Entrepreneurship has become the hot cake in town nowadays thanks to recession and ever increasing inflation. The primitive economics and psychological theories have the answer to same.

1. THEORIES OF
ENTREPRENEURSHIP
Prof. Akshay Ganbote
Prof. Akshay Ganbote 1

2. • Entrepreneurship is an evolved thing.
• Undergone metamorphosis change and
emerged as a critical input for socio-economic
development.
• The theories propounded by them can be
categorized as under- Sociological theories,
Economic theories, Cultural theories,
Psychological theories.
Prof. Akshay Ganbote 2

3. • Schumpeter - innovation
• McClelland - high need for achievement
• Hagen - creative personality
Prof. Akshay Ganbote 3

4. Schumpeter theory of
entrepreneurship
• Pioneering work of economic development.
• Carrying out of new combination of
entrepreneurship is basically a creative
activity.
• entrepreneur is one who perceives the
opportunities to innovate
Prof. Akshay Ganbote 4

5. 5 cases of Schumpeter
• The introduction of new goods; consumers are
not yet familiar, of a new quality.
• The introduction of new method of
production.
• The opening of new market.
• The conquest of new source of supply of raw
material.
• The carrying out of new organization.
Prof. Akshay Ganbote 5

6. Features of Theory
Invention Innovation
• Invention means creation of • Innovation means
new things application of new things
onto practical use.
1. Emphasis on the role of entrepreneurial functions in economic development.
2. Development means basic transformation of the economy that is brought about
by entrepreneurial functions.
3. Represents the enterprise with the R & D and innovative character. [But
developing countries lack these character]
4. The theory emphasizes on innovation and excludes the risk taking and
organizing aspects.
5. These are large scale businessman who introduce new technology, method of
production. :
Prof. Akshay Ganbote 6

7. Critical evaluation schumpeter’s
theory of innovation
1- The theory has the scope of entrepreneurism in the
sense that it has included the individual businessman
along with the directors and managers of the
company.
2 Schumpeter's innovating entrepreneurs represents the
enterprise with the R & D and innovative character.
But developing countries lack these character.
3 The theory emphasizes on innovation and excludes the
risk taking and organizing aspects.
4 Schumpeter’s entrepreneurs are large scale
businessman who introduce new technology, method
of production.
Prof. Akshay Ganbote 7