ENTREPRENEURSHIP AND INDIA

Entrepreneurs contribution to the economy is of immense value. He or she is

indispensable to the economic growth of the country. His or her products are
valuable to the overall development of the society. People need their products.
They simply cannot do without them. Ours is a consumer society now. Even in
the developing countries consumerism is gaining ground. Developed countries
anyway thrive on consumerism. Naturally, the role of an entrepreneur is of much
significance in generating products valuable for the comforts and luxurious living
of the people of a particular country.
An economy is much dependent upon the performance level of its entrepreneur.
He or she plays a vital role in the growth of the national income as well as raising
the per capita income of the people.Entrepreneurship is a critical element in the
growth of an economy. It is estimated that there are about 20 million
entrepreneurs in the US. India ranked second in total Entrepreneurship Activity
(TEA) according to the Global Entrepreneurship Monitor Report for the year 2002.
Subsequently, India slipped in TEA rankings.
For its size India has lower number of start-up entrepreneurs. In spite of the
shortcomings, it ranked ninth in the survey of entrepreneurial countries by
Global Entrepreneurship Monitor (GEM). India ranks the highest among a group
of countries in necessity-based entrepreneurship, which is associated with
developing countries. Conversely, it ranks fifth from bottom in opportunity-based
entrepreneurship.
One of the major hindrances faced by the Indian entrepreneur is that
of capital. It is worth nothing that there is greater willingness among people to

invest capital in enterprises that is already established than in start-ups. The

number of venture capitalists or angel investors in India is very low. Another
factor that has been hindering entrepreneurship in India is the lack of mentorsvery few success stories which could inspire youngsters to become entrepreneurs.
By and large, the India society is averse to risk. People normally look for
long-term and stable employment, such as government and public sector jobs.
There is an urgent need to overhaul the physical infrastructure and lack of
government support is major hindering entrepreneurship in India.
There are other factors that have been affecting entrepreneurship in India. The
majority of young people coming out of college are inclined towards the IT sector,
starving other sectors of critical talent. Most of the talent available in the country
is considered to be mediocre and technical talent is scarce. Another factor
weighing against entrepreneurship in India is that it is not perceived to be
socially glamorous, though the concept is getting accepted slowly.
Indias economy has been growing at a scorching pace. Today, its economy
ranks above that of France, Italy and UK. Its GDP is the third largest in Asia.
Among emerging nations, it has the second largest economy. The liberalization of
the economy in the 1990s has enabled a huge number of people to become
entrepreneurs. It is to Indias credit that its corporate and legal systems have
been operating with greater efficiency. Government needs to make efforts and
encourage entrepreneurship by providing training and also facilities, especially in
the rural areas.
With a burgeoning middle class, India has a huge potential, which, if tapped,
can be a vast market for products and services. Entrepreneurs can prosper by
catering to the requirements of this segment. India, with its abundant pool of

talent in the IT domain, management, manufacturing and pharmaceuticals, has

become the choicest destination for outsourcing of services from all over the
world. The scene for Indian entrepreneur is ideal. If he can seize the current
opportunity, he can succeed not only in India but also globally.
The

Indian

government

has

recently

commissioned

Entrepreneurship

Development Institute of India (EDI) to set up Entrepreneurship Development

Centres (EDCs) in Cambodia, Laos, Myanmar and Vietnam (CLMV) countries as a
mark of Indias commitment to the initiative of ASEAN integration. Vice-president
Hamid

Ansari

recently

inaugurated

the

Myanmar-India

Entrepreneurship

Development Centre (MIEDC), Myanmars ministry of education at Yangon.

