Solution:

The distinctive features of entrepreneurship are as follows :

(1). Innovation :

• The process of commercialising an invention is innovation. For example, stearn as an alternative source of energy was invented as early as AD 100.

• Later, in 1712, when it was used to run engines then the process was called innovative.

• In simple words, in business activity, novelty may take any one or a combination of the following :

• a) new products ;

• b) new methods of production ;

• c) new markets ;

• d) new sources of raw material ; or

• e) new forms of organisation.

• Innovation is a critical aspect of entrepreneurship. Entrepreneurs always try to create new and different values and get satisfaction in doing so.

• They try to convert a material into a resource or, combine the existing resources in a new and more productive manner.

• The act of innovation thus provides resources with a new capacity to create wealth.

(2). Motivation :

• Motivation comes from the word ‘motive’ (or goal). It means the urge in an individual to achieve a particular goal.

• In other words, it is the need to achieve that motivates a person. You may find many people with sufficient financial resources and. family support who are interested in independent ventures.

• Yet, very few actually start their business. Why is it so? Because they are comfortable in doing routine jobs and have no higher goals in life. They lack ‘motivation’.

• Entrepreneurs generally are highly active. They struggle constantly to achieve something better than what-they already have.

• They like to be different from others and are ready to work hard to reach their goal.

(3). Risk Taking :

• Risk-taking implies taking decisions under conditions where the reward on a certain action is known, but the occurrence of the event is uncertain.

• While doing so, an entrepreneur becomes responsible for the result of the decision. This responsibility however cannot be insured against failure.

• Imagine that you are a qualified pharmacist and that you have got a large sum of money from your parents.

• Which of the following options would you choose?

• a) Invest in a bank deposit with 8 per cent annual interest;

• b) Invest in a company with a possible return of 15 per cent;

• c) Start a medical shop in your locality (because people there have to travel a long distance to get medicines) with a fairly good chance of marking an immediate return of around 10 percent. (You are also aware that the business is sustainable and can bring in more returns say 20,30 or 50% in future if you put in your time and effort;

• d) Try your hick in the share market.

• Clearly, option ‘c’ calls for an entrepreneurial quality. Remember that successful entrepreneurs usually choose the moderate or middle path.

• They are not gamblers. At the same time, they are hot afraid of taking a decision if there is a reasonable chance of success.

(4). 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 oneself by effectively delegating responsibility to others.

• Unlike Schumpeter, Harbison’s entrepreneur is not an innovator but an organisation builder who harnesses the new ideas of different innovators to the rest of the organization.

• Entrepreneurs need not necessarily be the men with ideas or men who try new combinations of resources but they may simply be good leaders and excellent administrators.