A Refereed Monthly International Journal of Management
Start-up Entrepreneurship in India: A Conceptual Framework
Author
|
Dr. Deepika Upadhyay
Associate Professor,
Dept. of Management Studies
M.D.S. University, Ajmer.
|
Ms. Aparna Sharma
Research Scholar
Dept. of Management Studies
, M.D.S. University, Ajmer.
|
Introduction
The creation of the country's wealth depends largely on its
enterprises. Millions of unemployed youth in the country
would have increased substantially. Does someone want to
be part of that group which keeps knocking from pillar to
post, checking with employment exchanges, relatives,
friends, neighbors or apply for scarce government jobs,
with so many for so little and still not able to get a job to
their liking and then settle for a second or third rate job?
Some of the renowned First Generation Entrepreneur
(FGE) like Anil Agarwal, started his business in Mumbai in
1976 as a scrap-metal dealer, now he runs a mining and
metals empire that spans many locations in the world, created wealth and jobs for many. One could be like Dhirubhai Ambani who started as a clerk in a French company in Aden (Yemen), he was not born into a business family and yet, figured in the Forbes list of the richest Asians. Laxmi Mittal, Sabir Bhatia, Narayana Murthy, and women are not behind from men with names like Kiran Mazumdar Shaw, Ekta Kapoor, Shahnaz Hussain, Hina
Shah, Tarla Dalal, Ameera Shah etc. are some other names
in the endless list of true FGEs with almost no family
heritage of business and many of them do not have a formal
degree of management or engineering and yet they have
created a benchmark, wealth, jobs, social security and new
rule to aim and aspire for.
Entrepreneurship
Anyone who runs the business is called an Entrepreneur. An entrepreneur is the core segment for the economic growth of the nation. The entrepreneur is an individual who perceives a need of the market and then coordinates manpower, capital, and material to satisfy that need. The entrepreneur is one who has the initiative, skill for innovation and who looks for high achievements, is a catalytic agent of change and works for the good of people, society, and the country at large. Entrepreneur understands the market dynamics and searches the deviation so that he/she can exploit the gap as an opportunity.
There are many definitions of Entrepreneurship. However, the crux is, 'Entrepreneurship is an attempt by Entrepreneur to take the risk and challenge the status quo and create opportunities'. The French word 'entreprendre' means to
In underdeveloped economy resources are limited and cannot be utilized for further developments of products. Developing or underdeveloped countries always have the potential for imitated products because of the huge demand in the market. Imitating entrepreneurs have great opportunities in such market and can create a number of jobs for others. According to Hoselitz, in an underdeveloped country, not to speak of the Schumpeterian innovators, even imitator-entrepreneurs had a distinct role to play.
The word “Entrepreneurship” is not to be understood in a fabricated manner, instead, it can be understood in its totality. The totality encompasses bearing on economic, sociology and cultural bearings. Besides, social responsibility is the core segment of the entrepreneurial
Anyone who runs the business is called an Entrepreneur. An entrepreneur is the core segment for the economic growth of the nation. The entrepreneur is an individual who perceives a need of the market and then coordinates manpower, capital, and material to satisfy that need. The entrepreneur is one who has the initiative, skill for innovation and who looks for high achievements, is a catalytic agent of change and works for the good of people, society, and the country at large. Entrepreneur understands the market dynamics and searches the deviation so that he/she can exploit the gap as an opportunity.
There are many definitions of Entrepreneurship. However, the crux is, 'Entrepreneurship is an attempt by Entrepreneur to take the risk and challenge the status quo and create opportunities'. The French word 'entreprendre' means to
outlook. The researcher Schumpeter argued that the
technological change and innovation of the dynamic
economy come from the entrepreneurs. He asserted that the entrepreneurs do new things or do the old things which are already done earlier in a new way. Schumpeter argued that
the agents that drive innovation and the economy are large
companies which have the capital to invest in research &
development of new products and services and deliver
products to the customer at the reasonable price. As a result,
it increases the living standard of the people.
The researcher Schumpeter found innovation as the critical element of economic change. He argued that any changes in the economy revolve around entrepreneurial activities, market power, and innovation. He sought to prove that innovation-oriented market power has the ability to
provide better results than the price competition and
invisible hand. He also argued that technology updating
and innovation sometimes create temporary monopolies
which allow abnormal profits. These abnormal profits
attract the imitators and rivals which acts as a catalyst for
firms to develop new processes and products in the market.
Entrepreneurship in the 21st century is considered as the heroes of free enterprise. Many entrepreneurs have used the creativity and innovation to develop multimilliondollar companies. These entrepreneurs have developed new products and processes by analyzing and assuming all the risks associated with these enterprises. This is evident
from the massive growth of entrepreneurship worldwide in
the field of fashion, food, pharmaceuticals, computer,
transportation, services, healthcare, and later in a big way
in e-commerce. Some entrepreneurs from yesteryears
companies including Apple, Microsoft, Dell, Hotmail,
Infosys, Amul, Wipro, Reliance, Nirma, Hero group,
Havells, Biocon, Apollo Hospitals, Aravind Eye Care
System, Jaipur Foot, Narayana Health etc. have become
great successes.
