Question

Explain the characteristics of Entrepreneurship Development?

Answer 1

Entrepreneurship is the process of setting up a new business organisation. It is a process wherein a person decides to build a career in business by finding the market options and mobilizing the available resources.

The following are the characteristics of entrepreneurship:

1. Innovation: Entrepreneurship is an innovation. It focuses on research and development to be able to produce goods and services that satisfy the changing tastes of customers. It also develops new ways and means to reach out to customers and develop new markets. Innovation also involves the introduction of a new combination of factors of production, use of new technology, and discovery of new sources of supply of raw materials.
2. Economic activity: An entrepreneur produces a new product for customers as per their needs. He feels the need to do this so as to satisfy human wants and earn profit in return. It is a systematically planned activity as per the skills and knowledge of the entrepreneur. Thus, entrepreneurship is an economic activity.
3. Organization Building: Entrepreneurship involves organizing all the factors of production under one roof to develop a new product and build a successful enterprise. It is the process of bringing all the factors together. The time, place, form utility, etc. needs to be considered while organizing the resources.
4. Creative activity: Innovation has to be supported by creativity. Introducing creativity in producing something new is a big challenge for the entrepreneur. Thus creativity is an essential part of entrepreneurship.
5. Managerial skill and leadership: Leadership and managerial skills are the most important aspects of entrepreneurship. Other skills can be considered secondary. An entrepreneur must be able to lead and manage his enterprise successfully. Besides, he should be able to keep employees motivated. A successful entrepreneur has a passion for doing something new than just earning profit.
6. Skillful management: The success of entrepreneurship depends on skillful management. However, it is impossible for an entrepreneur to be an expert in all fields. Hence, he must delegate some areas of the business to professionals and skilled managers who are more capable than the entrepreneur in their respective fields.
7. Risk Bearing: Uncertainty is defined as a risk that cannot be insured against and is not calculable. The entrepreneur purchases the factors of production at certain prices utilizes them to create a product or service and then sells the product or service in the future at an uncertain price. Therefore, entrepreneurship involves bearing the risk of loss.
8. Gap filling function: The most significant feature of entrepreneurship is gap filling. It is the entrepreneur's job to fill the gap or make up the deficiencies that always exist in the knowledge about the production function.