Entrepreneurship development

Dr. Rupasi Tiwari Principal Scientist, IVRI, Izatnagar

Todays Topics

» Need for Entrepreneurship» Types of Entrepreneurship» Functions of Entrepreneur » Entrepreneurship Development Cycle» Life cycle of a Business venture» Strategies for ED» Barriers to Entrepreneurship» Identification of Potential Entrepreneurs

Need For Entrepreneurship

Indian Scenario

» Large country with surface area- 2.4 % of world’s total» Population- 17.31% of world’s total which means one out of

six people on this planet live in India» 2nd largest human population (1,220,200,000 i.e., 1.28

billion)» With the population growth rate at 1.58%, India is predicted

to have more than 1.53 billion people by the end of 2030.» In 2020 the average Indian will be only 29 years old» HINDUSTAN to YOUNG-ISTAN (Maximum youth population)» A great human resource in the form of its huge population

But…» Barriers in tapping down this potential efficiently » The most important one: lack of skilled knowledge

in them» The youths are not well groomed. » Most of them are unskilled and hence

unemployed or under employed

Unemployment Scenario In World

» The unemployment in 2015 was estimated to stand at 197.1 million and in 2016 is forecast to rise by about 2.3 million to reach 199.4 million.

» An additional 1.1 million jobless will likely be added to the global tally in 2017

» 12.7 per cent of the global youth labour force will be unemployed in 2016

(ILO report World Employment and social Outlook-2016 (WESO)

Current Unemployment Rate is 7.97%

• unemployment scenario in India is characterised by underemployment and disguised employment and huge regional imbalances.

• Gujarat had lowest unemployment rate in the country last year, while Sikkim had the highest

(Labour bureau, 2013-2014 and www.economictimes.com)

The current unemployment rate currently stands at 7.97 percent (New BSE index , 2016) at http://www.indiatvnews.com

Trends in Agriculture Work Force in India

» India is losing more than 2,000 farmers every single day and that since 1991, the overall number of farmers has dropped by 15 million (Sainath, 2013).

» Over the past few years, rural youth have been shying away from agriculture (IFAD, 2012; Paisley, 2013).

» 263 million people (54.6%) are engaged in the agriculture sector and over half of them are now agricultural labourers (Census, 2011)

» The total agricultural workers is expected to decline to 190 million by 2022 (expected decline of 33%).

• Demand for animal food products is responsive to income changes, and is expected to increase in future

• Rural poverty is less in states where livestock contributes more to farm income eg., Punjab, Haryana, Jammu and Kashmir, Himachal Pradesh, Kerala, Gujarat and Rajasthan

• Mostly, marginal farmers and those who have quit farming are joining the livestock business.

• About 70 per cent of the livestock market in India is owned by 67 per cent of the small and marginal farmers and by the landless.

• Prosperity is now more dependent on per capita livestock ownership than on agricultural farms

• Global market for animal products is expanding fast, and there is an opportunity for India to improve its participation in global market

(Report of The working group On Animal husbandry & dairying 12th Five year plan(2012-17)

Demand of livestock products and entrepreneurship

The only way answer:

Meaning of Entrepreneur:

Derived from French word Entreprendre means “to undertake”.

Richard Carleton: “a person who buys factors of production at certain prices in order to combine them into a product with a view to sell them at uncertain prices”

Considered as a risk bearer. Ex. Farmer pays definite price for seeds, fertilizers, pesticides, labours etc but not certain at which price he could sell his produce.

J.B. Say: “one who combines the land of one, labour of another & capital of yet another & thus produces a product. By selling product pays rent, wages and interest.”

Peter F Ducker: “One who considers the changes that take place in market as an opportunity to do business. Innovation is his tool.”

Joseph Schwnpeter: “Individuals who introduce something new in the market or economy.”

Niccolo Machiavelli: “Entrepreneurs are simply those who understand that there is little difference between obstacle and opportunity and are able to turn both to their advantage.”

