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 smallscale 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
1
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 entrepreneur 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
2
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.
3
9
7.8
7.6
8
7
6
5
4
3.6
3
2
3.5
3.6
4.1
3
4.1
3.53.7
2.3
1992-1997
3.1
2.6
1997-2000
2002-2007
1.31.4
1
0
Food Grains Other Crops Fruits & Veg Livestock
Fisheries
Fig 1-1 Average Annual Growth Rate of Agriculture
Source: 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. Aavin 1 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 commercial
distribution in the state. The Dairy Development Department took over control of the milk cooperatives. It was replaced by the Tamil Nadu
Cooperative Milk Producers Federation Limited in the year 1981. On February 1, 1981, the commercial activities of the cooperative were handed
over 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 the
cooperatives.Tamil Nadu is one of the leading states in India in milk production with about 14.5 million litres per day. Dairy Development
Department, Government of Tamilnadu. "Policy Notes". http://www.tn.gov.in/policynotes/archives/policy2002_03/diary2002-03-b.htm.
Retrieved 16 July 2010
4
35
31.7
30
25
31.1
27.9
25.9
24.9
20.3
20
16.9
14.1
15
TE1982/3
TE 2007/8
10
5
2.7
4.4
0
Food Grains Other Crops Fruits & Veg Livestock
Fisheries
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.
Fruits &
Nuts,
2%
Other
Food
Items,
27%
Fruits &
Nuts, 4%
Vegtables,
11%
Cereals &
Pulses,
36%
Milk &
Products,
16%
Vegtables,
1%
Egg, Fish,
& Meat,
5%
Other
Food
Items,
21%
Milk &
Products,
20%
Egg, Fish,
2004/
Meat,
Fig.&1-3
Rural and urban population consumption of cereals for 2004/5and 1983 respectively
5
Source6%
National Sample Survey Organisation (NSSO), GOI, 2006a
5
Cereals &
Pulses,
51%
1983
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
5.5
Source: 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
Emerging linkages
Retailers
Agro
Processors
Emerging
linkages
Wholesaler &
Logistics
Suppliers
Farmers
Fig 1-4 Agri-system and the linkages progress chart
Source: Shanker A. And Rakash Mohan (2010) p.235
6
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.
Input
Output
Input Suppliers,
Processors and
Retailers
Mandi
Informal
Markets
Rural Business
Hubs
Farmers
Banks &
Insurance
Ext
Services
Money
Lenders
Source:Shanker A.and Rakash M. (2010) p 237
Fig 1-5 Rural /Agriculture Business Hubs reaching Agri-services to the Farmers
7
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.
8
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
9
the earliest definitions was given in 1734 where entrepreneurship was said to be selfemployment 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
10
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. An
examination 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
CONCEPTS
Actor and person in charge of large scale
Middle
production projects
Age
th
Person bearing risks of profits (loss) in a fixed17
price contract with government
Century
Richard Cantillon Person bearing risks is different from one
1725
supplying capital
Jean Baptiste Say Separated profits of entrepreneur from profits of
1803
11
1876
Francis Walker
1934
Joseph Schumpeter
1961
1964
1975
David McClelland
Peter Ducker
Albert Shapiro
1980
Karl Vesper
1983
Clifford Pinchot
1985
Robert Hisrich
capital
Distinguished between those who supplied
funds and
received interest and those who
received profits from managerial capabilities
Enterpreneur is an innovator and develops
untried technology
Entrepreneur is an energetic, moderate risk taker
Entrepreneur maximizes opportunities
Entrepreneur tales initiative, organizes some
social and economic mechanism, and accepts
risks of failure
Entrepreneur seen differently by economists,
psychologists, businesspersons, and politicians
Intrapreneur is an entrepreneur within an already
established organisation
Entrepreneurship is the process of creating
something different with value by devoting the
necessary time and effort, assuming the
accompanying financial, psychological, and
social risk; and receiving the resulting rewards
of monetary and personal satisfaction
Source: Robert D. Hisrich, “Entrepreneurship and Intrapreneurship Methods for Creating New Companies That Have an Impact on the Economic
Renaissance 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
12
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
1877
1894
1900
1910
1923
1933
1939
Founder
T V Sundram Iyer
Ghanshyam Das Birla
Dewan Bahadur A.M Murugappa
Chettiar
G Kuppuswamy Naidu
Brijmohan Lall Munjal
Dhirubhai Ambani
Jamsetji Tata
Company Name
TVS Group
Birla Group
Murugappa Group
Lakshmi Mills
The Hero Group (Hero Motors)
Reliance Industries
Tata Group
13
1946
1947
1950
1953
N R Narayana Murthy
J C Mahindra
Subhash Chandra
Kiran Mazwindar Shaw
1978
2003
P Ponnudurai
Capt G R Gopinath
Infosys Technologies
Mahindra Group
Zee T V
Biocon (First biotechnology company in
India)
Lion Dates Impex Private Ltd.
