The document discusses the concept and definitions of entrepreneurs and rural industries. It provides various definitions of an entrepreneur from different scholars as someone who organizes and manages a business undertaking and assumes the risk to make a profit. It also defines rural industries as any industry located in a rural area with a population of less than 20,000 people and investment of less than 3 crores in plant and machinery. The document further categorizes rural entrepreneurs into agricultural entrepreneurs, artisan entrepreneurs, merchant/trading groups, and tribal entrepreneurs based on their primary occupations and activities.

1. Presented By
Raghavendra M.com,
Lecturer in Commerce
Department of Commerce
GFGC CHIKKABASUR

2.  An Entrepreneur (ahn’tra pra
nur) is a person who organizes
and manages a business
undertaking, assuming the
risk for the sake of profit. Any
person (any age) who starts
and operates a business is an
entrepreneur.

3.  Entrepreneur is derived from the French
entreprendre, meaning “to undertake”.
 Although no single definition of entrepreneur
exists and no one profile can represent today’s
entrepreneur, research is providing an
increasingly sharper focus on the subject.

4.  Concept of Entrepreneur:
The word entrepreneur first appeared in the French language in
16th century. Since then it has been changing rapidly. It has
varied from country to country depending upon the level of
socio-economic development, purpose, problems of study, and
the field of specialization whether sociology, anthropology,
history, economics, psychology.
In early 16th century, the French applied the term entrepreneur
to the Men engaged in leading Military expeditions. Later
on they applied it to contractors and architects.
These Views Broadly Classified into three Groups Namely
Risk Bearer
Organizer
Innovator

5.  Richard Cantillon an Irish man living in France, was the
first who introduced the term entrepreneur and his unique risk
bearing functions in economics in the early 18th century. He
defined “entrepreneur as a an agent who buys factors of
production at certain prices in order to combine them in
to a product with a view to selling it at uncertain prices in
future.”
 Entrepreneur as an Organiser
 Jean Baptiste say, an aristocratic industrialist, with his
unpleasant practical experiences developed the concept of
entrepreneur. According to him an entrepreneur is one who
combines the land of one labor of another and the capital of
yet another and thus produces a product

6. Definitions of Entrepreneur:
1. According to Schumpeter, “ an entrepreneur is an innovator
whose functions is to carry out new combinations of means
of production. He introduces something new into the
economy:
(a) A new good
(b) A new production process
(c) Finds a new market
(d) Conquers a new source of supply of raw materials,
(e) Carries out a new organization of an industry.
2. According to Sharma and Akhouri defined the term
entrepreneur as ‘ one who owns and runs either a small or
medium scale industry or is engaged in the manufacturing of
handicrafts or has a service or supply unit’

7. Concept of entrepreneurship
The concept of entrepreneurship has also been defined by many.
According to author H. Cole, “ entrepreneurship is the
purposeful activity of an individual or a group of associated
individuals undertaken to initiate, maintain or distribution of
economic goods and services”.
Benjamin Higgins defined entrepreneurship as “ the functions
of seeing investment and production opportunities;
organizing an enterprise to undertake a new production
process raising capital, hiring labour arranging for supply of
raw-materials, finding a site and combining these factors of
production into a going concern; introducing new techniques
and commodities, discovering new sources of natural
resources; and selecting top managers for day to day
operations”

8. Characteristics of Entrepreneurs
Majority of the researchers have identified different
characteristics of entrepreneurs. Those are as follows,
1. Need for achievement
2. Need for influencing others
3. Risk taking
4. Openness to feedback and learning from experience
5. Need for independence
6. Hope of success
7. Belief that they can change the environment
8. Time orientation
9. Creativity and innovation
10. Ability to spot and exploit opportunities
11. Ability of organize resources

9. Other Characteristics
Besides these, there are several other characteristics identified by
researchers. Some of them not falling in the above are listed here.
1. Perseverance and hard work
2. High aspiration
3. Willingness to learn
4. Dynamic and creative
5. Adaptive
6. Good leader
7. Self-confidence
8. Will power
9. Determination to succeed
10. Self descipline
11. Pleasing personality, composed and tactful
12. High integrity
13. Responsible
14. Excellence in work etc.,

10. Types of Entrepreneurs :
They are four important types of entrepreneurs are as follows:
1. Innovative Entrepreneurs: according to Schumpeter's
entrepreneurs who carry out new combinations of means of
production fall in this category. Such entrepreneurs will
emerge only after a certain level of development is attained.
Hence, innovating entrepreneurs are commonly found in
developed economies. For the same reason they are the
rare commodity in an underdeveloped economy.
2. Imitating entrepreneurs: imitating entrepreneurs are
different from innovators. They adopt the technology and
products already developed to serve their own interests.
They are found in large numbers in newly industrializing
economies. However, they provide to the process of
economic growth is considered to be stronger than that
provided by innovators.

