Entrepreneurship on S&T
I am taking a seminar with the Human Resource Development Centre (HRDC) of the CSIR at Gazhiabad next week. This seminar will be primariliy to interact with a group of technocrats from Mangolia. HRDC is providing a training service on Research and Development. My part is to discuss with them about S&T Entrepreneurship. In this connection I was asked to preapre a short study material on the subject. Here it is:
An Essay on Entrepreneurship
Dr AK Sengupta
Senior Consultant, Consulting Engineering Services (India) Limited
Formerly Professor, International Management Institute, New Delhi
How does one define the term “Entrepreneurship”? One of the most useful definitions, from the points of view of an economist, is as follows:
Entrepreneurship is the practice of starting new organizations or revitalizing mature organizations, particularly new businesses, generally in response to identified opportunities. It can be defined as a creative human act involving mobilization of resources from one level of productive use to a higher level.
An entrepreneur is therefore someone who is an action oriented person with unusual foresight to recognize potential demand for goods and services. He/she has the ability to conceive novel applications from available resources, and to transform existing or latent demand into supply. Entrepreneurs are truly change agents who influence society by creating new enterprises, and at the same time get influenced by society to recognize its needs and fulfill such needs by astute management of resources.
According to Joseph Schumpeter, the Nobel Prize winning economists of early 20th century, an entrepreneur is a person who is willing and able to convert a new idea or invention into a successful innovation. He/she often brings about “creative destruction” across markets and industries, whereby established ways of doing things are destroyed by creating new and better ways of getting things done and new products and business models come into being. Entrepreneurs are essentially innovators, who through new and unusual combination of resources and methods of commerce satisfy customer wants and generate wealth, profit or societal good. They are achievement oriented individuals driven to seek new challenges and new accomplishments, and often are the engines of industrial growth. They are people who start new ventures with a vision of growth, seek constructive change, have the persistence to gather essential resources require and to overcome obstacles, and use their energy to achieve unusual results. One can make a long list of “traits’ or characteristics associated with entrepreneurship. Entrepreneurs are called “risk takers” (not gamblers), high achievers, (“failures” do not deter them), persistent innovators, dynamic leaders, and inspired energetic single-minded passionate individuals. According to Peter Drucker, the management guru, entrepreneurship is primarily about taking calculated risk. The behavior of the entrepreneur reflects a kind of person willing to put his or her career and financial security on the line and take risks in the name of an idea, spending much time as well as capital on an uncertain venture.
The human civilization has reached where it is today because of the contributions from millions of entrepreneurs who lived throughout the ages in all parts of the world. The earliest reference to entrepreneurial spirit can perhaps be traced back to circa 10000 BC when hunter gatherers got transformed into “agriculturist” communities. The early civilization in India or China thrived surely by the inspired leadership of artisans, farmers and trader. The European renaissance in the middle ages owes a lot to entrepreneurial activities of the artists, scientists and explores. The rapid industrialization in the nineteenth and twentieth century in Europe or Americas would not have happened without the unstoppable “never-say-die” spirit of the entrepreneurs in the farmlands, factories, universities, and scientific and business establishments in these countries.
The phenomenon of entrepreneurship has however not been monopolized in only a few countries. Across the globe growing number of people are realizing dreams of owning and operating their own enterprises. These businesses have been introducing innovative products and services, pushed back technological frontiers, created new jobs and employment, opened up markets (domestic as well as foreign), and in the process provided their founders with the opportunities to do what they enjoy most.
The interest in entrepreneurship has never been higher than it is now, at the beginning of the twenty first century. According to a recent survey, nearly 18% of adult Indians, 12% of adult Chinese and 11% of Americans are working towards starting their own enterprise/business or are already self employed and involved in some entrepreneurial activity. Fuelled by the downsizing trend among large corporations during the last few decades of the 20th century, there has been a surge of global entrepreneurship. Even thirty years ago, competitive conditions in the market place favored large organizations with complex hierarchy and layers of management. But advances in technology and knowledge led to conditions that demanded higher productivity from the capital employed, and companies had to shed manpower and improve efficiency. However, the same technological advancement also made it possible to create small companies that can cope with the pace of change, exploit market opportunities, adapt and adjust to new and modern technologies, and operate with competitive advantage. How do the small companies compete against giant corporations? According to a Harvard Chair Professor of Entrepreneurship, the answer is “because while the large corporations are studying the consequences, the entrepreneurs are jumping in and changing the world”.