Air Deccan
Source: 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:
“We 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
14
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 progress
in 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;
15

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)
Per farmer income
Unit
1991
Rupees
5300
2
Current
(2008)
9000
Vision
2025
45000
The Indus Entrepreneurs (TiE), was founded in 1992 in Silicon Valley by a group of successful entrepreneurs, corporate execut ives, 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 focus is on generating and nurturing our next generation of entrepreneurs.
16
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.
17
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 utilizes a new technology in a rural environment”.
18
Wortman (1990)
19
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
20
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
GDP/capita
(ppp)2
6402
0.762
GDP Growth4
86-96 avg
9.1
India
18.4
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
Country
TEA1
Thailand
1
HDI3
Source: Reynolds et al., 2002, 2Source: ADB, 2002, 3Source: UNDP,2002 ,4Source 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)
21
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) He
then 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 18th &
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 India 6 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. wwwsingapore.com/little-india-singapore.htm
22
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:
23
."As India modernizes, grows and plays a larger role in world affairs, we will need an everexpanding 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
24
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 1-5
Comparison of Population, Decadal Growth & literates between Yr 2001 and Yr 2011
Year
2001
2011
Population
62,110,839
72,138,958
Decadal growth
11.7%
15.60 %
No. of Literates
73.47%
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
Tamil Nadu
All India
Density of Pop / sq. km
2001
2011
429
478
267
324
Source: Census of India 2011
25
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
Total
Population
(in crore)
Tamil Nadu
6.21
All India
102.70
Source: Census of India 2011
2001
Urban
Population
(in crore)
2.7
28.5
%
Urban
Population
43.86
27.78
Total
Population
(in crore)
7.21
121
2011
Urban
Population.
(in crore)
1.9
21.8
%
Urban
Population
34.15
25.71
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).
26
Table 1.8 –
Distribution of usually working persons by broad industry division in Rural Area
Sectors
Agriculture
Mining &
Quarrying
Manufacturing
Electricity
Construction
Wholesale
Retail
Trade etc.
Transport
Storage etc
Financial
Insurance
Community
services
Rural
1999-2000
TN
India
705
784
4
6
TN
679
5
India
763
5
126
2
23
48
70
2
24
43
139
2
40
56
74
2
33
51
20
14
26
21
8
3
6
3
62
54
47
49
Source: NSSO 50th Round (1993-94) and 55th (1999-2000) Round
27
1999-2010
Source: www.tn.gov.in, Nov 2010
28
Fig.1.1-Tamil Nadu and Districts
Table 1-9
Activities in each district and the production for business in Tamil Nadu
District
1. Ariyalur
2. Coimbatore
3. Chennai
4. Cuddalore
5. Dharmapuri
6. Dindigul
7. Erode
8. Kanchipuram
Activities in Each Districts
This district is well known for its sugar cane and cashew nut
supply.
This district is well known for its textile industries. There are
more than 25,000 small, medium, large-scale industries and
textile mill present in the city. Coimbatore is also famous for the
manufacturing of motor pump sets and varied engineering goods..
This district is located in the northeast of Tamil Nadu and
considered as the capital for Tamil Nadu. Chennai`s economy is
equipped with a panoptic industrial base in the automobile,
technology, hardware, manufacturing and healthcare sectors. The
city is home to major India`s automobile industry and is the
country`s second-largest exporter of software, information
technology (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 is
responsible for 60 per cent of the country`s automotive exports
and is sometimes lovingly referred to as "the Detroit of India".
This district produces crops like millets, pulses, sugarcane,
groundnut, cotton, etc. There are number of fisheries present in
this locality. The district has several industries including small
scale cottage industries.
The district has been also the largest producer of mango and
accounts for one half of the mango yield in the state. Dharmapuri
District is the second largest producer of tomato and accounts for
22 percent of the total area of the state.