11. 3. Fabian Entrepreneurs: Fabian entrepreneurs are a
peculiar type of entrepreneurs. They are very cautious and
skeptical in adopting and implementing any change. They
stick to custom, religion tradition, past experience, and
follow in the footsteps of their ancestors. They are risk
averse and imitate new changes only when it is clear that
their survival is in danger without doing so.
4. Drone Entrepreneurs: The characteristics of drone
entrepreneurs are that they are very conventional and not in
favor of adopting any new change in their enterprise. They
bear loss rather than make changes in their production
processes. They struggle to exist but not grow. It is
stressed by many researchers on entrepreneurship that
imitating entrepreneurs have a more dominant role to play
in a developing economy which is characterized by capital
shortage

12. The Role of Entrepreneurs in Economic Development:
Economic Development essentially means a process of upward
change where by the real per capita income of a country
increases over a long period of time. The following are the
important points are to be considered are as follows
1. Capital formation
2. Generate employment opportunities
3. Increase the standard of living of the people
4. Regional balance
5. Backward and forward linkage
6. Growth of the gross domestic product
7. Increase in the export and import also
8. Increase in the infrastructural development

13. INTRAPRENEUR AND INTRAPRENEURSHIP
Contents:
1. Introduction
2. Intrapreneur
3. Intrapreneurship
4. Entrepreneur Vs Intrapreneur
5. Manager Vs Entrepreneurship

14. Introduction:
The definition of entrepreneur have changed as business concepts
have evolved and ownership forms have changed. It was once felt
that one must own a business in order to be considered an
entrepreneur. This requirement is no longer believe it is possible
for entrepreneurs to exist as employees of large corporations.
Thus, the birth of the concept “ intrapreneur”.
Intrapreneur
According to Donald Myers, Intrapreneur is one who champion’s
an innovation within the corporation but is not assuming financial
risk of the business”.
According to David H. Holt intrapreneur as a person who purchase
an innovation, becoming a champion for its development but does
so from within the security of his or her organizational position.
In simple terms employees who carry out entrepreneurial functions
in an organization are intrapreneurs.

15. Intrapreneurship
Intrapreneurship is the process of encouraging innovation with
existing companies through motivated employees who are
supported with company resources.
Entrepreneur Vs Intrapreneur
Entrepreneur Intrapreneur
Independent businessman. Owner of the
business
Semi-independent employee with freedom to
perform entrepreneurial function within the
organization
Bears full risk of the business Does not bear the financial risk
Raises the capital and is responsible for
returning the same
Neither raises the capital nor ensures
repayment
Entire profit from innovative goes to him Gets only little amount of reward for his
successful innovation in the form of bonus,
commission, perks, etc
Pioneer who start the enterprise Is an late entrant into the organization as an
employee
Major policy decision are taken by him, Takes no such policy decisions.

16. Manager Vs Entrepreneur
Basis Entrepreneur Manager
Status Has the motivation to start the
enterprise. Independent, self
employed, his own boss
Salaried person and not
independent of his employer
innovation Innovator and change producing
agent
Deals with day to day affairs.
Product of change
Risk Taking Being the owner of the
enterprise, takes calculated risk.
He does not share business
risk.
Skills Needs intuition, creative thinking
and innovative ability among
other skills
Depends more on human
relations and conceptual
abilities.
Reward Rewards are uncertain, irregular
and can even be negative
Rewards are fixed, regular
and can never be negative.

17. Theories of Entrepreneurship
Contents
1. Economic theories
2. Sociological theories
3. Psychological theories

18. Economic theories
The economists who consider entrepreneur as an important
variable in economic growth argue that his emergence is
situational. Economic incentives are the main drive for the
entrepreneurial activities. Economic incentives and gains
available create sufficient condition for the emergence of
industrial entrepreneurship. According to them, the
emergence of vigorous entrepreneurship is due to various
kinds of market imperfections and inefficient economic
policies.
Sociological theories
These theories stress on the social factors such as culture, social
values, social sanctions, and role expectations.

19. Theory of cultural values
According to T.C. Cochran, entrepreneurial response will be
determined primarily by Cultural Values. Entrepreneur is
not a supernormal individual. He is a representative of limited
group in his culture. He is society’s model personality.
Model personality is shaped by two conditions.
(a) Type of child rearing
(b) Schooling common to the culture.
The entrepreneur is influenced by 3 factors.
1. His own attitudes toward his occupation
2. The role expectations held by sanctioning groups
3. Operational requirements of the job.

20. Theory of Religious belief system
Max Weber in his thesis, protestant ethic and the spirit of
capitalism, argues that the emergence of entrepreneurship in
a society depends upon the religious belief system. The
belief system of Calvinistic Puritanism, (the protestant ethic)
encouraged entrepreneurship. This belief system is this
worldly because it preached hard work, devotion to work,
honesty, capitalism developed only in the occident where
Protestantism was present
Hagen’s theory of status withdrawal
It was developed in the context of contemporary backward
economies of Asia and Latin America. Hagen’s view of
economic development does not stress the spread of markets,
capital accumulation, perception of profitable opportunities,
willingness to save and the like. Rather economic
development is seen almost exclusively as a process of
technological change,

