1

CHAPTER-1

INTRODUCTION TO THEME

2

1.1 Executive Summary India needs to create 1-1.5 crore jobs per year for the next decade to provide gainful employment to its young population. Accelerating entrepreneurship and business creation is crucial for such large-scale employment generation. Moreover, entrepreneurship tends to be innovation-driven and will also help generate solutions to India’s myriad social problems including high-quality education, affordable health care, clean energy and waste management, and financial inclusion. Entrepreneurship-led economic growth is also more inclusive and typically does not involve exploitation of natural resources. Large Indian businesses both in the public and private sector have not generated significant employment in the past few decades and are unlikely to do so in the coming decade or two. Public sector and government employment has declined in the last few years, and is expected to grow very slowly in the coming years. Large private sector firms have also been slow in generating employment, which is unlikely to change due to increasing automation, digitization, and productivity gains. For example, the banking sector in India has recorded almost no employment growth in the last two decades despite multifold growth in its revenue and assets. Agriculture employs nearly a half of India’s work force but employment is likely to decline in this sector, due to improvements in productivity. India is an entrepreneurial country, but its entrepreneurs have had to struggle to create and grow their business ventures. There is, however, a growing group of first-generation Indian entrepreneurs – the founders of companies such as HCL, Cognizant, Infosys, Bharti and others that have generated large scale employment and significant wealth. They and others such as IndiaBulls, Makemytrip and Naukri have also demonstrated value creation through a public listing. These successes have encouraged a new breed of entrepreneurs especially in the internet and e-commerce space.

India’s entrepreneurial growth can be accelerated by creating more conducive conditions a catalytic government and regulatory environment, adequate capital flows (both debt and equity), support from businesses and society, and availability of appropriate talent and mentoring. Such an environment could replicate the success demonstrated by the Indian Information Technology (IT) and IT enabled services (ITES) industry over the last two decades. Starting in the early 1990s, the industry now directly employs 28 lakhs and indirectly an additional 89 lakhs people. Its revenues have grown from Rs. 350 crore in 1990 to Rs 4.5 lakhs crore in FY 2012. Several leading companies in this industry started as first-generation entrepreneurial ventures. By 2020, the IT and ITES industry is projected to contribute 9% of GDP with a revenue of over Rs 12 lakhs crore and direct and indirect employment to 30 million people. India has the potential to build about 2,500 highly scalable businesses in the next 10 years and given the probability of entrepreneurial success that means 10,000 start-ups will need to be

3

spawned to get to 2,500 large-scale businesses. These businesses could generate revenues of Rs10 lakhs crores a contribution to GDP and creation of employment at the same scale as projected for IT and ITES industry. Experience across countries suggests that vibrant entrepreneurial activity significantly improves social harmony, living standards, and quality of life.

However, there are significant roadblocks that hold back and dampen entrepreneurial activity in India. The country ranks low on comparative ratings across entrepreneurship, innovation and ease of doing business. The ecosystem for starting and running new ventures has many gaps. Regulations and procedures are restrictive and time-consuming and add significant cost for an emerging venture. Banks and financial institutions are wary of lending to first-generation entrepreneurs and to MSMEs in general, due to various norms like tangible asset coverage, DER etc., even though such enterprises make a major contribution to the economy, employment, and exports. This imposes constraints on their credit absorption capacity and consequently, growth. Established businesses have generally been passive in engaging with emerging ventures. Educational institutions are yet to actively promote entrepreneurship over careerism. Lack of Collaboration between all stakeholders leads to further roadblocks. The words entrepreneurs, intrapreneurs and entrepreneurship have acquired special significance in the context of economic growth in rapidly changing socio-economic and socio-cultural Climates, particularly in industry, both in developed and developing countries. Entrepreneurial development is a complex phenomenon. Entrepreneurship is the lifeblood of any economy, more so in the developing economy. In India entrepreneurism is in its cultural ethos. Entrepreneurship and enterprises are a continuous process and it is growing from centuries to centuries. “The entrepreneur’s journey proceeds from idea generation to venture formation to scaling up a business”.

4

1.2 Introduction

The word “entrepreneur‟ is derived from the French verb “enterprendre‟. It means “to

undertake”.

The Frenchmen who organized and led military expeditions were referred to as

“entrepreneurs”.

It was extended to cover civil engineering activities such as construction in 17th century. But it was Richard Cantillon, an Irishman living in France who first used the term entrepreneur to refer to economic activities. According to Cantillon “An entrepreneur is a person who buys factor services at certain prices with a view to selling its product at uncertain prices”. There are many views and opinions on the concept of entrepreneurship forwarded by some of the world famous management gurus and economists as mentioned below which will help in understanding this concept Oxford Dictionary “A person who sets up a business or businesses, taking on financial risks in the hope of profit”. International Encyclopedia “An individual who bears the risk of operating a business in the face of uncertainty about the future conditions”. According to F.A.Walker: “Entrepreneur is one who is endowed with more than average capacities in the task of organizing and coordinating the factors of production, i.e. land, labour capital and enterprises”. Schumpeter's Definition “The entrepreneur in an advanced economy is an individual who introduce something new in the economy- a method of production not yet tested by experience in the branch of manufacturing, a product with which consumers are not yet familiar, a new source of raw material or of new markets and the like”. Drucker’s Views on Entrepreneur

“An entrepreneur is the one who always searches for change, responds to it and exploits it as

an opportunity. Innovation is the specific tool of entrepreneurs, the means by which they

exploit changes as an opportunity for a different business or different service”.

Adam Smith

The entrepreneur as an individual who forms an organization for commercial purpose. He is proprietary capitalist, a supplier of capital and at the same time a manager who intervenes between the labor and the consumer. “Entrepreneur is an employer, master, merchant but explicitly considered as a capitalist

5

CHAPTER -2

OBJECTIVES OF STUDY AND

REASERCH METHOLDOGY

6

2.1 Objectives of Research

To Understand the Brief Meaning Of Entrepreneurship.

To understand the model of Indian Entrepreneurship.

To be aware of the different types of Entrepreneurship.

2.2 Research Methodology The research methodology used for this research project is as follow: The information has been collected from internet and the attempt has been made to give latest trend and statistics. 50 entrepreneurs and aspiring entrepreneurs have agreed to present their opinion on Indian entrepreneurship. This is the backbone of this research project. The attempt has been made to provide the support of pictures collected information and graphs for statistics

7

CHAPTER -3

THEORIES OF ENTREPRENEURSHIP

8

3.1 Economist point of view According to economist entrepreneurship and economic in those situation where

particular economic conditions are most favorable. Entrepreneur connects different markets he is capable of gap-filling he is input

completer and he creates or expands things. Small industry is a natural habitat of the entrepreneur where his role is like of a striker

who keeps the fire burning.

The entrepreneurship development in a particular country largely depends upon the economic policy, programme and economic environment of that country.

9

3.2 Sociologist’s point of view It emerges under specific social culture.

According to sociologist special sanction cultural value and role expectations are

responsible for the emergence of entrepreneurship. Society values are most important determents of attitude and role expectation.

Sociologist’s considers the entrepreneurs as role performer corresponding to the role

expected by the society.

According to sociologist’s the function of entrepreneur is to coordinate at every stage i.e., beginning, maintenance and expansion.

Every entrepreneur needs two qualities they are optimistic outlook and dynamism e.g. Protestant ethic from west emerged as a new class of industrialist. Halai Memon industrialist from Pakistan. Marwari’s & Parsi’s from India.

10

3.3 The Psychologist’s view

It is more likely to emerge when a society has sufficient supply of individuals

possessing particular psychological characteristic.

It’s the high need of achievement which drives people towards entrepreneurial activity.

Individual with high achievement motive tend to take keen interest in situation of high risk desire for responsibility and desire for task performance.

Frank young describes an entrepreneur as a change agent.

T.V. Rao describes entrepreneurship as a creative and innovative response to environment.

11

CHAPTER -4

BACKGROUND OF

ENTREPRENEURSHIP IN INDIA

12

4.1 History of Entrepreneurship in India The history of entrepreneurship is important worldwide, even in India. In the pre colonial

times the Indian trade and business was at its peak. Indians were experts in smelting of metals

such as brass and tin. Kanishka Empire in the 1st century started nurturing Indian

entrepreneurs and traders.

Following that period, in around 1600 A.D., India established its trade relationship with

Roman Empire. Gold was pouring from all sides. Then came the Portuguese and the English.

They captured the Indian sea waters and slowly entered the Indian business. They forced the

entrepreneurs to become traders and they themselves took the role of entrepreneurs. This

was the main reason for the downfall of Indian business in the colonial times which had its

impact in the post-colonial times too. The colonial era make the Indian ideas and principles

rigid.

A region of historic trade routes and vast empires, the Indian subcontinent was identified with

its commercial and cultural wealth for much of its long history. Gradually annexed by the

British East India Company from the early eighteenth century and colonized by the United

Kingdom from the mid-nineteenth century, India became an independent nation in 1947 after

a struggle for independence that was marked by widespread nonviolent resistance. It has the

world's twelfth largest economy at market exchange rates and the fourth largest in

purchasing power. Economic reforms since 1991 have transformed it into one of the fastest

growing economies however, it still suffers from high levels of poverty, illiteracy, and

malnutrition. For an entire generation from the 1950s until the 1980s, India followed socialist-

inspired policies. The economy was shackled by extensive regulation, protectionism, and

public ownership, leading to pervasive corruption and slow growth. Since 1991, the nation has

moved towards a market-based system

Entrepreneurship is the result of three dimensions working together: conducive framework

conditions, well-designed government programmes and supportive cultural attitudes.

Across these three perspectives of entrepreneurship, two major conclusions are apparent.

Firstly, the economic, psychological and sociological academic fields accept that

entrepreneurship is a process. Secondly, despite the separate fields of analysis,

entrepreneurship is clearly more than just an economic function.

13

4.2 Economy of India before British-Raj The Indian economy in the pre-British period consisted of isolated and self-sustaining villages

on the one hand, and towns, which were the seats of administration, pilgrimage, commerce

and handicrafts, on the other. Means of transport and communication were highly

underdeveloped and so the size of the market was very small.

4.3 Industries and handicrafts in pre-British India

The popular belief that India had never been an industrial country is incorrect. It was true that agriculture was the dominant occupation of her people but the products of Indian industries enjoyed a worldwide reputation. The muslin of Dacca, the calicos of Bengal, the sarees of Banaras and other cotton fabrics were known to the foreigners. Egyptian mummies dating back to 2000 B.C. were wrapped in Indian muslin. Similarly, the muslin of Dacca was known to the Greeks under the name Gangetika. The chief industry spread over the whole country was textile handicrafts. The high artistic skill

of the Indian artisans can be visualised from this account given by T.N. Mukherjee : "A piece of

the muslin 20 yards long and one yard wide could be made to pass through a finger ring and

required six months to manufacture." Besides the muslins, the textile handicrafts included

chintzes of Lucknow, dhotis and dopattas of Ahmedabad, silk, bordered cloth of Nagpur and

Murshidabad. In addition to cotton fabrics, the shawls of Kashmir, Amritsar and Ludhiana

were very famous. Not only that India was also quite well-known for her artistic industries like

marble-work, stone-carving, jewellery, brass, copper and bell-metal wares, woodcarving, etc.