In recognizing the importance of the evolution of entrepreneurship into the 21st century, it can be reiterated that entrepreneurship is a dynamic process of vision, change, and creation. It needs proper usage of energy and passion to create and implement new ideas and to develop a creative solution. Essential ingredients including the
willingness to take calculated risks in terms of time, equity,
or career, the ability to formulate an effective venture team; the creative ability and skill to develop required resources; the fundamental skill to build a solid business plan; and, finally, the vision to recognize opportunity where others see chaos, contradiction, and confusion.
Role of Entrepreneurship in Economy can be
enumerated as:
• Provides larger employment, contribute to
productivity, value addition and income.
• Increase in per capita income increases the living standard of people.
• Initiates and constitutes a change in the structure
of business and society (leading to increment in
output which allows more wealth to be shared by
the participants.)
• Mobilizes local resources and skills.
• Innovative products in the economy (product evolution process which means the process of developing and commercializing an innovation which stimulates economic growth.)
Silicon Valley is one of the hotbeds for Entrepreneurs
located in the southern portion of the San Francisco Bay
Area in the USA. It is a place for the world's largest high-
tech companies, as well as for the start-up companies. The
term originally referred to a large number of silicon chip
innovators and manufacturers in the region, but eventually
came to refer to all high tech businesses in the area. Now it is generally known as a metonym for the high-technology economic sector in the USA. Silicon-valley can be said to be the hub or start-up ecosystem for the high tech innovation and development. Besides, it is accounted for 1/3 of all the venture capital in the USA.
Jamsetji Nusserwanji Tata (Tata Group), Dhirubhai
Ambani (Reliance Group), Jamnalal Bajaj (Bajaj Grop),
Henning Holck-Larsen, Soren Kristian Toubro (Larsen &
Toubro Group), Karsanbhai Patel (Nirma), Balvantray
Kalyanji Parekh (Pidilite), Anil Agarwal (Sterlite), Ekta
Kapoor (created and inspired the TV serials and created an
industry on its own), V.G. Siddhartha (Café Cofee Day),
Sachin Bansal and Binny Bansal (Flipkart), some Indian
“First Generation Entrepreneur”, are the leaders and wealth
creators, where every one of them thought differently about business and about life in general. Nowadays, First
Generation Entrepreneurs is often used for New
Entrepreneurs. Before setting up a new entrepreneurship an entrepreneur needs to complete various procedural and legal hurdles.
Entrepreneurship and Innovation
If innovation is a key stimulant of economic growth, entrepreneurs are synonymous with innovation – and there's no time like a downturn to take advantages of entrepreneurial thinking. Entrepreneurship has been
'embedded in the Indian genius and is a part of its tradition'.
As per renowned economist, T.N. Srinivasan, 'India has
been an entrepreneurial society …. We had the
entrepreneurial skill but suppressed it for too long a time …
and now it is thriving.' The entrepreneurial spirit is an on-
going characteristic of India's history. Particularly visible
in a number of communities is facilitated principally by the
successful use of informal 'entrepreneurial ecosystems' and
interdependent business networks.
India has had a very strong history and heritage of
innovation. In fact, India was the largest economy in the world in the 16th Century. However, in the following centuries India lost its edge in innovation. Postindependence our founding fathers tried to focus on creating institutions which could nurture innovation by making great investments for setting up institutions of higher learning like the IITs and the IIMs; R&D laboratories in areas such as atomic energy, space, agriculture, medicine, defense, etc. which are yielding great results today.
There are lots of efforts at the grassroots for innovation,
but, there is a significant challenge in scaling these
initiatives. The focus has to be on how to achieve the
requisite scale to generate impact through innovations at
the grassroots to benefit a large cross-section of people. An
Indian model of innovation which can solve the problems
of the people at the 'bottom of the pyramid'. The key at the grassroots level really is affordability, scalability and sustainability. If innovation is not affordable, people at the grassroots would not be able to buy it, use it and as a result it would not scale.
Entrepreneurship and Innovation in India occurs in 'far
more encompassing and far reaching ways than in
developed countries', and could therefore be far more
complex, 'for there is so much that needs to be done'. The
Indian attitude of 'Jugaad' is a concept of finding a solution
based on a refusal to accept defeat, and calling on initiating,
spontaneous thinking, and resolving. It means to quickly
fulfill the market demands at the lower possible prices. It
acts as an entrepreneurial trait that has been as much a part
of everyday Indian living as its rich tradition of philosophy
and speculation. Low-cost innovation ecosystem of India is
Ideal conditions demanding a new product innovation for
Entrepreneurs.
Jugaad is a colloquial Hindi-Urdu word that can mean a
simple workaround, used for a solution that bend rules, or a
resource that can be used as such, or a person who can solve
a complicated issue. This meaning is often used to signify creativity to make existing things work or to create new things with meager resources.
However, 'Hack' is very similar to 'Jugaad', as 'Jugaad' is a thought of a survival tactic whereas 'Hack' is seen as an intellectual form of art. Nowadays, Jugaad is accepted as a
management technique and currently it is well recognized
all around the world as a form of frugal engineering in
India. It also applies to all kind of creativity and out of the
box thinking which maximizes the resources for a company
and for its stakeholders.
