WRITE AN ESSAY ON THE GROWTH OF ENTREPRENEURSHIP IN INDIA INTRODUCTION:ENTERPRENEUR “An entrepreneur is one who always searches for change, responds to it and exploits it as an opportunity. Innovation is the basic tool of entrepreneurs, the means by which they exploit change as an opportunity for different business of service.”
To put it very simply an entrepreneur is someone who perceives opportunity, organizes resources needed for exploiting that opportunity and exploits it. Laptops, mobile phone, Motor Bikes, Credit Cards, Courier Service, and Ready to eat Foods are all examples of entrepreneurial ideas that got converted into products or services. ENTREPRENEURSHIP: „A systematic innovation, which consists in the purposeful and organized search search for changes, and it is the systematic analysis of the opportunities such changes might offer for economic and social innovation.‟
Entrepreneurship is the practice of starting new organizations or revitalizing mature organizations, particularly new businesses generally in response to identified opportunities. Entrepreneurship is a creative human act involving the mobilization of resources from one level of productive use to a higher level of use. "It is the process by which the individual pursue opportunities without regard to resources currently controlled."Entrepreneurship involves a willingness to take responsibility and ability to put mind to a task and see it through from inception to completion. Another ingredient of entrepreneurship is sensing opportunities, while others see chaos, contradiction, and confusion. Essence of Entrepreneurship is going against time with maturity and servings a change agent. Entrepreneurship is considered to be a significant dtmin a n t o f e c o n o m i c deve develo lopm pmen ent. t. New New ent entre repr pren eneu euri rial al acti activi viti ties es play play a vit vital al part in the process of Creative destruction fosters innovation, employment, and growth. Whil e India has traditionally been an entrepreneurial country, it fares poorly in numerous global studies exploring the entrepreneu entrepreneurial rial and business business potential of countries countries but, on the other hand on th e most conservative basis, our domestic consumption, in virtually any sector, has the – perhaps, just to catch up with a potential to at least double, or treble, from current levels – perhaps, country like China. Then, there is the entire global opportunity, across diverse sectors internationally; the "Made in India" tag is now an increasingly respected brand, valued for quality, reliability, and competitiveness. Truly, with economic reforms in the country, and with the virtual removal of all trade barriers, the world is now our market and our opportunity. The pursuit of these opportunities requires an indomitable spirit of entrepreneurship. Entrepreneurship is often a difficult undertaking, as a vast majority of new businesses fail.
GROWTH OF ENTREPRENEURSHIP IN INDIA
The proper understanding of the growth of entrepreneurship of any country w o u l d evolve within the context of the economic history of the particular country becomes thesubject matter of this section. The growth of entrepreneurship in India is, th eref ore, presented into two sections viz. •
Entrepreneurship during Pre-Independence •
Entrepreneurship during Post-Independence ENTREPRENEURSHIP DURING PRE-INDEPENDENCE
The evolution of the Indian entrepreneurship can be traced back to even as early asRigveda, when metal handicrafts existed in the society. This would bring the point homethat handicrafts entrepreneurship in India was as old as the human civilization itself, andwas nurtured by the craftsman as a part of their duty towards the society. Before Indi acame into contact with west, people were organized in a particular type of economic andsocial system of the village community. Then, the village community fe at ur ed th eeconomic scene in India. The Indian towns were mostly religious and aloof from thegeneral life of country. The elaborated cast based diversion of workers c on si st ed o f f a r m e r s , a r t i s a n s a n d r e l i g i o u s p r i e s t s . T h e m a j o r i t y o f t h e art isan s wer e t rea ted asvillage servants. Such compact system of village community effectively protectingvillage artisans from the onslaughts of extern al competit ion was one of the importan t contributing factors to the absence of localization of industry in ancient India.Evidently, organized industrial activity was observable among the India artisans in a fewrecognizable products in the cities of Banaras, Allahabad, Gaya, Puri & Mirzapur whichwere established on their river basins. Very possibly this was because the rivers servedas a means of transportation facilities. These artisan industries flourished over the period because the Royal patronage was to them to support them. The workshops called„kharkhanas‟ came into existence. The craftsmen were br o u g h t i n t o a n a s s o