Definition of Entrepreneur

Analysis of Existing Entrepreneurs

» Truly new, novel and innovative ideas: 3-4%

» Rest 96%

˃ Enhancement -- improvement / refinement of features – cheaper, better, faster, more user-friendly

˃ Extension to features-- Toothbrush with a built in toothpaste,Pen with a torchligh, Mobile handset with camera, FM radio,MP3 player , Memory sticks with MP3 players, Wristwatch with a calculator

˃ Specialization -- niche’ creation Low cost airlines (Ryanair, Easyjet, Air Deccan), Boutique financial advisory services, Super-specialty hospitals

Enhancement, Extensions and Specializations

Enhancements Extensions

Specialization

Types of Opportunities

» Creation of new products» Discovery of new geographical markets» Creation or discovery of new raw materials» New methods of production and organizing

TYPES OF ENTREPRENEURS 1. Based on functional characteristics :

a. Innovative entrepreneur : such entrepreneurs introduce new goods or new methods of production or discover new markets or newly organise their enterprise. Entrepreneurs in this groups are characterized by aggressive assembly of information for trying new combination of factors.

b. Imitative or adoptive entrepreneur : these people imitate techniques and technology innovated by others. Entrepreneurs of this trait are reactive in nature and are ready to adopt to innovation happening around.

c. Fabian entrepreneur : accept change only when they feel threatened that failure to do so would result in losses. They are imitative by nature but not determinant and also lack in power.

d. Drone entrepreneur : these are entrepreneur who refuse to accept to adopt to changes adopted by the competitors. When competition increases they are pushed out of the market as it becomes uneconomical for them to carry their business further due to financial crisis.

2. Based on development : a. Prime mover : he is a person who moves in powerful sequence

of development, expansion and diversification of business.

b. Manager : these kind of entrepreneur do not initiate expansion or innovation but believe in utilizing available resource in organization and performing assigned activities to them.

c. Minor innovator : these set of entrepreneurs contribute to economic progress by finding better use for existing resources.

d. Satellite : these are set of suppliers who provide business with required resources and then move towards productive enterprise.

e. Local trading : these entrepreneur limit their products or service to local market.

3. Based on entrepreneur business :a. Manufacturing : these are set of entrepreneurs who

are into production of products that will be sold in market using resources and suppliers. E.g. Apparel, textile products.

b. Whole selling : these are set of entrepreneur who prove to be supporting hand for producers they sell in goods produced in production centre to middlemen in market.

c. Retailing : he is kind of entrepreneur one who sells goods produced by companies directly to consumers.

d. Service : these are set of qualified entrepreneurs who are specialized in particular field and render service to customers

4.Based on nine personality types of entrepreneurs

a. Improver : when entrepreneur continuously focuses on development of business then he tends to improve overall economy through development in business process.

b. Advisor : these are entrepreneurs who provide high level assistance to customers in market. Main motto of these entrepreneur is to provide vale addition information required by customers.

c. Superstar : he is kind of person who tends to attract attention through his charismatic features example CEO, MD of organization.

d. Artist : these kind of entrepreneurs are reserve by nature but are suitable for the jobs which require creativity such as web designer.

e. Visionary : visionary entrepreneur are futuristic in nature, they will have high degree of curiosity to understand changes happening in world. They prefer taking initiative and like to be in line with competitive environment.

f. Analyst : analyst entrepreneur is a person one who believes in analyzing the existing and tries to maintain status quo and bring improvement.

g. Fireball : entrepreneur running business which is composed of life, energy, optimism and one who believes in bringing change by changing mindset of customers. E.g. Ad agency.

h. Hero : these are kind of entrepreneurs who have ability to lead and run their business through challenges.

i. Healer : these provide nurturing and harmony to the business. They have an uncanny ability to survive and persist with an inner calm.

5. According to use of technology : a. Technical entrepreneur : strength of technical

entrepreneur is the technical knowledge of person. He possesses craftsmen skill in him which he develops to apply and implements to develop technical aspect of product.

b. Non technical entrepreneur : these entrepreneurs believe in coming up with new strategies rather then concentrating technical aspect of the product. His target is not to change the technology related to the product but rather increase demand for product with effective strategies by attracting customers.

c. Professional entrepreneurs : are the one who are interested in floating a business rather then managing or operating the same.

