“The best way to predict

the future is to create

it.”- Peter Drucker

ENTREPRENEURSHIP

The Next Big Thing!

Amit Singh Post Graduation Programme(PGP) Indian Institute of Management Ahmedabad p13amitsingh@iimahd.ernet.in 8758978192

© Amit Singh

Amit Singh, IIM A

Contents

Abstract ...................................................................................................................................... 2

Introduction ............................................................................................................................... 3

Can Entrepreneurship be defined? ............................................................................................ 3

Entrepreneurship-Innovation-Creativity ................................................................................... 3

Disruptive innovation and Entrepreneurship ............................................................................ 6

Different forms of Entrepreneurship ......................................................................................... 6

Intrapreneurship ........................................................................................................................ 7

Social Entrepreneurship ............................................................................................................. 8

Corporate Social Entrepreneurship: A New Paradigm .............................................................. 9

Importance of Entrepreneurship in today’s world .................................................................. 10

Present status of entrepreneurship in India ............................................................................ 11

Conclusion ................................................................................................................................ 12

References ............................................................................................................................... 14

Amit Singh, IIM A

Abstract

Entrepreneurship is difficult to define as its meaning keep evolving with time. Few

decades back, it was meant to be a small business venture which has now changed to

startup companies which can make big. But the basic values and attributes which define

the spirit of entrepreneurship remain unchanged. The entrepreneurs are characterized

by self-belief, passion, hard work, perseverance, determination and flexibility. In

order to survive, an entrepreneur must continually innovate. Innovation and

Entrepreneurship are tightly intertwined. Entrepreneurship happens when there is a

marriage among innovation, creativity and risk taking ability. Disruptive innovation has

lately caught the fancy of world and is much talked about after the success of products

like smart phones, WhatsApp and social media. Creativity helps in finding new

innovative solutions to the old/new problems while the spirit of entrepreneurship helps

in crafting that solution into a sustainable business proposition. Many of us have a

perception that entrepreneurship means starting your own venture. Though it is

partially correct but it is not just limited to that. Entrepreneurship is a spirit that

defines a person. It is value system inside a person which makes him/her do

entrepreneurial activities. There are evolving concept of Intrapreneurship, Social

entrepreneurship, Corporate Social Entrepreneurship and Social Intrapreneurship. The

importance of entrepreneurship in this interconnected and dependent world cannot be

more emphasized. Earlier an innovation happened in some part of world would require

decade to get transfer to rest of the world. But now it is not the case. Because of

information technology revolution, fruits of innovation can be shared with just a click of

mouse around the world. This has created a lasting impact not only on individual but

also on society. Converting youth from job seekers to job creators can be regarded as

the most fundamental change it has brought in our society. At present, the Indian

entrepreneurship scene is fast developing. Entry barriers for new entrepreneurs

have reduced to insignificant level. Capital and mentorship is readily available. The

incubation centres across the country have become the core around which other factors

of entrepreneurship revolve. Entrepreneurship is the next big thing!

Amit Singh, IIM A

“The happiest time in an man’s life is when he is in red hot pursuit of a dollar with a

reasonable prospect of overtaking it” – Henry Wheelar Shaw

Introduction

There have been numerous attempts in the past to describe what entrepreneurship is

and how it affects our economy and society at large. A number of studies exist which

focus on the individual characteristics and personality traits of entrepreneurs largely

within the context of small businesses. Over the past decade, the success of internet and

technology firms like Google, Facebook, Yahoo and now Flipkart, Amazon and Snapdeal

etc. have changed the whole meaning of entrepreneurship. Now entrepreneurship is

just not limited to small businesses, rather it is fastest way to become big in the market.

Can Entrepreneurship be defined?

“The entrepreneur always searches for change, responds to it, and exploits it as an

opportunity”- Peter F.Drucker, Innovation and Entrepreneurship: Practice and Principles.

The study of entrepreneurship is an unfolding journey which is progressively

elaborative. The more information we acquire, the more we learn about the

entrepreneur. But even as we learn more we left with an unclear picture of what makes

up this dynamic individual who creates national economics. This is not to say that there

are no workable definitions.