21. Hagen postulates that the sequence of changes brings about
entrepreneurial behavior. It is as u under;
According to Hagen, postulate means ” creative personalities
emerge when the members of some social groups experience
the withdrawal of status respect.”
Status withdrawal is perception on the part of the members of
some social group that their purposes and values in life are not
respected groups in the society whom they respect and whose
esteem they value”.
The four types of events can produce status withdraw:
1. Displacement by force,
2. Denigration of valued symbols,
3. Inconsistency of status symbols with a changining
distribution of economic power and
4. Non-acceptance of expected status on migration to a new
society.;

22. Theory of group level phenomenon
Frank W. Yung argues that Entrepreneurship is a group level
phenomenon. It emerges from reactive sub-groups in society.
Reactiveness or solidarity is the degree to which the members
create, maintain and project a coherent definition of their
situation.
A group becomes reactive when.
a) It is experiencing low status recognition and is denied
access to social networks, and
b) Is in possession of greater range of institutional resources
than other groups in society at the same system level.
Such groups typically seize upon the rhetoric of religion or
politics as a vehicle for expressing their deviant view of the
world. All the members of the sub-group’s position without
bringing it into conflict with other groups.

23. Psychological theories
David McClelland’s achievement motivation theory is most
important in this aspect. McClelland was concerned with the
question of why some countries develop rapidly in the
economic sphere at certain times and not others. It is usually
explained in terms of external factors. But McClelland
emphasizes internal factors such as human values and motives
that lead man to exploit opportunities, to take advantage of
favorable trade conditions; in short, to shape his own destiny.

24. The important internal factor singled out was ‘high need for
achievement’ which drives people towards entrepreneurial
activities. This achievement motive is inculcated through
child-rearing practices, which stress standards of excellence,
maternal warmth, self-reliance training and low father
dominance.
People with this motive desire to do well for the sake of inner
feeling of personal accomplishment. They tend to work
harder at certain tasks, to learn faster, to do their best work
when it counts for the record and not when special incentives
such as money, prizes are introduced.
Ideological
values
Family
socialization
Need for
achievement
Entrepreneurial
behavior

25. Behavioural Theory of John Kunkel
The model is concerned with the overtly expressed activities of
individual and their relations to the previously and presently
surrounding social structures and physical conditions.
An individual’s behavior patterns are shaped after they have
been performed.
That is, certain activities judged desirable by a society or group
are positively reinforced, others are not, and still others may
be punished.
By positively reinforcing an activity after it has been performed
the probability of repetition is increased, and if such
reinforcement is frequent and intermittent the probability
approaches certainty.
This approach to human behavior includes the following basic
ideas.

26. 1. Behaviour is maintained or weakened by a reinforcing or
aversive stimulus, which follows it.
more accurately, the presentation of reinforcing stimuli
increases the probability that a behavior pattern will be
repeated, while the presentation of an aversive stimulus
decreases the probability that the behavior pattern will be
repeated in the future.
2. The absence of reinforcement or punishment also decreases
the probability that the activity will be repeated, and over
time the extinction of behavior is the ultimate result.
3. When a reinforcing stimulus is presented after an activity is
performed in certain context, the behavior will be emitted
again in the same context, or a specific of it, even with out
immediate reinforcement.

27. 4. If positive reinforcement is continuous, behavior is easily
maintained while the reinforcement lasts, but upon
termination of reward extinction proceeds very quickly. If
positive reinforcement is intermittent or discontinuous,
behavior will be equally well maintained and after the
termination of such reinforcement extinction will be quite
slow.
According to the behavioral model, psychological prerequisites
of economic development are certain behavior patterns,
whereas the social prerequisites are the determinants of the
reinforcing and discriminative stimuli by means of which
desired behavior patterns are shaped and maintained.
Among the behavioral prerequisites of economic development
are the
Savings of money, investment of savings, risk taking,
economic innovation, the ability to wait for returns on
investment, selling one’s labor

28. Meaning and definition of rural industries:
According to Khadi and Village Industries
Commission (KVIC), “ rural industry mean any
industry located in rural area, population of which
does not exceed 10,000 or such other figure which
produces any goods or renders any services with
or without use of power and in which the fixed
capital investment per head of an artisan or a
worker does not exceed a thousand rupees’

29. Recently the Government of India has modified
the definition of village industry to enlarge its
scope. Accordingly, any industry located in
rural area, village or town with a population of
20,000 and below and an investment of Rs. 3
corers in plant and machinery is classified as
village industry.

30. Categories of Rural Entrepreneurs
1. Agricultural entrepreneurs: individuals whose primary
occupation is agriculture are agricultural entrepreneurs. In
fact, in the later 18th century physiocratic economists called
the agricultural cultivators, as entrepreneurs. According to
N. P Singh, the persons who do not have land or other
farming resources but are willing to take up an enterprise in
the village that will aid agriculture can also be regarded as
farm entrepreneurs.
2. Artisan Entrepreneurs: Artisans are skilled persons
working in villages. The Reserve bank of India has
identified more than 100 crafts pursued by artisans in
villages. These entrepreneurs acquire their skills through
professional training in association with their group or
through in heritage. Important classes among them are
carpenters, blacksmiths, weavers, potters, etc.,

31. 3. Merchant and Trading groups: the small segment of the
rural community is engaged in business activities. They run
petty shops, do commission business, buy the farmers
products in the village itself and sell in urban area for profit.
This group was perceived to be traditionally exploitative
class.
4. Tribal entrepreneurs: Tribal entrepreneurs are
predominantly found in the tribal villages. They are so
called because their source of origin is the tribal community.
They could be regarded as an entrepreneurial class by itself.
Traditionally they did not pursue any occupation and
depended on forest produce for livelihood.

