Role of entrepreneur in developing country

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CHAPTER 1

INTRODUCTION

1.  RESEARCH BACKGROUND

1.1 INTRODUCTION

The role of entrepreneurship in society has changed drastically over the last

few decades. During the immediate post-World War II period, the importance of 

entrepreneurship seemed to have faded away; however, this situation has reversed

completely in recent years. It is small entrepreneurial firms in the rural sector of the

country that have brought about the dynamism, organizational capability, innovation

and boldness that characterized the giant Indian corporations. Many started as small-

scale industries in the village and flourished into large-scale industries.

The focus of entrepreneurship research over the past decade has also changed

significantly. Today, entrepreneurship and the impact of entrepreneurship on society

are the subjects of a growing body of research primarily in the disciplines of 

economics, management, finance, marketing and strategy. Entrepreneurship is not

new to us. It has been here ever since man started to exchange food and goods for 

living. The “barter trades or trading” existed in early years of Egypt, Rome, England,

Africa, America, China, India and all other ancient countries. Entrepreneurship has

 been existent since the emergence of migration of humanity from continent to

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continent. It started as a trading business among the early settlers and later it transformed into

entrepreneurship.

Many opted for entrepreneurship as a source of self-employment, innovation oriented

 business application, self-financing, self-sustainability and incremental economic growth within

their communities. Nevertheless, entrepreneurship has come to be perceived as an engine of 

economic and social development throughout the world. According to Edward Lazear at

Stanford University (2002), “the entre preneur is the single most important player in a modern

economy.” David Hart at the Kennedy School of Government at Harvard University discussing

the dot-com bubble in the late 1990s wrote: “Entrepreneurship is an economic phenomenon

worthy of attention from those who worry about economic growth and particularly from those

charged with sustaining that growth.”(Hart, 2003)

Even though researchers have advanced numerous theories regarding the evolution of 

entrepreneurs, several questions have been asked frequently on entrepreneurship and its role in

the society-Who is an entrepreneur? What is entrepreneurship? What is an entrepreneurial 

career path? These frequently asked questions reflect the increasing national and international

interest in entrepreneurs, who they are and how they influence the economy. The term

entrepreneur is derived from the French verb entreprendre that means “undertake”. The original

related words in English are Entry and Enterprise.

In the early 16th century, the Frenchmen who organized and led militant expeditions were

referred to as “entrepreneurs”. Around 1700AD, Cochran who was a pioneer in civil engineering

expanded the scope of the term “entrepreneur” and applied it to civil engineering activities such

as construction, architecture and public works. Bernard Belidor (cited. Auyong Y S 2009) applied

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the concept to the function of buying labour and material at uncertain prices and selling the

resultant product at contracted price. François Quesnay (cited John M. Hobson 2004) regarded a

rich farmer who manages and makes his business profitable by his intelligence, skill and wealth

as an entrepreneur. According to Petrin T (1994), entrepreneurship has an enormous employment

 potential; politicians see it as the key strategy to prevent rural unrest, farmers perceive it as an

instrument for improving farm earnings; and women regard it as an employment possibility near 

their homes which provides autonomy and independence and reduces the need for social support.

Entrepreneurship has been promoted as a central means of maintaining vitality in comparatively

small-sized, dispersed and dependent populations, making the best use of the limited resources

available (Nerys Fuller-Love et al, 2006). However, the studies made on entrepreneurship

development at the global arena have addressed it as an instrument to overcome poverty and

generate wealth.

India was predominantly a rural economy at the time of independence in 1947, with

agriculture accounting for approximately 75 per cent of the workforce and 55 per cent of GDP.

Development literature says that when there are unlimited supplies of labour in the early stages

of development, the extra growth that an economy receives is due to the reallocation of labour 

from low productivity agricultural sector to high productivity non-agricultural (industrial) sector.

With more than 52 per cent of the workforce still dependent on agriculture for their livelihood,

agriculture in India has far reaching impact on poverty reduction as well as on rural

development. Thus, it is meaningful to view agriculture not as farming alone but as a holistic

value chain, which includes farming, wholesaling, warehousing (including logistics), processing,

and retailing. Figure 1-1 shows the growth pattern of agriculture.

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Fig 1-1 Average Annual Growth Rate of AgricultureSource: National Accounts Statistics, CSO, GOI,2008

The average annual growth rate of food grains sector is much less than that of non-food

grain sector which comprises of high value and commercial crops. Dairy in India has been a

classic example of a sector that has witnessed exponential growth. India has achieved the number 

one position in milk production (more than 100 million tons). With the amendment of Milk and

Milk Products Order (MMPO) in March 2002, the private sector participation in the industry has

increased in a significant way. Aavin1 Milk distributors can be seen in many of the towns. Even

grocery shops have started selling milk in very small quantities for easy reach out to the

customers. Many rural farmers have taken up milk production which has been a good source of 

generating income.

1 The Dairy Development Department was established in Tamil Nadu in the year 1958 to oversee and regulate milk production and commercialdistribution in the state. The Dairy Development Department took over control of the milk cooperatives. It was replaced by the Tamil NaduCooperative Milk Producers Federation Limited in the year 1981. On February 1, 1981, the commercial activities of the cooperative were handedover to Tamilnadu Co-operative Milk Producers' Federation Limited which sold milk and milk products under the trademark "aavin". With many

 private companies entering the field of dairy, the Tamil Nadu government is giving high priority to improve the performance of thecooperatives.Tamil Nadu is one of the leading states in India in milk production with about 14.5 million litres per day.   Dairy DevelopmentDepartment, Government of Tamilnadu. "Policy Notes".  http://www.tn.gov.in/policynotes/archives/policy2002_03/diary2002-03-b.htm . Retrieved 16 July 2010

3.6 3.5

7.6

4.1

7.8

1.3

2.3

4.13.5

2.6

1.4

3.63

3.73.1

0

1

2

3

4

5

6

7

8

9

Food Grains Other Crops Fruits & Veg Livestock Fisheries

1992-1997

1997-2000

2002-2007

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Fig 1-2 Output of Total Agriculture 1982 to 2008

Source: CSO, GOI, various issues.

The output of Fruits & Vegetables, Livestock and Fisheries has increased gradually so as to be

able to meet the demand of the local markets. Rapid economic growth, rising income levels and

changing demographics have triggered a significant change in demand patterns. Thus, in

response to new demand patterns, developed markets and infrastructure and a change in

approach from farming towards a new agro-system will be needed.