There are numerous authors who have tried to define entrepreneurship in their own

way by understanding the psychological and sociological underpinning that an

entrepreneur has. The core of entrepreneurship, both individual and corporate, is

this pursuit of opportunity. Entrepreneurs more or less differ among themselves but

successful entrepreneurs are characterized by self-belief, passion, hard work,

perseverance, determination and flexibility. Entrepreneurship embrace an

incremental innovation process which eventually triggers an entrepreneurial event.

Entrepreneurship-Innovation-Creativity

One other way of looking entrepreneurship is to recognize that entrepreneurship is

enabled by (a) the current or potential existence of something new (an innovation) (b)

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which may have been developed by new ways of looking at old problems (creativity)

(c) or the lessened capability of prior process or solutions to respond effectively to new

solution parameters brought on by new or emerging external conditions

(environmental change). The role played by change, innovation and creativity is

critical to understand entrepreneurship.

It is widely accepted that at the heart of any successful business is a great idea.

Some seem so simple we wonder why nobody thought of them before. Others are so

revolutionary that we wonder how anybody could’ve thought of them at all. In business

language, a successful idea takes the form of a business model. Idea generation is a

part of creativity. Creativity is defined as creation of a new idea by the art of

imagination.

Source: www.brandadventure.co.uk

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A creative mind can come up with new or improved ideas which when innovated

may lead to public use. This innovated use when exploited commercially giving

the fruit of innovation which drives the business lead to an entrepreneurship

venture. An individual who leads and manages this entrepreneurial process is

called an entrepreneur.

He is a person who is oriented towards the future that has a vision and develops ideas,

tries to predict events and changes and use them in an adequate manner, is able to

recognize the opportunity that others have not noticed or have not given importance to.

Economists emphasize entrepreneur’s role as an innovator who markets his

innovation. This fact is repeatedly held true in the history. Had Edison not marketed

his innovative electric bulb well enough, stature of Edison would have been limited to

just a scientist not as a successful businessman. We all know how one innovative

product that time lead to whole line of innovation leading to today’s digital backbone-

semiconductor transistor!

In order to survive, an entrepreneur must continually innovate. Innovation and

Entrepreneurship are tightly intertwined. Peter F.Drucker defines innovation as “a

specific tool of entrepreneurs, the means by which they use changes as favourable

opportunity for some other business or service activity, so entrepreneurs must create

something new, something different, they must change or transform value”. Thus the

most task of the entrepreneur is to create value in the market.

Amit Singh, IIM A

Disruptive innovation and Entrepreneurship

Whatsup came and destroyed the SMS services; Smartphones came and destroyed the

market of features phones. Such innovations are called disruptive innovations which

disrupt the existing way of doing things. As per Clayton M. Christensen, a disruptive

innovation is an innovation that helps create a new market and value network, and

eventually disrupts an existing market and value network (over a few years or decades),

displacing an earlier technology.

With the digital technology encompasses every sphere of our life, the time taken by

disruptive innovation to show impact has considerably decreased. Now a product

which might be just unknown few years before can completely change the landscape in

one-two years. Hence disruptive innovation has become a major weapon in the

entrepreneur’s armoury. Entrepreneur can now become billionaires in two-five year

time with the help of a disruptive innovation idea. This was not possible earlier where

entrepreneur was a synonym with small businesses. But this is no longer valid where

one idea can really change the world.

Different forms of Entrepreneurship

There is huge misconception about the word- Entrepreneurship in the world around

us. Many of us have a perception that entrepreneurship means starting your own

venture. Though it is partially correct but it is not just limited to that.

Entrepreneurship is a spirit that defines a person. It is value system inside a

Amit Singh, IIM A

person which makes him/her do entrepreneurial activities. It is hard to believe that

a person can be an entrepreneur even when he is working in a company. Let us see

different form of same entrepreneurial spirit.

Intrapreneurship

Intrapreneurship is the act of behaving like an entrepreneur while working within a

large organization (Wikipedia). It refers to employee initiatives in organizations to

undertake something new, without being formally asked. Intrapreneurship applies the

'start-up' style of management (characterized by flexibility, innovation, and risk taking)

to a secure and stable firm. This usually lead to fast tracking the product development

(by circumventing the bureaucracy) so that advantage of a new opportunity can be

taken. Thus, Intrapreneurs are Inside Entrepreneurs who follow the goal of the

organization.