The surge of entrepreneurial activity is demonstrated by the growth of small and medium sector enterprises (SMEs) across the world. In the USA, it is estimated that between 3 and 4 million new businesses are started every year. In India there are more than 12 million small businesses in operation that contribute to more than 40% of the nation’s Gross National Income (GNI). A large majority of these enterprises are based in the realm of Science and Technology (S&T). The march of S&T started in the nineteenth century in Europe, rapidly progressed in the post second world war era and got accelerated in the post 1970 decade in the myriad fields of manufacturing, mining and metallurgy, chemical engineering, biological an medical sciences, computer sciences, communication technologies and so forth. Many corporations that are industry giants today began very modestly as entrepreneurial ventures by individuals engaged in these S&T fields. To cite a few examples, Intel Corporation in Micro-electronics, Sun Micro-systems in electronic workstations, and Microsoft in software all began as start up companies in America. Similarly, in India we have examples of successful companies like Reliance Industries, WIPRO, Infosys, and Biocon. Many new fields of S&T which made debut only a few years ago, like bio-informatics, genetic engineering, 3G mobile communication, have already matured to a great extent and businesses worth billions of dollars have got established. As the S&T sophistication gets enhanced, opening up possibilities of newer technology innovations, the customer expectation and demands also are expanding, and consequently market opportunities emerge for starting new start ups.
All entrepreneurial endevours begins with an innovative idea which may be conceived at the workplace, out of experience, or observing and identifying a societal want, or through research and development efforts in laboratories, or university/college. Entrepreneurship is about translating the creative idea into a useful application, through a process of nurturing, developing, rationalizing, planning, implementing and finally commercializing (bringing it into reality for people or customers to accept). This is the innovation path all entrepreneurs have to traverse. For science and technology entrepreneurs, this process can often be facilitated in Incubators located in academic or scientific institutions, especially for the first generation S&T entrepreneurs, through providing initial working space, mentoring support from experts, networking, seed finance and so forth. Such Incubators have become quite common during the last twenty years or so in the United States, Europe, China, India and many other developed and developing countries.
Not all entrepreneurial initiatives aim only at generating wealth and profits for the individual promoters. Apart from commercial enterprises and independent businesses, there are two other categories of entrepreneurship, namely corporate entrepreneurship and social entrepreneurship. Corporate Entrepreneurship is concerned with those employees of an established corporation who exhibit spirit of entrepreneurship while engaged with specific tasks and responsibilities in the corporation. Corporate entrepreneurs, also known as Intrapreneurs, are those creative employees who combine the resources of the corporation in unusual ways to create innovative new products or services. An Intrapreneur has a knack to identify business opportunity before anybody else within or outside the corporation does, and often has the knowledge or skills to get things moving. He/she not only helps the company to become more productive and / or to introduce new products or services, and in the process ensures increased business and profits, it often leads to generating new divisions, subsidiaries or even new “spin off” companies outside the parent organization. It is very important for the management of companies to identify, encourage and nurture such intrapreneurs among their employees.
Social entrepreneurship involves application of entrepreneurial skills for the public good rather than for private profit, and using imagination to identify new opportunities and determination to bring them to fruition. This term is used to describe forms of activity and people who are socially innovative, or 'enterprising' in the non-economic sense of the word. Hence, the label 'social entrepreneur' has come to apply to any individual seeking to effect social change through creative and innovative ways. Some well known and universally respected social entrepreneurs are Vinoba Bhave (Founder of the “Bhoodan” Movement in India), Mary Montessori (who developed new approach to child education), Mother Theresa (founder of the Missionaries of Charity), Florence Nightingale (who propagated the modern concept of nursing), Mohammad Yunus (Founder of “Grameen” Bank in Bangladesh and proponent of Micro-credit) and Verghese Kurien (the first CEO of AMUL Milk Project and promoter of the White Revolution in India).
Presently the world is passing through an era of great global depression, when older big corporations are contracting, and people in large numbers are finding themselves out of employment. This also is the time for the spirit of entrepreneurship to flower. With advancement of internet technologies and e-commerce, and prospect of large investment in environment friendly energy sources, infrastructure, education and health sector industries in most countries, extensive scope for entrepreneurial opportunities are also likely to open up. It has been said that the next wave of growth and prosperity in the world will come about on the shoulders of entrepreneurs around the world, both in developed and developing nations.
References
David H Holt, Entrepreneurship: New Venture Creation, Prentice Hall India, 2007
Kaplan, Patterns of Entrepreneurship, Wiley & Sons, 2001
Zimmerer & Scarborough, Essentials of entrepreneurship and small business management, Prentice Hall, India,2006
Joseph Schumpeter, Capitalism, Socialism, and Democracy, 3rd edition, Harper and Row, New York, 1950
Peter Drucker, "Entrepreneurship in Business Enterprise", Journal of Business Policy, vol 1, 1970.