Fig. 1-3 Rural and urban population consumption of cereals for 2004/5and 1983 respectivelySource National Sample Survey Organisation (NSSO), GOI, 2006a

31.7 31.1

14.1

20.3

2.7

24.9

27.9

16.9

25.9

4.4

0

5

10

15

20

25

30

35

Food Grains Other Crops Fruits & Veg Livestock Fisheries

TE1982/3

TE 2007/8

Cereals &

Pulses,

36%

Milk &

Products,

16%Egg, Fish,

& Meat,

Vegtables,

11%

Fruits &

Nuts, 4%

Other

Food

Items,

27%

Cereals &

Pulses,

51%Milk &

Products,

20%

Egg, Fish,

& Meat,

5%

Vegtables,

1%

Fruits &Nuts,

2% Other

Food

Items,

21%

2004

1983

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The growth of Indian economy has gone up to 8.5 per cent with the help of the farm sector,

which shows the agriculture sector’s support to economic growth (CSO, 2011) 

Table 1-1

Growth Indian Economy

Growth of Indian Economy

Growth in per cent at 2004-2005 Prices

Q4 2009-2010 Q4 2010-2011

GDP at Factor Cost 8.0 8.5

Agriculture, Forestry & Fishing 1.1 7.5

Manufacturing 15.2 5.5Source: CSO, 2011

The future source of growth in agriculture will be increasingly coming from the so-called high

value segment (fruit and vegetables, livestock and fishery). The rural entrepreneur plays an

important role in supporting the demand of the market. Government of India had anticipated the

change and eventually changed the concept of rural enterprises in order to meet the requirement.

Input

Suppliers

Farmers

Wholesaler &

Logistics Suppliers 

Retailers

Agro

Processors

Emerging linkages

Emerging

linkages

Fig 1-4 Agri-system and the linkages progress chartSource: Shanker A. And Rakash Mohan (2010) p.235

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Likewise, Rural entrepreneurship in India has geared up to meet the challenge by

investing in modernized equipment, taking-up training pertaining to agriculture activities and

using information technology adequately to have the latest information around the globe. The

approach towards agro-system farm-firm linkages was introduced [see Fig 1-4]. Farmers in the

village now could sell their products to the firms which in turn their get support from the farmers

as raw material supply. The linking of small and fragmented farms with large-scale processors

and retailers has helped the farmers in emerging as independent institutions.

Source:Shanker A.and Rakash M. (2010) p 237Fig 1-5 Rural /Agriculture Business Hubs reaching Agri-services to the Farmers

Ext

Services

Banks &

Insurance

Informal

Markets

Mandi

Input Suppliers,

Processors and

Retailers

Farmers

Money

Lenders

OutputInput

Rural Business

Hubs

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Government of India has taken several initiatives during the Ninth Plan period. Several

anti-poverty programmes have been restructured to enhance the efficiency of these

programmes in providing increased benefits to the rural entrepreneurs. Programmes

introduced/restructuring effected were:

  Self Employment Programmes have been revamped by merging the Integrated

Rural Development Programme (IRDP);

  Development of Women and Children in Rural Areas (DWCRA);

Supply of Improved Tool-Kits to Rural Artisans (SITRA),

  Training of Rural Youth for Self Employment (TRYSEM),

  Ganga Kalyan Yojana (GKY) and the Million Wells Scheme (MWS) into a holistic

self-employment scheme called Swarnjayanti Gram Swarozgar Yojana (SGSY).

Similarly, Government of Tamil Nadu has also introduced numerous programmes that enable

the entrepreneurs in the rural sector to emerge as economic contributors and become a trade

source for rural businesses. The Rural Development and Panchayat Raj Department Policy Note

2010-2011 lists the various policies designed to overcome the problems associated with rural

development thereby providing the people in the village a better livelihood. The policy

addresses the issues of employment for youth, men and women, enhancement of 

transportation, upgrading of houses, empowerment of women and enormous fund subsides.

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1.2 DEFINITIONS OF ENTREPRENEUR AND ENTREPRENEURSHIP

Richard Cantillon, Irish-French economist during the 1800s, stated that entrepreneur is a

dealer who purchases the means of production for combining them into marketable products

(Michael O.,1985). Another French economist and busiessman, Jean- Baptiste Say, expanded

Richard Cantillon’s ideas and defined the entrepreneur as an Organiser of a business (Hollander,

Samuel, 2005). Adam Smith a Scottish Social Philosopher and a pioneer of Political Economy

described an entrepreneur as a person who only provides capital without taking active part in the

leading role in an enterprise (Hollander Singh, 1973). Joseph A Schumpeter who has expanded

the theory of entrepreneurship, recognized a person who introduced innovations as an

entrepreneur (Swedberg, Richard, 1992). Frank Knight describes entrepreneur as a change agent.

 Noah Webster thinks entrepreneur as one who assumes the responsibility of risk and

management of business (Vincent P. Bynack ,1984). Peter F Drucker defines an entrepreneur as

one who always searches for change, responds to it and exploits it as an opportunity. Innovation

is the specific tool of entrepreneur , the means by which the exploits change as an opportunity for 

a different business or service. (Peter F Drucker, 1954)

A vast literature has emerged over the last two decades providing insights into the many

facets of entrepreneurship. Lazear (2002) and Parker (2004) offer a comprehensive

understanding of the entrepreneurial choice, new firm formation and the role of the

entrepreneurship in growth, reflecting a broad consensus that has emerged in recent times. 

Defining entrepreneurship is not an easy task. There are almost as many definitions of 

entrepreneurship as there are scholarly books on the subjects (Byrd W.A., 1987, p. 3). In fact

after 200 years, a commonly accepted definition of entrepreneurship has failed to emerge. One of 

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the earliest definitions was given in 1734 where entrepreneurship was said to be self-

employment with an uncertain return (Sharma and Chrisman, 1999).

Two hundred years later, the importance of innovation was highlighted as

entrepreneurship was described as the process of creating new combinations of products,

 processes, markets, or organizational forms (Schumpeter, 1934). Entrepreneurship has also been

defined as simply the “creation of an organization” (Hoy 1987; Gartner 1988). Recent research

analyzing the impact of entrepreneurship on economic growth at the regional level has used

measures of entrepreneurship based on new business starts.(Acs and Armington 2004, Camp

2005; Audretsch and Kielbach 2005)

1.3 THE RECORD OF ENTREPRENEURIAL ACTIVITIES

There have been as many definitions of entrepreneurship as there have been writers on

the subject. Entrepreneurship is not new but it is an ancient trade, which can be traced to the

expedition of the Marco Polo, who attempted to establish trade routes to the Far East. (Lanstorm

B., 1967) In the era of Marco Polo, the traders were known as merchant adventurers, who took 

an active role in trading. It can be assumed that the term enterprise was in relatively common use

 by 1492 because Christopher Columbus used it. (Crosby, A. W., 1987) In the journal of his first

voyage to the New World he wrote, “I declared to Your Highness that all the gain of this my

enterprise should be spent in the conquest of Jerusalem . . . ” (Bartlett, 1968).

The definition of entrepreneurship has been traditionally concerned with the roles and

functions of the entrepreneur (Jin-Ichiro Yamada, 2004). Entrepreneurship is defined as the set

of activities to promote socio-economic stablisation and effective utilization of resources by

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stimulating socio-economic progress, creating new values, and providing employment

opportunities (Shane and Venkataraman, 2000).

Entrepreneurship is often said to be a network activity (Birley, 1984). Much of the

difference in definition and approach to entrepreneurship is related to viewing the entrepreneur 

as a person recognizing opportunities or creating opportunities (Arson S. Spencer et al, 2008).