32. Classification of village industries
1. Mineral based industry
2. Forest based industry
3. Agro based industry
4. Polymer and chemical based industry
5. Engineering and non-conventional industry
6. Textile industry
7. Service industry.

33. Problems of Rural Entrepreneurs
according to 9th five year problems the government of India
has short listed the problems of rural entrepreneurs are as
follows
1. Inadequate flow of credit
2. Use of obsolete technology, machinery and equipment.
3. Poor quality standards
4. Inadequate infrastructural facilities.
5. Inadequate supply of raw materials
6. Marketing problem
7. Shortage of skilled labours
8. Shortage of power
9. Lack of technical education.

34. Strategies for the development of Rural Entrepreneurs
Establishing an industry and, thereby developing
entrepreneurship is not one-man activity. In fact, it involves
multi-pronged activities. Though the answer to the question
how to develop rural entrepreneurship lies in the solutions of
the problems faced in this regard, yet the following measures
are suggested for developing entrepreneurship in the rural
areas in the country.
1. Continuous supply of raw materials
2. Make availability of credit facilities.
3. Establishment of common market facilities
4. Arrangement of orientation program (EDP)
5. Impart entrepreneurial education
6. Initiations has to be taken by the NGO’s and Government
apex bodies

35. According to an ILO(International Labour Organization) study
women consist of 50 per cent of the world’s population, do the
2/3 of the worlds work, receive just 10% of world’s income
and less than one percent of world’s property.
Women owned businesses are highly increasing in the
economies of almost all countries. The hidden entrepreneurial
potentials of women have gradually been changing with the
growing sensitivity to the role and economic status in the
society. Skill, knowledge and adaptability in business are the
main reasons for women to emerge into business ventures.
‘Women Entrepreneur’ is a person who accepts challenging
role to meet her personal needs and become economically
independent.

36. Department of Economics, Faculty
of Social Sciences, Banaras Hindu
University
 Earlier there were 3 Ks
◦ Kitchen
◦ Kids
◦ Knitting
 Then came 3 Ps
◦ Powder
◦ Pappad
◦ Pickles
 At present there are 4 Es
◦ Electricity
◦ Electronics
◦ Energy
◦ Engineering

37. Department of Economics, Faculty of Social Sciences,
Banaras Hindu University
 Naina Lal Kidwai,
Investment Banker
 Fortune magazine listed
her as one of the world’s
most powerful
businesswomen in 2003.
India Inc recognises her
as one of its most
powerful investment
bankers. But Naina Lal
Kidwai, HSBC’s deputy
CEO, can’t be reduced
to simple woman-banker
equations; her
professional vision
transcends gender

38. Department of Economics, Faculty of Social Sciences,
Banaras Hindu University
 Shahnaz Husain,
Herbal Beauty Queen
She’s the "Estee
Lauder of India", with
even famous
department stores like
Galleries Lafayette in
Paris, Harrods and
Selfridges in London
and Bloomingdales in
New York stocking her
cosmetics, creams and
lotions.

39. Department of Economics, Faculty of Social Sciences,
Banaras Hindu University
 Vineeta Bali
 Director, Academic
Success Program
 she practiced law as a
business litigator for three
years, and then as a
transactional attorney for
the Silicon Valley Law Group
for several years. Her main
responsibilities as a
transactional attorney were
in the following areas:
mergers and acquisitions,
investor financing and
corporate funding, business
formation and corporate
governance, securities
compliance for privately held
and public companies.

40. Department of Economics, Faculty of Social Sciences,
Banaras Hindu University
 Lalita Gupte, Banker
 she’s created a
formidable global
presence of what
was once a native
development finance
institution. Account-
holders can now
bank at ICICI
branches in UK, the
Far East, West Asia
and Canada. With
ICICI since 1971,
Gupte was the first
woman to be
inducted on the
board in 1984.