6. According to stages of development :

a. First generation entrepreneur : are those who do not possess any entrepreneurial background. They start industrial unit by the means of their own innovative skill.

b. Second generation entrepreneur : are those entrepreneur who inherit family business firm and pass it from one generation to other.

c. Classical entrepreneur : is a stereotype entrepreneur who aims to maximize his economic returns at every level consistent with the survival of the unit but with or without element of growth.

7. According to capital ownership : a. Private entrepreneur : when an individual or group of

people together set up enterprise collectively bear profit and loss of company, and adopting latest techniques in business are known as private entrepreneur.

b. State entrepreneur : refers to trading or industrial venture undertaken by the state or the government.

c. Joint entrepreneur : refers to combination of private and state enterprise running the business by sharing resources with each other.

INTRAPRENEUR Intrapreneur is the person who works

within the organization, utilizes the resources available within the organization and tries to accomplish present task in innovative and creative manner by effective utilization of available resources.

WHAT IS ENTREPRENURESHIP ?

“ The function of seeking investment & production opportunities; organising an enterprise to undertake a new production process; raising capital; hiring labour, arranging for raw material, finding a site & combining these factors of production into a going concern; introducing new techniques, new commodities, discovering new sources of natural resources & selecting top-managers for day-to-day operations.”

- By B. HIGGINS:

Status of Entrepreneurship & Higher Education

» India is ninth in the Global Entrepreneurship Monitor (GEM) survey of entrepreneurial countries

» It is highest among 28 countries in Necessity based entrepreneurship, while 5th from the lowest in opportunity based entrepreneurship.

» Entrepreneurship in India is basically necessity based. Number of individuals taking entrepreneurship as a career choice is much lower as compared to forced entrepreneurs

Strategies For Entrepreneurship development

1. Govt. , Non Govt. and Supporting institutuions for Entrepreneurship Development

2. Incubation Facility3. Educational Programmes4. Entrepreneurship Networks5. Industry –Academia/ Institute-Industry interface

Government in country has come up with various institution for supporting entrepreneurship. These are :

i) National institute for entrepreneurship and small business development ( NIESBUD )

ii) Entrepreneurship development institute in India ( EDII ) iii) National Institute of Small Industry Extension Training (NISIET)iii) Indian Institute of Entrepreneurship (IIE) iv) Small Industries Service Institutes (SISI)v) Small Industries Development Organisation (SIDO)vi) National Small Industries Corporation(NSIC) vii) National Alliance of Young Entrepreneurs (NAYE)viii) National Science and Technology Entrrepreneurship Development

Board( NSTEB)ix) Innovative entrepreneurship development centers (IEDC)x) Science and technology entrepreneurship development centres (STED)

National Institutions

Supporting Institutions

Nationalized Banks Co-operative Banks Small Industries Development Bank of India (SIDBI) Industrial Development Bank of India (IDBI) Industrial Credit and Investment Corporation of India (ICICI) State Financial Corporation (SFC) National Bank for Agriculture and Rural Development (NABARD) Khadi and Village Industries Commission.

2. Incubation facility : premiere business schools and technical institution in India have entrepreneurship centres which provide incubation facility to start up small scale unit. Incubator is facility designed to assist start up companies with respect to providing knowledge and technical assistance.

IVRI is the first Veterinary Business Incubator in the World.

