Nature & Characteristics of Entrepreneurship:
(1) Innovation: A businessman, who simply behaves in traditional ways, cannot be an entrepreneur. Innovation involves problem solving and the entrepreneur is a problem solver. According to Schumpeter entrepreneurship is a creative activity. An entrepreneur is basically an innovator who introduces something new in the economy.
(2) High Achievement: People having high need for achievement are more likely to succeed as entrepreneurs. The achievement motive is, by assumption a relatively stable enduring characteristic of an individual. Achievement motive can be increased by deliberate efforts. Various studies on psychological roots of entrepreneurship reveal the presence of high achievement among successful entrepreneurs.
(3) Managerial Skill and Leadership: According to B.F. Hoselitz, managerial skills and leadership are the most important facets of entrepreneurship. Financial skills are only of secondary importance. A person who is to become an industrial entrepreneur must have more than the drive to earn profit. He must have the ability to lead and manage.
(4) Group Level Pattern: Entrepreneurial characteristics are found in clusters which may qualify themselves as entrepreneurial groups. Entrepreneurial activity is generated by the particular family background, experience as a member of certain groups and as a reflection of general values.
(5) Organisation Building: According to Harbison entrepreneurship implies the skill to build an organisation. Organisation building ability is the most critical skill required for industrial development. This skill means the ability to ‘multiply one self’ by effectively delegating responsibility to others.
(6) Gap Filling Function: The most significant feature of entrepreneurship is gap filling. It is the job of the entrepreneur to fill the gap or to makeup the deficiencies which always exist in the knowledge above the production function. Some inputs like motivation and leadership are vague and their output is indeterminate. An entrepreneur has to Marshall all the inputs to realise the final product.
(7) Status Withdrawal: According to Hagen ‘creative innovation’ or change is the fundamental feature of economic growth. An entrepreneur is a creative problem solver interested in things in practical and technological realm. He feels a sense of increased pleasure when facing a problem and tolerates disorder without discomfort. In traditional societies, position of authority was granted on the basis of status, rather than individual ability. Hagen visualized an “innovative personality” in contrast to such authoritarian personality.
(8) A Function of Social, Political and Economic Structure: Entrepreneurs are not equally distributed in the population. Minorities have provided most of the entrepreneurial talent but all the minorities are not important sources of entrepreneurship. Entrepreneurial supply depends upon the four structure viz. limitation structure, Demand structure, opportunity structure and labour structure. However entrepreneurship depends on rather specific combinations of circumstances which are difficult to create and easy to destroy.
Psychologically, Entrepreneurship is a vigorous application of the person’s energies towards the long-cherished goals.