This theory is also called innovation theory or dynamic theory. According to this theory, the entrepreneurs emerges because of individuals having certain psychological elements i.e., will power, self-intuitions, tolerance capacity. The entrepreneur is a person who has creative nature. Entrepreneurship refers to a process of action which an entrepreneur undertakes to establish an enterprise. It can be defined as the propensity of mind to take calculated risks with confidence to achieve a predetermined business or industrial objective. It creates wealth by bringing together resources in new ways to start and operate an enterprise. It is the process of planning, organizing, operating and assuming the risk of a business venture. It is the ability to take risk independently to make more earnings in the market oriented economy.