41. A strong desire to do something positive is an inbuilt quality of
entrepreneurial women, who is capable of contributing values
in both family and social life. With the advent of media,
women are aware of their own traits, rights and also the work
situations. The glass ceilings are shattered and women are
found indulged in every line of business from pappad to
power cables. The challenges and opportunities provided to
the women of digital era are growing rapidly that the job
seekers are turning into job creators. They are flourishing as
designers, interior decorators, exporters, publishers, garment
manufacturers and still exploring new avenues of economic
participation.
In India, although women constitute the majority of the total
population, the entrepreneurial world is still a male dominated
one. Women in advanced nations are recognized and are more
prominent in the business world. But the Indian women
entrepreneurs are facing some major constraints like –

42.  Lack of confidence – In general, women lack confidence in their
strength and competence. The family members and the society are
reluctant to stand beside their entrepreneurial growth. To a certain
extent, this situation is changing among Indian women and yet to
face a tremendous change to increase the rate of growth in
entrepreneurship.
b) Socio-cultural barriers – Women’s family and personal
obligations are sometimes a great barrier for succeeding in
business career. Only few women are able to manage both home
and business efficiently, devoting enough time to perform all their
responsibilities in priority.
c) Market-oriented risks – Stiff competition in the market and
lack of mobility of women make the dependence of women
entrepreneurs on middleman indispensable. Many business women
find it difficult to capture the market and make their products
popular. They are not fully aware of the changing market
conditions and hence can effectively utilize the services of media
and internet.

43.  d) Motivational factors – Self motivation can be realized through
a mind set for a successful business, attitude to take up risk and
behavior towards the business society by shouldering the social
responsibilities. Other factors are family support, Government
policies, financial assistance from public and private institutions
and also the environment suitable for women to establish business
units.
e) Knowledge in Business Administration – Women must be
educated and trained constantly to acquire the skills and
knowledge in all the functional areas of business management.
This can facilitate women to excel in decision making process and
develop a good business network.
f) Awareness about the financial assistance – Various institutions
in the financial sector extend their maximum support in the form of
incentives, loans, schemes etc. Even then every woman
entrepreneur may not be aware of all the assistance provided by the
institutions. So the sincere efforts taken towards women
entrepreneurs may not reach the entrepreneurs in rural and
backward areas.

44.  g) Exposed to the training programs - Training programs
and workshops for every type of entrepreneur is available
through the social and welfare associations, based on duration,
skill and the purpose of the training program. Such programs
are really useful to new, rural and young entrepreneurs who
want to set up a small and medium scale unit on their own.
h) Identifying the available resources – Women are hesitant
to find out the access to cater their needs in the financial and
marketing areas. In spite of the mushrooming growth of
associations, institutions, and the schemes from the
government side, women are not enterprising and dynamic to
optimize the resources in the form of reserves, assets mankind
or business volunteers.

45. Other major problems of women entrepreneurs in India
1 Problems of raw materials
2 Shortage finance
3 Family ties
4 Male dominated society
5 Lack of education
6 More dependency etc.,

46.  Procedure of getting finance should
be simple
 Effective propagation of programmes
and yojna
 Linkages between product, services
and market centers.
 Encouragement to technical and
professional education.

47. Development of women entrepreneurs
Since women constitute 50 percent of the population,
development is not possible without their active participation
in economic activities. The development entrepreneurship
among women is definite step to draw them into active
economic role. In India special importance was given to
women development beginning with the VI five year plan.
There was a definite policy shift from the welfare concept to
development of women.
Seventh five year plan document covered a special chapter
under the title Integration of women in development the plan
had the following specific objectives
1. To treat women as specific target groups in all development
programmes.

48. 2. To diversify and alter suitably vocational training facilities
to suit the needs and skills of women.
3. To assume the hard work and increase the productivity of
women entrepreneurs by encouraging them to adopt
appropriate technologies, equipments and practices.
4. To provide marketing assistance at the state level
5. To increase women’s
Women Entrepreneurs Association
National Alliance of Young Entrepreneurs (NAYE)
NAYE has a separate wing for women entrepreneurs. This
wing is the leading organization of women entrepreneurs in
India. It organizes conferences and puts forth its demands
to central and state governments to provide special
incentives and facilities to women entrepreneurs.

49. World association of women entrepreneurs(WAWE)
It organizes international conferences on women
entrepreneurship and aims to bring together qualified women
to take up active part in employer organization. It advises to
how the position of women in business and industry could be
improved. This association has the membership of 27,000
women entrepreneurs.

50. Introduction:
When it was accepted entrepreneurship is very essential for
economic development, then concerns were focused on how
entrepreneurs arise and how to develop entrepreneurship in an
economy. Various people were involved with this process of
entrepreneurship development, and they developed some
models.

51. John Kao’s Model of Entrepreneurship
Entrepren
eurship
The
Person
The
Environm
ent
The Task
The
organisati
on

52. John Kao has developed a conceptual model of
entrepreneurship. As shown in the figure, four factors are
involved in entrepreneurship development.
1. The Person: the individual is the key factor in
entrepreneurial activity. He is a creative personality and
makes things happen. Entrepreneurs has distinct
personality, certain skills and experience and has
motivation. The success of entrepreneurial venture depends
largely on the personality of the entrepreneur.
Entrepreneurs requires a variety of skills ranging from
intuition to analytical ability.
2. The Task: An entrepreneur has to perform several tasks.
First he has to perceive opportunity and then bring together
necessary resources to give life to the idea. He has to
provide leadership. His leadership qualities will attract and
retain people with him.