The cast-iron pillar near Delhi is a testament to the high level of metallurgy that existed in

India.

14

The Indian industries "not only supplied all local wants but also enabled India to export its

finished products to foreign countries." Thus, Indian exports consisted chiefly of manufactures

like cotton and silk fabrics, calicos, artistic wares, silk and woolen cloth. Besides, there were

other articles of commerce like pepper, cinnamon, opium, indigo, etc. In this way, Europe was

a customer of Indian manufactures during the 17th and 18th centuries. It was this superior

industrial status of India in the pre-British period that prompted the Industrial Commission

(1918) to record: "At a time when the West of Europe, the birth place of modern industrial

system, was inhabited by uncivilized tribes, India was famous for the wealth of her rulers and

for high artistic skill of her craftsmen. And even at a much later period, when the merchant

adventures from the West made their first appearance in India, the industrial development of

this country was, at any rate, not inferior to that of the more advanced European nations."

4.4 Decline of Indian handicrafts and progressive realization of the Indian economy

Before the beginning of Industrial Revolution in England, the East India Company

concentrated on the export of Indian manufactured goods, textiles, spices, etc., to Europe

where these articles were in great demand. The Industrial Revolution reversed the character

of India's foreign trade. Tremendous expansion of productive capacity of manufactures

resulted in increased demand of raw materials for British industry and the need to capture

foreign markets. As a first step, attempts were made to restrict and crush Indian

manufactures. On the other hand, efforts were made to commercialise agriculture so as to

step up the export of raw materials. The Indian textile handicrafts were the first to be hit. The

decline of this industry started a chain reaction leading to the speedy decline of other

handicrafts. The process of decline of handicrafts was accelerated by the development of

means of transport. The principal causes that led to the decay of handicrafts were as follows:

Disappearance of the Indian royal courts who patronized the crafts earlier.

The lukewarm attitude of the British colonial govt. towards the Indian

crafts.

Imposition of heavy duties on the imports of the Indian goods in England.

Low priced British made goods produce on large scale which reduced the

competing capacity of the product of the Indian handicrafts

Development of transport in Indian facilitating the easy access of British

product even to far-flung remote part of the country.

Changes in the tastes and habits of the Indian, developing craziness of

foreign products.

Unwillingness of the Indian craftsmen to adapt to the changing tastes and

needs of the people

15

4.5 Nature of Unemployment in India

India is a developing economy, the nature of unemployment, therefore, sharply differs from the one that prevails in industrially advanced countries. Lord Keynes diagnosed unemployment in advanced economies to be the result of a deficiency of effective demand. It implied that in such economies machines becomes idle and demand for labour falls because the demand for the products of industry is no longer there. Thus Keynesian remedies of unemployment concentrated on measures to keep the level of effective demand sufficiently high so that the economic machine does not slacken the production of goods and services. This type of unemployment caused by economic fluctuations did arise in India during the

depression in the 1930’s which caused untold misery. But with the growth of Keynesian

remedies, it has been possible to mitigate cyclical unemployment. Similarly, after the Second

World War, when war-time industries were being closed, there was a good deal of frictional

unemployment caused by retrenchment in the army, ordnance factories, etc. These workers

were to be absorbed in peacetime industries. Similarly, the process of rationalization which

started in India since 1950, also caused displacement of labour. The flexibility of an economy

can be judge from the speed with which it heals frictional unemployment.

But more serious than cyclical unemployment or frictional unemployment in a developing economy like India is the prevalence of chronic under- employment or disguised unemployment in the rural sector and the existence of urban unemployment among the educated classes. It would be worthwhile to emphasize here that unemployment in developing economies like India is not the result of deficiency of effective demand in the Keynesian sense, but a consequence of shortage of capital equipment of other complementary resources.

4.6 Process of industrial-transition in India

The process of industrial transition in the British period is broadly divided into industrial

growth during the 19th century and industrial progress during the 20th century. It was mainly

the private sector whether indigenous or foreign that carried industrialization forward. Only

after the First World War some protection was granted to Indian industries otherwise Indian

industry had to weather all storms and face world competition on its own strength. This

explains the slow growth of industrialization.

Private enterprise and industrial growth in the 19th century: The outstanding industrial events

of the 19th century were the decline of indigenous industries and the rise of large-scale

modern industries. This change was brought about by private enterprise. The rise of large-

16

scale industries was slow in the beginning but by the close of the 19th century, the movement

was more rapid.

The period 1850 to 1855 saw the establishment of the first cotton mill, first jute mill and the

first coal mine. In the same period, the first railway line was laid in India. In a period of 25

years, that is, by the last quarter of the 19th century, there were 51 cotton mills and 18 jute

mills. During the same period, India produced one million tons of coal per annum and the

Indian railways had a mileage of 8,000. By the end of the 19th century there were 194 cotton

mills and 36 jute mills, and coal production had risen to over 6 million tons per annum. In

spite of the very rapid increase in industrialization and the fact that the foundations for the

development of modern industries for the utilization of coal and iron resources were laid by

the end of the 19th century.

During the 19th century, it was but natural that British business should pioneer industrial

enterprise in India. The Britisher had experience of running industries at home. British

enterprise received maximum state-support. Besides, much of the business developed in India

was related either to the Government or interests in some way connected with Britain.Though

industrialization was started by the British in the 19th century, the Britishers were more

interested in their profit and not in accelerating the economic growth of India.

Apart from the British, the Parsis, the Jews and the Americans were also prominent first as

merchants and later as industrialists. They were close-knit and highly progressive

communities. The Parsis were particularly progressive to rapidly adopt European busine

17

CHAPTER-5

SIGNIFICANCE OF

ENTREPRENEURSHIP

18

5.1 Significance Of Entrepreneurship

The world is experiencing one of the most extraordinary periods in history. The power equation continues shifting across countries and regions, while rapid changes unfold in the marketplace, reshaping both the political landscape and the interactions between governments and businesses. The financial crisis, combined with rising inflation and the consequent slowdown in global demand, has engendered significant insecurity about the outlook of the world economy, and increased anxiety about its potential implications on the accomplishment of the Millennium Development Goals by 2015. On the other hand, India has been one of the fastest growing economies of the past decade.

Indian economic growth has been characterized by multifaceted development – increases in

production have been consistent and robust, and the economy has displayed clear indicators

of shifting from an agrarian one to one in which services like business services, banking,

communications, etc. play a major part. Growth has been fueled, in part, by rising exports –

exports grew by more than 180% over the last decade, and exports of manufactured goods, in

particular, now account for more than half of the foreign trade. More encouragingly, a strong

rise in domestic demand has played a major role in this growth.

“Entrepreneurship is driving growth everywhere from Israel to Ireland, Taiwan to Turkey, and,

of course, in India and China. Even the mature economies of the Old World long enamored of

central planning and tight coordination between big business and big government are getting

into the act.”

Carl J. Schramm.

19

CHAPTER-6

ENTREPRENEURSHIP AND ECONOMIC

DEVELOPMENT

20

Entrepreneurship helps in the process of economic development in the following ways :

1) Employment Generation :

Growing unemployment particularly educated unemployment is the problem of the nation.

The available employment opportunities can cater only 5 to 10 % of the unemployed.

Entrepreneurs generate employment both directly and indirectly. Directly, self employment as

an entrepreneur and indirectly by starting many industrial units they offer jobs to millions.

Thus entrepreneurship is the best way to fight the evil of unemployment.

2) National Income :

National Income consits of the goods and services produced in the country and imported. The

goods and services produced are for consumption within the country as well as to meet the

demand of exports. The domestic demand increases with increase in population and increase

in standard of living. The export demand also increases to meet the needs of growing imports

due to various reasons. An increasing number of entrepreneurers are required to meet this

increasing demand for goods and services. Thus entrepreneurship increases the national

income.

3) Balanced Regional Development :

The growth of Industry and business leads to a lot of Public benefits like transport facilities,

health, education, entertainment etc. When the industries are concentrated in selected cities,

development gets limited to these cities. A rapid development . When the new

entrepreneurers grow at a faster rate, in view of increasing competition in and around cities,

they are forced to set up their enterprises in the smaller towns away from big cities. This helps

in the development of backward regions.

4) Dispersal of economic power :

Industrial development normally may ledS to concentration of economic powers in a few

hands. This concentration of power in a few hands has its own evils in the form of

monopolies. Developing a large number of entrepreneurers helps in dispersing the economic

power amongst the population. Thus it helps in weakening the harmful effects of monopoly.

21

5) Better standards of living :

Entrepreneurers play a vital role in achieving a higher rate of economic growth.

Entrepreneurers are able to produce goods at lower cost and supply quality goods at lower

price to the community according to their requirements.When the price of of the commodies

decreases the consumers get the power to buy more goods for their satisfaction. In this way

they can increase the standard of living of the people.

6) Creating innovation :

An entrepreneur is a person who always look for changes. apart from combining the factors of

production, he also introduces new ideas and new combination of factors. He always try to

introduce newer and newer technique of production of goods and services. An entrepreneur

brings economic development through innovation.

Entrepreneurship also helps in increasing productivity and capital formation of a nation. In

short, the development of the entrepreneurship is inevitable in the economic development of

the country. The Role played by the entrepreneurship development can be expressed in the

following words :

" Economic development is the effect for which entrepreneurship is a cause "

22

CHAPTER-7

SMALL SCALE ENTREPRENEURSHIP IN

INDIA

23

“Journey of Thousand Miles Begins With a Single Step”.

7.1 Introduction

A common classification is between traditional small industries and modem small industries.

Traditional small industries include khadi and handloom, village industries, handicrafts,

sericulture, coir, etc. Modern small-scale industries produce wide range of goods from

comparatively simple items to sophisticated products such as television sets, electronics

control system, various engineering products, particularly as ancillaries to the large industries.

The traditional small industries are highly labour-intensive, while the modem small-scale units

make use of highly sophisticated machinery and equipment. For instance, during 1979-80

traditional small industries accounted for only 13 per cent of the total output but their share

in total employment was 56 per cent. In that year, total output of traditional small industries

came to be Rs. 4,420 crores and this output was produced with the employment of 133 lakh

workers, the average output of labour in traditional small industries was roughly Rs. 3,323.

As against this, the share of modem small industries in the total output of this sector was 74 per cent in 1979-80 but their share in employment was only 33 per cent. Obviously, these industrial units would be having higher labour productivity. For instance, in 1979-80 a total output of Rs. 24,885 crores was produced by 78 lakh workers in modem small-scale industries-the average product of labour being Rs.31,900. One special characteristic of traditional village industries is that they cannot provide full time employment to workers, but instead can provide only subsidiary or part-term employment to agricultural labourers and artisans. Among traditional village industries, handicrafts possess the highest labour productivity; besides, handicrafts make a significant contribution to earning foreign exchange for the country. Under these circumstances, active encouragement of handicrafts is a must. On the other hand, traditional village and small industries are largely carried on by labourers and artisans living below the poverty line, while modem small industries can provide a good source of livelihood. Hence, if with an expansion of employment, the number of persons living below the poverty line has also to be reduced, then a rapid and much larger expansion of the modem small sector will have to be planned.