1. Animal Nutrition2. Animal reproduction 3. Medicine 4. Vermi Biotechnology 5. Livestock Products Technology6. Animal Biotechnology Division7. Bacteriology & Microbiology8. Veterinary Public health9. Biological products10. Livestock Production management11. Referral veterinary Polyclinic12. IVRI Campus Bangalore 13. IVRI Campus Mukteshwar

Business Incubation Avenues“ First Veterinary Business Incubator in the world”

Research Education

Technology Transfer

“Top Incubation Center”

1.Centre for Innovation, Incubation& Entrepreneurship (CIIE) - IIM Ahmedabad Set up in 2001 Since inception CIIE has 15-odd innovations grow out of

the incubation centre in varied technologies2.Society for Innovation and Entrepreneurship

(SIE)- IIT Bombay Set up in 2004 It currently has 16 companies under its incubation

programme

“Top Incubation Center”

3.Cell for Tech Innovation, Development & entrepreneurship support- IIT Chennai Set up in 2000 Organises national level competitions, ‘Breakthrough’

(general business plan competition) and ‘Genesis’ (social entrepreneurship plan competition)

4.Society for Innovation and Development (SID) - IISc, Bangalore Set up in 2006 The investigator is given a seed capital for Rs 20 lakh a

year for two years as soft loan for the approved plan

“Top Incubation Center”

5.The SP Jain Centre for Entrepreneurship Development- SPJIMR 16-week 'Start Your Own Business' programme-a public

programme held every six months. 6.Technology Business Incubator (TBI) - BITS

Pilani In association with DST, BITS has established Technology

Business Incubator in the area of embedded systems and VLSI design back in 2004

So far, TBI has helped spawn ten companies.

“Top Incubation Center”

7.Technology Incubation and Entrepreneurial Training Society (TIETS) – IIT Kharagpur Set up in 2005, So far, the institute has been able to

incubate two companies through ‘Concipio’ over the last three years. Besides, an in house panel has helped 11-12 ventures take wing

8.Nirma Labs, Nirma University, Ahmedabad Established in 2004, Nirma Labs used to pride itself in a

three-step model for students who were interested to start their own businesses-training, incubation and funding.

Agribusiness Incubator , ICRISAT, Hyderabad

» The Agri-business Incubator (ABI) is a place where the process of starting agri-business ventures is catalysed.

» This is by supporting entrepreneurs with agri technology, consultancy, networking with management experts, venture capital funding, marketing experts and physical infrastructure.

» The incubator maximizes success by minimizing risk by offering the best opportunity.

Objectives of ABI: » Entrepreneurship Awareness » Income Generation » Policy Impact » Profitable Enterprises » Research Commercialization

More About Incubators

» NIT, Calicut» VIT, TBI, Vellore» TBI, KEC, Erode» TBI, Composites, B’lore» NDBI, Ahmedabad

DST website: www.connectone.in

“Industry-Academia Interface”

» Biocon Ltd and Indian School of Business (ISB) have launched a cell for innovation management.

» Hewlett-Packard (HP) India announced the winners of the second annual edition of ‘HP innovate 2009’. The award has been instituted to recognise and reward outstanding creative ideas of young engineering graduates in India

“Industry-Academia Interface”

» Month long ‘Igniting Minds and Ideas’-IEEE certification programme (by the Delhi based ISO certified strategy consulting firm ‘Total Solutions Incorporation’ (TSI) and ‘Total Resource Academy of India (TRAIN)’ a knowledge management , training and development organisation ) held for students of Delhi Public School (DPS), R K Puram.

ICAR Agritech Investors Meet

» The Agri-Tech Investors Meet 2013 has showcased ready-to-commercialize agri-technologies from different sectors of agriculture and their business potential. This enabled start-ups or industries to avail Technology Busineincubation support under the 22 NAIP- BPD’s in India.

“The National Entrepreneurship Network (NEN)”

The National Entrepreneurship Network (NEN) is a network of academic institutions across India performing research & developing and delivering world-class education, skill-building programs, networking activities and company-starting assistance to new, high-growth entrepreneurs.

“The National Entrepreneurship Network (NEN)”

» NEN was launched in 2003 through an India-wide selection process to select the Founding Partner Institutions to anchor this network. The five NEN Partners are: ˃ Birla Institute of Technology and Science- Pilani˃ Indian Institute of Technology- Bombay˃ Indian Institute of Management- Ahmedabad˃ Institute of Bioinformatics andApplied Biotechnology- Banglore˃ S P Jain Institute of Management andResearch- Mumbai

» Goal:˃ NEN’s goal is to launch 2,500 entrepreneurs who will create a minimum of

500,000 jobs by 2014.