Dr AK Sengupta
Senior Consultant, Consulting Engineering Services (India) Limited
Formerly Professor, International Management Institute, New Delhi
How does one define the term “Entrepreneurship”? One of the most useful definitions, from the points of view of an economist, is as follows:
Entrepreneurship is the practice of starting new organizations or revitalizing mature organizations, particularly new businesses, generally in response to identified opportunities. It can be defined as a creative human act involving mobilization of resources from one level of productive use to a higher level.
An entrepreneur is therefore someone who is an action oriented person with unusual foresight to recognize potential demand for goods and services. He/she has the ability to conceive novel applications from available resources, and to transform existing or latent demand into supply. Entrepreneurs are truly change agents who influence society by creating new enterprises, and at the same time get influenced by society to recognize its needs and fulfill such needs by astute management of resources.
According to Joseph Schumpeter, the Nobel Prize winning economists of early 20th century, an entrepreneur is a person who is willing and able to convert a new idea or invention into a successful innovation. He/she often brings about “creative destruction” across markets and industries, whereby established ways of doing things are destroyed by creating new and better ways of getting things done and new products and business models come into being. Entrepreneurs are essentially innovators, who through new and unusual combination of resources and methods of commerce satisfy customer wants and generate wealth, profit or societal good. They are achievement oriented individuals driven to seek new challenges and new accomplishments, and often are the engines of industrial growth. They are people who start new ventures with a vision of growth, seek constructive change, have the persistence to gather essential resources require and to overcome obstacles, and use their energy to achieve unusual results. One can make a long list of “traits’ or characteristics associated with entrepreneurship. Entrepreneurs are called “risk takers” (not gamblers), high achievers, (“failures” do not deter them), persistent innovators, dynamic leaders, and inspired energetic single-minded passionate individuals. According to Peter Drucker, the management guru, entrepreneurship is primarily about taking calculated risk. The behavior of the entrepreneur reflects a kind of person willing to put his or her career and financial security on the line and take risks in the name of an idea, spending much time as well as capital on an uncertain venture.
The human civilization has reached where it is today because of the contributions from millions of entrepreneurs who lived throughout the ages in all parts of the world. The earliest reference to entrepreneurial spirit can perhaps be traced back to circa 10000 BC when hunter gatherers got transformed into “agriculturist” communities. The early civilization in India or China thrived surely by the inspired leadership of artisans, farmers and trader. The European renaissance in the middle ages owes a lot to entrepreneurial activities of the artists, scientists and explores. The rapid industrialization in the nineteenth and twentieth century in Europe or Americas would not have happened without the unstoppable “never-say-die” spirit of the entrepreneurs in the farmlands, factories, universities, and scientific and business establishments in these countries.
The phenomenon of entrepreneurship has however not been monopolized in only a few countries. Across the globe growing number of people are realizing dreams of owning and operating their own enterprises. These businesses have been introducing innovative products and services, pushed back technological frontiers, created new jobs and employment, opened up markets (domestic as well as foreign), and in the process provided their founders with the opportunities to do what they enjoy most.
The interest in entrepreneurship has never been higher than it is now, at the beginning of the twenty first century. According to a recent survey, nearly 18% of adult Indians, 12% of adult Chinese and 11% of Americans are working towards starting their own enterprise/business or are already self employed and involved in some entrepreneurial activity. Fuelled by the downsizing trend among large corporations during the last few decades of the 20th century, there has been a surge of global entrepreneurship. Even thirty years ago, competitive conditions in the market place favored large organizations with complex hierarchy and layers of management. But advances in technology and knowledge led to conditions that demanded higher productivity from the capital employed, and companies had to shed manpower and improve efficiency. However, the same technological advancement also made it possible to create small companies that can cope with the pace of change, exploit market opportunities, adapt and adjust to new and modern technologies, and operate with competitive advantage. How do the small companies compete against giant corporations? According to a Harvard Chair Professor of Entrepreneurship, the answer is “because while the large corporations are studying the consequences, the entrepreneurs are jumping in and changing the world”.