c i a t i o n pronounced as „guild system‟. On the whole, perfection in art, durability beyond doubtand appeal to the eye of the individual were the distinguishing qualities inherent in theIndian craftsmanship that brought much everlasting laurels of name and fame of theillustrious India in the past. To quote, Bengal enjoyed worldwide celebrity for Corah,Lucknow for chintzes, Ahmadabad for dupttas, and dhotis, Na gpur for si lk boarded cloth, Kashmir for shawls and Banaras for metal wares. Thus, form th the immemorial tillthe earlier years of the 18 century, India enjoyed the prestigious status of the queen of the international trade with the help of its handicrafts.Unfortuna tely, so much prestigious Indian handicraft industry, which was basically aco tt ag e an d sm al l se ct or , de cl in ed at th e en d of th e 18 th century for various reasons.These may be listed as-1.Disappearance of the Indian royal court s who patronized t he crafts earlier.2.The lukewarm attitude of the British colonial govt. towards the Indian crafts.3.Imposition of heavy duties on the imports of the Indian goods in England.4.Low priced British made goods produce on large scale which reduced the competing capacity of the product of the Indian handicrafts.5.D evelopmen t of transport in
Indi an facil itat ing the easy acce ss of Brit ish prod uct even to far-flung remote part of the country 6.Changes in the t astes and h abits of th e Indian, de veloping crazi ness of foreign products.7.Unwillingnes s of the Indian craftsmen to adapt to the changing tastes and needsof the people.Some scholars hold the vi ew t hat manufacturing entrepreneurship in India emerged ast h e l a t e n t a n d m a n i f e s t c o n s e q u e n c e o f e a s t I n d i a c o m p a n y a d v e n t i n I n d i a . T h e c o m p a n y i nj e c t e d v a r i o us c h a n ge s i n t he I n d i an e c o n om y t h r o u g h e x p o r t o f r a w materials and import of finished goods in India. Particularly, the parsis established goodrapport with the company and were much influenced by the company‟s commercialoperations. The company established its first ship building industry in Surat where from167 3 onw ards the par sis bui lt vass als for the comp an y. The m o s t i m p o r t a n t w a s shipwright Lowjee Nushirvan, who migrated to Bombay around 1935. He belonged to aWadi a fami ly whi ch gave birt h to man y l ead ing shi p -bui lde rs of Bo mb ay . In 16 77 , Manjee Dhanjee was given a contact for building the first l ar ge gu n p ow de r m il l i nB o m b a y f o r t h e e a s t I n d i a c o m p a n y . B e s i d e s , a P a r s i f o r e m a n o f a g u n f a c t o r y belonging to the company established a steel industry in Bombay in 1852. On the basisof these facts, it c a n b e s t a t e d t h a t t h e e a s t I n d i a c o m p a n y m a d e s o m e c o n t r i b u t i o n towards entrepreneurial growth in India. But whether the company did it deliberately for th e grow th of entrepreneurship in India or it was just a coincident that people came in co nt ac t with the company and entered the manufacturing, nothing can be said w i t h certitude.The actual emergenced of manufacturing entrepreneurship can be noticed in the th secondhalf of the 19 century. Prior to 1850, some stay failure attempts were, indeed , made bythe Europeans to setup factories in India. In the beginning, the Parsis were the founder manufacturing entrepreneurs in India.Ranchodlal chotalal, a Nagar Brahman, was the first Indian to think of setting up thetextile manufacturing on the modern factory lines in 1847, but failed. In his secondattempt, he succeeded in setting up a textile mill in 1861 at Ahmadabad. But beforethis, the first cotton textile manufacturing uni t was alr ead y s etu p by a P ars i, Cow asj ee Nanabhoy Dabar in Bombay in 1854 fallowed by Nawrosjee wadia who open his textilemil l i n B omb ay in 188 0. The cre dit for the expansion of textile industries upto 1915goes to the Parsis. Out of 96 textile mills existing in 1915, 43% (41) were set up by parsis, 24% (23) by Hindus, 10% (10) By Muslims and 23% (22) by British citizens.Later, the Parsis invaded other fields, mainly iron and steel industry, also JamshedjeeTata was the first Parsi entrepreneur who established the f i r s t s t e e l i n d u s t r y i n Jamshedpur in 1911.In the first wave of manufacturing entrepreneurship, except parsis, all others hailed fromnon-commercial communities. Why the well-known commercial communities, namely,J a i n s a n d V a i s h y a s o f A h m a d a b a d a n d B a r o d a , l a g g e d b e h i n d i n e n t r e p r e n e u r i a l initiative throughout the nineteenth century can be explained by two factors. Firstly, theimprovement of business climate in the countryside during t his p eriod results in anincrease in the quantum of trade which assumed quick returns on investments. This proves the commercial activity more lucrative during the period, Secondly; it can also beattribute to t heir conservative atti tude t o chan ge from commercial entrepreneurship toindustrial entrepreneurship.The Swadeshi