53. 3. The Environment: entrepreneur and his organization are
part of the environment. The environment influences,
facilitates or hinders the growth of entrepreneurship and the
viability of the enterprise. He draws resources from the
environment, and his output goes to the environment. The
environment consists of several elements such as economic,
socio-cultural, political, legal and others. The entrepreneurs
will keep on acting and reacting to various environmental
changes. He tries to understand the environment well.
4. The Organization: The entrepreneur builds the
organization and his creative work takes place in it. It
includes the organization structure, rule, policies, culture,
human resources systems and communication systems. The
organization should fit best with personal vision, with they
key task to be preformed and with the environment.

54. Udai Pareek and Nadkarni Model of Entrepreneurship
Development :
Pareek and Nadakarni have identified four sets of factors that
influences development of entrepreneurship. They are the
individual, socio-cultural traditions, support systems and the
environment.
1. The Individual: the individuals generate entrepreneurship
in a society. They initiate, establish, maintain and expand
enterprises and make the enterprise a success. The factors
in individuals that are found to be of relevance to
entrepreneurship development are.
a.Motivational Factors: they are considered to be crucial to
entrepreneurship. The major elements of motivational
factors are (i) individuals need for achievement as it was
found to be significantly related to entrepreneurial success;

55. (ii) Personal efficiency (iii) his coping capability
Entrepr
eneurs
hip
Individ
ual
Support
system
Socio-
cultural
factors
Enviro
nment

56. Skills: An entrepreneur needs several skills which constitute an
important contributing factor to entrepreneurship. (i) Skills in
product identification and project development, (ii)
management skills, i.e., accounting, financial control,
marketing, production planning and inventory control, and
(iii) enterprise building .
(b) Knowledge: knowledge in the areas of industry, technology
and general economic and political environment.
2. Socio-Cultural Factors: It is observed that individuals
grow in the traditions of their families and the society, and
internalize certain values and norms from these source. Since
these values and norms get filtered through the individual
whom it seeks to influence, they have indirect influence on
entrepreneurship. The factors are (a) family expectations and
pressure (b) Risk-taking © self-reliance (d) value to work
with one’s own hand and (e) value given to work.

57. Support system: efficient and effective support system such as
financial institutions, agencies set-up for development of
entrepreneurship, non-governmental agencies and educational
institutions concerned with the promotion of entrepreneurship
development administration in the district, contribute to a very
great extent to the success of an entrepreneur. Quite often
entrepreneurs come into contact with these support systems.
Environment: This refers to economic and political
philosophy of the government and consequential
encouragement generated and opportunities available in a
society as a result of such policies .
Even though entrepreneurship is viewed here a dependent
variable with all the four sets of factors influencing and
contributing to, it may be noted that the individual, the
environment and support systems are considered to influence
entrepreneurship directly,

58. NISIET Model of Entrepreneurship Development
A Conceptual model of entrepreneurship development worked
out at National Institute for small industries , extension and
Training, Hyderabad, involves various activities of
organizations concerned with the task of entrepreneurship
development. These activities are conveniently grouped
under three categories
I. Stimulatory Activities
II. Support Activities
III. Sustaining Activities.
I. Stimulatory Activities: The stimulatory activities refer to all
such activities that stimulate entrepreneurship in any
society. They are entrepreneurial education, planned
publicity about entrepreneurial opportunities, Identification
of potential entrepreneurs in a given area, motivating them
by providing economic insight and managerial skills
through training.

59. 1. Impart entrepreneurial education
2. Make planned publicity for entrepreneurial opportunities
3. Identify potential entrepreneurs through scientific method
4. Impart motivational training to new entrepreneur
5. Help and guide in selecting products and preparing projects
reports.
6. Make available techno-economic information and product
profiles
7. Evolve new products and process suitable to the local
situation
8. Set up local agencies with trained personnel for
entrepreneurial counseling.
9. Create situation where entrepreneurs get due recognition.

60. II. Support Activities: these activities that help the
entrepreneurs in establishing and running their enterprises are
called support activities. These includes:
1. Registration of unit.
2. Arrange finance
3. Provide, land, shed, power an water etc.,
4. Guidance for selecting and obtaining machinery
5. Supply of scarce raw material
6. Obtain licenses/import licenses
7. Provide common facilities
8. Help in getting tax relief or other subsidies.
9. Offer management consultancy
10. Help in marketing products
11. Provide inforamtion

61. III Sustaining Activities: Setting up of an enterprise is not
enough. It should run profitably and continuously.
Sustaining activities ensures:
1. Help in modernization
2. Help in diversification /expansion/substitute production.
3. Provide additional finance for full capacity utilization
4. Arrange for deferring repayment/interest
5. Provide diagnostic industrial extension/consultancy service
6. Bring about modification/change in legislation or policy
7. Introduce and increase product services
8. Provide need-based common facilities centre.

62. Introduction:
Entrepreneur possesses certain characteristics. Are these
characteristics inborn or can they be inculcated in a grown up
individual? To find answer to this question, David
McClelland, Harvard University Professor of Psychology
conducted an experiment in India with a team. This
experiment is known as Kakinada Experiment. The
experiment proved that it is possible to inculcate
entrepreneurial qualities through proper training. Hence, the
origin of concept of entrepreneurship development.

