Start-up India: The drivers to innovation in promoting entrepreneurship
Innovation & entrepreneurship has been defined in many ways. Similarly, the determinants carry a wide spectrum of understanding, with a direct impact on the economic development. With time, the level of entrepreneurship varies substantially. There has been a shift on economic activities from larger to smaller firms or start-ups, which have catapulted the rate of economic development. This is the time for a start-up India.
There are no established indicators that can be generally reached to consensus, in measuring the level of entrepreneurship undertaken and so be the case of the determinants that lead to this phenomenon of being entrepreneurial. There is a connect within the demand and supply side of a business opportunity, which is integrated. At the same time, it is endowed by the role of government policies towards creating a distinctive environment. There must be visible efforts for creating a genuine atmosphere for the new ones, ‘who in normal situation would never thought of going entrepreneurial’ to those ‘willing to have a young business of their own’. The government must therefore, accelerate efforts in continuing to create a conducive environment towards entrepreneurship.
The broad framework
It has been universally accepted that mostly the policy measures for ease of doing a business are the rudimentary aspects promoting entrepreneurship. This deals with macro conditions, which are economic policies, the demographics, the decision-making process by the incumbent entrepreneur, the market and broadly the government policies. The economics and equilibrium between demand creation and supply must concert together.
On the other side connected with the individual, is the psychology with focus on motives and qualities with the potential entrepreneurs. Here comes the background of the individual from the family, culture, risk taking ability and powered by passion playing a critical role. The government can definitely endow and influence entrepreneurship.
These entrepreneurship determinants can vary from micro, meso and to macro. The microlevel is connected with the entrepreneur’s decision-making process. It also involves the process of motivation that accelerates on becoming self-employed. There are several factors that initiate to becoming self-employed. These are persona factors connected with education, skills, psychological intentions, back ground of the family, experience, financial stability etc. Secondly, the meso level identifies the links towards entrepreneurship and finally the macro level has an influence by the environmental factors.
There are pull and push factors. The opportunities for being entrepreneurial is the demand side and is being viewed from the consumers and the firm’s fore front. The more diverse is the consumer, greater is the potential to establish an enterprise. The supply side of entrepreneurship is heavily dependent on demographic composition, abilities by the incumbent entrepreneurs, cultural and competence factors that can influence entrepreneurship.
Demand side
This demand side comprises of factors like technological development, globalisation and widely the stages of economic development. They directly influence the structure of the industrial architecture and the demands thereof, creating opportunities for would be entrepreneurs. Each one is linked to each other. Technological advancements are one big inducing affect towards the intense rise in entrepreneurship. At the same time globalisation has created world markets as one singularity with seamless information, hence opportunities have been more accessible to be exploited to scale. The lesser the trade barriers, more shall be an increase in international competition and hence, increased requirements to fulfil the demands. It has a direct influence on the diversity of demand. Since people over the globe are aware on the competitive products, the need to create a distinctive advantage over its rival becomes imperative.
Economic development focuses on the issues that relate to the increased wages or a system of social security. The more the increase in wealth, it leads to more consumer needs. Thus, a specialised group of firms engage in the supply of meeting these new demands, forwarded by the uplifting of the economy. Hence, the creation of these new firms takes place. Once these new firms engaged in the supply tend to agglomerate becoming larger firms, the tendency to disintegrate may arise, while the businesses may be outsourced. These may additionally result into the creation of new firms, who shall then be responsible for either being sub contracted to lesser risky businesses or/and stimulate start-ups. On the other side, clusters are also responsible for the development process and in encouraging entrepreneurship. They are responsible for enhancing opportunities for newer ventures.
Supply Side
As said earlier, this supply side towards entrepreneurship is gauged by a typical characteristic exhibited by the population. Within this the income level disparity plays an important role. This may hence promote the choice of taking up a career as an entrepreneur. Innovation will aid to its existence and performance. Urban area takes precedence from Rural ones on account of requisite infrastructure, support mechanisms etc in promoting start-ups. These clusters could be the research centres, the higher education institutions, which are more in cities or areas that have an upper edge producing more skilled workforce with a tendency to attract new businesses. These are areas that provide signals for economic activities. The government can visibly identify these, easily.
The age and structure of the population has an influence on entrepreneurship as it is the age, which impacts to the distinction of being an entrepreneur. Most of the entrepreneurs initiate a new business between 25-40 years of age. The immigration results to those environments and places that encourage the route to being an entrepreneur. The choice of being a wealth creator enhances in such uncertainty circumstances, where the entrepreneur in study is motivated to search for unconventional means to sustenance. These immigrants may initially face criticism, but due their applied nature of taking risks, are positioned better psychologically. They being banished in their local environments are more, comparatively to the newer settlements, where they can face uncertainty but in phases of positive development. Thus, initiating a new business or a start-up may be a means of earning a living and at the same time obtain a recognition with fame.
Income disparity is yet another factor that promotes and influences entrepreneurship. On the ‘supply-side’ this disparity may push low wage earners and risk takers to plunge into entrepreneurship and on the ‘demand-side’ is the added need for a differentiated market for products and services.
Hence, for an entrepreneurial opportunity to be visible, the incumbent entrepreneur must possess requisite skills and knowledge to perceive an opportunity. It is said, adequate experience, managerial skills, knowledge of the market and combined with skills for human resource management become essential ingredients on becoming an entrepreneur. The personality traits though innate, but can be improved along the journey of entrepreneurship. However, this combination of demand and supply side can be capitalised in creating the new age entrepreneur, a campaign on Start-up India, as the drivers to innovation in promoting entrepreneurship.
