The Entrepreneurship Paradox- what it needs for entrepreneurs in the MSME sector to sustain

Since the 1980’s, the world of work has changed dramatically. We have all witnessed the turbulenceresulting from waves of corporate restructurings and downsizings. Thus it is not surprising that the career aspirations of those people left in the workforce would also start changing. The old corporate ‘psychological contract’ implying a lifetime employment to loyal workers has now become virtually null and void and many workers departing from corporations often prefer to try a new career direction.

We now see patterns in corporate hiring practices and these have a substantial impact on the language and strategies of people in the labor force. For example, many people who in the past would have preferred traditional full time employment, have now become acknowledged entrepreneurs, choosing to describe themselves as ‘independent contractors’ to earn interim income via ‘foot-in–the-door ’assignments. Often these assignments are with potentially attractive employers who may not have full time openings, yet still have work which needs to be done. The contractor gets a chance to show off his or her skills prior to trying to securing traditional employment should an opening eventually arise or be created. Thus, in the new paradigm wearing an entrepreneurial hat can often be an effective job search strategy and can also provide interim income.

Moreover, another pattern that is developing is the rise of the ‘situational entrepreneur’. Some departing employees are now using the windfall of an attractive severance package to buy a business not because they are so committed to entrepreneurship per se but rather because they wish to ‘buy a job’. For various reasons, often due to their age and economic status, they believe that their chance to earn a solid income is better served by entrepreneurship than by seeking another full time job. These examples represent just two of the many career patterns and configurations occurring in today’s complex workforce.

`In India, the post economic reform era since 1991 witnessed a proliferation of economic opportunities for the entrepreneurial classes in India. There emerged a vibrant small scale sector .Technocrats, IT Professionals, educated and not so educated but enterprising class found the Post 1991 India as a hub of new possibilities, business potential and innovations. There emerged entrepreneurs from informal /unorganized sector as well as from formal organized sector.

India needs entrepreneurs for two reasons-one is to capitalize on new opportunities and second is to create wealth and new jobs. In the next ten years,110-130 million Indian citizen  will be searching for jobs and this will include 80-100 million looking for their first jobs. This does not include disguised unemployment of over 50% among the 230 million employed in the rural areas. Point here is that there is a strong need for entrepreneurs and start-ups. There are huge gaps and demand to be fulfilled which crop up regularly. Often one particular offering gives rise to ten other gaps to be met. For example, the telecom industry gave rise to mobile phones which led to need for mobile apps, content, security software, data storage and technology to share mobile content over internet .There isn’t lack of ideas or entrepreneurial zeal in individuals but the challenge remains in making them marketable and execute with precision. The present generation is better educated and more eager to start on their own rather than join other companies. The rapid rise in students from premier institutes favoring starting up their own ventures poses a promising future for entrepreneurship in India.

Entrepreneurship is required to transform innovations into new products or services. In other words, the more individuals are willing to become entrepreneurs, the more ideas and innovations will become a reality. The benefits for society from this are obvious .New enterprises make up for enterprise deaths and particularly innovative ones add to the potential growth of economy. However,India isn’t making making most of its young talent  and is instead pushing that talent into large established irms.That’s okay as long as the firms flourish but this is not what India needs in the long term.What we need for the next decade are thousands of new companies that will focus on developing  products and services needed to tap the massive opportunities in India and around the world.

A recent study shows that Asia ,has the highest fear of being an entrepreneur,and India is no different from anywhere else.Almost 40 percent of the potential entrepreneurs in India don’t set up businesses because they are worried about failure.In Sub-Saharan Africa,only 20% of the people surveyed said that they were afraid to fail.As  a nation we pride ourselves on the extraordinary talent pool and the entrepreneurial acumen of our youngsters,Yet till date,we have very few billion dollar start-ups and even fewer large product companies,This is despite a number of companies being founded and funded  in the past two decades.The primary reason for this is the birth characteristics of the startps: whether an entrepreneur has given birth to a baby or a dwarf.Some entrepreneurs conceptualise and create strong companies.Others by not taking confident strides in the formative stage are left with ventures that remain small.Therefore entrepreneurs must have the right mindset and  ensure that their companies do not grow into a dwarf.

The entrepreneurial eco-system requires entrepreneurs with a mindset that helps in overcoming hurdles  and a support system that facilitates enterprise growth.The entrepreneurs need to keep the following mantras in mind

  • The entrepreneurs should never be afraid of setbacks. They have to keep the following mantras in mind:
  • Never let business and commerce come in the way of creativity. We expose ourselves to cynicism and critical judgment everyday, but have to keep calm and accept the good with the bad. These are professional hazards and we need to recognize them and wake up every morning and start work again
  • Be patient and handle situations calmly. If one has not done anything wrong, things would ultimately pass and truth would surface.
  • Listen to your heart and intuitions that speaks to you when you are at crossroads and have the courage to follow through. As Churchill said, if you are going through hell, keep going
  • Some things are worth doing even if you fail in doing them, because the efforts challenge you to stretch yourself. Failure often brings out in you qualities and talents that you had neglected because you had become too settled in what you were doing when you were succeeding
  • What you do to yourself after a setback reveals the best and the worst of you
  • Sometimes life is really bad. But you have to put a control X and start again
  • Difficulties and Challenges are a constant. Only those with character and resolve confront them and win.
  • At moments of crisis and tough decisions, there is need to recalibrate the mind and ask ‘what’s the worst case scenario’ and once one can adjust to that; there will be clarity of the decision making capability.
  • Self confidence is the most desired trait. Believe and nothing is impossible
  • When you take charge of business, it is important to set boundaries and be clear about the

The government and the development agencies should help in providing support to the enterprises by providing the following support

1)Enhancing capacity of enterprises  to facilitate compliance required  for

  • maintaing standards and certification requirements;
  • ability to better manage intellectual capital,including protection of IPR’s
  • The uneven power that MSME’s face with larger enterprises

2)Facilitate enhanced use of ICT for enabling integration of MSME’s in the global value chain

3) Increase the role of local industry associations specially in strategic initiatives like joint marketing,or for joint bids ,particularly in government procurement,or promotion schemes for potential suppliers

4)Strengthen and ensure sincere implementation of scehems like Credit Gaurantee Scheme,Credit linked Capital scheme and other similar schemes for strengthening MSMEs financial health.

5 Promote partnership between MSMEs and organizations overseas that can develop or transfer technology, products ,processes or managerial practices.

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