Source: thelawofmotion.net

In today’s dynamic world where changes are so fast that a large organization may not

able to detect the change in time leading to existential crisis have made this concept

very attractive to the corporations. It is a win-win situation for both- employees and

employers. Employees are given a channel to vent their entrepreneurial spirit by using

the corporation’s resources without been held accountable in case of a failure.

Employers in turn get most innovative and disruptive products through this process as

well as the spill over effects are tremendous over the organization culture. Most apt

example would be Google which allow employees to use 20% of their time to their ideas

using Google resources. This policy actually led to fantastic products like AdSense,

Google news and Gmail for Google which it aggregate in a portal called as “Google lab”.

At Lockheed Martin, Intrapreneurs developed a number of famous aircraft designs and

at 3M, they came up with Post-It Notes. Similarly at LinkedIn, Facebook, Twitter and

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many other organizations, Intrapreneurs are responsible for a lot of product innovation

around the world today. Smart companies want employees to become an Intrapreneur

because it fuels business growth by innovation and allows them to gain a competitive

advantage in their industry. It also allows companies to engage employees meaningfully

and reduce the attrition rate.

Social Entrepreneurship Social Entrepreneurship is not about philanthropy and notions of corporate social

responsibility. It is all about the belief that it is possible to make a sustainable difference

through market driven solutions. It is about the passion social entrepreneur share

towards bringing a sustainable social change, using a market based model that does not

bypass the poor; instead treats them as valuable customers and consumers and not an

object of their bounty. They follow ‘best practices’ to bring about ‘next practices’ and

have vision to change not the rules of the game but the game itself.

Entrepreneurship is all about creation of economic value through new organization

or new coordination that relies on established accounting and market based measures

of performance. Social Entrepreneurship is built in the theoretical foundations of

commercial entrepreneurship that focus on creation of economic value through

‘innovation’. It offers market based solutions to social problems thus creating sound

businesses that address C K Prahlad’s “Bottom of the Pyramid” society. Financial

performance is only one of the parameters to assess the contribution of a social

enterprise, unlike commercial enterprise. Social benefit is the key. Social

entrepreneurship empowers people economically and thus socially and in turn,

politically. Profit beyond self is the hall mark of the social entrepreneurship. One of

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the most quoted and celebrated example of this is “Grameen Bank” of Bangladesh

created by the Nobel Laureate, Prof. Mohd. Yunus.

In the words of Prof M.Yunus, social entrepreneurship is defined as “ as a for profit,

socially relevant, innovative and sustainable economic entity that offers innovative

solutions to the problems faced by people at the BoP, through provisions of goods and

services at an affordable price to them. It brings goods and services within the reach,

usability and affordability of the people who otherwise would find it difficult to access and

afford. It creates economic as well as social value double bottom line), besides

environmental value that brings sustainability to the effort”.

This paradigm does not talk of double bottom line but triple: earned profits,

accruing social benefits and environmental sustainability.

Corporate Social Entrepreneurship: A New Paradigm

Currently a number of large corporate houses are seeking to create more robust forms

of strategic alliances that support some cause and also improves their bottom lines.

Recent examples include ITC e-choupal and HUL Shakti project where companies

supply chain is integrated into a social cause leading to a Change. These types of

initiatives are known as Corporate Social Entrepreneurship (CSE).

Source: http://csi.gsb.stanford.edu

CSE is to create social value that in turn creates business value. The concept of CSE

is defined as the process of extending the firm’s domain of competence and

corresponding opportunity set through innovative leveraging of resources, both within

and outside its direct control, aimed at simultaneously creation of economic and social

value. The CSE process takes companies beyond the traditional patterns of charity,

giving into more robust forms of corporate citizenship. Therefore it is more of business

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strategy that helps all the participants in the process gain, the corporation, the partners,

and the consumers. It has to be understood that CSE is different from Corporate

Social Responsibility (CSR). CSR is an activity performed by corporates to give back

the society in philanthropic way which may or may be aligned with firm’s strategic

vision. While CSE has firm’s vision build into it and performed to create value for all

stakeholders.