7.2 Small sector industrial policy

The Government announced its policy towards the small sector on 6th August 1991. The main

features of the Policy were:

The small-scale Industrial Sector has emerged as a dynamic and vibrant sector of the economy

during the eighties. At the end of the Seventh Plan period, it accounted for nearly 35 per cent

of the gross value of output in the manufacturing sector and over 40 per cent of the total

exports front the country. It also provided employment opportunities to around 12 million

people.

24

The primary objective of the Small Sector Industrial Policy during the nineties was to impart more vitality and growth impetus to the sector to enable it to contribute its mite fully to the economy, particularly in terms of growth of output, employment and exports.

7.3 Role of small-scale industries in Indian economy The small-scale industrial sector which plays a pivotal role in the Indian economy in terms of

employment and growth has recorded a high rate of growth since Independence in spite of

stiff competition from the large sector and not so-encouraging support from the Government.

This is evidenced by the number of registered units which went up from 16,000 in 1950 to

36,000 units in 1961 and to 33.7 1akh units in 2000 - 2001. During the last decade alone, the

small-scale sector has progressed from the production of simple consumer goods to the

manufacture of many sophisticated and precision products like electronics control systems,

micro-wave components, electro-medical equipment, T.V. sets, etc.

The Government has been following a policy of reservation of items for exclusive

development in the small-scale sector. At the time of the 1972 Census of a Small - Scale

Industrial Units, there were 177 items in the reserved list. By 1983, the reserved list included

837 items for exclusive production in the small-scale sector. These units produce over 8,000

commodities.

Census 2010-11 reported that 97.2% of the registered SSI units were proprietary, only 1.3

percent were partnerships and 0.5 per cent were private companies and just 0.1% were co-

operative. In other words, the dominant type in the ownership pattern is proprietary with a

small fraction operating as partnerships.

25

7.4 Output and Employment of the Small Industries

According to the Third Census, in 2001-02, there were 13.75 lakh units in the registered sector

and 91.46 lakh units in the unregistered sector, thus recording a total number of 105.21 lakh

units in the SSI sector. Ironically, the Census estimated a much lower figure of production by

SSI sector. Keeping these facts in view, the Ministry of Small Scale Industries has revised the

data pertaining to SSI sector.

The data reveal that the total number of SSI units has increased from 79.6 lakhs in 1994-95 to

123.4 lakhs in 2005-06, indicating an annual, average growth rate of 4.1 per cent, but their

production increased from Rs. 1,09,116 crores in 1994-95 to Rs. 2,77,668 crores in 2008-09

i.e. an annual average growth of 8.8 per cent. As a consequence of the increase in SSI units,

more especially in the unregistered sector, employment increased from 191.4 lakhs in 1994-

95 to 294.9 lakhs in 2005-06, recording an average growth rate of 4.5 per cent per annum. So

far as exports by the SSI sector are concerned, they increased from Rs. 29,068 crores in 1994-

95 to Rs. 1,50,242 crores in 2005-06, recording a growth rate of 16.1 per cent per annum. The

Ministry has not changed the data pertaining to exports. On the whole, it can be stated that

during 1994-95 to 2005-06, the SSI sector recorded an annual average growth rate of

26

production by 8.8%, of employment by 4.5 per cent and of exports by 16.1 %. This is a

creditable achievement.

Obviously, the growth rate of the small-scale sector has been faster both in terms of output and employment. In other words, the output employment ratio for the small scale sector is 1: 1.4. The rapid growth of the small-scale industries has a great relevance in our national economic policies. The growth of the small sector improves the production of the non-durable consumer goods of mass consumption. As such, it acts as an anti-inflationary force. If a big push is given to the small sector, it can become a stabilising factor in a capital-scarce economy like India by providing a higher output capital ratio as well as a higher employment-capital ratio. In this connection, we may refer to the relatively low capacity utilisation of the small-scale

industries. The capacity utilisation in the small sector as a whole was of the order of 53 per

cent. There were, however, many units having high capacity utilisation e.g., industries utilising

60 to 80 per cent of the capacity included leather goods, readymade garments, tiles, woollen

knitwear, etc. Industries like plastic products had very low capacity utilization

7.4.1 Exports From Small Scale Industry

Substantial increase in exports were observed in the case of readymade garments, canned and processed fish, leather sandals and chappals, food products, hosiery and marine products, etc. The value of exports increased to Rs.1,643 crores in 1980-81 and to a record high figure of Rs.1,50,242 crores in 2005-2006. A very significant feature of exports from the small-scale sector is their share in non-traditional exports. The share of exports from the small-scale sector represents about 32.3 per cent of total exports in 2005-2006. The obvious conclusion is that the growth of SSIs in terms of number and output is comparatively much higher in reserved items than in unreserved items. The policy of reservation has, therefore, positively helped the growth of this sector. Despite such positive evidence in favour of reserved items, the Union Budget (1997-98)

dereserved 14 items till now manufactured by SSI sector. These items included ice-cream,

biscuits, synthetic syrups, a variety of automobile parts, corrugated paper and boards,

vinegar, poultry feed, rice milling, dal milling etc.

After the announcement of Industrial Policy of 1991, the Government has been dereserving

more and more items of the SSI sector. As against 806 reserved items in 1977, the number of

reserved items in 2007 is only 239.

27

CHAPTER-8

WOMAN ENTREPRENEURSHIP IN

INDIA

28

8.1 INTRODUCTION

In the past women is taken only as house manager but with the change of time, change of thinking and spread of education the role of women in society is also changed. Now a days the women is not only a housewife but she plays different roles like Bank Manager, Civil Officer, I.A.S. etc.The women entrepreneur is also the one outcome of this fast changing society. But the women entrepreneur in Indian context has to face a lot of challenges to survive in this male dominating society. Women entrepreneurship has been recognized as an important source of economic growth.

Women entrepreneurs create new jobs for themselves and others and also provide society

with different solutions to management, organization and business problems. However, they

still represent a minority of all entrepreneurs. Women entrepreneurs often face gender-based

barriers to starting and growing their businesses, like discriminatory property, matrimonial

and inheritance laws and/or cultural practices; lack of access to formal finance mechanisms;

limited mobility and access to information and networks, etc.

Women’s entrepreneurship can make a particularly strong contribution to the economic well-

being of the family and communities, poverty reduction and women’s empowerment, thus

contributing to the Millennium Development Goals (MDGs). Thus, governments across the

world as well as various developmental organizations are actively undertaking promotion of

women entrepreneurs through various schemes, incentives and promotional measures.

Women entrepreneurs in the four southern states and Maharashtra account for over 50% of

all women-led small-scale industrial units in India.

29

States No of Units Registered

No. of Women Entrepreneurs

Percentage %

Tamil Nadu 9618 2930 30.36

Uttar Pradesh 7980 3180 39.84

Kerala 5487 2135 38.91

Punjab 4791 1618 33.77

Maharastra 4339 1394 32.12

Gujrat 3872 1538 39.72

Karnataka 3822 1026 26.84

Madhya Pradesh 2967 842 28.38

Other States and UTS 14576 4185 28.71 Source: Economic Survey 2008-09

Out of total 940.98 million people in India, in the 1990s, females comprise 437.10 million

representing 46.5 percent of the total population. There are 126.48 million women workforce

but as per the 1991 census, only 1, 85,900 women accounting for only 4.5 per cent of the

total self-employed persons in the country were recorded. As per a rough estimate the

numbers of SSIs are expected to be2.5 billion having 9% women entrepreneurs in to it.

Considering this trend, women participation in another five years was 20 % more, raising the

number of women entrepreneurs to about 5, 00,000. Combined effect of motivational drive,

preparation of information material, conducting training, creation of women industrial

estates, and training of promoters and use of mass media all together is bound to accelerate

the process of women entrepreneurship development.

8.2 Challenges To Woman Entrepreneur:

1. Lack of Education: The first and most serious problem to women entrepreneur is the lack/ less education facility. These further results in lack of knowledge and information about availability of raw material, financial facilities, Govt. helps and coming opportunities. This blocks the path of growth of women entrepreneur. 2. Male dominated Society: The Indian society is changing fastly but yet it is male driven society. The thinking towards women is inferior as compared to men. About 90% women talent goes waste due to the negligence and non-supporting nature of family members. So women have to fight a long battle to become a successful entrepreneur as compared to men.

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3. Family Ties: Every entrepreneur has to spend a lot of time for his business if he wants to grow. But in case of women entrepreneur the family becomes an obstacle in that thing. If a woman is unable to devote enough time to family, it gives rise to conflicts on the other hand without giving full time to business she can not be a successful entrepreneur. 4. Problem of Finance: In India it is a trend that the parental immovable properly or business goes in hands of male child by succession. So the woman faces the difficulty in obtaining finance, managing the working capital and credit. As the women has very less property in their own name which restricts in obtaining loans from financial institutions as they demand the security for loan granted. 5. Scarcity of Raw Material: The women are not much aware about the alternative source of raw material or they do not have access to them. So the women entrepreneur faces difficulty in obtaining proper and adequate raw material. 6. Stiff Competition: A lots of women enterprise have imperfect organizational set up but they have to face severe competition from organized industries which compels them to withdraw or to fight a cut-throat competition.

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8.3 Motivational Triggers for Women Entrepreneurship As we discussed there are many serious problems exists in the way of women entrepreneur. But these cannot block the way of progress if these are tackled properly. So we should have to take some positive steps to motivate the women entrepreneur some of which can be as under : 1. Overcoming family Resistance: The first and most serious problem of family resistance can be removed through the co-operation from the male partners. If the male members give support and motivates women they can become successful entrepreneur. 2. Education & Training: The professional education and training should be imparted to women which should start right from the high school level. The well designed courses for building confidence and practical knowledge should be made part of the curriculum. 3. Change in Attitude: Societal change is not an overnight phenomenon it is a gradual and slow process. But without this change the subsidies and credit allocation to women will not bring much change. 4. Initiation into Professional Work: Usually families provide financial and emotional support to sons for setting up a business or profession. But the parents and daughters should be convinced that the skills and knowledge of daughter if utilized could provide them with profitable occupation. 5. Self Recognition: Women must be pulled out of normal restrictive environment and should teach to recognize her own psychological needs and give her needs an expression. They must be motivated to involve actively in business being run in their names.

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8.4 Provision of Amenities It is desirable to provide amenities particularly required by them in industrial areas like easy mobility and closeness to homes, child care facilities, regular bus service, crèches for children etc. Now a day's Indian Govt. Is becoming aware about status of women in society. So government is Providing some facilities to women which are as under: 1. Prime Minister Rojgar Yozna: Started in April 1999 The Govt. has modified elegibility criteria and has given age limit relaxation to women. 2. Khadi & Village Industries Commission: This scheme took measures to generate more employment opportunities for women. 3. Support for Training & Employment (STEP): Govt. has started training programmes exclusively for self-employment of women. 4. Trade Related Entrepreneurship Assistance and development scheme (TREAD): Some other schemes are also introduced by Govt. for initiating women entrepreneurship but the way is so long that these steps too short. In India the past image of restricted and home bound women is slowly going under change. The Indian women even after facing many obstacles is now becoming a educated and economically independent. Govt. has come forward with many facilities, concessions and incentives exclusively for women entrepreneur. But in spite of these women have to go a long way fulfilling their multiple role of a mother, wife and a business women as well.