‘Entrepreneur’ and ‘Entrepreneurship’ have become buzzwords both in academia and in the

 popular press, and have been used in wide variety of contacts (Drakopoulou Dodd and Anderson,

2007).  Table 1-1 provides a short selection of definitions that have been offered. Anexamination of the common elements in these definitions reveals the following characteristics of 

entrepreneurship

  Creativity and innovation

  Resource gathering and the founding of an economic organisation

  The chance for gain(or increase) under risk and uncertainty

Entrepreneurship, then is the creation of an innovative economic organization (or network of 

organisations) for the purpose of gain or growth under conditions of risk and certainty.

TABLE 1-1 DEVELOPMENT OF ENTREPRENEURSHIP THEORY AND

THE TERM ENTREPRENEUR  

YEAR AUTHORS CONCEPTSMiddle

Age

Actor and person in charge of large scale production projects

17t

Century

Person bearing risks of profits (loss) in a fixed- price contract with government

1725 Richard Cantillon Person bearing risks is different from onesupplying capital

1803 Jean Baptiste Say Separated profits of entrepreneur from profits of 

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capital1876 Francis Walker Distinguished between those who supplied

funds and received interest and those whoreceived profits from managerial capabilities

1934 Joseph Schumpeter Enterpreneur is an innovator and develops

untried technology1961 David McClelland Entrepreneur is an energetic, moderate risk taker 1964 Peter Ducker Entrepreneur maximizes opportunities1975 Albert Shapiro Entrepreneur tales initiative, organizes some

social and economic mechanism, and acceptsrisks of failure

1980 Karl Vesper Entrepreneur seen differently by economists, psychologists, businesspersons, and politicians

1983 Clifford Pinchot Intrapreneur is an entrepreneur within an alreadyestablished organisation

1985 Robert Hisrich Entrepreneurship is the process of creating

something different with value by devoting thenecessary time and effort, assuming theaccompanying financial, psychological, andsocial risk; and receiving the resulting rewardsof monetary and personal satisfaction

Source: Robert D. Hisrich, “Entrepreneurship and Intrapreneurship Methods for Creating New Companies That Have an Impact on the EconomicRenaissance of an Area” In Entrepreneurship Intrapreneurship and venture Capital ed. Robert D Hisrich (Lexington, MA Lexington Books 1986)

 p. 86

1.3.1 ENTREPRENEURSHIP: THE PAST, THE PRESENT, THE FUTURE

Entrepreneurship, as an academic field of study, is quite young. Myles Mace apparently

offered the first course in entrepreneurship at the Harvard Business School in 1947. Peter 

Drucker started a course in entrepreneurship and innovation at New York University in 1953.

The current condition of entrepreneurship reflects tremendous growth in almost all dimensions of 

the field. The number of universities with entrepreneurship courses has increased from fewer 

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than 10 in 1967 to a large number today. In fact entrepreneurship has become part of the

curriculum in all universities in India, when the University Grant Commission had directed the

universities to teach the entrepreneurship to every third year student of engineering in India. This

indicates that government has been preparing the student to know the entrepreneurial

development and know its benefits. Recent research on entrepreneurship around the world

indicates that the cultural characteristics that can foster successful entrepreneurial activities and

its related economic benefits are a strong education base, the necessary financial support,

opportunities for networking among entrepreneurs and a well-defined, minimal role for the

government.

The future trend for entrepreneurship seems to favor new firm formation with continued

high rates of revenue. According to Cooper A. (1995) the wealth and job creation associated with

new firms in recent years is likely to be continued. The capital city of Tamil Nadu, Chennai was

once a fishing village and today it has become one of the growing metropolitan cities and well

established municipality which has earned an icon in the world map. This is due the opening up

of business ventures, many from village have gone to Chennai and started a business and become

 business tycoons. The pioneers of entrepreneurship in India are shown in the table below:-

Table 1-2

Successful Entrepreneurs in India

Year Founder Company Name

1877 T V Sundram Iyer TVS Group1894 Ghanshyam Das Birla Birla Group1900 Dewan Bahadur A.M Murugappa

Chettiar Murugappa Group

1910 G Kuppuswamy Naidu Lakshmi Mills1923 Brijmohan Lall Munjal The Hero Group (Hero Motors)1933 Dhirubhai Ambani Reliance Industries1939 Jamsetji Tata Tata Group

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1946  N R Narayana Murthy Infosys Technologies1947 J C Mahindra Mahindra Group1950 Subhash Chandra Zee T V1953 Kiran Mazwindar Shaw Biocon (First biotechnology company in

India)

1978 P Ponnudurai Lion Dates Impex Private Ltd.2003 Capt G R Gopinath Air DeccanSource: India Entrepreneurs, 2010, The Year denotes the start of business

1.4 NEED FOR THE STUDY 

There have been several important developments in entrepreneurship research over past

decade that call for distinctive attention. While traditionally research in entrepreneurship focused

on the study of entrepreneurship itself, today it has shifted towards traits and personality.

However, very little research has been done on the entrepreneurship development in rural area,

especially in India.

Former President of India, Dr A P J Abdul Kalam, in his address to the parliament at the

farewell function hosted by the speaker of Lok Sabha in the Central hall of Parliament House,

 New Delhi on 3rd July 2007 said:

“ W e are happy that our economy is in the ascent phase and our GDP is growing at 

nearly 9% per annum. It is evident that economic growth is not fully reflected in the quality of 

life of a large number of people, particularly in rural areas”, 

(National Information Centre, 2007)

The speech of Ex-President Dr A P J Abdul Kalam has indeed inspired us to embark on a

study of rural sector to know its economic growth and the status of the quality of life of the rural

 people. Government of India has introduced many schemes for the rural sector to lift up the

villagers below the poverty line and also to provide an opportunity to them to start business on

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their own. One of the schemes that was introduced to the rural sectors, was known as “ PURA”

Providing Urbanised amenities to Rural Area. A similar type of scheme was introduced in

Thanjavur District. This is known as “Periyar PURA” which was named after the great social

reformer, Thanthai Periyar. His vision was to introduce self-sustainable jobs (entrepreneurship)

to the villagers using the natural resources within their villages. He wanted women to be

educated and be self reliant through entrepreneurship development. Periyar Maniammai

University, situated at Vallam, Thanjavur has been providing continuous support to the PURA

villages as the supporting institution for Entrepreneurship Development. Even though the PURA

Scheme has been operating for the past eight years, no study has yet been made on the progressin entrepreneurial activities. In order to align with the aspiration of our former President we

chose to study PURA scheme in Villages of Thanjavur to know the determinants of 

entrepreneurship and the role of supporting institutions in facilitating entrepreneurship

development.

Shane and Venkataraman (2000) say that researchers were emphasizing on the

individual’s behavior and cognitive issues rather than focusing on the discovery and exploitation

of opportunities.. Evans and Jovanovic (1999) emphasised on those entrepreneurial activities that

 bring economic growth, which were not fully exposed by the researchers. Based on the judgment

of Shane and Venkataraman (2000) and Evans and Jovanovic (1999, we have attempted to

conduct our study on entrepreneurship development in rural sector and to expose the economic

growth in that area.