Current Status of Entrepreneurship and Innovation in
India
With the rise in knowledge-intensified services in India the salience of Entrepreneurship has been intensified. The entrepreneurs who are not associated with traditional business communication have also begun to emerge in good number. There is no doubt that in the past twenty years the entrepreneurship has grown rapidly, visibly so, generating employment and creating wealth. The
initiatives and efforts after economics liberalization have helped to improve the climate for entrepreneurship. It included the systematic attempts to decrease the 'license
raj', more efforts to make funding more easily accessible to
entrepreneurs and other institutional support to 'techno-
preneurs'. Thus, the opportunities created by today's global
knowledge economy coupled with the 'unshackling of
indigenous enterprise', have contributed to making India a
'fertile ground' for Entrepreneurship.
According to recent surveys which were undertaken by Price Waterhouse Coopers and Goldman Sachs have estimated that by 2050 India has potential to be among world's leading economy. The economy of India can potentially gain from the characteristic feature of the
country such as a democratic open society, a strong
technology base (with capacity for leapfrogging), vibrant
capital markets which includes venture capital markets and
growing private equity, an increasingly population of youth
(50% of India is younger than 25 years), a sizeable market
with unmet needs as well as an environment of free and full
competition in the private sector. India enjoys enormous
potential for the creation of wealth with the help of
knowledge, access to finance, availability of skilled human
resources, and the ability of the State to create an enabling
environment. Therefore, it is not wrong to say that
entrepreneurship and innovation are the core elements of
the economy to generate wealth.
In terms of sectors and number of people engaged, the
Entrepreneurship 'Pyramid' is designed by the following
levels:
Level 1: It includes agriculture and other activities such as plantation, forestry, fishing, mining, crop production, livestock, and quarrying.
Level 2: It encompasses trading services such as wholesale, retail trade, restaurants and hotels.
Level 3: It encompasses traditional sectors or old economy
such as gas supply, water supply, and electricity supply.
Level 4: Emerging sectors (including knowledge intensive sectors): IT, Finance, Insurance and Business services, Construction, Community, Social & Personal Services, Supply Chain, Transport-Storage-Communication etc
Levels 2 and 3 (Trading and Manufacturing) of the above
Entrepreneurship Pyramid includes the traditional fields of
entrepreneurship whereas level 4 is a modern / emerging
sector with high growth rates. We may expect a broadening
of levels 3 and 4 in future with the activities of other levels.
Such shifting of levels can be observed by analyzing time
series data regarding new company registration depending
upon sectors. In past years the number of new companies
registered has been increased drastically.
In level 4, the number of new companies has been growing rapidly in comparison to those in other levels. It must be observed that the most of the entrepreneurial venture in Level 1 and Level 2 do not register themselves as companies and work largely as self-employed entities.
Government Initiatives for Promotion of Innovation
and Entrepreneurship
Government of India has initiated several measures that
would encourage development of innovation and
translation of the innovation into product or process or
service and at the same time to bring coherent synergy among the players. Such a synergy is also expected to address the increasing complexity of technologies that are becoming multidisciplinary. Many of the R&D initiatives of the government aim at bringing the much needed synergy through Public-Private-Partnership (PPP).
Indian economy has undergone major structural change. In
the last decade, the shares of agriculture, manufacturing
and services in the Gross Domestic Product (GDP) had
changed from 28.52%, 24.37% and 47.11% in 1997-98 to 20.83%, 26.78% and 52.39% respectively in 2007-08. The share of merchandise trade in GDP increased from 20.28%, to 38.61% over the same period. India's share in world export too registered good growth increasing from 0.5% in 1990 to 1.1% in 2006. The shift is definitely in favor of manufacturing and service sectors. Obviously, technology aided by qualified manpower resources and the
government's resolve have played an important role in
bringing about this transformation. An increase in India
share in world exports indicates that India is becoming
globally more competitive. To sustain this trend the
government is consciously brining in Research, Innovation
and Technology (RTI) to the center stage. Fortunately,
India is endowed with good R&D infrastructure with 400
Scientific and Industrial Research Organizations (SIROs),
besides several government departments and private
foundations engaged in either scientific research or its promotion. In addition, several universities and academic institutions are engaged in basic research activities. Prior to 1991, government funded R&D programs predominantly aimed at advancing the scientific knowledge. They were
executed in the publicly funded R&D and academic
institutions supported by grant-in-aid known as extramural
research funding. Whilst these efforts have laid a strong
R&D base in the country, they did not translate the research
outcomes into innovative technologies. As a result, the
country was largely dependent on the technology imports.
This led to a situation wherein the R&D investments by the
private industry remained very low. Since the liberalization
of economy and signing of the WTO, the direction of R&D
pursuits in the country has significantly changed. Innovation driven R&D has become the order of the day. Since involvement of the industry has become very important in translating the innovations into commercial viable technologies, there is a shift in the mandates of government R&D programs. Industry involvement has
become an essential factor in several programs that have
been launched in post liberalization period. They are either
based on collaborative or PPP approach.
