Emergence of Entrepreneur Class

Who is Our Entrepreneurial Class?

• Tata, Ambani, Singhania, Dalmia, Wadias, Godrej etc

• A class bereft of divisions

• Haldirams, Aggarwals etc

 Origin of Entrepreneurial Class
• Founders of early industrial establishments in England, Germany
and France

• Were men with mechanical rather than commercial/financial skills

whose innovations were in the field of technology

• Asians lacked aptitude/attitude, which prevented them from

becoming entrepreneurs even though there was no lack of capital
and raw material

• were involved in trading activities rather than innovative/creative

activities
 Evolution of Entrepreneurial Class
• 19th century entrepreneurs :
- bore the risks of future uncertainity of profits in new ventures
- Different from capital suppliers

• 20th century entrepreneurs:

- Not only took a risk of creating new venture but also
innovated with products, technologies, markets etc
- Different from venture capitalists

• Intrapreneurs or corporate entrepreneurs

 Indian Entrepreneurship
• Started in colonial rule with inspiration for starting one’s own
borrowed from foreigners

• Truly started flourishing in late 19th century, got a fillip from

East India company’s advent in India – through export of raw
materials & import of finished goods

• Swadeshi movement’s contribution

• Government protection post the first world war

 Indian Entrepreneurship – Post
Independence Scenario
• Gained momentum after the launch of economic planning in
1952

• Led to faced paced creation in small units and movement

from one segment to next (Eg- Small to Medium)
 Entrepreneurship in India - Post
Independence Scenario
• Favourable industrial policy

• Dissemination of entrepreneurial acumen and knowhow

• Capital subsidy (Sidbi, SFC), technical knowhow, market

infrastructure encouraged small scale industries

• Universities & colleges have introduced courses. Govt

encouraging EDPs for young entrepreneurs
Factors Affecting Growth of Entrepreneurship

• Causes for slow growth of entrepreneurship

- Collective vs individualistic society
- Social conditioning: Stability over risk
- Availability of raw materials
- Skilled labour/manpower
- Developed capital market/ shortage of funds
- Technical Knowhow/ old techniques of production
- Marketing challenges
Factors Affecting Growth of Entrepreneurship

• Factors driving growth of entrepreneurship

- Independent way of life
- Existing opportunities/gaps
- Achievement orientation/risk taking ability
- Disruption/crisis in economy leading to layoff/insecurity
- Inherited business
- Economic policy of the govt
- Environmental factors : Availability of FOP, easy accessibility of
customers and suppliers, economic and political stability of a
country
Entrepreneurship and Social factors in India
• Family Background

• Social Status

• Caste and Religion

• Social Mobility
Entrepreneurship and Economic Factors in India

• Govt’s economic policy

- Eg- Reservation of certain items for small scale industries,
concessions in form of excise duty, preference in
procurement, common testing facilities, concessional finance
through SIDBI etc
• Institutional Finance

• Industrial parks/SEZs

• Availability of Raw Materials : High Price & Inferior quality

Entrepreneurship and Economic Factors in India

• Availability of technical know how/machinery : Role of NSIC

• Marketing Facilities : Quality controls by govt, incentives for

exports, trade fairs