» The ZTM_BPD unit of IVRI helps its registered members in the following ways:

Business Support Services Detail Project report (DPR) Market research Technology Based Entrepreneurship development

programme Market Linkages» Registration Fees: Rs. 5000 for annual Membership and Rs.

25000 for life membership

Entrepreneurship Development at IVRI

3. Educational programs : » Entrepreneurship is becoming popular

choice as an elective in MBA programs at business schools in India.

» In addition to educational programs there are some business school which provide certification programs and training to candidates intending to start up their own business.

4. Successful Entrepreneurs networks » Refers to association formed by successful

entrepreneur where by becoming member of such association fresher's will get some guidance and assistance to start up their own business.

» E.g. TiE : the indus entrepreneurs was founded in silicon valley in 1992 by successful entrepreneurs and professionals in country.

Entrepreneurship Development Cycle

Entrepreneurship Development Cycle

1. Generating entrepreneurial awareness in the community through well planned publicity.

2. Identifying and selecting potential entrepreneurs.

3. Helping them through training to raise their motivational level.

4. Improving their skills in modern management methods.

5. Developing technical competence relevant to the product selected.

6. Helping them to develop project report.

7. Making available techno-economic information and project profiles.

8. Helping entrepreneurs to select new products.

9. Developing a data bank on new products and process available to target group.

10. Creating forums for entrepreneurs to discuss their mutual problems and success.

11. Evolving new products and processes available to the local situation.

12. Public recognition of entrepreneurial excellence.

1. Registration of the unit.2. Arranging finance of any type and fixed capital on working capital.3. Helping in purchase of plant and machinery.4. Providing land, shed, power, water, etc. for establishing the unit.5. Guidance for selecting and obtaining plant and machinery and layout.6. Issue of licenses for scarce raw materials.7. Granting tax relief and other types of subsidy.8. Offering management consultancy.9. Assisting in marketing the products either through reservation or assigning

government quota purchase etc.10. Providing information related to the industry.

1. Helping in modernization / products substitution.

2. Additional financing for full capacity utilization.

3. Deferring repayment/interest depending on the situation.

4. Help and guidance in diagnosing the cause of failure or low production.

5. Modification or change in legislation/policy affecting units.

6. Product reservation/creation of new avenues for marketing.

7. Quality testing and quality improvement at low cost .

8. Creating common facilities which are not feasible in a single unit but are needed by the unit both in production and marketing organization.

Stimulatory Phase

Generating entrepreneurial awareness in the community through well planned publicity.

Identifying and selecting potential entrepreneurs. Helping them through training to raise their

motivational level. Improving their skills in modern management

methods. Developing technical competence relevant to the

product selected.

Stimulatory Phase

Developing a data bank on new products and process available to target group.

Making available techno-economic information and project profiles

Helping them to develop project report.

Developing a data bank on new products and process available to target group.

Creating forums for entrepreneurs to discuss their mutual problems and success.

Evolving new products and processes available to the local situation.

Public recognition of entrepreneurial excellence.

Support Phase

This includes all such activities that help entrepreneurs in establishing and running their enterprises. The activities in this phase may include:

Registration of the unit.

Arranging finance of any type and fixed capital on working capital.

Helping in purchase of plant and machinery.

Providing land, shed, power, water, etc. for establishing the unit.

Guidance for selecting and obtaining plant and machinery and layout.

Support Phase

Issue of licenses for scarce raw materials.

Granting tax relief and other types of subsidy.

Offering management consultancy.

Assisting in marketing the products

Providing information related to the industry.

These activities provide nurturance and remove many hurdles which are likely to cause sickness or discourage the new entrepreneurs.

Sustaining Phase

Activities in this phase are all those that help the entrepreneur in continuous, efficient and profitable running of an enterprise. The sustaining activities may include:

» Helping in modernization / products substitution.

» Additional financing for full capacity utilization.

» Deferring repayment/interest depending on the situation.