There are some great cases of entrepreneurship and
innovation in India for example:
The concept of IT offshoring, the concept came into force in early 1990 with Indian IT companies mainly Infosys, Tata Consultancy Services, Wipro launched IT offshoring services worldwide, created millions of jobs in India. Moved up from low-end IT functions to the delivery of complete IT processes, now Offshoring industry
contributes nearly 6% to Indian GDP and the growth of IT
outsourcing was nearly 3 times higher than the growth of IT
spending in 2009.
SEWA – Self Employed Women's Association. SEWA is the first organization registered as a Trade Union for selfemployed women. SEWA's General Secretary, It is an amalgamation of the labor movement, the co-operative movement and the women's movement. Through various initiatives, SEWA has made many women self-reliant. It has a membership of 1 million women.
ITC e-choupal: It's an Information Communication
Technology (ICT) initiative for Indian farmers by Indian
FMCG giant ITC. The model eliminated the need for
middlemen in mandis from the sourcing strategy, thereby
sharing the profit with farmers. In real-time information to
the farmer was available despite their distance from
mandis. It has user base (2008) of 4 million farmers in
40,000 villages.
Narayana Hrudayalaya: They provide telemedicine
services to rural areas in India and abroad and have
performed heart surgeries for children from 73 countries,
even after providing low-cost services for the poor. The
hospital has a profit margin of 7.7%, whereas the average
for any US hospital is 6-7% with a user base of globally
70,000 heart patients.
Aravind Eye Care: High volume/low margin model has
been applied to hit the target with low-cost. The system has
better performance than many Western hospitals. Followed
the model of value adding time, where generally it would
take 30 min for one surgery Arvind Eyecare would do it in
10 minutes, developed Aravind tele-ophthalmology
network.
Dabbawallas: Literally lunch box carriers, are a centuryold network of 5,000 men who crisscross the city on foot, bicycle and local trains to transport about 2,00,000 piping hot lunches from people's homes to their workplaces. This low-tech, inexpensive and error-free system Turnover of nearly approximately USD 11.25 million per annum, best supply chain management, 100% customer satisfaction, and best time management with pricing USD 4 per month.
GE's ultra-portable Electrocardiograms (ECG Machines):
Innovation made it possible to move ECG testing from the
cardiologist's domain to ath of a general physician. Priced
1/3 -1/4th of imported ECG systems of similar quality,
battery operated and extremely lightweight for usage in
rural areas. 7500 units sold out of which 2,000 in India till
the year 2010.
Jaipur Foot: The Jaipur Foot fabricated and fitted by the Bhagwan Mahaveer Viklang Sahayata Samiti (BMVSS) costs less than USD 30 compared to USD 8,000 for a comparable prosthesis in the United States. BMVSS has also held camps in 20 countries of Asia. Africa and Latin America and fitted more than 15,000 artificial limbs over time. BMVSS supported more than 30 artificial limb fitting independent institutions in the country by transferring its technology and giving training to their personal. Jaipur
Foot was in 16 countries, now 22 countries (including
India) are covered by BMVSS in Asia, Africa, and Latin
America.
Gramateller: Low-cost rural ATM: the ATM is produced
by an Indian company along with IIT Madras faculty, given
the rich features and low power consumption of
Gramateller, it can give multinational ATM vendors a stiff
competition in emerging markets. Gramateller consumes
only 4% of the power consumed by a conventional ATM
and also has unique features like biometric identification
entrepreneurs and innovators in ever-growing list who
have contributed immensely to the country's economy and
society are Ajay Piramal (Piramal Enterprises Ltd.), Ajit
Nagral (Nu Genesis Technology Corp.; Megaware, Inc.;
Sciformix Corp.), Ashok Desai, (Mastek Ltd.), Cecil
Antony (Synergy Group), Glenn Saldanha (Glenmark Pharmaceuticals Ltd.), K. Ganesh (Tutor Vista), M.S. Sidhu, (Apara Enterprise Solutions), Sam Balsara (Madison Communications), Sanjeev Bhikchandani
(InfoEdge India Ltd.), Subhash Bagaria, (Kemwell India
Ltd.), Subramani Ramchandrappa, (Ricchcore Lifesciences), Dr. Sunita Maheshwari and Dr. Arjun Kalyanpur, (Teleradiology Solutions), Sriram Raghavan (Comat Technologies), Vijay Nair (Only Much Louder).
Start-Ups
Start-ups have been recent trend in economy over the last
few years in Indian market. This has resulted into
emergence of big firms across the country. One of the factor
leading to this emergence has been the funding by
government as well as non-government organisations.
Even aspiring entrepreneurs have managed well to acquire funding from investors. We can conclude that this is the era in which Indian market is driven by new trends with a scope of exponential growth. Various tools are also supporting entrepreneurs to study recent trends on daily basis such as google trends, google insights, Alexa internet, etc.2015 Government of India has offered facilities to evolve and guide start-up entrepreneurs and refined dynamics to a great extent.