63. Definition of EDP:
Entrepreneurship Development Programme is a programme
designed to help an individual in strengthening his
entrepreneurial motive and in acquiring skills and
capabilities necessary for playing an entrepreneurial role
effectively.
Objectives of EDP
1. To identify potential entrepreneurs and train them to
strengthen entrepreneurial qualities and motivation of the
individual
2. To analyze the environment related to small industry
business.
3. To help in the selection of product/project
4. To help in project formulation

64. 5. To understand the process and procedure of setting up of
small enterprises.
6. To know and influence the sources of help and support
needed for launching enterprise.
7. To teach basic management skills.
8. To give the pros and cons of being an entrepreneur
9. Appreciation of social responsibility/entrepreneurial
discipline
10. To provide post training assistance.
Phases of EDP
I Pre-training Phase
II Training Phase
III Post Training or follow up phase

65. I. Pre-training Phase:
A. Necessary preparations to launch the programme are don
the preparation is related to
1. creation of infrastructure for training
2. Preparation of course content
3. Arrangement of faculty
4. Designing tools and techniques for selection of trainees
5. Formation of selection committee
6. Publicity campaign for the programme
7. Development of application from
b. Survey of environment for entrepreneurial opportunities
c. Identification and selection of potential entrepreneurs.

66. II. Training Phase: This phase is devoted for motivation
and skill development the following are the important
activities carried out:
1. Achievement motivation training
2. Technical knowledge and skill
3. Support system and procedures
4. Market survey
5. Project preparation
6. Managerial skills
III. Post Training or follow up Phase:
1. Preparing and maintaining a separate file for each trainee
2. Keeping in touch with every entrepreneur
3. Passing the desired information well in time
4. Visiting the entrepreneurs periodically
5. ‘organizing follow up meeting

67.  Meaning of Project and Project Identification :
Project is a scientifically evolved work plant devised to achieve
a specific objectives within a specified period of time.
Project identification is concerned with the collection ,
completion, and analysis of economic data for locating
possible investment opportunities and to develop
characteristics of such opportunities.
Project Characteristics:
Every project will have 3 features namely:
Inputs
Outs
Social cost and benefits.

68. Input characteristics: it will specify what the project will
require in terms of raw materials, energy, manpower, finance
and organizational setup. The nature and magnitude of these
inputs should be clearly determined.
Out put Characteristics: it will define what the project will
generate in the form of goods and services, employment,
revenue, etc.,
Social Costs and benefits: it is necessary to assess the
sacrifice the society is required to make and the benefits that
will accrue to the society from the given project. It is to be
ensured that benefits should be more than the costs.
Project Formulation
The entrepreneur in a developing country faces many problems
in establishing a new project. Selection of appropriate
technology , the knowledge of available external economies,

69. availability of technically qualified personnel, resources
available and about the government regulation. Project
formulation exercise undertaken at the right time reduces the
severity of these problems.
Meaning:
Project formulation is a step by step investigatin and
development of project idea. It involves the joint effort of a
team of experts.
Elements of Project Formulation
1. Feasibility analysis
2. Techno economic analysis
3. Project design and network analysis
4. Input analysis
5. Financial analysis
6. Social –cost benefit analysis
7. Project appraisal

70. Feasibility Report
The details gathered about a project are condensed into one
master repost called project report or feasibility report.
Project report means synchronization and synthesis of
relevant data relating to the project. In simple words, it is a
written statement of what an entrepreneur proposes to take
up.
Background of the industry & the project
Demand for the proposed product or service
Cost of Investment
Project Report assesses
operational cost
Expected Profitability

71. General Format of feasibility Report:
1. Introduction
2. Summary and Recommendations
3. Product
4. Market potential
5. Process and know how
6. Plant and machinery
7. Location
8. Land and building
9. Raw materials
10. Utilities
11. Effluents
12. Manpower requirement
13. Capital cost
14. Working capital , Mode of finance, Manufacturing cost

72. Institutions for Non-financial Support
1. District Industries Centres (DICs)
2. Small Industries Service Institutes (SISIs)
3. Small Industries Development Corporations (SIDCOs)
4. National Institute for Small Industry, Extension and
Training (NISIET)
5. Entrepreneurial Development Institute of India (EDII)
6. National Institute for Entrepreneurship and Small Business
Development (NIESBUD)
7. Technical consultancy Organization (TCOs)

73. 1. District Industries Centres(DICs)
The Industrial policy of 1977 announced by the then janta
Party Government laid greater emphasis on the effective
promotion of cottage and small –scale industries. The
statement pointed out the need for a single organization at
the district level for the effective development of this sectors.
As a result, DICs were started under centrally sponsored
scheme in the 1978.
The DICs provide al the services and facilities to the
entrepreneurs including the identification of suitable project
Functions of DICs:
1. To conduct industrial potential surveys keeping in view the
availability of resources in terms of material and human skill,
infrastructure, demand for product etc.,