According to Saraswathy (2002), the entrepreneurial opportunity is set up based on:-

   New ideas or inventions that may or may not lead to the achievement of one or 

more economic ends that become possible through those ideas or inventions;

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  Beliefs about things favorable to achievement of possible valuable ends; and

  Actions that generate and implement those ends through specific (imagined) new

economic artifacts (the artifacts may be goods such as products and services

and/or entities such as firms and markets, and/or institutions such as standards and

norms)

The economic development through entrepreneurship in India depended upon the

entrepreneur’s activities (Shivaram V, 2003). Rural entrepreneurship is an industrial route to

development through non-farm entrepreneurship for rural economic development. (Subrata Dutt,

2004). Rural development is more than ever before linked to entrepreneurship. Institutions and

individuals promoting rural development now see entrepreneurship as a strategic development

intervention that could accelerate the rural development process. (T. Petrin, 1994).

Mr Suren Dutia, the former CEO of TiE Global2 in his speech on ‘Entrepreneurship is hidden

ingredient of India’s success”, TiE Coimbatore, Tamil Nadu-India said

“ Entrepreneurs have played an enormous role in shaping the Indian economy since the country

became independent; Entrepreneurship is hidden ingredient of India’s success”.

(The Hindu, 2010)

Table 1-3,

Rural Development and Projection( for Tamil Nadu)

Unit  1991  Current

(2008) 

Vision

2025 

Per farmer income  Rupees  5300 9000 45000

2 The Indus Entrepreneurs (TiE), was founded in 1992 in Silicon Valley by a group of successful entrepreneurs, corporate executives, and senior

professionals with roots in the Indus region. There are currently 13,000 members, including over 2,500 charter members in 57 chapters across

14 countries. TiE’s mission is to foster entrepreneurship globally through mentoring, networking, and education. Dedicated to the virtuous cycle

of wealth creation and giving back to the community, TiE’s f ocus is on generating and nurturing our next generation of entrepreneurs.

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Population dependent

(directly and

indirectly) on

Agriculture 

Crores  3.5  3.6  1.8 

Source: Tamil Nadu Vision 2025, Confederation of Indian Industry Report 2008

Tamil Nadu’s rural areas will have well developed infrastructure and will be well connected to

the urban hubs. The per capita income of rural household will grow five fold through improved

agricultural practices and strong growth in manufacturing and services. Table 1-2 shows the

Tamil Nadu Vision, 2025 (CII Report, 2008).

This shows the importance of entrepreneurial development in rural areas and its

contribution to economic growth as a field of study. The transformation of rural communities

through entrepreneurial activities i.e. self-employment, small business owners, small scale

industries, family business gives rise to certain questions such as:

-  What drives these entrepreneurial activities in rural area?

-  How does entrepreneurship affect the growth of the rural area?

- 

Is entrepreneurship a means of employability?

-  What support does the rural community get from Institutions?

-  Why does the rural community choose entrepreneurship?

The intricate trend of entrepreneurship effects in rural area has engrossed the interest and

attention of management disciplines covering human resources, marketing and finance aspects of 

this challenging and risky activity. A number of studies on entrepreneurship development have

 been conducted in the East and West. The studies on entrepreneurship development in India

especially those relating to rural areas are very few. Hence, there is a need for more research on

entrepreneurship development rural areas in India.

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The economic reforms of the early 1990s set the stage for substantial improvements in

the Indian economy. India’s economy grew at an average of 3.5 per cent in 1991-2001 to 9 per 

cent 2003-2008 (Acharya and Mohan, 2010). Further, its rate of inflation and fiscal deficit both

decreased substantially (Bhalla, 2000). The progress of Indian economic development from 1947

to the present provides further evidence that individuals do respond to incentives in their pursuit

of self-survival and accumulation of wealth. (Anil K. Lal  and Ronald W. Clement,

2005).Entrepreneurial efforts were found to generate a wide range of economic benefits,

including new businesses, new jobs, innovative products and services, and increased wealth for 

future community investment (Kayne, 1999).

The entrepreneurship activities in India have been increasing gradually after the

liberation of trades and business opportunities that followed the independence. The restructuring

of business and trades has driven many entrepreneurs to venture into new area of operation as

mentioned by Kayne (1999). Companies like Reliance, Tata, TVS, MRF, Infosys Technologies,

Wipro, TCS, Maruti Suzuki etc. have used the opportunities to enter into businesses and become

well known business leaders around the globe. Home based businesses, have been popular 

among the people living in rural areas where the investment was within the capability and people

were able to attain the expected small income. In Thanjavur District, there were 92 Self-Help

Groups in the year 2001 and the number has grown to 365 Self-help Groups in the year 2008

and 1365 in the year 2011(Annual Report 2007 of Centre for Rural development-PMU).

Increasingly, rural entrepreneurship and small business ventures have been seen as a strategy for 

rural development (Hoy, 1996). Rural entrepreneurship is defined by Wortman as

“the creation of a new organization that introduces a new product, serves or creates a

new market, or utiliz es a new technology in a rural environment”. 

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Wortman (1990)

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Despite the consolidation, much of the related issues of Entrepreneurial Activity remains

fragmented and there is no indication that a study has been carried out on rural development

 based on Entrepreneurship activities. Hence, there is a need to study the Entrepreneurial Activity

in rural area of India and its development.

1.5 ENTREPRENEURSHIP AND DEVELOPMENT

Asia’s success in economic development and poverty reduction has inspired governments

and development organizations to increase their support for SME’s (Small -Medium Enterprise)

and entrepreneurial activity.(James Richardson, 2004). In the 1980’s, emphasis on creating new

economic activities for ‘self -generating’ growth began to take hold in the development

community (Sweeney,1987). According to Cecorra (1999), these themes have been reflected in

the numerous policies and programs supporting entrepreneurial activity in less developed

regions. However, in spite of all the policies and programs, there has been little empirical

research in this area to assess the effects of increased entrepreneurial activities in rural regions. A

number of studies have looked at the effects of specific programs with generally positive

conclusions. (e.g., Andersn, 2002; Dumas, 2001; Graham & Manning,2000; Mariottis 1999;

Owuala, 1999; Fadahunsi, 1991). These positive reports have probably helped to fuel the interest

in entrepreneurship support programs among the development community.

Hence, East Asia has experienced economic growth for more than a decade but the region

remains in the underdeveloped or less developed category. Overall 60 per cent of the population

lives in rural area and agriculture is still the largest sector (ADB, 2001). Asian countries have

 been receiving considerable attention from international development organizations such as

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Asian Development Bank, World Bank and United Nations Development Program. Development

economists have shown interest in entrepreneurship. China has been very much successful in

reducing poverty rates with recent statistics showing poverty rates in the low single digits (ADB,

2002a).