But the major problems which are striking new businesses
are unorganised regional market, lack of transparent policy,
lack of infrastructure, knowledge, skills. The framework
need to be evolved with this dynamic environment.
Start-ups are the entrepreneurial ventures describing newly
emerged firms which are in the initial stage of its operations
where entrepreneurs convert their ideas into operations or
trading by laying down the basic structure of the business.
It is designed to rapidly develop business model. They are
generally involved in the design and implementation of the
innovative processes of the development, validation and
research for target markets.
It can be said that a start-up is a new born company built on
the basis of new technology, innovation, need of the market where in founders try to capitalize on developing a product.
given below we can conclude four types of innovation in
system:
1. Product Development / Revolutionary Innovation
2. Diversification / Architectural Innovation
3. Market Penetration / Regular Innovation
4. Market Development / Niche Creation
According to U.S. Small Business Administration Starts-
ups are the business that is typically technology oriented
and has high growth potential. Start-ups in the economy is
job destroyer as well as job creator and helps the economy
to increase national income by having different attitude
towards innovation.
The Start-up is an entity that is registered or incorporated in
India not prior to 5 years with a yearly turnover not
exceeding 25 crores in any preceding working financial
year towards deployment, innovation, development, or
commercialization of new process, products, or services driven by intellectual property or technology. Such an
entity should not be formed by splitting up or
reconstruction of a business which is already in existence.
Besides, an entity shall cease to be a start-up when its
turnover for the previous financial year has already
exceeded 25 crores or when it has already completed 5
years from the day of incorporation. This is only applicable
for Government enlisted start-up schemes in India.
In Simple Words Start up is a new born company which is
generally small and operated by few founders. Start-up
companies act as a powerful engine in economy as they
assist to grow and develop all over the world.
A startup is a young firm that is developing and growing, is
in the first stage of operation and usually has a small group
of individuals. It can be an entrepreneurial venture of a new
business which is designed to look for a repetitive and
scalable business model or temporary business
organization. This unknown business model searches for
disrupting existing markets or making new ones. It is a
dynamic business firm based on early life, technology and innovation, in which the founders have tried to keep an eye on developing a product or service for which they have a demand.
The startup is the new venture this startup generally create
employment and after growth opportunity by introducing
innovation as well as replicable models. Startups have the
potential to achieve scale growth with exclusive cash flow
with the right kind of person.
New types of business opportunities that provide growth and employment opportunities are generally considered new, dynamic, and scalable. There are big challenges for startups like cash flow and finding the right people and
increasing their abilities. According to the NASSCOM
report on digital startup, India now has about 110
incubators and accelerators in India. Incubators work with
entrepreneurs to create a business around a concept, create
a prototype and develop skills such as understanding the
market. Incubator programs can run for more than a year.
Accelerators usually offer smaller but more intense
programs to support business models, market opportunities
and production in the category of start-ups.1 (Nasscom
Report 2015)
Linking Skills to Entrepreneurship and a Startup Economy finding adequately skilled labor is an often mentioned challenge for startups today. The lack of appropriate skills is a result of mismatched education at three levels: At the
school where education methods focus on rote learning,
rather than creative thinking and analytical ability. In
vocational training, where curricula and technology used is
often out of date and not adapted to modern industry or
startups. At universities, which produces many graduates
not fit for employment. This result is a young workforce unequipped with the right skills to join the modern industry and a large cost for the private sector on training or retraining new employees.
Department of Industrial Policy and Promotion (DIPP)
working on a clear definition of Startup as it is required by
the public. Accordingly a startup is a juvenile, energetic
company built on know-how and innovation in which the
founders try to capitalize on initiating a product or service
for which they think there is a demand for it. A start-up is a
unit (Private Limited Company or Registered Partnership
Firm or Limited Liability Partnership) shall be considered a
“Startup” – it should follow in these guidelines:
- Up to 5 years from the date of its incorporation/ registration
- Its turnover for any of the fiscal years has not exceeded
INR 25 crore, and
- Is working on renewal, expansion, distribution or commercialization of new products, processes or services operated by technology or intellectual property. This unit should not be formed by the construction or reorganization of an existing trade.
- A proprietorship or a public limited company is not
entitled as startup. A one-person company, being a private
limited company is allowed to be recognized as a 'startup'.
Department of Industrial Policy and Promotion (DIPP) has created frequently asked questions on the Start-up India
Programme with the aim to address common queries,
ranging from definition of Startup to the procedure for
listing, papers required, process etc. to gain tax and IPR
benefits, the establishment of Inter-Ministerial Board etc.
Online Portal and Mobile Application for Registration are
two dedicated online for the Startups was launched by
Government. The portal includes information on various
benefits under the Startup India program. The new and
existing institution will now be able to apply for start-up
registration by filing an online application. Once
registered, the program will be able to apply for various
benefits and plans declared under the program.
The Start-up is the business enterprise which can be in any form such as company, a partnership, or temporary
organization. They are formed to search for a scalable and
repeatable business model. These newly created companies are in a phase of development and research markets. The term became popular internationally during the dot-com bubble when a great number of IT companies were founded. Because of such a background, many consider start-ups to be the only technology-based companies. But as nowadays, technology is becoming a common factor. These days, the essence of start-ups has more to do with scalability, growth, and innovativeness.