Centres in the other countries have already started functioning.
EDI, Gujarat, a national resource institution, focuses on entrepreneurship
education, training and research. Referring to EDIs various business-oriented
and job-oriented courses, Manoj Mishra, an associate senior faculty from EDI
explains: Earlier, when entrepreneurs encountered problems in their business,
they blamed it on environment, polices red-tapism, faulty systems and so on.
Entrepreneurs rarely assessed their own competency and knowledge. Fortunately,
mindsets have broadened and entrepreneurs place major emphasis on their level
of understanding, entrepreneurial know-how and traits in dealing with issues.
While this is what a business-oriented course looks at, a job-oriented course aims
to build competency and skills required to become a manager rather than an
employer.
In view of EDIs expertise in entrepreneurship, the University Grants
Commission (UGC) had assigned it with the task of developing a curriculum. The
Gujarat

Textbook

Board

assigned

the

task

of

developing

textbook

in

entrepreneurship for classes XI and XII which has been done, informed Mishra.

ENTREPRENEURSHIP AND INNOVATION:

Entrepreneurship is the practice of starting new organizations or revitalization
mature organizations, particularly new business generally in response to
identified opportunities. Entrepreneurial activities are substantially different
depending on the type of organization that is being started. Entrepreneurship
ranges in scale from solo projects (even involving the entrepreneur only part-time)
to major undertaking creating many job opportunities. Lately more holistic
conceptualizations

of

entrepreneurship

as

specific

mindset

(see

also

entrepreneurial mindset) resulting in entrepreneurial initiatives e.g. in the form of

social

entrepreneurship,

political

entrepreneurship,

or

knowledge

entrepreneurship emerged.
A convenient definition of innovation from an organization perspective is given
by Luecke and Katz (2003), who wrote: Innovation... is generally understood as
the successful introduction of knowledge in original, relevant, valued new
products, processes, or services. Innovation typically involves creativity, but is not
identical to it: innovation involves acting on the creative ideas to make some
specific and tangible difference in the domain in which the innovation occurs. For
example, Amabile et al. (1996) propose: All innovation begins with creative
ideas... We define innovation as the successful implementation of creative ideas
within an organization. In this view, creativity by individuals and teams is a
starting point for innovation; the first is necessary but not sufficient condition for
the second. For innovation to occur, something more than the generation of a
creative idea or insight is required: the insight must be put into action to make a
genuine difference, resulting for example in new or altered business processes
within the organization, or changes in the products and services provided. A
further characterization of innovation is as an organizational or management

process. For example, Davila et al. (2006), write: Innovation. Like many business
functions, is a management process that requires specific tools, rules, and
discipline From this point of view the emphasis is moved from the introduction of
specific novel and useful ideas to the general organizational processes and
procedures for generating, considering, and acting on such insights leading to
significant organizational improvements in terms of improved or new

business products, services, or internal processes. Through these varieties of

viewpoints, creativity is typically seen as the basis for innovation, and innovation
as the successful implementation of creative ideas within an organization (c.f.
Amabile et al. 1996 p.1155). From this point of view, creativity may be displayed
by individuals, but innovation occurs in the organization context only.
The conceptual relationship between entrepreneurship and innovation has
been discussed in the literature for many years. The economics of innovation, in
particular, have attracted increased attention in recent years (Grupp, 2001;
Arora, Fosfuri, & Gambardella, 2002; Stoneman, 1995). Sundbo (1998)
summarised the basic theories of the economics of innovation: (i) the
entrepreneur paradigm; (ii) the technology-economics paradigm; and (iii) the
strategic paradigm. According to this paradigm, only a person who founds a
new company on the basis of a new idea can be called an entrepreneur.
Entrepreneurship

is

viewed

as

creative

act

and

an

innovation.

Entrepreneurship is about creating something that did not previously exist.

The creation adds value to the individual and the community, and is based upon
perceiving and capturing an opportunity (Johnson, 2001). Bygrave and Hofer (in
Legge & Hindle, 1997) regarded entrepreneurship as a change of state, a dynamic

process, and a unique event, Legge and Hindle (1997) believed that people who
lead teams and organization to introduce innovations are entrepreneurs.
Entrepreneurs seek opportunities, and innovations provide the instrument by
which they might succeed. Corporate entrepreneurship often refers to the
introduction of a new idea, new products, a new organizational structure, a new
production process, or the establishment of a new organization by (or within) an
existing organization.

Dr S Nagaraj
PrinipalPU & UG
IIBS
Bangalore