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CHAPTER-9

SOCIAL ENTREPRENEURSHIP IN INDIA

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9.1 Introduction

The terms social entrepreneur and social entrepreneurship were used first in the literature on

social change in the 1960s and 1970s. The terms came into widespread use in the 1980s and

1990s, promoted by Bill Drayton the founder of Ashoka: Innovators for the Public, and others

such as Charles Leadbeater From the 1950s to the 1990s Michael Young was a leading promoter

of social enterprise and in the 1980s was described by Professor Daniel Bell at Harvard as 'the

world's most successful entrepreneur of social enterprises' because of his role in creating more

than sixty new organizations worldwide, including the School for Social Entrepreneurs (SSE)

which exists in the UK, Australia and Canada and which supports individuals to realize their

potential and to establish, scale and sustain, social enterprises and social businesses. Another

British social entrepreneur is Lord Mawson OBE. Andrew Mawson was given a peerage in 2007

because of his pioneering regeneration work. This includes the creation of the renowned

Bromley by Bow Centre in East London. He has recorded these experiences in his book "The

Social Entrepreneur: Making Communities Work and currently runs Andrew Mawson

Partnerships to help promote his regeneration work

Social entrepreneurship means identifying or recognizing a social problem and using entrepreneurial principles to organize, create, and manage a social venture to achieve a desired social change Business entrepreneurs typically measure performance in profit and return, but social entrepreneurs also take into account a positive return to society. Social entrepreneurship typically furthers broad social, cultural, and environmental goals and is commonly associated with the voluntary and not-for-profit sectors . Profit can at times also be a consideration for certain companies or other enterprises.

Social entrepreneurship practised in a world or international context is called international social entrepreneurship.

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9.2 What does a social entrepreneur do?

While business entrepreneurs aim to generate profits, social entrepreneurs aim to improve social values. But they differ from non-governmental organizations in that they aim to make broad-based, long-term changes, instead of few immediate small-time results. They recognize when a section of the society is stuck and offer innovative ways to break out of its stagnant state. They find out the things that don’t work and alter the system to solve the problems. They detect resources while others see problems. They consider the affected people as part of the solution and not as passive beneficiaries. They propagate the solution and persuade the whole society to adopt it.

9.3 Social Entrepreneurs In India?

Social entrepreneurship is quietly revolutionizing the less privileged sections of India. Here are some of the more prominent social entrepreneurs in India.

Dr Govindappa Venkataswamy and Thulasiraj D Ravilla established Aravind Eye Hospital in 1976. Till date, it has treated more than 2.3 million outpatients and carried out more than 2.7 lakh operations in 2006-07, about two-thirds of them free.

Barefoot College, started by Bunker Roy in 1972, has made innumerable school dropouts in villages into “barefoot” doctors, engineers, architects, teachers, designers and communicators

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Self-Employed Women’s Association (SEWA) started by Ela Bhatt in 1972 provides financial, health, insurance, legal, childcare, vocational and educational services to poor self-employed women, who comprise its members.

Bhartiya Samruddhi Investments & Consulting Services (BASIX) started by Vijay Mahajan is the first microfinance project to lend to the poor.

Narayana Hrudayalaya Institute of Medical Sciences and its network of hospitals run by Devi Shetty perform about three dozen surgeries a day. Of these, 60% are carried out at nominal cost or free of charge.

Technology Informatics Design Endeavour (TIDE) run by S Rajagopalan and Svati Bhogle supports the development of financially rewarding and environmentally-friendly methods invented by leading research institutions into thriving enterprises.

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CHAPTER-10

CORPORATE ENTREPRENEURSHIP

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10.1 Introduction

First, though, what exactly is corporate entrepreneurship? We define the term as the process

by which teams within an established company conceive, foster, launch and manage a new

business that is distinct from the parent company but leverages the parent’s assets, market

position, capabilities or other resources. It differs from corporate venture capital, which

predominantly pursues financial investments in external companies. Although it often

involves external partners and capabilities (including acquisitions), it engages significant

resources of the established company, and internal teams typically manage projects. It’s also

different from spinouts, which are generally constructed as stand-alone enterprises that do

not require continuous leveraging of current business activities to realize their potential

Corporate entrepreneurship is more than just new product development, and it can include

innovations in services, channels, brands and so on. Traditionally, companies have added

value through innovations that fit existing business functions and activities. After all, why

would they develop opportunities that can’t easily be brought to market? Unfortunately, this

approach also limits what a company is willing or even able to bring to market. Indeed, the

failure to recognize that new products and services can require significantly different business

models is often what leads to missed opportunities. Corporate entrepreneurship initiatives

seek to overcome such constraints.

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10.2 The Need for Corporate Entrepreneuring Many companies today are realizing the need for corporate entrepreneuring. Articles in

popular business magazines are reporting the infusion of entrepreneurial thinking into large

bureaucratic structures. In fact, in many of his books, Tom Peters has devoted entire sections

to innovation in the corporation. Quite obviously, both business firms and consultants /

authors are recognizing the need for in-house entrepreneurship.

This need has arisen in response to a number of pressing problems, including rapid growth in the

number of new and sophisticated competitors, a sense of distrust in the traditional methods of

corporate management, an exodus of some of the best and brightest people from corporations to

become small-business entrepreneurs, international competition, downsizing of major

coorprations, and an overall desire to improve efficiency and productivity.

The first of these issues, the problem of competition, has always plagued businesses.

However, today's high-tech economy is supporting a far greater number of competitors than

ever before. In contrast to previous decades, changes, innovations, and improvements are

now very common in the marketplace. Thus corporations must either innovate or become

obsolete.

Another of these problems, losing the brightest people to entrepreneurship, is escalat-ing as a

result of two major developments. First, entrepreneurship is on the rise in terms of status,

publicity, and economic development. This enhancement of entrepreneurship has made the

choice more appealing to both young and seasoned employees. Second, in recent years

venture capital has grown into a large industry capable of financing more new ventures than

ever before. The healthy capital market enables new entrepreneurs to launch their projects.

This development is encouraging people with innovative ideas to leave large corporations and

strike out on their own.

The modern corporation, then, is forced into seeking avenues for developing in-house

entrepreneuring. To do otherwise is to wait for stagnation, loss of personnel, and decline. This

new "corporate revolution" represents an appreciation for and a desire to develop

entrepreneurs within the corporate structure.

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CHAPTER -11

INTRAPRENEURSHIP IN INDIA

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11.1 INTRODUCTION

The global economy is creating profound and substantial changes for organizations and

industries throughout the world. These changes make it necessary for business firms to

carefully examine their purpose and to devote a great deal of attention to selecting and

following strategies in their pursuit of the levels of success that have a high probability of

satisfying multiple stakeholders. In response to rapid, continuous, and significant changes in

their external and internal environments, many established companies have restructured

their operations in fundamental and meaningful ways. In fact, after years of restructuring,

some of these companies bear little resemblance to their ancestors in their business scope,

culture, or competitive approach.

The new century is seeing corporate strategies focused heavily on innovation. This new

emphasis on entrepreneurial thinking developed during the entrepreneurial economy of the

1980s and 1990s. Peter Drucker, the renowned management expert, de-scribed four major

developments that explain the emergence of this economy. First, the rapid evolution of

knowledge and technology promoted the use of high-tech entrepreneurial start-ups. Second,

demographic trends such as two-wage-earner families, continuing education of adults, and

the aging population added fuel to the proliferation of newly developing ventures. Third, the

venture capital market became an effective funding mechanism for entrepreneurial ventures.

Fourth, American industry began to learn how to manage entrepreneurship.

Continuous innovation (in terms of products, processes, and administrative routines and

structures) and an ability to compete effectively in international markets are among the skills

that increasingly are expected to influence corporate performance in the twenty-first

century's global economy. Corporate entrepreneurship is envisioned to be a process that can

facilitate firms' efforts to innovate constantly and cope effectively with the competitive

realities that, companies encounter when competing in international markets.

Entrepreneurial attitudes and behaviors are necessary for firms of all sizes to prosper and

flourish in competitive environments.

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11.2 Defining the Concept Operational definitions of corporate entrepreneurship have evolved over the last 30 years

through scholars' work. For example, one researcher noted that corporate innovation is a very

broad concept that includes the generation, development, and implementation of new ideas

or behaviors. An innovation can be a new product or service, an administrative system, or a

new plan or program pertaining to organizational members. In this context corporate

entrepreneurship centers on reenergizing and enhancing the firm's ability to acquire

innovative skills and capabilities.

11.3 The Nature of Intrapreneurship In recent years the subject of intrapreneurship has become quite popular, though very few

people thoroughly understand the concept. Most researchers agree that the term refers to

entrepreneurial activities that receive organizational sanction and resource commitments for

the purpose of innovative results. The major thrust of intrapreneuring is to develop the

entrepreneurial spirit within organizational boundaries, thus allowing an atmosphere of

innovation to prosper.

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CHAPTER -12

CYBERPRENEURSHIP IN INDIA

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12.1 Introduction It is a combination of the words 'cyber' and 'entrepreneur' and loosely means many things but generally regarded as meaning an entrepreneur who has an online based business on the Internet that targets international consumers. These cyberpreneur‘s do not need offices or extensive support staff all over the world. They just need an idea, a great idea, and a cable to the Internet.

12.2 The Internet Most people alive today have probably heard of the Internet. In fact, if the propaganda is believed, most people have already surfed the Internet. At least most computer users have probably done so. It is becoming more and more common for firms and organizations everywhere to advertise and even sell their products and services via the Internet. Cyber Entrepreneurs is similar to Entrepreneur but the difference is where the conduct their business. Internet entrepreneurs combine creativity and marketing skills to sell goods and services on

the World Wide Web.

The Internet has shown spectacular growth over the past few years and will almost certainly continue to grow. On the other hand, the failure rate of Internet businesses is high, because the medium evolves in ways that are impossible to predict. Employment in Web-related business is volatile. Many large companies have invested heavily in developing Internet sites. Then, as those sites fail to produce revenue, companies alter their plans and "downsize" or abandon the sites, often laying off employees in the process. Like other new industries, the Internet offers high-risk opportunities. Individuals with the

rightidea and the skills necessary to capitalize on it can earn a fortune. At the same time, far

more Internet-based businesses will fail rather than succeed.

12.3 Nature Of The Work

The Internet—a worldwide network of computer networks—offers businesses and individuals a relatively inexpensive way to communicate with a global audience. The development of the Internet over the past forty years has opened an entirely new medium for communication and commerce. Creative individuals with something to say or something to sell and technical interests and abilities can use the Internet to reach vast numbers of people. Internet entrepreneurs are individuals who are familiar with the culture and technology of the Internet and are able to apply their knowledge to sell products or services via the Internet. In

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general, these entrepreneurs exploit the World Wide Web (the Web)—the portion of the Internet where users post "pages" of text, images, audio, and video using the HTML programming language. On a basic level the Web provides individual entrepreneurs and business organizations with an inexpensive means to offer documents and software to a worldwide audience. Commercial Web sites fall into two basic types: pay sites and free sites. Pay sites offer subscribers proprietary information for a fee. The information can range from financial analysis to software applications to sports statistics. Free sites attract users with interesting content, and then make money through advertising or sales generated through the site. For example, "search engines" such as Yahoo and Google help users find Web pages for free while exposing the users to advertisements. Other free sites are essentially online catalogs selling products and offering feature articles and reviews. Home electronics, computer equipment, books, music, video games, and travel arrangements are among the most popular items sold over the Internet. Many Web sites are owned and maintained by huge corporations. Nearly all Fortune 500

companies have Web sites. On the other hand, there are also thousands of smaller businesses

represented online—many owned and operated by individuals. Regardless of whether they

work for a large corporation or a tiny business, Internet entrepreneurs must combine

marketing skills with an aptitude for using new and evolving technology.

