the moderate or middle path. They are not gamblers. At the same time, they are hot afraid of taking a decision if there is a reasonable chance of success. You must be aware that businessmen spend considerable amount of time in planning their enterprises. They study the market technology, examine and re-examine the demand, the prices, machinery and processes involved, make detailed enquiries about sources of finance and think about other business lines. Why do you think they do through all these processes? In order to minimize the risks involved and avoid difficulties that may arise in the future, as far as possible :

4. Organisation Building : According to Harbison entrepreneurship implies the skill to build an organisation. Organisation building ability is the most critical skill required for industrial development. This skill means the ability to ‘multiply oneself by effectively delegating responsibility to others. Unlike Schumpeter, Harbison’s entrepreneur is not an innovator but an organisation builder who harnesses the new ideas of different innovators to the rest of the organization. Entrepreneurs need not necessarily be the men with ideas or men who try new combinations of resources but they may simply be good leaders and excellent administrators.

5. Managerial-Skills and Leadership : According to Hoselitz, managerial skills and leadership are the most important facets of entrepreneurship. Financial skills are only of secondary importance. He maintains that a person who is to become an industrial entrepreneur must have more that he drive to earn profits and amass wealth. He must have the ability to lead and manage. He identifies three types of business leadership, namely merchant money lenders, managers and entrepreneurs. The function of the first group is market oriented, that of the second is authority-oriented while the third group has a addition to these a production-orientation.

The commodity with which a money lender deals is acceptable to everyone but an industrial entrepreneur creates his own commodity and its acceptability is uncertain. Therefore, the entrepreneur assumes more risk than a trader ora money lender. Only a strong desire to make profit is not enough to succeed in entrepreneurship. Entrepreneurship can develop in a society where its culture permits a variety of choices and where social processes are not rigid. The social conditions should encourage the development of enterprise. There are innumerable cases, in entrepreneurial history, of firms, which failed because their founders could not function as managers or feared to enlist the services of managers when required.