» Help and guidance in diagnosing the cause of failure or low production.

Sustaining Phase

» Modification or change in legislation/policy affecting units.

» Creation of new avenues for marketing.

» Quality testing and quality improvement at low cost .

Life cycle of anentrepreneurial venture Life cycle of entrepreneurial firms

˃ Birth stage˃ Breakthrough stage˃ Maturity stage

Each stage poses different managerial challenges and requires different managerial competencies.

Stages in the life cycle of an entrepreneurial firm

STAGES IN ENTREPRENEURIAL PROCESS

Identify an opportunity

Establish vision

Persuade others

Gather resources

Create new venture, product or market

Change/ adapt with time

Identify an opportunity : is an first step towards setting up an enterprise. Entrepreneur before identification of an opportunity should do proper market analysis about market situation, economic conditions and understand taste preference of customers.

Establish vision : is second step towards establishing an enterprise. In the process entrepreneur is required to establish long term vision and accordingly plan in mission which will serve as roadmap to achieve company vision. Objectives established by entrepreneur should be flexible in nature to adjust according to changing situation.

Persuade others : even though the idea of entrepreneurship is initiated by individual person, it requires team effort to covert an idea into reality. Entrepreneur is required to convince skilled employees to work on business plan, make investors and marketers understand credibility of business to enhance status and goodwill of company in business market.

Gather resources : next step towards entrepreneurship requires gathering of required resources to start business. Resources includes

a. Finance resources : it refers to getting required capital through financial institutions, raising capital through general public by issue of shares, raising required finance though other resources such as self investment, finance through family and friends.

b. Operating resources refers to tangible and intangible resources which includes machinery, raw material, company image, operating procedure, transportation etc.

c. Human resources refers to skilled labour force in organization and other decision in relation to human resource such as training and development of employees, decision to hire permanent or temporary employees, amount of investment to be made of human resource in organization.

d. Information resources : it is very important on part of organization to collect information about competitors, customers taste and preference, recent development in area of business company will be operating. The company has to maintain valid and accurate management information system in order to suffice to the information needs of company.

create new venture : once the entrepreneur has arranged in for resources mentioned above, next step involves creation and establishment of new venture. Which requires fulfilment of various legal formalities.

Change and adapt with time : initial plan developed by entrepreneur may not be suitable for long run. So business plan is required to be updated on regular basis to cope up with recent trends or updation in market.

A Venture’s Typical Life Cycle

Innovation

Decline

Functions of An Entrepreneur

Functions of entrepreneur

Risk taking

Innovate Analyze

opportunity

Strategies to start ventureDevelop

business plan

Acquire resources

Start venture

Develop venture

Direct activities of firm

Supervise and control

FUNCTIONS OF ENTREPRENEUR 1. Risk measurement and risk taking : risk taking

and risk measurement is the primary function of entrepreneur. Risk are not only related to success or failure of business but also involve personal and professional career forgone for the sake of opportunity.

2. Innovate/ create/ discover : entrepreneurship is innovativeness of individual and does not involve ownership. Principal function of the entrepreneur is to carry out new combinations of means of production.

3. Analyze opportunities : entrepreneur has to have opportunity seeking style where he has to evaluate credibility of various alternatives and choose suitable alternative which will prove to be profitable in future.

4. Strategies for venture : entrepreneur has to strategize long term plan for starting venture. He has to analyze the market and devise effective strategies to face present and future competition.

5. Develop business plan : business plan is written document containing details about every aspect of proposed business venture. It provides roadmap to employees working in company to attain objectives and is capable of convincing potential customers they are share holders and investors of company.

6. Acquire resources : entrepreneur has to acquire various types of resources such as men, money, material, machinery to start venture. Entrepreneur has to have suitable skills to line up required resources for the company.

7. Organize and start venture : entrepreneur should be a good organizer, he should deploy suitable resources at right place in right time required to for the company to ensure effective working of organization.

8. Develop and grow venture : it is not only important to start a venture but also company should be able to respond to changes happening in the business market which is crucial factor deciding existence of company.