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CHAPTER -13

ULTRAPRENEURS IN INDIA

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13.1 Introduction Entrepreneurs no longer have the luxury of long development and product proving time spans. Windows of market opportunity open and close rapidly. Today‘s entrepreneur needs a new mindset, what we term ultrapreneuring. Gone are those days of developing a company to die with-no more cradle to grave thinking. Ultra growth companies aren‘t made to be passed on to the next generation. Ultrapreneurs create them and sell out, merge or combine. Their lifelong challenge is to do it again and again. Many people have established successful businesses and then suddenly sold them off to

managers at good valuations and move on to a new venture. Such people are called as serial

entrepreneurs.

The watch word is harvest. The sole intent is to build a company, then sell out in three years

or less. The challenge is to leverage the investment dollars, the management team, and the

product or service niche to attract a predetermined, designated purchaser

Ultrapreneur is about taking enterprise beyond the paradigm of shareholder value, quarterly

results and human resources to incorporate a new vision, a new ethics and a new way of

working. If entrepreneurship‘ meant to take in hand, to manage (in its original, literal sense),

from the Old French entreprendre to take between (the hands) then ultrapreneurship is about

taking (organizations) beyond‘ the pattern of capitalism that is now threatening our very

existence on this planet.

Ultrapreneur is for everyone who is looking for fresh thinking in the wake of climate change,

globalisation and the growing unrest of the world‘s underemployed and undervalued

populations and who wants to change the world. But who also seeks the knowledge, skills and

experience and the wisdom to make that change positively and effectively.

Ultrapreneurs make it happen by being prepared for constant change – by continually adapting their business plans for the changes that are dictated by the realities of their market place, customers and team. Making it happen, ultrapreneurial style, can be summarised by addressing two primary pressures, those from outside and those from within the organisation. The ultrapreneurial key is to maintain realistic goals, delegate, put effort, into a balanced life,

and be around to really enjoy the rewards

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CHAPTER -14

BEING ENTREPRENURS IN INDIA

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14.1 What Makes Someone an Entrepreneur?

Who can become an entrepreneur? There is no one definitive profile. Successful en-trepreneurs come in various ages, income levels, gender, and race. They differ in education and experience. But research indicates that most successful entrepreneurs share certain personal attributes, including: creativity, dedication, determination, flexibility, leadership, passion, self-confidence, and “smarts.”

Creativity is the spark that drives the development of new products or services or ways to do business. It is the push for innovation and improvement. It is continuous learning, questioning, and thinking outside of prescribed formulas.

Dedication is what motivates the entrepreneur to work hard, 12 hours a day or more,

even seven days a week, especially in the beginning, to get the endeavor off the ground.

Planning and ideas must be joined by hard work to succeed. Dedication makes it happen.

Determination is the extremely strong desire to achieve success. It includes persistence

and the ability to bounce back after rough times. It persuades the entrepreneur to make

the 10th phone call, after nine have yielded nothing. For the true entrepreneur, money is

not the motivation. Success is the motivator; money is the reward.

Flexibility is the ability to move quickly in response to changing market needs. It is being

true to a dream while also being mindful of market realities. A story is told about an

entrepreneur who started a fancy shop selling only French pastries. But customers wanted

to buy muffins as well. Rather than risking the loss of these customers, the entrepreneur

modified her vision to accommodate these needs.

Leadership is the ability to create rules and to set goals. It is the capacity to follow

through to see that rules are followed and goals are accomplished.

Passion is what gets entrepreneurs started and keeps them there. It gives entrepreneurs

the ability to convince others to believe in their vision. It can’t substitute for planning, but

it will help them to stay focused and to get others to look at their plans.

Self-confidence comes from thorough planning, which reduces uncertainty and the level

of risk. It also comes from expertise. Self-confidence gives the entrepreneur the ability to

listen without being easily swayed or intimidated.

Smarts consists of common sense joined with knowledge or experience in a related

business or endeavor. The former gives a person good instincts, the latter, expertise.

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Many people have smarts they don’t recognize. A person who successfully keeps a

household on a budget has organizational and financial skills. Employment, education, and

life experiences all contribute to smarts.

Every entrepreneur has these qualities in different degrees. But what if a person lacks one or

more? Many skills can be learned. Or, someone can be hired who has strengths that the

entrepreneur lacks. The most important strategy is to be aware of strengths and to build on

them.

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14.2 Why Become an Entrepreneur?

What leads a person to strike out on his own and start a business? Perhaps a person has been

laid off once or more. Sometimes a person is frustrated with his or her current job and doesn’t

see any better career prospects on the horizon. Sometimes a person realizes that his or her

job is in jeopardy. A firm may be contemplating cutbacks that could end a job or limit career

or salary prospects. Perhaps a person already has been passed over for promotion. Perhaps a

person sees no opportunities in existing businesses for someone with his or her interests and

skills.

Some people are actually repulsed by the idea of working for someone else. They object to a

system where reward is often based on seniority rather than accomplishment, or where they

have to conform to a corporate culture.

Other people decide to become entrepreneurs because they are disillusioned by the bureaucracy or politics involved in getting ahead in an established business or profession. Some are tired of trying to promote a product, service, or way of doing business that is outside the mainstream operations of a large company. In contrast, some people are attracted to entrepreneurship by the advantages of starting a

business. These include:

Entrepreneurs are their own bosses. They make • the decisions. They choose whom to do

business with and what work they will do. They decide what hours to work, as well as what

to pay and whether to take vacations.

Entrepreneurship offers a greater possibility of achieving significant financial rewards than

working for someone else.

It provides the ability to be involved in the total • operation of the business, from concept

to design and creation, from sales to business operations and customer response.

It offers the prestige of being the person in charge.

It gives an individual the opportunity to build equity, which can be kept, sold, or passed on to the next generation.

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Entrepreneurship creates an opportunity for a person to make a contribution. Most new

entrepreneurs help the local economy. A few—through their innovations—contribute to

society as a whole. One example is entrepreneur Steve Jobs, who co-founded Apple in 1976,

and the subsequent revolution in desktop computers.

Some people evaluate the possibilities for jobs and careers where they live and make a conscious decision to pursue entrepreneurship. No one reason is more valid than another; none guarantee success. However, a strong desire

to start a business, combined with a good idea, careful planning, and hard work, can lead to a

very engaging and profitable endeavor.

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14.3 Entry Strategies for New Ventures

It is easy to be captivated by the promise of entrepreneurship and the lure of becoming one’s own boss. It can be difficult, however, for a prospective entrepreneur to determine what product or service to provide. Many factors need to be considered, including: an idea’s market potential, the competition, financial resources, and one’s skills and interests. Then it is important to ask: Why would a consumer choose to buy goods or services from this new firm? One important factor is the uniqueness of the idea. By making a venture stand out from its

competitors, uniqueness can help facilitate the entry of a new product or service into the

market.

It is best to avoid an entry strategy based on low cost alone. New ventures tend to be small. Large firms usually have the advantage of lowering costs by producing large quantities. Successful entrepreneurs often distinguish their ventures through differentiation, niche

specification, and innovation.

Differentiation is an attempt to separate the new company’s product or service from that of its competitors. When differentiation is successful, the new product or service is relatively less sensitive to price fluctuations because customers value the quality that makes the product unique. A product can be functionally similar to its competitors’ product but have features that improve its operation, for example. It may be smaller, lighter, easier to use or install, etc. In 1982, Compaq Computer began competing with Apple and IBM. Its first product was a single-unit personal computer with a handle. The concept of a portable computer was new and extremely successful.

Niche specification is an attempt to provide a product or service that fulfills the needs of a specific subset of consumers. By focusing on a fairly narrow market sector, a new venture may satisfy customer needs better than larger competitors can.

Changes in population characteristics may create opportunities to serve niche markets. One growing market segment in developed countries comprises people over 65 years old. Other niches include groups defined by interests or lifestyle, such as fitness enthusiasts, adventure-travel buffs, and working parents. In fact, some entrepreneurs specialize in making “homemade” dinners for working parents to heat and serve.

Innovation is perhaps the defining characteris• tic of entrepreneurship. Visionary business expert Peter F. Drucker explained innovation as “change that creates a new dimension of performance.” There are two main types of product innovation. Pioneering or radical innovation embodies a technological breakthrough or new-to-the-world product. Incremental innovations are modifications of performance.” There are two main types of product innovation. Pioneering or radical innovation embodies a

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technological breakthrough or new-to-the-world product. Incremental innovations are modifications of existing products

But innovation occurs in all aspects of businesses, from manufacturing processes to pricing policy. Tom Monaghan’s decision in the late 1960s to create Domino’s Pizza based on home delivery and Jeff Bezos’ decision in 1995 to launch Amazon.com as a totally online bookstore are examples of innovative distribution strategies that revolutionized the marketplace.

Entrepreneurs in less-developed countries often innovate by imitating and adapting products created in developed countries. Drucker called this process “creative imitation.” Creative imitation takes place whenever the imitators understand how an innovation can be applied, used, or sold in their particular market better than the original creators do.Innovation, differentiation, and/or market specification are effective strategies to help a new venture to attract customers and start making sales.

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14.4 Choosing a Form of Business

In many countries, entrepreneurs must select a form of organization when they start a small

business. The basic forms of organization are sole proprietorships, partnerships, and

corporations. Each has advantages and disadvantages. Moreover, the laws and regulations

that apply to business owners vary from country to country and by local jurisdiction.

Entrepreneurs should consult an attorney or other expert to make sure that they have all the

necessary licenses and permits, and are aware of all their legal obligations. In many countries,

the local Chamber of Commerce or local business council is also a good source of information.

Sole Proprietorship: In a sole proprietorship, the individual entrepreneur owns the business and is fully responsible for all its debts and legal liabilities. More than 75 percent of all U.S. businesses are sole proprietorships. Examples include writers and consultants, local restaurants and shops, and home-based businesses.

This is the easiest and least expensive form of business to start. In general, an

entrepreneur files all required documents and opens a shop. The disadvantage is that

there is unlimited personal liability all personal and business assets owned by the

entrepreneur may be at risk if the business goes into debt.

Partnership: A partnership consists of two or more people who share the assets, liabilities, and profits of a business. The greatest advantage comes from shared re-sponsibilities. Partnerships also benefit by having more investors and a greater range of knowledge and skills.

There are two main kinds of partnerships, general partnerships and limited

partnerships. In a general partnership, all partners are liable for the acts of all other

partners. All also have unlimited personal liability for business debts. In contrast, a

limited partnership has at least one general partner who is fully liable plus one or more

limited partners who are liable only for the amount of money they invest in the

partnership.

The largest disadvantage of any partnership is the potential for disagreements, regardless of how well or how long the partners have known each other.