campaign, i.e.,
emphasis on indigenous goods, provided, indeed, a proper seedbed for inculcating and developing nationalism in the country. It
was the influenceof Swadeshi that Jamshedji Tata even named his first mill 'Swadeshi Mill'. The spirit of indigenousness strengthened its roots so much in the country that the Krishna Mills in itsadvertisement of Tribune of April 13 made the following appeal: "Our concern isfinanced by native capital and is under native management throughout"."The second wave of entrepreneurial growth in India began after the First World War.For various reasons, the Indian Government agreed to 'discriminating' protection t oc e r t a i n i n d u s t r i e s , e v e n r e q u i r i n g t h a t c o m p a n i e s r e c e i v i n g i t s b e n e f i t s s h o u l d b e registered in India with rupee capital and have a proportion of their directors as Indians.The advantages of these measures were mostly enjoyed by the Indians. The Europeansfailed to harness the protect ionist p olicies to t heir int erests." These measures helped i ne s t a b l i s h i n g a n d e x t e n d i n g t h e f a c t o r y m a n u f a c t u r i n g i n I n d i a d u r i n g t h e f i r s t f o u r decades of the twentieth century. During these decades, the relative importance of Parsisd e c l i n e d a n d G u j a r a t i s a n d M a r w a r i V a i s h y a s g a i n e d t h a t p e n d u l u m i n I n d i a ' s entrepreneurial scene.The emergence of Managing Agency System which mad e its own con tri but ion to theIndian entrepreneurship can be traced back to 1936 when Carr, Tagore & Co. assumedthe management of Calcutta Steam Tug Association. The credit for this initiation goesto an Indian, Dwarkanath Tagore, who encouraged others to form joint-stock companiesand invented a disti nct meth od of management in w hich management remained in thehands of the 'firm' rather than of an 'individual' . Historical evidences a ls o d o c on fi rm t h a t a f t e r t h e E a s t I n d i a C o m p a n y l o s t m o n o p o l y i n 1 8 1 3 , t h e European ManagingAgency Houses entered business, trade and banking. And, these h ou se s ma rk ed l yinfluenced eastern India's Industrial scene. Iti s
st at ed t ha t th e Ma na gi n g A ge nc yH o u s e s w e r e t h e r e a l e n t r e p r e n e u r f o r t h a t p e r i o d p a r t i c u l a r l y i n E a s t e r n I n d i a . Brimmer" holds the opinion that Agenc y Hou ses emerg ed to overc ome the limi tati onsimposed by a shortage of venture capital and entrepreneurial acumen though all may notagree squarely with this view. Reasons for slow growth of entrepreneurship in During British period in India. 1.
Not given proper protection : The ente rpri ses were not given prop er prot ectio n by British Government. 2. Discouragement
by British Government : Only those industries in which theBritish Government put their own capital were given encouragement. 3.
High railway freight charges:
Th e ra il wa y fr ei gh t ch a rg es w er e hi gh er fo r locations not nearer to the ports. This proved that the transportation of the goodsmanufactured for the Indian markets were more expensive than goods meant for exports. 4. Exorbitant tariffs:
The British imposed exorbitant tariffs on India made goods. 5.C o n s t a n t l y
harassed for getting licenses : E n t r e p r e n e u r s w e r e c o n s t a n t l y harassed for getting licenses and finance to established and run industries. 6.
No facilities for technical education: t h e r e w e r e a l m o s t a n y f a c i l i t i e s f o r technical education w hich alone could st rength In d i a n i n d u s t r i a l entrepreneurship.
7.
Entrepreneurs faced fierce competition from abroad : The Indian indigenousentrepreneurs faced fairs competition from machine made goo ds expor ted to India from abroad. 8.
L
ack of transportation and communication facilities : Lack of transportati on and communication facilities acted as the stumbling blot in the way of industrialgrowth. 9.
Not encouraged the establishment of heavy industries: The British Governmentdid not encourage the establishment of heavy industries like heavy machinery,iron and steel which are necessary for rapid industrialization. 10.
Political turmoil : Political turmoil and abolition of princely courts discouragedthe growth of entrepreneurship. 11.
Multi-currency system :
P r e v a l e n c e o f m u l t i c u r r e n c y s y s t e m a f f e c t e d t h e business environment and blocked the growth.Ins pi te of th e a bo ve pr ob le ms, th e ex por t t ra de of te xt il e i n 17th century was onascending trend. During this period, grouping of Indian merchants into j o i n t s t o c k associations for the purpose of managing the supply of textiles to European companieswas very significant. This helped in exporting huge volume of textiles to the Europeanmarkets leading to favorable terms of trade.