9. Delegate, direct and lead the plan : during the growth stage of the company entrepreneur should provide required resources for the company and during later stage entrepreneur should come up with effective strategies to face competition and guide employees in company performing role of leader.

10. Supervise and control : for success of business it is important to have suitable mechanism in place so that entrepreneur can track overall success of the company.

ENTREPRENEURSHIP AND ITS BARRIERS

1. Macro economic environment : macroeconomic environment in which SSI operates is dependent on policies of the government in supporting private participation in business. Macro means large and it refers to various factors existing in the environment which effect the working of company. E.g. instability in government of country which leads to change in legal legislation on continuous basis.

2. Legal and regulatory environment : Formal entrepreneurship is formed by registration and licence procedure, commercial and contractual laws, real estate regulations and laws. If the administration procedure and laws are unclear, time consuming and cumbersome then it proves to be barrier in operation of SSI.

ENTREPRENEURSHIP AND ITS BARRIERS

3. Corruption and unfair competition : a corrupt can lead to unfair competition, which in turn can become major hurdle to entrepreneurship activity in country. Excessive approvals and regulations from government required by entrepreneurs may make the government officials corrupt they develop attitude to take bribe for quicker completion of work.

4. Financial obstacles : start up ventures are usually dependent upon capital to be sourced from financial institution. But it is general tendency of financial institution to be reluctant in providing finance to SSI rather then LSI as LSI given in more amount of interest compare to SSI.

5. Tax burden : in many regions government charges tax to SSI at similar rate as to LSI which SSI cannot afford to pay as the revenue generated by SSI is comparatively less.

6. Challenges in attracting talent : to generate improved quality of product in the company human resource in company should be efficient in nature. It is possible only when company is able to attract efficient employee to join company, but candidates these days expect in for higher salary which SSI cannot afford to pay because of the same SSI has to compromise with average candidates in the company.

7. Difficulty to source raw material : for timely production of product in the market it is important to have proper supply of raw material, but supplier in market give second preference to SSI in market compare to LSI as they order in bulk rather then SSI in market.

8. Expensive to access proprietary technology : as investment amount of SSI is industry is less they cannot afford to do heavy investment in technology which again has adverse effect on quality and quantity of product produced by the company.

Who is a Entrepreneur............

Identification of potential Entrepreneur............

Identifying Entrepreneurial Traits:

» Every participant must have a minimum level of eligibility for developing into an entrepreneur.

» The entrepreneurial traits are broadly classified into two groups:

» (I) Socio Personal Characteristics:» (II) Human Resource Factors:

I) Socio-Personal Characteristics:

» (i) Age: » Young people are more successful entrepreneurs because the older

people are more reluctant to take risky ventures.

» (ii) Education: » A minimum level of education is essential.

» (iii) Family background: » Family background helps in creating entrepreneurial environment

and occupational awareness for the entrepreneurs. If an entrepreneur selects a trade which is being carried in his family, it is obvious that he would be more with it.

I) Socio-Personal Characteristics:

(iv) Size of family: » The size and type of the family and status of entrepreneur in the

family are also important social personal characteristics. In a joint family, entrepreneur may command little authority but has generally a greater risk-bearing capacity as compared to nuclear family.

(v) Working hands: » A small entrepreneur has generally to depend upon family

members as he cannot afford to hire workers.(vi) Social participation: » Social participation determines the amount of influence of

entrepreneur outside his immediate family circle. The successes of entrepreneur greatly depend upon the social participation.

Human Resource Factors

(i) Achievement Motivation: » Achievement motivations include both personal achievement and social achievement.

It is the basis of entrepreneurship as entrepreneurs with high need achievement succeed better.

(ii) Risk taking willingness: » It refers to seeking challenge on one’s activity. Two persons may view the same venture

as involving different degree of risk. If both of them go for the same venture, if means that the person perceiving greater amount of risk in the venture has the higher risk-taking willingness.

(iii) Influence Motivation: » It refers to the desire for influencing other people and the surrounding environment.