According to Steve Blank and Bob Dorf, a start-up is an
organization which is formed to search for a repeatable as
well as for scalable business model. But Paul Graham defined a start-up as a company which is formed to grow
fast rather than being a newly founded company.
Aswath Damodaran, a Professor of finance at the Stern
School of Business at New York University stated that the
value of a startup firm “rests entirely on its future growth
potential.” His definition emphasizes the stage of
development instead of the structure of the company or its
industry. Besides, he attributes few traits to a start-up which
encompasses, but are not restricted to, its lack of history and financial statements of the past, the dependency of it on private equity, and its statistically small probability of
survival.
Evolution of Start-Ups
Start-ups are in various forms and sizes. Some of the critical tasks are to build a team to secure key skills and resources to be able to conduct research and build a first Minimum Viable Product. It is the product with the highest return on investment versus risk in order to validate, assess
and develop the ideas or business concepts in addition to
opportunities to establish further and deeper analysis. This
helps to understand the business concepts as well as their
commercial potential. Generally, start-up business models are found via top-down approach or bottom-up approach.
The new companies with various parameters attract the
investors such as risks, reward, profile, and scalability.
Successful startups are more profitable and scalable in
comparison to established business because they have
better potential to grow rapidly with low-cost of investment
of capital-labor or land. Even they encounter various
unique options for funding. Venture capital firms may help
startup companies begin operations and exchanging seed
money for an equity stake. Though in practice, many
startups are initially financed by the founders themselves.
Other financing/funding opportunities include different
types of crowdfunding. The crowdfunding is the way of
financing a venture or a project by raising monetary contribution from a large number of people.
Startup Ecosystem
A startup ecosystem is developed by the people, startups in their different stages, and the different types of the organization in a location which can be either virtual or physical, interacting as a system to design a new startup companies. The startup ecosystem is supported and assisted by the increasing number of funds, angels, and assisting organizations like incubators, event platforms, co-working spaces, accelerators, and academic programs. Different organizations focus on the particular parts of the
ecosystem function and startups at their particular stage of development.
The composition of the startup ecosystem:·
investment and research i.e. Intellectual
property rights (IPR)
· Entrepreneurship Education
· Startups at various stages
· Entrepreneurs
· Startup team members
· Angel investors
· Startup mentors
· Startup advisors
· Start-up events
India is shifting towards startup-friendly culture and environment thus introduced helpful policies. To beat unemployment and arouse young generation creates an entrepreneurial ecosystem for producing more and more
business opportunities. Confederation of Indian Industry
(CII) has the vision to build a startup ecosystem which
assists industries through state and central government.
Seeking opportunities for a developing nation is quite easy
as compared to other countries. Issues arise day by day
needs a solution where new business models take birth in
affordable circumstances. A startup ecosystem involves
entrepreneur, financial and technical support system mentioning supports including incubation. It also
comprises programmes policies and research interface
with academia.
Startup and Entrepreneurship
In the last five years, India approved the tremendous
growth of technology-based startups success stories. India
has vast Industry market of micro and small enterprises
across different sectors, small technology companies
achieve great success to solve customers' problem by
providing innovation idea. According to the last financial year (2015-16) “98473 companies were incorporated in India”. Nasscom in recent study found that India has approximately 4400 startups. These startups employ approximately 85000 people with gross funding of approximately $6.5 Billion till 2018. Thus, Technology and traditional startup ecosystem have shown their quick growth in the Indian market.
Startup ecosystem India has introduced world's 3rd rank in
Global Startup Ecosystem 2015. These startup's focused on IT-enabled products and e-commerce, online payments, analytics and internet service based ventures.
The Indian Government initiative to enabling ecosystem
realizes the need to improve the facility environment and
funding to startup and has taken several initiatives which
include these three efforts:-
1. Improving entrepreneurial environment
2. Providing direct support to the basic needs of startups
3. Provide entrepreneurial skills
New policies have been announced by MSME and
Ministry of Skill Development and Entrepreneurship. The present government has announced a new startup policy
launched on January 2016. Additionally, many state
governments are implementing and drafting the startup policies and programs supporting entrepreneurship.
Startup India aims to create a strong eco-system for
promoting sustainable economic growth, large scale employment opening, innovation, and design. To
accomplish the aim of this movement the government has
come up with an “Action Plan” which will accelerate this movement. This movement will include digital/technology sector, agriculture, manufacturing, social sector, health care, education etc.
Entrepreneurial businesses are characterized by their
capacity to plan ahead, their capacity to innovate and their
willingness to take the risk to allow them to innovate and
thus develop and grow successfully. Innovation is the core
element of an entrepreneurial nosiness that ultimately
affect the business performance. The higher performance
of the start-ups will lead to the entrepreneurial success.