This district has a flourishing economy well known for its iron
locks, tobacco and handloom industry. The main occupation of
the people living in the district is agriculture and the district has
more than 200,000 hectare of cultivable area. Rice, pulses,
sugarcane, groundnut, gingelly, cotton and millets are the main
crops that are grown here. Small Scale industries like lock
manufacturing, leather products and handloom industries.
This district has a number of powerloom textile industries. The
other major industries of the district are screen printing and
vanaspati manufacturing..
This district has been famous for its silk sarees and weaving and
agriculture are the main occupations of the people living in the
29
9. Kanyakumari
10. Karur
11. Krishnagiri
12. Madurai
13. Nagapattinam
14. Namakkal
15. Nilgiris
district. Kanchipuram district is popular for its renowned crafted
world famous silk sarees, a traditional home industry. It is proud
to be the home of vital production bases of international industrial
groups including Ford, Saint Gobain, Hyundai as well as a
number of export houses in and around the Madras Export
Processing Zone. The product range from factories in this district
include cars, auto parts, phones, float glass, air conditioners,
Sugar industry, fashion garments, etc..
This district is a tourist paradise with Kanyakumari beach,
Kumari Amman Temple, Swami Vivekananda Rock Memorial,
Gandhi Mandapam, Kalakadu Wildlife Sanctuary and Olakkay
Aruvi Waterfalls.
This district is a agriculture based region and people have good
sense of artistic infrastructure which is unique throughout the
Tamil Nadu.
This district is famous for its mulberry cultivation. The district
has a favourable cultivation which favours the cultivation of crops
like paddy, maize, ragi, banana, sugarcane, cotton, tamarind,
coconut, mango and groundnut. A major hill range of the district
is Melagiri
This district is a major industrial and commercial district of Tamil
Nadu and houses many textile industries, dairy farms and
engineering industries. The district is famous for Jasmine flowers.
Jasmine flowers from the district of Madurai are transported to
other 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 employment
opportunities. The District offers ample scope for the field of
textiles, readymade garments, bakery units, and floriculture, dairy
and cold storage units, Agro and Herbal products, Granite stones,
Blue metal jelly, Chamber bricks, Rubber and plastic based
industries. There is also a very good scope for starting food
processing and agro based industries.
This district has a rich cultural heritage and the major tourist
destination in the district are Kodikkarai, Nagore, Sikkal,
Thirukandiyur and Velankanni. This district has traditionally been
referred to as East Thanjavur and Paddy granary of South India.
This district is an industrial district of the state and some of the
major industries are textile industry, transport industry, poultry
units and sago and starch industry.
This district is the most beautiful district of Tamil Nadu with its
dense forests, gushing streams and undulating peaks The district
is mainly a Horticulture area and the entire economy of the
30
16. Perambalur
17. Pudukottai
18. Ramanathapuram
19. Salem
20. Sivagangai
21. Thanjavur
22. Theni
23. Tiruchirapalli
district depends upon the success and failure of Horticultural
crops like Carrot, Potato, Cabbage, Coffee, Tea, Spices and
Fruits. Coonoor is a taluk of Nilgiris which is an important trade
centre for tea and the Tea Board of India has a branch office at
this place.
This district favours the cultivation of paddy, groundnut,
sugarcane, millets and cashew.
This district is famous for its cashew nuts and ancient cave
temples.
This district is situated in the south eastern part of Tamil Nadu.
The mainstay of the district is agriculture and the major crops
grown here are paddy, corn, cottons, groundnut, gingelly and
chillies.
This district has a rich mineral deposit and the minerals found
here are magnetite, bauxite, quartz, limestone, soapstone, rough
stone and granite. The production of un-bleached sugar-vellam is
one of the major cottage industries in the district of Salem.
Another prominent cottage industry of this district is rope
making. Both cotton and silk fabrics woven in the district of
Salem find popular market throughout the state of Tamil Nadu
The `Kurunji` flowers which blossom once in twelve years also
attract tourists. Coffee, spices like pepper, cardomom, fruits like
orange, butter fruit, jack fruit are grown in Yercaud.
This district has rich cultural heritage which has been major
attraction for the locals.
This district is dotted with numerous temples and is also known
for its arts and crafts. The total area under cultivation in the
district of Thanjavur is 241292 hectares and the major crops
grown in this district are rice, millets, groundnut, pulses, cotton,
sugarcane, etc. Thanjavur district is also known as rice bowl of
Tamil Nadu.