Experts agree that a partnership agreement drawn up by an experienced lawyer is essential to a successful partnership. It is often used to:

Create a mechanism for resolving disagreements;

Specify each partner’s contribution to the partnership;

Divide up management responsibilities;

Specify what happens if a partner leaves or dies

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Corporations: Corporations are recommended for entrepreneurs who plan to

conduct a large-scale enterprise. As a legal entity that has a life separate from its

owners, a corporation can sue or be sued, acquire and sell property, and lend

money.

Corporations are divided into shares or stocks, which are owned by one, a few, or many people. Ownership is based on the percentage of stock owned. Shareholders are not responsible for the debts of the corporation, unless they have personally guaranteed them. A shareholder’s investment is the limit of her liability. Corporations can more easily obtain investment, raise capital by selling stock, and survive a change of ownership. They provide more protection from liability than other forms of business. Their potential for growth is unlimited.

However, corporations are more complex and expensive to set up than other forms of

business and are usually subject to a higher level of government regulation.

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14.5 Creating a Business Plan

A comprehensive business plan is crucial for a start-up business. It defines the entrepreneur’s vision and serves as the firm’s resume.

There are many reasons for writing a business plan:

To convince oneself that the new venture is worthwhile before making a significant financial and personal commitment.

To assist management in goal-setting and long-range planning.

To attract investors and get financing.

To explain the business to other companies with which it would be useful to create

an alliance or contract.

A business plan can help an entrepreneur to allocate resources appropriately, handle unexpected problems, and make good business decisions. A well-organized plan is an essential part of any loan application. It should specify how the

business would repay any borrowed money. The entrepreneur also should take into account

all startup expenses and potential risks so as not to appear naive.

A standard business plan is usually about 40 pages in length. It should use good visual formatting, such as bulleted lists and short paragraphs. The language should be free of jargon and easy to understand. The tone should be business-like and enthusiastic. It should be strong on facts in order to convince people to invest money or time in the new venture. The basic elements of a standard business plan include: Title Page Table of Contents Executive Summary Company Description Product/Service Market and Competition Marketing and Selling Strategy Operating Plan Management/Organization Financing Supporting Documents

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The executive summary is the cornerstone of a good plan. This is the section that people read in order to decide whether to read the rest. It should concisely summarize the technical, marketing, financial, and managerial details. More importantly, it needs to convince the reader that the new venture is a worthy investment. The company description highlights the entrepreneur’s dream, strategy, and goals. The product/service section should stress the characteristics and benefits of the new venture. What differentiates it from its competition? Is it innovative? The financial components of a new venture’s business plan typically include three projections: a balance sheet, an income statement, and a cash-flow analysis. These require detailed estimates of expenses and sales. Expenses are relatively easy to estimate. Sales projections are usually based on market research, and often utilize sales data for similar products and services produced by competitors. Writing a business plan may seem overwhelming. However, there are ways to make the

process more manageable. First, there are many computer software packages for producing a

standard business plan. Numerous books on entrepreneurship have detailed instructions, and

many universities sponsor programs for new businesses.

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14.6 Sources of Financing

Many entrepreneurs struggle to find the capital to start a new business. There are many

sources to consider, so it is important for an entrepreneur to fully explore all financing

options. He also should apply for funds from a wide variety of sources.

Personal savings: Experts agree that the best source of capital for any new business is

the entrepreneur’s own money. It is easy to use, quick to access, has no payback

terms, and requires no transfer of equity (ownership). Also, it demonstrates to

potential investors that the entrepreneur is willing to risk his own funds and will

persevere during hard times.

Friends and family: These people believe in the entrepreneur, and they are the second

easiest source of funds to access. They do not usually require the paperwork that

other lenders require. However, these funds should be documented and treated like

loans. Neither part ownership nor a decision-making position should be given to these

lenders, unless they have expertise to provide. The main disadvantage of these funds

is that, if the business fails and money goes lost, a valuable relationship may be

jeopardized.

Banks: Banks are very conservative lenders. As successful entrepreneur Phil Holland

explains, “Many prospective business owners are disappointed to learn that banks do

not make loans to start-up businesses unless there are outside assets to pledge against

borrowing.” Many entrepreneurs simply do not have enough assets to get a secured

loan from a lending institution. However, if an entrepreneur has money in a bank

savings account, she can usually borrow against that money. If an entrepreneur has

good credit, it is also relatively easy to get a personal loan from a bank. These loans

tend to be short-term and not as large as business loans.

Venture investors: This is a major source of funding for start-ups that have a strong

potential for growth. However, venture investors insist on retaining part ownership in

new businesses that they fund.

Formal institutional venture funds are usually limited partnerships in which passive

limited partners, such as retirement funds, supply most of the money. These funds

have large amounts of money to invest. However, the process of obtaining venture

capital is very slow. Several books, such as Galante’s Venture Capital & Private Equity

Directory, give detailed information on these funds.

61

Corporate venture funds are large corporations with funds for investing in new

ventures. These often provide technical and management expertise in addition to

large monetary investments. However, these funds are slow to access compared to

other sources of funds. Also, they often seek to gain control of new businesses.

Angel investors tend to be successful entrepreneurs who have capital that they are

willing to risk. They often insist on being active advisers to businesses they support.

Angel funds are quicker to access than corporate venture funds, and they are more

likely to be invested in a start-up operation. But they may make smaller individual

investments and have fewer contacts in the banking community.

62

CHAPTER -15

ENTREPRENURSHIP EDUCATION IN

INDIA

63

15.1 INTRODUCTION

“I'm not afraid of storms, for I'm learning to sail my ship”.

Entrepreneurship has been considered the backbone of economic development. It has been

well established that the level of economic growth of a region to a large extent, depends on

the level of entrepreneurial activities in the region. The myth that entrepreneurs are born, no

more holds good, rather it is well recognised now that the entrepreneurs can be created and

nurtured through appropriate interventions in the form of entrepreneurship development

programmes.

In the era of liberalisation, privatisation and globalisation along with ongoing IT revolution,

capable entrepreneurs are making use of the opportunities emerging from the evolving

scenario. However, a large segment of the population, particularly in the industrially backward

regions/rural areas generally lags behind in taking advantage of these opportunities.

Therefore, there is a need to provide skill development and entrepreneurship development

training to such people in order to mainstream them in the ongoing process of economic

growth.

Entrepreneurship development and training is, thus, one of the key elements for development of micro and small enterprises (MSEs), particularly, the first generation entrepreneurs. To undertake this task on regular basis, the Ministry has set up three national-level Entrepreneurship Development Institutes (EDIs). These are, the National Institute for Micro, Small and Medium Enterprises (NI-MSME), Hyderabad; the Indian Institute of Entrepreneurship (IIE), Guwahati and the National Institute for Entrepreneurship and Small Business Development (NIESBUD), Noida. Further, the Ministry has been implementing (in addition to the schemes of MSME-DO) an important scheme, namely, Scheme for Assistance for Strengthening of Training Infrastructure of Existing and New Entrepreneurship Development Institutes (EDIs). The main objectives of the scheme are

(i) promoting entrepreneurship for creating self-employment through enterprise creation

(ii) facilitating creation of training infrastructure; and

(iii) supporting research on entrepreneurship related issues.

64

15.2 NATIONAL INSTITUTE FOR MICRO, SMALL AND MEDIUM

ENTERPRISES (NI-MSME), HYDERABAD

NI-MSME, formerly known as National Institute of Small Industry Extension Training (NISIET), was

set up in 1960 at New Delhi as a Department of Central Government under the Ministry of

Commerce and Industry and was initially known as Central Industrial Extension Training Institute

(CIETI). Subsequently, in 1962, it was shifted to Hyderabad and converted into an autonomous

society. In 1984, the Institute was renamed as National Institute of Small Industry Extension

Training (NISIET). After enactment of the MSMED Act, 2006, the Institute has been renamed as

National Institute for Micro, Small and Medium Enterprises (NI-MSME), w.e.f. 11th April 2007. The

Institute has benefited not only the Indian micro, small and medium enterprises (MSMEs) but also

those in other developing countries through a plethora of activities and thus helped in promoting

self-employment and enterprise development. The Institute is constantly evolving in accordance

with the changing times, modifying its focus with the emerging needs of MSMEs and providing

solutions in the form of consultancy, training, research, and education. NI-MSME’s programmes

65

are designed to have universal relevance for successfully training the entrepreneurs to face

challenges and emerging competition in the era of globalisation.

The academic activities of the Institute are organized through centres of excellence focusing on

specific needs of the MSMEs. The Academic Council of the Institute is the central coordinating

body for benchmarking, formulation and evaluation of academic activities and programmes.

15.3 INDIAN INSTITUTE OF ENTREPRENEURSHIP (IIE), GUWAHATI

The Indian Institute of Entrepreneurship (IIE) was set up at Guwahati in 1993. It took over NI-

MSME’s NER Centre w.e.f. 1st April, 1994. The Institute is completing 14th year of its operation on

31st March 2008. During this period, the Institute has expanded its activities to a great extent

covering all facets of MSME activities. Since its establishment and up to March 2007, the Institute

has organized 1167 training programmes / workshops / seminars / meets with a cumulative

participation of 38524 persons. The Institute has obtained ISO-9001-2000 certification from the

Bureau of Indian Standards. The Institute has expanded its canvas of activities not only in terms of

geographical coverage but also in terms of diversification into various related areas of the

activities pertaining to socio-economic development. The Institute regularly organises training

programmes and undertakes research and consultancy services in the field of promotion of

MSMEs and entrepreneurship

15.4 SCHEME OF PARTNER INSTITUTIONS

In spite of the best efforts of existing national and state level entrepreneurship development institutions (EDIs), it is felt that there is a need to fill the gap in providing entrepreneurship training in the selected backward/rural areas and also organising entrepreneurship development programmes (EDPs) for persons belonging to Scheduled Caste / Scheduled Tribe / Minority / Women categories, which might have been left out of the network of existing training institutions. In order to bridge this gap, the three national-level Entrepreneurship Development Institutions have recently come out with a scheme of setting up of Entrepreneurship Development Centres (EDCs) through Partner Institutions (PIs).

Through this scheme these institutions would be collaborating with Partner Institutions for

organising training programmes and for implementing other income generating

schemes/programmes, especially in the remote and backward areas. This scheme will

enhance the outreach of these institutions and at the same time, the Partner Institutions will

also be benefited in terms of capacity building of their faculty, access to the infrastructure and

resources of national-level institutions through e-classes etc. Through this approach, these

institutions would be able to spread the entrepreneurship movement throughout the length

and breadth of the country.

66

Government of India has established several other institutions for young ignited minds to

learn entrepreneurship. Government and private institutions are coming up with many new

courses for making entrepreneurship very good carrier. Many institutions have planned

special courses for woman entrepreneurship, social entrepreneurship, growth of family

business etc.

67

CHAPTER -16

INDIAN ENTREPRENEURS

68

Dhirajlal Hirachand Ambani

(28 December 1932 - 6 July 2002)

Think big, think fast, think ahead. Ideas are no one‘s monopoly

Dhirajlal Hirachand Ambani was born on 28 December 1932, at Chorwad, Junagadh in Gujarat,

When he was 16 years old, he moved to Aden,Yemen. Initially, Dhirubhai worked as a dispatch

clerk with A. Besse & Co. Married to Kokilaben. Dhirubhai also worked in Dubai for sometime.

