The role of entrepreneurship in economic development varies from economy to economy depending upon human & material resources, industrial environment and the importance attached to the entrepreneurial growth by the political system. The emergence, working and growth of entrepreneurs is facilitated in the economies where favourable conditions exist. According to Joseph Schumpeter, ‘Entrepreneur is one who seeks to reform or revolutionise the pattern of production by exploiting an innovation or more generally an untried technological possibility for producing a new commodity or producing an old one in a new way by opening up a new source of supply of material or a new outlet for a product.” Thus Schumpter is of the opinion that an entrepreneur is always on the lookout for potential profitable opportunities and exploits them in the best interest of his enterprise. According to Peter F. Drucker an entrepreneur must be capable of analysing the opportunities and exploit them successfully. Opportunities according to Drucker are of three kinds.
1. Additive Opportunities
2. Complementary Opportunities
3. Break through Opportunities
Additive opportunities are those opportunities which enable the decision maker to better utilise the existing resources without in any may involving a change in the character of a business.
Complimentary opportunities involve the introduction of new ideas and as such do lead to a certain amount of change in the existing structure.
Breakthrough opportunities on the other hand involve fundamental changes in both the structure and character of the business. Additive opportunities involve the least amount of disturbance to the existing state of affairs and hence there is least amount of risk. There is more risk involved in complimentary and break through opportunities. With the increase in risk it becomes all the more important for the entrepreneur to carefully define the nature and scope of the project idea and analyse various solutions aimed at realising objectives of the project by selecting that solutions which on one hand helps in reducing cost and risks and on the other hand facilitate the realisation of maximum possible returns to the enterprise. While selecting a project a prospective entrepreneur has to consider various aspects like input, output, social cost and benefits. Input refers to the requirement of various things like raw material, labour, power, funds etc.. There must be detailed investigation with regards to all these inputs covering both their present and future availability. Output refers to what the project will produce in terms of goods and services, revenue and generation of employment. At the same time a thorough study must be made with regards to the costs that society will be called upon to bear in the event of setting up of a unit and the benefits which will accrue to the society. Entrepreneurs have to consider availability, at a particular place, of 5 Ms.comprising of Men, Materials, Machines, Money and Markets. They are equally concerned about the availability off infrastructural facilities like, roads, power water, severage and communication facilities. Besides these there are various other things to be considered by the prospective entrepreneur and include various financial and non-financial incentives provided by the government, availability of markets and environmental factors etc.