Table 1-4

Selected Asian Statistics

Country TEA GDP/capita(ppp)2 

HDI GDP Growth86-96 avg

Thailand18.4

6402 0.762 9.1

India 17.9 2358 0.577 5.9

Korea 14.5 17380 0.882 8.6

China 12.3 3976 0.726 9.9

Singapore 5.9 23356 0.885 8.4

Hong Kong 3.4 25153 0.888 6.3

Japan 1.8 26755 0.933 2.9

1

Source: Reynolds et al., 2002,2

Source: ADB, 2002,3

Source: UNDP,2002 ,4

Source IMF, 2002

Table 1-3, shows that India stands second to Thailand in entrepreneurial activities. The emphasis

on entrepreneur development programs and policies has stimulated India’s growth in

entrepreneurial activities. Support for SME’s is a common theme because it is recognized that

SME’s generate most new jobs. The belief is that entrepreneurs are an important part of job

creation and economic growth. (OECD, 2000)

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1.6 ENTREPRENEURSHIP IN INDIA 

In India, the history of traders can be traced to the period of King Rajendra Cholan, who

initiated expedition across the Indian Ocean to seek new ventures. (Majumdar R C, 1961) Hethen joined the Pallava3 Kings of Sumatra to have a commercial connection with China. He went

on to establish trades between India and South East Asia which later became a trading area for 

ancient Indians. ( Avari, Burjor, 2007). In 1818, Indians began to travel to many other part of 

South East Asia4, whereby their presence has become a historical event.

According to Rajeswary Brown (1993), Indians arrived in Singapore during the 18

th

&19th century as textile traders, spice traders or Chettiars 5who lent money to Indians to set up

 business, hoteliers, popular restaurant owners and owners of many sundry shops. As trading

flourished , people began to set-up businesses within the country. Today, there are more than

1000 shops in Singapore’s Little India6 which is owned by people of Indian origin. Needless to

say, Indians can be found in many part of South East Asia, where they have established their 

entrepreneurial activities, and became successful entrepreneurs in various fields of business.

Almost four decade ago, Baumol (1968) proclaimed that encouragement of the entrepreneur is

3 The Pallava dynasty was a Tamil dynasty of South India which ruled the northern Tamil Nadu region and the southern Andhra Pradesh region

with their capital at Kanchipuram. The word Pallava in Sanskrit means branch. The Pallavas were from the Kuruba/Kurumba community. They

originally belonged to the Guntur region of Andhra Pradesh. This area is still referred to as Palnadu or Pallava Nadu. Pallavas gained prominence

after the eclipse of Satavahanas of Andhra and decline of Cholas in Tamil Nadu. The Pallavas patronized Tamil, Telugu and Sanskrit. Some of the

most illustrious Sanskrit poets like Bharavi and Dandin and the seashore rock-cut temples of Mahabalipuram belongs to the Pallavan era.  

(Hermann, Kulke; Rothermund D (2001) [2000].  A History of India. Routledge).4 Southeast Asia consists of two geographic regions: Mainland Southeast Asia, also known as Indochina, comprises Cambodia, Laos, Myanmar

(formerly Burma) , Thailand, Vietnam and Peninsular Malaysia, and Maritime Southeast Asia, which is analogous to the Malay Archipelago, 

comprises Brunei, East Malaysia, East Timor, Indonesia, the Philippines, and Singapore. Hitchcock, Michael, et al. Tourism in South-East Asia.

New York: Routledge, 1993 5 Chettiar, commonly used by people of South Indian origin in India and abroad. Chettiar is the 3rd dominant clan and Surname by majority in

Tamil Nadu.  This community is known for its trade in spices, for its role in the hotel industry . David Rudner (1989) Banker's Trust and the

Culture of Banking among the Nattukottai Chettiars of Colonial South India. Modern Asian Studies 23 (3), 417-458.6  The Little India area in Singapore was reported to have developed around a former settlement for Tamil convicts. Its location along the

Serangoon River originally made it attractive for raising cattle, and trade in livestock was once prominent in the area. Eventually, other

economic activity developed, and by the turn of the 20th century, the area began to look like a Tamil ethnic neighbourhood.  www-

singapore.com/little-india-singapore.htm 

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the key to the stimulation of growth. This has been corroborated by the growth of 

entrepreneurship development spreading across the South East Asia.

The spirit of enterprise is much prevalent in India. Rural entrepreneurship helps to reduce

 poverty while enhancing the numbers of middle class people within the country. Increasingly,

everyday individual with a bit of money, a dollop of resourcefulness and plenty of ambition was

feeling emboldened to become an entrepreneur (Gupte, 2004). India was ranked second among

all nations in Total Entrepreneurship Activity according to the Global Entrepreneurship Monitor 

(GEM) Report of 2002. But after several years, India appears to have a Total Entrepreneurship

Activity (TEA) level rather close to the world average. TEA average per year from 2001 to 2009

was 12.1per cent whereas the World’s average was 10.6 per cent. This shows India’s continuous

improvement in entrepreneurial activities and its involvement in enhancing the entrepreneurial

commitment (GEM report, 2009). The Global Entrepreneurship Monitor (GEM) report also

identifies whether its respondents are starting new business to take advantage of attractive

opportunities. GEM report 2004-2009 shows that 20 per cent of Early-Stage Entrepreneurs in

India have International Orientation.

The Prime Minister of India, Dr Manmohan Singh in his Convocation address at 29th

Convocation of Sri Sathya Sai Institute of Higher Learning at Puttaparthi University, India,

emphasised on entrepreneurship as follows:

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."As India modernizes, grows and plays a larger role in world affairs, we will need an ever-

expanding pool of human resources, the quality of which will have to be second to none. We

need global leaders in education, entrepreneurship, technology and management,"  (Economist Times, 2010)

In his speech, he addresses the need for entrepreneurs and their contribution to India’s

global market entry and economic growth. This apart, when we look at entrepreneurship in India,

we can see India’s entrepreneurs globally competing in almost all the fields —  be it telecom,

 power, technology, biotech or manufacturing. In the recent days, we are seeing substantial

activities in the social sector as well. In spite of working towards business excellence, about 72

 per cent of India’s population continues to reside in rural area (GOI, 2010). The government has

vital role to play in bringing the urbanized activities into rural areas and providing the rural

community with the opportunities to progress with the national growth. Nevertheless, about 19

 per cent of the rural community are self-employed who are running their family business or 

small scale business. Yet, the rural economy has not shown sufficient growth.

1.7 ENTREPRENEURSHIP IN TAMIL NADU

Tamil Nadu is one of the states in India, covers an area of 130,058 square kilometres

(50,216 sq miles). It is the eleventh largest state in India . Tamil Nadu consists of 32 districts (See

Fig 1.1), which provide spectrum of agricultural products and non-agricultural products. Each

district has its own distinctive business involvement and has its fair share in promoting

entrepreneurship in rural area so as to provide a livelihood to the families in the rural

communities in that district. Tamil Nadu has grown fairly fast during the 1990’s and forged

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ahead in almost all the economic sectors. Tamil Nadu has also done well in terms of human

development.

The total population of Tamil Nadu is 72,138,958 as per the provisional results of the

Census of India 2011. In terms of population it holds the sixth position among the States in the

country. Tamil Nadu’s decadal growth rate was 11.7 per cent during 1991 -2000. It has improved

to 15.60 per cent as per 2001 -2011 Decadal Growth (Census, 2011). The literacy rate in the

State has shown remarkable improvement 73.47 per cent as per 2011 census when compared to

62.66 per cent ten years back during 1991 Census.