The surge of entrepreneurial activity is demonstrated by the growth of small and medium sector enterprises (SMEs) across the world. In the USA, it is estimated that between 3 and 4 million new businesses are started every year. In India there are more than 12 million small businesses in operation that contribute to more than 40% of the nation’s Gross National Income (GNI). A large majority of these enterprises are based in the realm of Science and Technology (S&T). The march of S&T started in the nineteenth century in Europe, rapidly progressed in the post second world war era and got accelerated in the post 1970 decade in the myriad fields of manufacturing, mining and metallurgy, chemical engineering, biological an medical sciences, computer sciences, communication technologies and so forth. Many corporations that are industry giants today began very modestly as entrepreneurial ventures by individuals engaged in these S&T fields. To cite a few examples, Intel Corporation in Micro-electronics, Sun Micro-systems in electronic workstations, and Microsoft in software all began as start up companies in America. Similarly, in India we have examples of successful companies like Reliance Industries, WIPRO, Infosys, and Biocon. Many new fields of S&T which made debut only a few years ago, like bio-informatics, genetic engineering, 3G mobile communication, have already matured to a great extent and businesses worth billions of dollars have got established. As the S&T sophistication gets enhanced, opening up possibilities of newer technology innovations, the customer expectation and demands also are expanding, and consequently market opportunities emerge for starting new start ups.
All entrepreneurial endevours begins with an innovative idea which may be conceived at the workplace, out of experience, or observing and identifying a societal want, or through research and development efforts in laboratories, or university/college. Entrepreneurship is about translating the creative idea into a useful application, through a process of nurturing, developing, rationalizing, planning, implementing and finally commercializing (bringing it into reality for people or customers to accept). This is the innovation path all entrepreneurs have to traverse. For science and technology entrepreneurs, this process can often be facilitated in Incubators located in academic or scientific institutions, especially for the first generation S&T entrepreneurs, through providing initial working space, mentoring support from experts, networking, seed finance and so forth. Such Incubators have become quite common during the last twenty years or so in the United States, Europe, China, India and many other developed and developing countries.
Not all entrepreneurial initiatives aim only at generating wealth and profits for the individual promoters. Apart from commercial enterprises and independent businesses, there are two other categories of entrepreneurship, namely corporate entrepreneurship and social entrepreneurship. Corporate Entrepreneurship is concerned with those employees of an established corporation who exhibit spirit of entrepreneurship while engaged with specific tasks and responsibilities in the corporation. Corporate entrepreneurs, also known as Intrapreneurs, are those creative employees who combine the resources of the corporation in unusual ways to create innovative new products or services. An Intrapreneur has a knack to identify business opportunity before anybody else within or outside the corporation does, and often has the knowledge or skills to get things moving. He/she not only helps the company to become more productive and / or to introduce new products or services, and in the process ensures increased business and profits, it often leads to generating new divisions, subsidiaries or even new “spin off” companies outside the parent organization. It is very important for the management of companies to identify, encourage and nurture such intrapreneurs among their employees.
Social entrepreneurship involves application of entrepreneurial skills for the public good rather than for private profit, and using imagination to identify new opportunities and determination to bring them to fruition. This term is used to describe forms of activity and people who are socially innovative, or 'enterprising' in the non-economic sense of the word. Hence, the label 'social entrepreneur' has come to apply to any individual seeking to effect social change through creative and innovative ways. Some well known and universally respected social entrepreneurs are Vinoba Bhave (Founder of the “Bhoodan” Movement in India), Mary Montessori (who developed new approach to child education), Mother Theresa (founder of the Missionaries of Charity), Florence Nightingale (who propagated the modern concept of nursing), Mohammad Yunus (Founder of “Grameen” Bank in Bangladesh and proponent of Micro-credit) and Verghese Kurien (the first CEO of AMUL Milk Project and promoter of the White Revolution in India).
Presently the world is passing through an era of great global depression, when older big corporations are contracting, and people in large numbers are finding themselves out of employment. This also is the time for the spirit of entrepreneurship to flower. With advancement of internet technologies and e-commerce, and prospect of large investment in environment friendly energy sources, infrastructure, education and health sector industries in most countries, extensive scope for entrepreneurial opportunities are also likely to open up. It has been said that the next wave of growth and prosperity in the world will come about on the shoulders of entrepreneurs around the world, both in developed and developing nations.
References
David H Holt, Entrepreneurship: New Venture Creation, Prentice Hall India, 2007
Kaplan, Patterns of Entrepreneurship, Wiley & Sons, 2001
Zimmerer & Scarborough, Essentials of entrepreneurship and small business management, Prentice Hall, India,2006
Joseph Schumpeter, Capitalism, Socialism, and Democracy, 3rd edition, Harper and Row, New York, 1950
Peter Drucker, "Entrepreneurship in Business Enterprise", Journal of Business Policy, vol 1, 1970.
Labels: Entrepreneurship, Innovation
posted by Arya Kumar Sengupta @ 2:12 AM
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