Start-up India Policy
The Government has initiated with Startup in India Stand-
up India. The Prime Minister announced the initiation of
“Start-up India” and” Stand-up India” during the speech of
Independence Day on August 15, 2015. The government
will encourage bank financing for start-ups and offer
monetary motivation to increase entrepreneurship and
employment creation. This proposal is expected to offer
improved support for entrepreneurship and assist in setting
up a system of start-ups in the country.
Further, the Ministry of Finance announced the need to introduce new schemes for newly created and
entrepreneurial sectors; To include the accessible parts of the country; Encourage new activities in terms of new products and processes. The Budget Speech 2014-15 promised to generate a technology hub system, a programme to assist forward and backward linkages within several value sequence and setting up incubation and
acceleration centers at the district level.
The “Startup India” action plan was launched by the Honorable Prime Minister starting of 2016. Different ministries have properly incorporated the startup mission
and have enabled ease of doing business to in support of the
articulated visualization of making it easier for the
entrepreneurs to perform business effortlessly.
According to the latest study by Nasscom, India has about
4400 startups that occupy around 85,000 employees. Total
support till 2015 in startups is estimated to be Rs. 650 crore. This excludes funding in startups incorporated before 2010, such as Flipkart, Practo, Zomato, Quickr, and Inmobi, which, if taken into account, will additionally increase the investment figure. Both environmental and traditional startups are growing rapidly in the environment. A new startup policy has been developed by the ministries and these policies go beyond economic and non-economic assistance for the network with a collaborative platform. It also includes the relation of Public, Nonprofit, Private and the Academic Sector. The Government understands the need for improving the business environment including fast approvals and other government services. Enabling implementation of new
environment, give direct support for startups and provide
the skill set for entrepreneurship.
India is the third leading startup ecosystem across the world, with three-four startups originating every day. The Hub will work as a nodal stage and will allow users to tie with the ecosystem investors, access free knowledge resources, equipment and templates on HR, legal, bookkeeping and regulatory issues and forums for discussion. More than fifty relevant Government programs has also been aggregated by the Hub. In the next phase, the platform will also aggregate schemes available across various state
governments. To provide a better customer friendly
experience, a smart intelligence platform has been
provided along with Chatbots to automatically assemble,
revise information and reply to queries. The promotional
event of the Hub was to accelerate by a symposium on
'Navigating the Startup Landscape' with a representative
from each of the key elements of ecosystem like startup, accelerator, shareholder, incubator, and mentoring communities.
Competency and Competency Mapping
The world economy is changing rapidly due to the
introduction of liberalization, privatization, and
globalization. The speed and flexibility of strategy and
decision making has become a vital part of the business to
emerging competitive challenges today. All business strives to achieve higher profits, growth, and development. Without better performance business cannot survive. Therefore, it is mandatory to investigate various factors that affect the performance of entrepreneurs. To meet the current challenge of competition and growth, the human resource has taken a prominent place. Thus, there is a continuous need for human resources to perform a better with the help of various tools and techniquesHuman Resource Development builds competency-based models Some people do assume that competence and competencies are similar
Accordingly, the economy is grappling with the task of designing successful entrepreneurs in order to meet the growing aspiration and expectation of knowledge entrepreneurs and aligning them with the needs of the business economy. The Competency Mapping and development of entrepreneurs to facilitate is one such function. Decisions related to competency design depends upon the number of organizational factors, including business needs and in-place processes. Customization is essential to the overall success of competency efforts since The present study on “A STUDY OF COMPETENCY
MAPPING OF START-UP ENTREPRENEURS IN
RAJASTHAN” is a very unique study which has not been studied earlier to my knowledge. Other studies have been made on various subjects such as Competency,
Competency mapping of employees, Start-ups, etc. but the linkage between Start-up entrepreneurs and Competency Mapping has not been studied by any other scholar. The study, therefore, makes an attempt to study the competency mapping with its cause and effect on Start-up entrepreneurs.
The economy today need focused effort on human resource
development through well-streamlined HR policies and
processes to develop uninterrupted talent and knowledge
pipeline by attracting, developing and retaining right mix
of skill, knowledge and ability in order to achieve
economies growth and expansion.
Competence: It is a skill what people can do and can be measured. It is an enabler to get quality and standardized result. It has three components:
Knowledge: collection and retention of information in
one's mind, Skill : ability to demonstrate a system and
sequence of behavior which results in something which can
be observed and analysed and Motive : it is the desire to
achieve one's goal.
policies are designed and redesigned continuously to meet these challenges.
Competency
Competency means the capability to implement skills,
knowledge, and abilities or combination of all to perform
the specific task effectively and efficiently in an
organization. It serves as the basis for skill standards that
specify the level of knowledge, skills, and abilities which
are required for success in the organization as well as
potential measurement criteria for assessing competency attainment. In simple words, it is the quality of being well qualified physically and intellectually. It facilitates the
achievement and accomplishment of specified goals.