This district is surrounded by vast stretches of fertile lands and tea
gardens. It is a major tourist destination with its cascading
waterfalls and countless pilgrim centers. Kumbakarai Falls, Suruli
Falls and Sri Kamatchi Amman Temple are the major tourist
destination. The major food crops grown in this district include
Paddy, Bajra, Jowar, Ragi, Samai, Maize, Redgram, Blackgram,
Cowpea, Greengram, Lablab and Kollu. The cash crops grown in
the Theni district include Cardamom, Chillies, Arecanut, Pepper,
Tamarind, Sugarcane, Coriander, Banana, Mango, Guava,
Grapes, Jackfruit, Sappotta, Onion, Brinjal, Beetroot, Ladies
Finger, Cotton, Tomatoes, Silk Cotton, Coconut, Groundnut,
Sunflower, Coffee seeds, Betel Leaves, Tea,
This district is largely dependent on agriculture. The chief crops
cultivated in the district are rice, millets, pulses, sugarcane,
31
24. Tirunelveli
25. Thiruppur
26. Thiruvannamalai
27. Tiruvallur
28. Thiruvarur
gingelly, groundnut and cotton Some of the major crops grown in
this district are rice, pulses, millets and other cereals, groundnut,
sugarcane, cotton, gingelly, etc. Sericulture was introduced in
Tiruchirappalli 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 eight
sericulturists in silkworm rearing.
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. The
district is also dotted with numerous temples Krishnapuram
Temple, Swamy Nellaiappar Temple and Kanthimathi Ambal
Temple.
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 employment
opportunities, but also contributed to the overall economic growth
of this district. The innovative self help groups 7of woman in this
district are also playing a major role in shaping the rural economy
and helping rural women to be self reliant.
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. The
district started to industrialize following the establishment of the
industrial complex near Cheyyar by the State Industries
Promotion Corporation of Tamil Nadu (SIPCOT). This has
initiated 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
This district is largely an industrial along with agriculture. Some
of 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 few
towns and some influence from the Chennai city.
The district lies between Nagapattinam district on the east and
Thanjavur district on the west, and is bounded by the Palk Strait
on the south. The district produces rice, pulses, sugarcane,
groundnut, gingerly oil and cotton. There are medium scale
industries 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
32
29. Thoothukkudi
30. Vellur
31. Villupuram
32. Viruthunagar
materials for local consumption. This district also well known for
it Khadi8 production.
This district, also known as Tuticorin District, has been a district
of Tamil Nadu state in southern India.. It is also known for Pearl
cultivation with abundance of pearls found in the seas of
Thoothukudi. This district has been famous for banana tree and
most banana leaf is delivered to various district and the main
exporter of banana leaves in Tamil Nadu. . Tuticorin has been the
second largest producer of Salt in India next to Gujarat. Jaggery is
produced from palmyrah juice; the production of jaggery is the
main occupation of the people.
The district produces rice, pulses, sugarcane, groundnut, gingerly
oil and cotton. There are large scale industries, medium scale
industries and small scale industries which supports and supply
materials for local consumption. The innovative self help groups
of woman are also playing a very useful role in building rural
economy and helping rural women to be self reliant. Industries
like Bharat Heavy Electricals Ltd Ranipet, Tamil Nadu
Explosives Ltd., Katpadi. Have been set up. Besides there has
been
marked
growth
of
small
scale
industries
and Tanneries in the district
This district enriched with black granites, blue metals and rivers
and 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 scale
industries 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
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 and
Palkova.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.
33
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 TAFE
Tractors.
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 the 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. )
POPULATION
3396.57
34
Male Population
Female Population
Rural Population
Urban Population
TOTAL WORKERS
Male Workers
Female Workers
Rural Workers
Urban Workers
Cultivators
Agricultural Labourers
Household Industry
Other Workers
1096638
1119500
1467577
748561
897123
618471
278652
648453
248670
144942
410718
37986
303477
Table 1-9, Thanjavur District Profile
Source: Thanjavur District, National Informatics Centre, District Collectorate, Thanjavur
35
Table 1-11,
Industries in Thanjavur District
Types of Industries
Quantity
(2001)
10
357
85
Medium Scale Industries
Small Scale Industries
Cottage Scale Industries
Quantity
(2010)
18
428
85
Source: Thanjavur District, National Informatics Centre, District Collectorate, Thanjavur
36
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 saree 9
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.
37
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
38
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
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