He returned to India and founded the Reliance Commercial Corporation with an initial capital

of Rs 15000. Dhirubhai set up the business in partnership with Champaklal Damani from

whom he parted ways in 1965.

Achievements: Dhirubhai Ambani built India's largest private sector company. Created an

equity cult in the Indian capital market. Reliance is the first Indian company to feature in

Forbes 500 list.

Dhirubhai Ambani was the most enterprising Indian entrepreneur. His life journey is

reminiscent of the rags to riches story. He is remembered as the one who rewrote Indian

corporate history and built a truly global corporate group. Dhirubhai Ambani alias Dhirajlal

Hirachand Ambani was born on December 28, 1932, at Chorwad, Gujarat, into a Modh family.

His father was a school teacher. Dhirubhai Ambani started his entrepreneurial career by

selling "bhajias" to pilgrims in Mount Girnar over the weekends.

69

After doing his matriculation at the age of 16, Dhirubhai moved to Aden, Yemen. He worked

there as a gas-station attendant, and as a clerk in an oil company. He returned to India in 1958

with Rs 50,000 and set up a textile trading company.

Assisted by his two sons, Mukesh and Anil, Dhiru Bhai Ambani built India's largest private

sector company, Reliance India Limited, from a scratch. Over time his business has diversified

into a core specialisation in petrochemicals with additional interests in telecommunications,

information technology, energy, power, retail, textiles, infrastructure services, capital

markets, and logistics.

Dhirubhai Ambani is credited with shaping India's equity culture, attracting millions of retail

investors in a market till then dominated by financial institutions. Dhirubhai revolutionised

capital markets. From nothing, he generated billions of rupees in wealth for those who put

their trust in his companies. His efforts helped create an 'equity cult' in the Indian capital

market. With innovative instruments like the convertible debenture, Reliance quickly became

a favorite of the stock market in the 1980s.

In 1992, Reliance became the first Indian company to raise money in global markets, its

highcredit-taking in international markets limited only by India's sovereign rating. Reliance

also became the first Indian company to feature in Forbes 500 list.

Dhirubhai Ambani was named the Indian Entrepreneur of the 20th Century by the Federation

of Indian Chambers of Commerce and Industry (FICCI). A poll conducted by The Times of India

in 2000 voted him "greatest creator of wealth in the century".

Dhirubhai Ambani died on July 6, 2002, at Mumbai.

70

Jehangir Ratanji Dadabhoy (J.R.D.)

(July 29, 1904- November 29, 1993 )

One of the pioneering industrialists of India, Jehangir Ratanji Dadabhoy(J.R.D Tata ) was born

in Paris on July 29, 1904. He became the chairman of the Tata Group in 1938. He saw the

assets of the Tata Group climbing from Rs 62 crore (Rs 620 million) in 1939 to over Rs

10,000crore 1990.

Under him, the Tata Group diversified into a large number of sectors from airlines to hotels,

trucks to locomotives, soda ash, heavy chemicals to pharmaceuticals, financial services, tea,

air-conditioning etc. He was not only an industrialist, but was a pioneering aviator too and

brought commercial aviation to India, besides being a patron of the arts and philanthropist.

He faced severe problems like foreign exchange crunch and severe government controls on

big business, but all these could not deter him. He was a great leader and motivator. He

encouraged entrepreneurs such as Sir Homi Mody, Russi Mody, Sumant Moolgaokar and

Darbari Seth, and many others.

He formed the Tata Administrative Service and the Tata Management Training Centre , the

Tata Institute of Fundamental Research, and was the longest serving member of the Atomic

Energy Commission. He passed away in Geneva on November 29, 1993.

71

Lakshmi Nivas Mittal

Lakshmi Nivas Mittal was born on June 15, 1950 in Sadulpur, Rajasthan, India and is presently

the CEO & Chairman of Arcelor Mittal. Lakshmi Nivas Mittal was listed in the Forbes List of

Billionaires in 2006 as the the richest Indian and the fifth richest man in the world with an

estimated wealth around of $25.0 billion and is the richest man in the United Kingdom.

Young Lakshmi Nivas Mittal spent his first years in Sadulpur, before his father moved to

Kolkata. Lakshmi graduated from St. Xavier's College, Calcutta. He founded Mittal Steel in

1976, which soon became a global steel producer with operations on 14 countries. His success

mantra lies in the identification, acquisition and turnaround of many loss making steel

companies all across the world.

In 1994, he took over the international operations of his family's steel business. Arcelor Mittal

is presently the world's largest producer of low and mid-grade steels, with operations in

Romania, Bosnia-Herzegovina, South Africa, Poland, Czech Republic, Indonesia, Kazakhstan

and many other countries. Mittal is considered to be close to the British Prime Minister Tony

Blair and has donated large sums of money to the Labour party coffers. He bought his

residence at 18-19 Kensington Palace Gardens from Formula One car racing boss Bernie

Ecclestone in 2004 for £57.1 million ($105.7 million), the highest-ever price paid for a house.

His son Aditya is the CFO(Chief Financial Officer) of Arcelor Mittal. Mr. Mittal has been

nominated as a member of the Foreign Investment Council in Kazakhstan, the International

Investment Council in South Africa, the World Economic Forum's International Business

Council, besides being a Director of ICICI Bank Limited and being on the Advisory Board of the

Kellogg School of Management in the United States.

72

Azim Premji

The software czar of India Azim Premji is the Chairman of Wipro Technologies, one of the

largest software companies in India. One of the richest Indians worldwide, Premji was born on

July 24, 1945. When he was studying Electrical Engineering at Stanford University in the

United States, he had to rush back and take over the mantle of the family's business on the

sudden demise of his father. In those days, Wipro dealt with hydrogenated cooking fats,

bakery fats, toiletries, hair care soaps, baby toiletries etc. Under Premji, the company shifted

from soaps to software.

Under his stewardship, WIPRO has grown from a US$ 2 million hydrogenated cooking fat

company to a US $1.76 billion IT- giant. Ranked among the top 100 Technology companies

globally, Wipro is also the largest BPO services provider based in India. Premji was named as

the Business Man of the Year 2000 by Business India and the Business Leader of the Year 2004

by the Economic Times. The TIME magazine listed him in 2004 as one of the 100 most

influential people worldwide. In 2003, the Fortune magazine named him as one of the 25

most powerful business leaders outside the US.

He was awarded honorary doctorates by many renowned institutions like the Indian Institute

of Technology, Roorkee and the Manipal Academy of Higher Education, besides serving on the

Prime Minister's Committee for Trade and Industry in India. He founded the Azim Premji

foundation in 2001, a not-for-profit organization to help the poor and the downtrodden. He

received the Padma Bhushan award from the Union Government in 2005.

73

Dr. Kiran Mazumdar-Shaw

Dr. Kiran Mazumdar-Shaw has entered the elite ranks of the Indian business world as India's

richest woman. Born on 23 March, 1953, she is the Chairman & Managing Director of Biocon

Ltd. She did her schooling from Bangalore and graduated in Zoology from Bangalore

Universityin 1973, after which she moved on to Ballarat University in Melbourne, Australia.

She became India's first woman Brew Master and started off as a trainee brewer in Carlton &

United Beverages in 1974, following which she worked in various positions in Kolkata and

Vadodara.

She collaborated with Biocon Biochemicals Limited, Ireland, to found Biocon India in 1978.

Initially, she faced many problems, but she was not the one to give up. Her firm has grown to

be the biggest biopharmaceutical firm in India today. Though her business interests keep her

occupied, she has found time to write a book titled 'Ale and Arty'. She tied the knot with John

Shaw, in 1998, who was working as the managing director of Madura Coats. After their

marriage, John Shaw quit Madura Coat and joined Biocon.

A very active social activist, she has been involved in various projects like the Bangalore

Agenda Task Force (BATF). She was awarded the MV Memorial Award, given in honour of the

great engineer and visionary Sir M Vishwesharaiah. Apart from this, she was awarded the

Wharton Infosys Business Transformation Award in 2006, the Padma Bhushan in 2005, the

Lifetime Achievement Award from the Indian Chamber of Commerce in 2005, the Ernst &

Young Entrepreneur of the Year Award in Healthcare & Life Sciences Category in 2002 besides

the Padma Shri in 1989.

74

Dr.Majumdar-Shaw has held several honorary and advisory positions. Among them, she was

the Chairperson and Mission Leader of the Confederation of Indian Industry's National Task

Force on Biotechnology, a member of the Prime Minister's Council on Trade & Industry in

India, Member, Board of Science Foundation, Ireland , Member, Board of Governors, IIM

Bangalore and many others. In doing so, she has set an example for other Indian women to

follow.

75

RAHUL BAJAJ

Rahul Bajaj is the Chairman of the Bajaj Group, which ranks among the top 10 business houses

in India. The Bajaj Group has diversified interests ranging from automobiles, home appliances,

lighting, iron and steel, insurance, travel and finance. Rahul Bajaj is one of India's most

distinguished business leaders and internationally respected for his business acumen and

entrepreneurial spirit.

Rahul Bajaj is an alumnus of Harvard, St. Stephen's and Cathedral. He took over the reins of

Bajaj Group in 1965. Under his stewardship, the turnover of the Bajaj Auto the flagship

company has risen from Rs.72 million to Rs.46.16 billion. Rahul Bajaj created one of India's

best companies in the difficult days of the licence-permit raj. He established factories at

Akurdi and Waluj. In 1980s Bajaj Auto was top scooter producer in India and its Chetak brand

had a 10-year waiting period.

The initiation of liberalization in India posed great challenges for Bajaj Auto. Liberalisation

brought the threat of cheap imports and FDI from top companies like Honda. Rahul Bajaj

became famous as the head of the Bombay Club, which opposed liberalization. The scooter

sails plummeted as people were more interested in motorcycles and the rival Hero Honda was

a pioneer in it.

The recession and stock market collapse of 2001 hit the company hard and it was predicted

that the days of Bajaj Auto were numbered. However, Bajaj Auto re-invented itself,

established a world-class factory in Chakan, invested in R&D and came up with Bajaj Pulsar

Motorcycle. Bajaj Pulsar is currently a leader in its segment.

Recently, Rahul Bajaj was elected to Rajya Sabha from Maharashtra

76

NARAYANA MURTHY

One of the founders of Infosys Technologies Limited; Chosen as the World Entrepreneur of

the Year - 2003 by Ernst and Young

Narayana Murthy is the Non-Executive Chairman and Chief Mentor of Infosys Technologies

Limited. He is a living legend and an epitome of the fact that honesty, transparency, and moral

integrity are not at variance with business acumen. He set new standards in corporate

governance and morality when he stepped down as the Executive Chairman of Infosys at the

age of 60.

Born on August 20, 1946, N.R. Narayana Murthy is a B.E. Electrical from University of Mysore

(1967) and M.Tech from IIT Kanpur (1969). Narayan Murthy began his career with Patni

Computer Systems in Pune. In 1981, Narayana Murthy founded Infosys with six other

software professionals. In 1987, Infosys opened its first international office in U.S.A.