Table 1-5Comparison of Population, Decadal Growth & literates between Yr 2001 and Yr 2011 

Year Population Decadal growth No. of Literates

2001 62,110,839 11.7% 73.47%2011 72,138,958 15.60 % 86.6%

Source: Census of 2011

Tamil Nadu is not only one of the most populous states of India but also densely

 populated. Density of population in Tamil Nadu is 478 persons per sq. km. whereas the national

average is 324 persons per sq. km., and is the sixth highest among the major states of India

(Table 1.6).

Table 1.6

Density of Population in Tamil Nadu and India

States Density of Pop / sq. km2001 2011

Tamil Nadu  429  478 

All India  267  324 

Source: Census of India 2011

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Tamil Nadu is also relatively more urbanised than the other major states of India. According to

the 2001 Census, 43.86 percent of the population of Tamil Nadu lives in urban areas whereas the

level of urbanization at the national level is 27.78 per cent. According to 2011 census the level of 

urbanization of Tamil Nadu has decreased to 34.15 per cent.

Table 1.7

Level of Urbanization in Tamil Nadu and All-India

States  2001 2011

Total

Population

(in crore) 

Urban

Population

(in crore) 

%

Urban

Population 

Total

Population

(in crore) 

Urban

Population.

(in crore) 

%

Urban

Population 

Tamil Nadu 6.21 2.7 43.86 7.21 1.9 34.15All India 102.70 28.5 27.78 121 21.8 25.71

Source: Census of India 2011

The comparison of the population shows the Tamil Nadu’s population has been shifting

towards urbanization, that is, rural area being transformed into modernized vicinity.   Rural is

identified as ‘countryside, agriculture, traditional culture and geographic peripherality’. (Sarah

et al, 2004) The increase in level of urbanisation in Tamil Nadu over the period 2001-2011 is

related to the emergence of a large number of statutory towns. In the 2011 census, all statutory

towns and places that satisfy certain demographic and economic criteria are treated as urban.

However, let us look at the rural area and their working persons by broad industry categorisation.

The comparison of the result in Table 1.8, shows that people are shifting towards industrial

sector to seek jobs thus resulting in reduction in agriculture related jobs. People seek job in

manufacturing and wholesale/retailing sector which is related to Entrepreneurial Development.

The creation of a country’s wealth and dynamism depends upon the competitiveness of its firms

and this, in turn, relies fundamentally on the capabilities of its entrepreneurs and managers

(Álvaro Cuervo et al, 2007).

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Table 1.8 –  

Distribution of usually working persons by broad industry division in Rural Area

Sectors  Rural

1999-2000  1999-2010 TN  India  TN  India 

Agriculture 705 784 679 763Mining &

Quarrying

4 6 5 5

Manufacturing 126 70 139 74Electricity 2 2 2 2Construction 23 24 40 33Wholesale

RetailTrade etc.

48 43 56 51

Transport

Storage etc

20 14 26 21

Financial

Insurance

8 3 6 3

Community

services

62 54 47 49

Source: NSSO 50th Round (1993-94) and 55th (1999-2000) Round

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Source: www.tn.gov.in, Nov 2010

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Fig.1.1-Tamil Nadu and Districts

Table 1-9

Activities in each district and the production for business in Tamil Nadu

District Activities in Each Districts

1.  Ariyalur This district is well known for its sugar cane and cashew nutsupply.

2.  Coimbatore This district is well known for its textile industries. There aremore than 25,000 small, medium, large-scale industries andtextile mill present in the city. Coimbatore is also famous for themanufacturing of motor pump sets and varied engineering goods..

3.  Chennai  This district is located in the northeast of Tamil Nadu and

considered as the capital for Tamil Nadu. Chennai`s economy isequipped with a panoptic industrial base in the automobile,technology, hardware, manufacturing and healthcare sectors. Thecity is home to major India`s automobile industry and is thecountry`s second-largest exporter of software, informationtechnology (IT) and information-technology-enabled services(ITES), just behind Bangalore. Chennai Zone contributes 39 per cent of the State`s GDP (gross domestic product). The city isresponsible for 60 per cent of the country`s automotive exportsand is sometimes lovingly referred to as "the Detroit of India".

4.  Cuddalore This district produces crops like millets,   pulses,  sugarcane, 

groundnut, cotton, etc. There are number of fisheries present inthis locality. The district has several industries including smallscale cottage industries.

5.  Dharmapuri The district has been also the largest producer of mango andaccounts for one half of the mango yield in the state. DharmapuriDistrict is the second largest producer of tomato and accounts for 22 percent of the total area of the state.

6.  Dindigul This district has a flourishing economy well known for its ironlocks, tobacco and handloom industry. The main occupation of the people living in the district is agriculture and the district hasmore than 200,000 hectare of cultivable area. Rice,   pulses, 

sugarcane, groundnut, gingelly, cotton and millets are the maincrops that are grown here. Small Scale industries like lock manufacturing, leather products and handloom industries.

7.  Erode This district has a number of powerloom textile industries. Theother major industries of the district are screen printing andvanaspati manufacturing..

8.  Kanchipuram This district has been famous for its silk sarees and weaving andagriculture are the main occupations of the people living in the

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district. Kanchipuram district is popular for its renowned craftedworld famous silk sarees, a traditional home industry. It is proudto be the home of vital production bases of international industrialgroups including Ford, Saint Gobain, Hyundai as well as anumber of export houses in and around the Madras Export

Processing Zone. The product range from factories in this districtinclude cars, auto parts, phones, float glass, air conditioners,Sugar industry, fashion garments, etc..

9.  Kanyakumari This district is a tourist paradise with Kanyakumari beach,Kumari Amman Temple, Swami Vivekananda Rock Memorial,Gandhi Mandapam, Kalakadu Wildlife Sanctuary and OlakkayAruvi Waterfalls.

10. Karur This district is a agriculture based region and people have goodsense of artistic infrastructure which is unique throughout theTamil Nadu.

11. Krishnagiri This district is famous for its mulberry cultivation. The district

has a favourable cultivation which favours the cultivation of cropslike paddy, maize, ragi, banana, sugarcane, cotton, tamarind,coconut, mango and groundnut. A major hill range of the districtis Melagiri

12. Madurai This district is a major industrial and commercial district of Tamil Nadu and houses many textile industries, dairy farms andengineering industries. The district is famous for Jasmine flowers.Jasmine flowers from the district of Madurai are transported toother cities of India as well as to other countries i.e Singapore,Malaysia. The District has a very few reputed organizations in the private sector like T.V.Sundaram Iyengar & Sons, Madura Coats,

Fenner (I) Ltd., George Oaks Ltd. etc. which are engaged in the production of variety of goods like tyres and tubes, machineries,textile, conveyor belts etc. and also provided employmentopportunities. The District offers ample scope for the field of textiles, readymade garments, bakery units, and floriculture, dairyand cold storage units, Agro and Herbal products, Granite stones,Blue metal jelly, Chamber bricks, Rubber and plastic basedindustries. There is also a very good scope for starting food processing and agro based industries.

13. Nagapattinam This district has a rich cultural heritage and the major touristdestination in the district are Kodikkarai, Nagore, Sikkal,Thirukandiyur and Velankanni. This district has traditionally beenreferred to as East Thanjavur and Paddy granary of South India.

14. Namakkal This district is an industrial district of the state and some of themajor industries are textile industry, transport industry, poultryunits and sago and starch industry.