Competencies are the characteristics of an individual.It
leads to the act of skill, knowledge, and ability. Thus,
competency must be demonstrated and observed. The
output of the person's effort with competency towards the
specific task is better than the person without it. It also
includes the capacity to transfer skills and abilities from
one area to another. It distinguished high performers.
competency includes attitude, values, skills, knowledge
abilities, aptitude, etc. essentially needed to perform the task in an organization. Competencies are required to implement so that business can perform their taskeffectively and efficiently due to dynamic change in allCompetency is further divided into four categories
Rao, and Pestonjee, D M (1981) classified resources
Human / Behavioural Competencies
The competencies task in an organization. Competencies are required to required in recruiting and selection. It motivates, utilizes implement
competencies into the following: Meta Competencies: Competencies which help
Technical / Functional Competencies: These individuals to facilitate adaptability and flexibility. It competencies (knowledge, skills, attitudes, etc.) are reflects the cognitive process of a higher order. Meta associated with technology or functional expertise to Competency includes learning, adaptability, anticipating perform a particular role easily. and creating change. It helps the gap to meet challenges.
Conceptual Competencies: The competencies which are
Competency Mapping
Competency Mapping is the process of identifying
competencies (knowledge, skills,and abilities) of the
individual or organization and incorporating them
throughout the various processes (job evaluation, training
and development programmes) of the organization.
Competency Mapping helps the employees by providing
them the necessary opportunity to chalk their career
development in the Organization. It breaks given role into
finer constituent tasks and helps to identify needed
competencies to perform optimally. It helps to identify
strengths and weaknesses of an individual or organization
so that they can apply their competencies systematically to
accomplish their tasks. It involves documentation of all
competencies so that proper record can be maintained for
further assessment.
It has been observed that hard work, dedication and
intelligence are not only the main factors to make an
entrepreneur successful. There are other factors too which
HR processes like talent induction, appraisals, training and
development yields good quality results.The benefits of
Competency Mapping Approach:
The higher level of productivity: Competency mapping
helps to increase the productivity of an individual as well as
of the economy.
Improved work performance: By analysing the deviation
between the current and required performance, various
competencies can be developed which in return helps to
improve work performance.
Training that is focused on organizational objectives.
help an individual to excel in his/her profession. Successful
entrepreneurs are generally aware of such qualities and
thus possess to do their work effectively. They make full
utilization of their knowledge and train their subordinates
too to achieve their long term targets. Organizational
psychologists have refined this understanding and
converted it into a structural and formal process known as
Competency Mapping. It has emerged as the most powerful
technique in finding the right qualities as well as in the
development of such qualities. Thus, Competency
Mapping can be defined as a process through which one
assesses and determines one's strengths as an individual
and in some cases, as part of an organization.Competency
Mapping studies two dimensions: Emotional intelligence
and strengths of the individual in areas like team structure,
leadership and decision making.
Competency Mapping can be tailored according to the type
of organization as well as according to the need of
environment. As a result of competency mapping, all the
Competency Mapping of individual gives crystal clear
sense of their own competencies which help him/her to
compare with the ones required for a position of work or
interest. It helps to facilitate growth. It encourages career
development, training, performance management,
succession planning, etc.
Competency Mapping process is formulated to measure
and identifying and assessing individual and group
performance as it is related to the organization and its
stakeholders. Though level of awareness is growing, still
competency based Human Resource remains unexplored
in many organizations. Various Human Resource
departments are struggling to formulate good framework
for their organization.
Competency Mapping Process
Steps of Competency Mapping are as under:
1) Job Analysis: Job Analysis means to collect all the
necessary information related to particular job so that all
the duties and responsibilities can be determined according
programmes are conducted after evaluating entrepreneurs on the basis of key behaviour analysed during mapping of competencies. This will ensure to develop individual to be successful entrepreneur in this dynamic economy.
Techniques adopted for Competency Mapping are numerous as for as human resource management is concerned. There can be described below:
The organizations implement competency mapping to
match the talent of personnel and the capabilities with
particular job tasks. There are various techniques which are
involved in conducting a job analysis to figure out the core
skills and behavioral pattern which are needed to perform
the role, drafting a job description depending upon the key
competencies and aligning the resources to meet the competency requirements. The competency mapping techniques make it easier for businesses to assess performance and to enhance productivity. The most common approaches include:
1. Written Exercise
2. Assessment Centre
3. 360 degree
4. In basket
5. Role playing
6. Management games
7. Group discussion
8. Psychometric tests
9. Interviews
10. Self-assessment
11. Peer assessment
12. Behavioural interview
13. Behavioural description interview
Neuroticism
Like Human Resource Management uses the Competency
Model for HR activities, it can also be used for developing
start-up entrepreneurs. It details out as below:
Big Five Personality Traits Model (Five Factor Model)
Openness to experience: It shows creativity, curiosity, and
preference for innovative and new. It shows the extent to
which a person is imaginative or independent. An
individual who seeks high openness is said to pursue self-
actualization.
Conscientiousness:It shows the tendency of organization
and dependability which leads to self-discipline. People
who seek a high level of conscientiousness tend to be
planned and more organized. Low conscientiousness
shows a higher flexibility and spontaneity but can also be
appeared as lack of reliability.
Agreeableness: It is the characteristic of cooperative
rather than antagonistic towards others. An individual who
has a higher level of agreeableness is seen to be submissive
in comparison to the individual who has a lower level of
agreeableness. The lower level of agreeableness tends to be
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