Importance of Entrepreneurship in today’s world

World around us is changing very fast. This is age of transformation where old problems

need new solutions. Young Entrepreneurs are at center of this transformation.

Entrepreneurship is not just a business model. It is much more than that. It is the way of

living which encompasses the thinking of risk taking, which is innovative and creating

jobs rather than seeking jobs. Its importance in interconnected and dependent world

cannot be more emphasized. Earlier an innovation happened in some part of world

would require decade to get transfer to rest of the world. But now it is not the case.

Because of information technology revolution, fruits of innovation can be shared with

just a click of mouse around the world. This has created a lasting impact not only on

individual but also on society. Now society is much more acceptable to

entrepreneurs than it was few decade back.

Source: doortobusiness.blogspot.com

The spirit of entrepreneurship not only creates economic benefits but also lead to more

job creation. Young graduates become job creators rather than job seekers. Industrial

revolution in the western world had changed the people live and do business. Think of

an entrepreneurship revolution across the world which will change the people live,

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think and do business much more rapid pace than industrial revolution. It will

transform our world.

Present status of entrepreneurship in India

Entrepreneurship is the next big thing. We have already seen first wave of

entrepreneurship from Silicon Valley in US. The success of firms like Microsoft, Google,

Facebook, Amazon, WhatsApp, Uber Cabs and many other small and big startups have

changed the way we live and do business. In India, first wave of modern

entrepreneurship came with the success of firms like Infosys, HCL, Wipro, Patni etc

which rode over the Information Technology boom. The second wave of the startups

drove over the e-commerce and increase internet penetration wave like Flipkart,

Snapdeal, Myntra, Quikr, Just dial etc. Now is the time for third wave of

entrepreneurship which would ride over mobile, tablets and cloud.

Source: www.dutiee.com

At present, the Indian entrepreneurship scene is fast developing. Entry barrier for new

entrepreneurs have reduced to insignificant level. Capital and mentorship is readily

available. The government policies are in place to encourage entrepreneurship. The

incubation centres across the country have become the core around which other factors

of entrepreneurship revolve. The institution based incubation centres like in IIMs and

IITs, the corporate based incubation like Microsoft Ventures, Google Entrepreneur and

privately run incubation centres like startup village, 99springboard, Tlabs, GSF etc have

revolutionize the way startups are nurtured in India.

Amit Singh, IIM A

Source: aboutraisingchickens101.com

These incubators have provided a structured way of engagement with startups and

provided a comprehensible framework where small startups and entrepreneurs can be

nurtured to become big. Entrepreneurships have now become a possible career options

for the youth and society is now more receptive of them seeing the recent success of

Flipkart, Snapdeal etc.

Conclusion

Entrepreneurship happens when there is a marriage among innovation, creativity and

risk taking ability. It not only benefits the individuals but also the society as a whole by

creating more jobs, using resources judiciously and increasing productivity.

Entrepreneurship is not just a career options but it is way of thinking.

Entrepreneurship in India is on the verge of explosive growth. Angel investors, venture

capital, media, startup clubs, service providers, mentors and training companies are

going to grow. And one important cog in the wheel is the incubator – the place where

startups are born and nurtured. When a baby is born, he/she is kept in the incubator for

first few hours and maybe days – this gives them a chance to adjust to outside

environment, and grow stronger before they face the outside world! In a similar way, a

startup is incubated in Incubation Center, which gives them a chance to bring their

business in shape, before they reach out to the world.

I believe the entrepreneurship ecosystem in India is fast maturing and would be engine

for growth in coming decade. This is only a start and if properly nurtured by our

government, society and finally by us, it would drive India to be truly next global super

power.

Amit Singh, IIM A

Source: articles.whmsoft.com

Amit Singh, IIM A

References

Kuratko D.F, Rao T.V.(2014) Entrepreneurship, A south Asian Perspective, Cengage

Learning

http://www.asiaentrepreneurshipjournal.com/AJESIII2Okpara.pdf

Drucker P.F. (1985) Innovation and Entrepreneurship, London: Pan Books Ltd.

Drucker P.F. (2002) Management Challenges for the 21st Century. London: Butter

Worth Heinemann

Chakravorti B. (2004) ‘The New Rules for Bringing Innovations to Markets”.

HarvardBusiness Review, March