In the context of employment generation the three terms- Income generation, Self-employment and Entrepreneurship are often used interchangeably.
Income generation is the initial stage in the entrepreneurial process in which one tries to generate surplus or profit. They are often taken on part- time or casual basis to supplement income e.g. a man with farm might rear some poultry birds to gain some profit.
Self-employment is the second stage in the entrepreneurial process and refers to an individual’s fulltime involvement in his own occupation. e.g. a person who starts a tea shop and remains happy and satisfied and has no plans to add on any other items or to grow in any other manner[e.g. supplying snacks/cool drinks/sandwiches to others in the vicinity.
Entrepreneurship is the terminal stage of the entrepreneurial process wherein after setting up a venture one looks for diversification and growth. An entrepreneur is always in search of new challenges. An entrepreneur is not a routine businessman he might not have resources but he will have ideas. He is innovative and creative. He can convert a threat into an opportunity. Small businessmen might shut-down or change his business if he anticipates losses but an entrepreneur will try again after analyzing the situation. On the other hand an entrepreneur can leave a perfectly running business to start another venture if he so desires.
Functionally all entrepreneurs are self-employed and income generating persons but the reverse is not true- all self-employed and income generating persons are not entrepreneurs. If seen on a continuum, income generation, self-employment and entrepreneurship can be considered as the initial, middle and final stages of the entrepreneurial growth process. Income generating experience encourages self-employment, which in turn facilitates graduating into entrepreneurship.
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