The entrepreneur would need sufficient motivation to both influence them and control the means to achieve the end in order to succeed in dealing with these diverse agencies and forces.

Being an entrepreneur requires specific characteristics and skills that are often achieved through education, hard work, and planning.

Human Resource Factors

(iv) Personal efficiency: » It has been defined as the general sense of adequacy in a person. It is the

tendency of an individual to accept success or failures which are within his control. It represents the potential effectiveness present at the inner level.

» The roots of efficiency of an individual lie in his perceptions and beliefs about himself. These beliefs may be the result of an individual’s self-concept and perception of his own strength.

(v) Aspirations: » Aspirations are goal statements concerning future level of achievement. These

can be regarded as a concept of individual of his future prospects and as a form of self motivation.

(Vi) Identification of Enterprise:» Once an entrepreneur is identified, it is necessary to identify a suitable

enterprise or project for him. The enterprise must be matched with the potential entrepreneur. All the background information like his skills, experience in the field, the physical resource available, family occupation, etc. should be taken into consideration.

PerceptiveEntrepreneurs view problems as opportunities and challenges.

CuriousEntrepreneurs like to know how things work. They take the time and initiative to pursue the unknown. ImaginativeEntrepreneurs are creative. They imagine solutions to problems that encourage them to create new products and generate ideas.

PersistentTrue entrepreneurs face bureaucracy, make mistakes, receive criticism, and deal with money, family, or stress problems. But they still stick to their dreams of seeing the venture succeed.

81Human Resource Factors

Goal-settingEntrepreneurs are motivated by the excitement of starting a new business. Once achieved, they seek out new goals or ventures to try.

HardworkingEntrepreneurs need a great deal of energy to see a venture start and succeed. Yet they are not deterred by the long hours to achieve their goal.

Self-confidentEntrepreneurs believe in themselves. Their self-confidence takes care of any doubts they may have.

FlexibleEntrepreneurs must be flexible in order to adapt to changing trends, markets, technologies, rules, and economic environments.

IndependentAn entrepreneur’s desire for control and the ability to make decisions often makes it difficult for them to work in a controlled environment.

82Human Resource Factors

A Scale to identify Potential Entrepreneurs

The Entrepreneurial Orientation Inventory» Instructions: This inventory contains twenty pairs of statements.

In each pair, you may agree with one statement more than the other. You have five points to distribute between the two statements in each pair, to indicate the extent to which you agree with each of the statements. You may distribute the five points in any combination (0-5, 1-4, 2-3, 3-2, 4-1, 5-0). If you agree slightly more than statement “a” than with “b”, then assign three points to “a” and two points to “b”. If you agree completely with “a” but do not agree at all with “b”, assign five points to “a” and zero to “b”.

» You may not divide your points equally (i.e., 2.5) between the two choices. You must choose one statement with which you agree more and then distribute the points.

Examples

Q1a. How successful an entrepreneur one will be

depends on a number of factors? One’s capabilities may have very little to do with one’s success. ............

b. A capable entrepreneur can always shape his or her own destiny. ...........

Q2. a. Entrepreneurs are born, not made.

...........b. b. It is possible for people to learn to become

more enterprising even if they do not start

The Entrepreneurial Orientation Inventory Scoring Sheet

» Name ................................................................................................... Date ..........................

» Instructions: Transfer your point allocations from the inventory form onto this scoring sheet.

» Inter Locus of ControlExternal Locus of Control

» 1 b .................................1 a ..............................

» 2 b .................................2 a ..............................

Analyses

» Determine the ratios of your internal/external locus of control scores by dividing the total internal score by the total external score. Record the amount here...............................

» Internal/external ratios above 3.0 indicate a high level of entrepreneurial internality; the chances are high that such individuals will initiate entrepreneurial activities.

» Ratios below 1.0 indicate that the respondent has a more external (less entrepreneurial) locus of control orientation.

» There is a need for this type of person to become more internal in order to be able to initiate and sustain entrepreneurial activities.

» Ratios above 1.0 indicate possible entrepreneurs. The higher the ratio above 1.0, the more internal the respondent is.

Thank You