15. Nilgiris This district is the most beautiful district of Tamil Nadu with itsdense forests, gushing streams and undulating peaks The districtis mainly a Horticulture area and the entire economy of the

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district depends upon the success and failure of Horticulturalcrops like Carrot, Potato, Cabbage, Coffee,  Tea, Spices andFruits. Coonoor is a taluk of Nilgiris which is an important tradecentre for tea and the Tea Board of India has a branch office atthis place.

16. Perambalur This district favours the cultivation of paddy, groundnut,sugarcane, millets and cashew.17. Pudukottai This district is famous for its cashew nuts and ancient cave

temples.

18. Ramanathapuram This district is situated in the south eastern part of Tamil Nadu.The mainstay of the district is agriculture and the major cropsgrown here are paddy, corn, cottons, groundnut, gingelly andchillies.

19. Salem This district has a rich mineral deposit and the minerals foundhere are magnetite, bauxite, quartz, limestone, soapstone, rough

stone and granite. The production of un-bleached sugar-vellam isone of the major cottage industries in the district of Salem.Another prominent cottage industry of this district is ropemaking. Both cotton and silk fabrics woven in the district of Salem find popular market throughout the state of Tamil NaduThe `Kurunji` flowers which blossom once in twelve years alsoattract tourists. Coffee, spices like pepper, cardomom, fruits likeorange, butter fruit, jack fruit are grown in Yercaud.

20. Sivagangai This district has rich cultural heritage which has been major attraction for the locals.

21. Thanjavur This district is dotted with numerous temples and is also known

for its arts and crafts. The total area under cultivation in thedistrict of Thanjavur is 241292 hectares and the major cropsgrown in this district are rice, millets, groundnut, pulses, cotton,sugarcane, etc. Thanjavur district is also known as rice bowl of Tamil Nadu.

22. Theni This district is surrounded by vast stretches of fertile lands and teagardens. It is a major tourist destination with its cascadingwaterfalls and countless pilgrim centers. Kumbakarai Falls, SuruliFalls and Sri Kamatchi Amman Temple are the major touristdestination. The major food crops grown in this district includePaddy, Bajra, Jowar, Ragi, Samai, Maize, Redgram, Blackgram,Cowpea, Greengram, Lablab and Kollu. The cash crops grown inthe Theni district include Cardamom, Chillies, Arecanut, Pepper,Tamarind,  Sugarcane, Coriander, Banana, Mango, Guava,Grapes, Jackfruit, Sappotta, Onion, Brinjal, Beetroot, LadiesFinger, Cotton, Tomatoes, Silk  Cotton, Coconut, Groundnut,Sunflower, Coffee seeds, Betel Leaves, Tea,

23. Tiruchirapalli This district is largely dependent on agriculture. The chief cropscultivated in the district are rice, millets, pulses, sugarcane,

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gingelly, groundnut and cotton Some of the major crops grown inthis district are rice, pulses, millets and other cereals, groundnut,sugarcane,  cotton, gingelly, etc. Sericulture was introduced inTiruchirappalli District in the late 70`s and the progress is slowly picking up. At present, it has got mulberry cultivation which is

about 217.00 acres involving about three hundred and eightsericulturists in silkworm rearing.24. Tirunelveli This district is an idyllic tourist destination. The tourist attraction

of this district are Mundanthurai Wildlife Sanctuary,Kunthakulam Bird Sanctuary and the Manjolai Hill Station. Thedistrict is also dotted with numerous temples KrishnapuramTemple, Swamy Nellaiappar Temple and Kanthimathi AmbalTemple.

25. Thiruppur This district contributes more than 25% of the Indian leather exports. There is also a fair amount of growth and progress of small scale industries and tanneries in this district. Thus, these

industrial activities have not only generated employmentopportunities, but also contributed to the overall economic growthof this district. The innovative self help groups 7of woman in thisdistrict are also playing a major role in shaping the rural economyand helping rural women to be self reliant.

26. Thiruvannamalai This district is one of the most venerated places in Tamil Nadu.Thiruvannamalai District is known for its two major businesses,agriculture and silk saree weaving. Rice cultivation and processing is the one of the biggest business in this district. Thedistrict started to industrialize following the establishment of theindustrial complex near  Cheyyar   by the State Industries

Promotion Corporation of Tamil Nadu (SIPCOT). This hasinitiated many automoble industries to setup their operation in producing spare parts for automobile. i.e. Mahindara & Mahindra,Ashok Leyland, etc One of the largest sugar mills in the country -Cheyyar co-operative sugars - is situated near Cheyyar  

27. Tiruvallur This district is largely an industrial along with agriculture. Someof the major industries located here are Madras Refineries,Madras Fertilizers, Manali Petro Chemicals, MRF, Ashok Leyland, TI Cycles, Britannia India Ltd. Basically an agriculture based district, it mainly contains village population with a fewtowns and some influence from the Chennai city.

28. Thiruvarur The district lies between  Nagapattinam district on the east andThanjavur district on the west, and is bounded by the Palk Straiton the south. The district produces rice, pulses, sugarcane,groundnut, gingerly oil and cotton. There are medium scaleindustries and small scale industries which supports and supply

7 Self Help Group (SHG) is group of females with the size of 10 to 15 members who will be selling their product which is processed or 

manufactured by the group

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materials for local consumption. This district also well known for it Khadi8 production. 

29. Thoothukkudi This district, also known as Tuticorin District, has been a districtof Tamil Nadu state in southern India.. It is also known for Pearlcultivation with abundance of   pearls found in the seas of 

Thoothukudi. This district has been famous for banana tree andmost banana leaf is delivered to various district and the mainexporter of banana leaves in Tamil Nadu. . Tuticorin has been thesecond largest producer of Salt in India next to Gujarat. Jaggery is produced from palmyrah juice; the production of jaggery is themain occupation of the people.

30. Vellur The district produces rice, pulses, sugarcane, groundnut, gingerlyoil and cotton. There are large scale industries, medium scaleindustries and small scale industries which supports and supplymaterials for local consumption. The innovative self help groupsof woman are also playing a very useful role in building rural

economy and helping rural women to be self reliant.  Industrieslike Bharat Heavy Electricals Ltd Ranipet, Tamil NaduExplosives Ltd., Katpadi. Have been set up. Besides there has been marked growth of small scale industriesand Tanneries in the district

31. Villupuram This district enriched with black granites, blue metals and riversand minerals is situated in the northeastern part of Tamil Nadu.The district of Viluppuram is developing in the industrial sector which also contributes significantly to the economy of the district.The Sugar industry is a major industry in the district with four sugar factories at Mundiyampakkam, Periasevalai,

Kacharapalliyam and Mungailthuraipattu. The small scaleindustries include sixty seven rice mills, seventeen Sago factories,five rice bran oil extracting units and eight cotton ginning mills.The major food crops of the district of Viluppuram are paddy,ragi, cholam, cumbu, blackgram, redgram, varage and horsegram.The chief cash crops are sugarcane, groundnut, cotton, casuarina

32. Viruthunagar This district is bounded by Tirunelveli District to the southwest,Kerala state to the west, and Theni district to the northwest.Virudhunagar is famous for  oil and cotton industry. Sivakasi, 20 km from Virudhunagar, is famous for its fireworks and printing presses.  Srivilliputtur  is very famous for Temples andPalkova.Aruppukottai is famous for spinning mills

Source: Government of Tamil Nadu, District, 2010

8 The term Khadi means cotton. Khadiī is Indian handspun and hand-woven cloth. The raw materials may be cotton, silk, or wool, which are

spun into threads on a spinning wheel called a charkha. It is a versatile fabric, cool in the summer and warm in the winter.Source: Kkadi and

Village Industries Commission, 2011.