74. 2. to prepare an action plan to effectively implement the
schemes identified.
3. To guide entrepreneurs in matters relating to selecting the
most appropriate machinery and equipment, sources of its
supply and procedure for procuring imparted machinery.
4. To appraise the worthiness of the various proposals
received from entrepreneurs
5. To assist the entrepreneurs in marketing their products and
assess the possibilities of ancillarization and export
promotions of their products.
6. To undertake product development work appropriate to
small industries.
7. To conduct artisan training programme

75. 2. Small Industries Service Institutes (SISIs)
SISIs were setup the government of India in different states.
They have the following objectives:
1. To give ideas to the entrepreneurs about the products,
process, and procedures for setting up of industries.
2. To motivate the prospective entrepreneurs by providing fist
hand information about the available facilities and
incentives.
3. To encourage women to start their own enterprises.
4. To conduct entrepreneurship Development Programmes fo
scheduled castes, scheduled tribes, and other weaker
sections in backward and rural areas.
5. To organize special programmes for artisans in cabin
making and furniture design
6. To give basic knowledge about machines and process in
leather industry to artisans.

76. Small Industries Development corporation (SIDCOs)
Since 1960, many states and union territories have setup
SIDCOs . They are the promotional bodies entrusted with
the major task of promoting industries and ensuring balanced
regional development, with each state. The important
functions are:
1. Financial assistance to industrial concerns in the forms of
direct investment, loans, and extension of guarantee for
loans and deferred payments;
2. Provision of industrial sheds/plots;
3. Promotional activities such as identification of project
ideas, selection and training of entrepreneurs, provision of
technical assistance during project implementation.
4. In some states they are empowered to establish and manage
industrial estates, develop industrial areas.

77. National Institute for Small Industry Extension and
Training (NISIET)
It was established as an autonomous society by the
Government of India at Hyderabad in 1962. it undertakes
training, research and consultancy activities in the four
related fields of small industry development, management
extension and information for development.
Every year about 90 regular training programmes are offered
in the relevant fields. NISIETs courses are fully residential
and participatory in nature.
Foundation for massive EDP movement in the country was
Laid at this institute under the leadership of David C.
McClelland in early 1960s. The experiment was conducted
in Andhra Pradesh in the town s of Kakinada and Rajmundri
in East Godvari District

78. In 1970’s the institute was one of the selected few to impart
training to young engineers and technologies.
Entrepreneurship Development Institute of India(EDII)
Gujarat Government, State Bank of India and All India
Financial Institutions jointly established the entrepreneurship
Development Institute of India at Ahmadabad in 1983. this
is an apex agency for creating the institutional infrastructure
required for entrepreneurship development. It undertakes
model training programmes, trains the trainers, conduct
research and assist the state level agencies in planning,
implementing and monitoring EDPs.
The institute expended resource person’s support to organize
entrepreneurs trainer motivators programme in African
countries. This programme was funded by common wealth
secretariat.

79. it supports the government policy of inculcating
entrepreneurial qualities in younger generation by
introducing the subject of entrepreneurship at +2level. EDII
is developing text book for 11th and 12th standards
The EDII has been entrusted with challenging task of
designing and implementing a programme an Gender
Planning in entrepreneurship by the Department of
personnel and training government of India.
Technical Consultancy Organization(TCOs)
At the initiative of IDBI, 14 technical consultancy
organizations covering 21 states have been setup jointly by
the all India Financial institutions, commercial banks and
state governments. Lack of technical consultancy cells with
commercial banks and private consultancy services
organizations in backward state necessitated the setting up
of TCOs in 1970.

80. The Main idea behind the establishment of these institutions is
to provide integrated consultancy services to small and
modicum entrepreneurs, and financial institutions. However
the state government and other agencies have also been
utilizing the services of TCOs.
The activities of the TCOs include the following
1. Identifying industrial potential and potential entrepreneurs.
2. Preparation of project profiles and to carry out techno
economic appraisal of industrial projects.
3. Appraisal of projects referred to them by financial
institutions
4. Conducting of Entrepreneurship Development
programmes, market research and surveys.
5. Provision of Technical and administrative assitance to
small and medium enterpreneurs.

81. The Main idea behind the establishment of these institutions is
to provide integrated consultancy services to small and
modicum entrepreneurs, and financial institutions. However
the state government and other agencies have also been
utilizing the services of TCOs.
The activities of the TCOs include the following
1. Identifying industrial potential and potential entrepreneurs.
2. Preparation of project profiles and to carry out techno
economic appraisal of industrial projects.
3. Appraisal of projects referred to them by financial
institutions
4. Conducting of Entrepreneurship Development
programmes, market research and surveys.
5. Provision of Technical and administrative assitance to
small and medium enterpreneurs.

82. Other institutions for financial support
1. Industrial Finance corporation of India (IFCI)
2. Industrial Development Bank of India (IDBI)
3. Industrial Reconstruction Bank of India (IRBI)
4. Industrial Credit and Investment Corporation of India
(ICICI)
5. Life Insurance Corporation of India and General
Insurance Corporation of India.
6. Unit Trust of India (UTI)

83. Thank You