Question

Long Answer:
Define entrepreneurship. Explain the characteristics of entrepreneurship.

Answer 1

Entrepreneurship is the process where an entrepreneur derives some new way to produce goods and services or brings about
innovation in order to earn profits. In words of B.C.Tandon, ‘entrepreneurship is the ability to create something new, organizing,
coordinating and undertaking risks and handling economic uncertainty’.

Characteristics of entrepreneurship are as follows:

i. Economic activity: entrepreneurship is an economic activity as entrepreneur provides goods and services for the satisfaction of human wants with the objective of earning profit.
ii. Innovation: Entrepreneurship is all about innovation such as innovation in method of production, finding new markets, looking for new sources of supply of raw materials, etc.
iii. Creativity: Innovation comes along with creativity. Entrepreneurship is regarded as a highly creative activity as it is said that entrepreneurship adds or creates 'value'.
iv. Building of organisation: In the entrepreneurship, various factor of production are arranged and managed for the successful running of the business.
v. Bearing risk: By venturing into the new and uncertain areas, the entrepreneur bears the risks involved in the project. Thus, entrepreneurship involves risk bearing.
vi. Leadership quality: Leadership forms an important characteristic of entrepreneurship as an entrepreneur is not only required to earn profits but also to lead and manage the organisation efficiently.