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The table 1.8 shows the various agricultural related businesses, manufacturing, industries

and small-scale industries of Tamil Nadu. Tamil Nadu was the third largest economy (2007 – 

2008, 2008-2009, 2009-2010) consecutively among all states in India, and also the most

industrialised state in India. We can deem that Tamil Nadu itself has been an entrepreneurship

hub for many business people. Natural resources available in Tamil Nadu offer opportunity for 

many entrepreneurs. Besides agriculture, Tamil Nadu has the major global automobile

companies and accessories manufacturing including BMW,  Ford,  Renault-Nissan,  Caterpillar, 

Hyundai,  Mitsubishi Motors and Michelin as well as local automobile majors like Ashok 

Leyland,  Hindustan Motors,  TVS Motors,  Royal Enfield,  MRF,  Apollo Tyres and TAFETractors. 

Tamil Nadu has historically been an agricultural state and is a leading producer of 

agricultural products in India. In 2008, Tamil Nadu was India's fifth largest producer of Rice.

The total cultivated area in the State was 56.10 million hectares in 2007 – 08. The Cauvery delta

region of the Thanjavur district has been known as the Rice Bowl of South India.

1.8 ENTREPRENEURIAL DEVELOPMENT IN THANJAVUR DISTRICT

Thanjavur District is one of the districts in Tamil Nadu which is well known for the

 production of rice . The district has been called as the rice bowl of Tamil Nadu since t he major 

supply of varieties of rice comes from this district. The district is made of 8 Taluks namely

Thanjavur, Papanasam, Kumbakonam, Thiruvaiyaru, Orathanadu, Thrupunandal, Pattukottai and

Peravurani.

Table 1-10

Thanjavur District Profile

Area ( Sq.Km. ) 3396.57

POPULATION

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Male Population 1096638Female Population 1119500Rural Population 1467577Urban Population 748561TOTAL WORKERS 897123

Male Workers 618471Female Workers 278652Rural Workers 648453Urban Workers 248670Cultivators 144942Agricultural Labourers 410718Household Industry 37986Other Workers 303477

Table 1-9, Thanjavur District ProfileSource: Thanjavur District, National Informatics Centre,  District Collectorate, Thanjavur 

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Table 1-11,

Industries in Thanjavur District 

Types of Industries  Quantity

(2001) Quantity

(2010) Medium Scale Industries 10 18Small Scale Industries 357 428Cottage Scale Industries 85 85Source: Thanjavur District, National Informatics Centre, District Collectorate, Thanjavur 

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This district lies in the Kaveri delta region, the most fertile region in the State. Besides

 paddy, coconut and sugarcane are the major products. It is the largest producer of Coconut in

Tamil Nadu. Even though the district is agriculture oriented, there are large number of small business owners in every corner of the village towns and city (Thanjavur Town). Many of them

start-up their own business such as vegetarian hotels, restaurants, coffee & tea stalls, silk saree9 

store, Thanjavur Paintings and famous dancing dolls of Thanjavur etc. This is an indication of 

entrepreneurial activities among the people living in this district. Among the population, 14.4

lakhs of the population are residing in the rural area.(see Table 1-10). Majority of them are

famers involved in agriculture. Besides farming, many of them do engage in non-agriculture

 business as shown in Table 1-10.

1.9 IMPROTANCE AND CONTRIBUTION OF THE RESEARCH

The role of the state in economic development began to change dramatically with the

advent of the Industrial Revolution . Hence, the resulting industrialization and economic

development were based on the establishment of individual property rights that encouraged the

growth of private capital. Competition and individual enterprise thrive in this environment

 because individuals pursue their self-interest of survival and wealth accumulation. The instinct to

survive under competitive pressures yields innovation and productivity increases, which

eventually lead to entrepreneurial activities that give the individual an opportunity to explore.

India is no exception to this trend. India was dragged into the industrial era. Many of the

technological developments that have since taken place in India have been geared more towards

9 A traditional attire for Indian women which is made from silk which comes in a variety of colours and /or in even made from gold thread.  

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the export market than bringing about all-round improvements in the quality of life for the Indian

masses. 

The Indian economy has experienced a major restructuring through entrepreneurship

development with the changes brought about by the Industrial Policy Resolution of June 1991.

The deregulation of Indian economy provided the private sector with numerous opportunities to

exploit the emerging demands in this huge market. Industries are moving from fragmented

 phases to consolidated ones. Entrepreneurship has become the major means of income in the

rural industries.

Indian Entrepreneurial Activities also have been undergoing unprecedented change since the

liberalisation era. The industries in rural area have been undergoing a profound restructuring

since the mid-1990s. This restructuring has been driven by substantial changes in regulatory

affairs, increased financial assistance and encouragement for economic performance that support

rural entrepreneurship. Some of these factors include licensing, insurance, royalties, shareholder 

return, patent and generic competition, extremely high risk and costly research and development,

clinical trial issues, international regulation and marketing distributions. The introduction of a

system of product patents on January 1, 2005 has profound implications for the entrepreneur 

inventors which has brought innovative products that can be marketed in the open market.

Products that are most popular among the rural communities are solar powered lamps, solar 

 powered stove and ploughing machine using a two wheeler engine. Many more products have

 been introduced to meet the needs of the growing population for their pleasant livelihood.

The new patent regime has also led to the multinationals from other countries, to look at

India not only for its traditional strengths in contract manufacturing but also as a highly attractive

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location for  research and development (R&D). The International Crops Research Institute for the

Semi-Arid-Tropics (ICRISAT) is a non-profit, non-political organization that conducts

agricultural research for development in Asia and sub-Saharan Africa with a wide array of 

 partners throughout the world. This research center is situated in Hyderabad. This is an

indication of India’s role in providing better source of income for the farmers by using

technology based agriculture methods. 

The findings of the study are relevant to entrepreneurship development in rural area

mainly for the following reasons:

(1) It identifies the entrepreneurship development activities in rural area,

(2) Its highlights the role of support from institutions for entrepreneurship development in rural

area.

(3) It shows the motive of the villagers choosing entrepreneurship.

(4) It identifies factors promoting sustainability of entrepreneurial activities in rural sector 

(5) It highlights the need for Training of rural communities in entrepreneurship development

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1.10 ORGANISATION OF THE DISSERTATION

The study is organised into chapters as mentioned below  

CHAPTERS  TITTLE/CONTENTS 

Chapter One Introduction

Chapter Two Review of Literature

Chapter Three Research Methodology

Chapter Four Data Analysis and Interpretation

Chapter Five Results and Discussion

Bibliography

Annexure