With the liberalization of Indian economy in 1990s, Infosys grew rapidly. In 1993, the company came up with its IPO. In 1995, Infosys set up development centers across cities in India and in 1996, it set up its first office in Europe in Milton Keynes, UK. In 1999, Infosys became the first Indian company to be listed on NASDAQ. Today (in 2006), Infosys has a turnover of more than $ 2billion and has employee strength of over 50,000. In 2002, Infosys was ranked No. 1 in the "Best Employers in India 2002" survey conducted by Hewitt and in the Business World's survey of "India's Most Respected Company." Conducted in the same year. Along with the growth of Infosys, Narayana Moorthy too has grown in stature. He has received many honors and awards. In June 2000, Asia week magazine featured him in a list of Asia's 50 Most Powerful People. In 2001, Narayana Murthy was named by TIME/CNN as one of the 25 most influential global executives. He was the first recipient of the Indo-French

77

Forum Medal (2003) and was voted the World Entrepreneur of the Year - 2003 by Ernst and Young. The Economist ranked Narayana Murthy eighth on the list of the 15 most admired global leaders (2005) and Narayan Murthy also topped the Economic Times Corporate Dossier list of India's most powerful CEOs for two consecutive years - 2004 and 2005.

78

CHAPTER -17

DATA EXAMINATION AND

INTERPRETATION

79

Q.1 which generation entrepreneur are you?

Fig 17.1

Interpretation

Out of 50 survey samples 54% said they are first generation Entrepreneur.

30% said they are second generation entrepreneurs.

10% said they are continuing with their ancestors business.

While 6% said they are willing to become entrepreneurs.

First54%Second

30%

Third10%

Aspirning6%

80

Q.2 What is your qualification?

Fig 17.2

Interpretation

Out of 50 survey samples 40% said they are Under Graduate.

30% said they have completed their graduation.

30% said they have done Masters (M.B.A).

7% said they have done some or other technical courses.

Under graduate 33%

Graduate30%

MBA30%

Others7%

81

Q.3 what was the motivational trigger for you to

become entrepreneur?

Fig 17.3

Interpretation

Out of 50 survey samples 41% said they opted for entrepreneurship for Independence.

25% said it was their dream to be an entrepreneur.

10% said they opted for entrepreneurship because of challenge .

Market opportunity made them entrepreneurs said 10%.

12% said they opted entrepreneurship because they had some unique ideas.

And 2 % said they opted entrepreneurship because of family back ground.

Independence41%

challenge10%

Dream desire25%

Family background2%

Idea driven12%

Market oppurtuinity

10%

82

Q.4 what was the stand of your family members when you

opted for establishing enterprises?

Fig 17.4

Interpretation

Out of 50 survey samples 50% of people said their family was supportive to them when

they thought of establishing an enterprises.

30% said their family was neutral when they were struggling for becoming an entrepreneur.

10% said their family opposed their decision for opting entrepreneurs.

10% said their family was very much supportive.

Opposed10%

Neutral30%

Supportive50%

Very supportive

10%

83

Q.5 what was the source of your start up funding?

Fig 17.5

Interpretation

Out of 50 survey samples 60% said they started their enterprises by their own finance.

20% they had taken help of venture capitalist to start their business.

12% said they had taken loan from banks.

8% said angel investor has helped them to start their business.

Self financed60%Banks

12%

Venture Capitalist20%

Angel investor8%

84

Q.6 what is the biggest problem faced by you?

Fig 17.6

Interpretation

Out of 50 survey samples 6% said Infrastructure is problem for them.

14% said legal system is hurdle for them.

14 % Corruption is stopping them from achieving their goals.

20% said labor laws is problem for them.

20% said taxation system is problem for them.

26% said license raj is hurdle for them.

Infrastructure 6%

Labor laws20%

Legal system14%

Corruption14%

Taxation20%

Licence Raj26%

85

Q.7 According to you which is the best place to do

business in India?

Fig.17.7

Interpretation

Out of 50 survey samples 66% said Maharashtra is the best place for establishing enterprises

in India.

20% said Gujarat is their dream destination do to business.

8% said Delhi is the place they think is best for establishing enterprises.

6% said Bangalore is best place to do business in India.

Maharashtra66%

Gujarat20%

Bangalore6% delhi

8%

86

Q.8 would you like your son/daughter to become

entrepreneur?

Fig 17.8

Interpretation

Out of 50 survey samples 80% of said they would like their son / daughter to became

entrepreneur.

14% said they would like if their Son/Daughter do service rather than business.

6% said it will be their son/daughters decision if they want to became entrepreneur or not .

Yes80%

No14%

Their choice6%

87

Q.9 Have globalization policy affected business?

Fig17.9

Interpretation

Out of 50 survey samples 79% said yes Globalization policy has affected their business.

21% said their business is not affected by globalization policy.

Yes79%

No21%

88

Guiding tips for Aspiring Entrepreneur

Focus. Focus. Focus.

Know what you do. Do what you know.

Know what you know, what you don't know and who knows what you don't.

Act like a startup.

Learn under fire.

No one will give you money.

Don't fall victim to your own Business.

Know when to call it quits.

89

CHAPTER -18

IN CONVERSATION

90

INTERVIEW WITH PROF. DINESH AWASTHI, PART TIME LECTURER,

ENTREPRENEURSHIPS DEVELOPMENT OF INDIA, GANDHINAGAR

1) There is a lot of talk about entrepreneurship in India. Never before have we seen

people so eager to start ventures. What, according to you, is the key driver for this?

Ans: You are absolutely correct. These are very exciting times. I think several key drivers are

leading to this new thrust in entrepreneurship: a never-before economic growth; a more

challenging mindset of the youth; new first-generation role models, such as Narayana Murthy

and Sunil Mittal; the takeover of large companies abroad by Indian businessmen; a more

liberal policy framework; and a general environment that celebrates the success of

entrepreneurial initiatives. All these factors have boosted the confidence of the country’s

youth. They dream big and achieve big. Never was it so in the history of Indian business.

However, a note of caution to this enthusiasm is the findings of the

Global Entrepreneurship Monitor (GEM),which indicate that while India is at the top of the

table with an Entrepreneurial Activity Index of 17.5—as compared to Japan, which is at the

bottom with an Index of 2.5—the quality of Indian entrepreneurship is not very encouraging.

It is dominated by necessity-driven entrepreneurial intents, rather than opportunity-driven

ones.

2) What do you think are the main hurdles in the growth of entrepreneurship? How can they

be overcome?

Ans: The major hurdle I see is the lack of access to risk capital for first-generation

powerhouses. The banking system remains conservative, and the venture capital market is

still in its infancy. Hoards of brilliant but somewhat risky ideas get killed due to a lack of funds.

The government is currently promoting innovations through facilitating the setting up of

Technology Business Incubators in various engineering colleges, universities and centers of

excellence, such as IIM-A, MICA, NID and IIT-B.

But a lot more needs to be done. For instance, while the Department of Science & Technology

in India has set up around 50 incubators (which have seen decent success), China has

promoted close to 800 technology business incubators, leading to surge of high-tech

businesses in China. We need to do a lot more to facilitate the emergence and growth of first-

generation entrepreneurs who are competent and globally competitive

91

3) Can entrepreneurship be taught or is it an inbuilt quality?

Ans: Entrepreneurship can be successfully taught, just like any other discipline. But the

methodology and pedagogy has to be very different; it has to be very action-oriented. Today,

international universities are offering full-fledged courses on entrepreneurship. The Harvard

Business School, Sloan School of Management and the Babson College, U.S.A., are some of the

reputed institutions that offer entrepreneurship programs.

Of late, management institutes in India, too, have woken up to the fact that entrepreneurship

is a challenging option that presents opportunities galore. Prestigious institutions like the IIMs

and the Indian School of Business (ISB) have already started offering entrepreneurship as an

elective. It has now been proven that people aren’t necessarily born entrepreneurs;

entrepreneurs can also be created through well-conceived training.

4) I have seen a number of people starting up, but failing to make it really big. What are

the reasons for this?

Ans: Setting up and running a business enterprise encompass multiple operations that

demand certain competencies in the entrepreneur. In the absence of the right orientation, it

becomes difficult for the entrepreneur to sustain the business. Moreover, if one becomes the

CEO of an enterprise just by virtue of being born into that family, not on the basis of his/her

aptitude, knowledge and competency, the chances are high of that business going bust. So, it

is important that the successor have the right kind of knowledge and orientation before

taking over the reins of the business.

5) What is your take on the future of entrepreneurship in India?

Ans:Just amazing. The ‘90s belonged to managers; the early 21st century will belong to

entrepreneurs. Without doubt, entrepreneurs are going to witness interesting and fruitful

times in realizing their dreams. Optimism is in the air, opportunities are aplenty, and the killer

instinct among the youth is abundant. All this makes it the most ideal time to take the big

plunge. India is going to witness an unleashing of entrepreneurial spirit like never before.

6) How can entrepreneurship be further promoted in India? What is the best ecosystem

for it?

Ans: All that is needed is to facilitate the growth of entrepreneurship, unhindered. I strongly believe that

the time has come to introduce entrepreneurship into the field of education, beginning at the secondary

92

level. It’s a pity that we have all sorts of policies in India, but we have yet to develop a National

Entrepreneurship Policy. It will also be worthwhile to think of setting up an Entrepreneurship

Commission, if not a separate Ministry of Entrepreneurship, as in Malaysia.

Moreover, we need to promote innovations and facilitate the emergence of high-tech enterprises to

remain global leaders. We need a more focused and well-crafted strategy to promote entrepreneurship

education in engineering colleges and to set up incubators therein. Such an effort must be backed by

providing these innovators access to startup funds or risk capital. Our financial institutions and banks

will need to be more proactive in helping these efforts come to fruition. The media, too, will play a critical

role in creating an environment in which entrepreneurship germinates and grows

93

CHAPTER -19

CONCLUSION

94

19.1 CONCLUSION

The report attempted to provide the reader with a broad brief overview of entrepreneurship

in India in general.

The first section presented the History of entrepreneurship in India importance of

entrepreneurship as a key factor in driving growth, and of the impact entrepreneurship has on

economies of countries. Different types of entrepreneurship Additionally, it also emphasized

that entrepreneurship education has indeed a vital role in shaping attitudes, skills and culture

required to foster entrepreneurship.

The next section concentrated on entrepreneurship education in the Indian context. India has

a long record of investing in entrepreneurship education, starting from very soon after

Independence. This section traces the timeline of efforts made by government and non-

governmental players in this area.

The another section of report contain the stories of some of the great entrepreneurs of India

who have played important role in shaping Country and who are being the source of

inspiration to many young entrepreneurs.

95

CHAPTER -20

ANNEXURE

96

REFERENCES

Entrepreneurship Education in India -A PERSPECTIVE By: Priya Bahadur Report Of National Knowledge Commission By: Govt of India Entrepreneurship in India: Why & How? By:Megha Aggarwal Entrepreneurship Development in the Micro Small and and Medium Enterprise Sector in India By: Shamika Ravi Women Entrepreneurship in India By:Mrs. Savita Kumari WEBLIOGRAPHY http://economictimes.indiatimes.com/topic/Entrepreneurship http://www.atrc.net.pk/resources/entrepreneurship/entrepreneurship. http://www.ediindia.org/&q=edi&ei=YwErUfCTM4yNrge16YG4Ag&usg=AFQjCNEq4SgGf-nipTGQw1FWeC3gTxb5Ng http://www.entrepreneur.com/magazine/index.html