The New Age Entrepreneur

Since the 1980’s ,the world of work has changed dramatically. We have all witnessed the turbulence resulting 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.

Entrepreneurship has very little to do with money. It is instead an attitude, a way of thinking. It goes beyond simply starting a company. In other words not all people who start their own organizations can necessarily be categorized as entrepreneurs. Entrepreneurs challenge assumptions, recognize opportunities in periods of change, reveal patterns where others see chaos and mobilize limited resource to achieve an objective.

Entrepreneurship is simply finding new opportunities to do things better and then seizing the opportunity. Relentlessly pursuing new opportunities, commitment to innovation and challenging traditional boundaries of thought is what entrepreneurship is all about. Entrepreneurship is the lifeblood of a free market economy and with changes in the business processes in the market economy, we today see the emerging profile of the ICE (Information, Communication & Entertainment) age entrepreneur. The emergence of ICE age entrepreneur has been mainly due to growth of Internet Economy and Venture Capital funding. The Internet Economy has rewritten the business rules and opened a lot of opportunities for the Indian entrepreneurs in the field of information, communication, entertainment, various IT enabled services and pharmaceuticals. The new internet economy is based on creating service organizations with strong information base and making profits from cutting costs of intermediaries and converting losses and wastages into savings and revenues. There has also been a rise of venture capital as a source of finance and is expected to grow further. The following are the five principles of business revolution in the new information economy:

  • Ideas are more valuable than factories, equipment,natural resources and cash
  • It’s not enough to have good ideas. One must implement them more quickly than ever before.
  • Companies compete globally.
  • Companies are less hierarchical than they used to be.
  • Companies have many shifting alliances.

In the light of these developments, the profile of the entrepreneur has also changed.

Changing profile of an entrepreneur

Access to resources rather than ownership of resources:

In the traditional economy, large capital and ownership of the resources likeland,building,machinery was needed to carry out production activity. Financing was also asset based,ie bankers and financial institutions were funding entrepreneurs who were the owner of the resources. Hence a trend had developed where the entrepreneur was giving high importance to ownership of physical resources and share markets were also reflecting this philosophy. Heavy asset based companies like ACC,Reliance etc were the market heroes. But in today’s Internet economy entrepreneurs believe in access to resources rather than ownership of physical assets. Most of the new age entrepreneurs are in the knowledge based service industry where the quality of service is the key thing and it is due to knowledge of the professionals employed rather than physical assets. Share markets also give high valuations to companies having human assets.

Inclination towards building non tangible assets:

In the days of the traditional economy due to excess of demand over supply whatever was produced by the industry was sold irrespective of quality. Also entry barriers for new players were very high hence building non tangible assets like brands etc were not a priority for the entrepreneurs. But in today’s economy, the entry barriers to many businesses have been lowered and Indian firms are competiting with multinationals and dumping from countries like China, Taiwan etc.Hence today’s entrepreneurs are focusing on building non tangible assets like brands,informationbase,team of qualified professionals which are key differentiating factors in knowledge based service industries.

Increasing trend of adopting entrepreneurship as a career by people from service backgrounds:

Earlier knowledge of business was not easily available, it used to reside in business community. To start a manufacturing unit heavy investment was required and due to lack of venture funding as a source of finance the entrepreneurs from family business background, who had access to family funds were having an upper hand over entrepreneurs with service backgrounds. But in the Internet economy knowledge based service industries were required. The knowledge based industries required low investment and had lower entry barriers .This encouraged people from the service background to take up entrepreneurship as a career and the availability of venture capital catalyzed the process.

Importance of entrepreneurial skills than ability to control business :

In the traditional economy the survival and growth of entrepreneur depended on his/her ability to control business environment i.e. ability to handle various inspectors, government departments and laws. With changing business environment the new age entrepreneur gives more importance to various entrepreneurial skills like creativity, innovation etc, in order to grow and survive. In today’s dynamic business environment those who offer best service will survive.

The emergence of Professional Entrepreneurship:

The traditional economy entrepreneur used to nurture his enterprise like a baby and his emotional attachment never allowed him to sell his enterprise. But today’s entrepreneurs are becoming more professional and are selling their successful start-ups to bigger businesses and moving further in their journey of entrepreneurship.Sabir Bhatia of Hotmail and Rajesh Jain of Indiaworld are examples of professional entrepreneurs.

The new age entrepreneur also prefers to out source the production activity and concentrate on knowledge-based activities. There is also a distinct preference for service sector opportunities rather than the manufacturing sector. In view of the changes mentioned above, the role of education and training becomes very important and in this context it is possible to envisage three key ways in which the word ‘enterprise’ and ‘entrepreneurship’ can be linked :

  • Education about enterprise;
  • Education through enterprise; and
  • Education for enterprise

The first of these relates to the role of education in raising the awareness of enterprise and entrepreneurship as a key change agent in the economic process. The second concerns the ways in which the education process itself can be enhanced by using pedagogic styles which work in and makes use of ‘enterprising’ situations, including student centered and real world project driven approaches. The third is specifically aimed at entrepreneurship development and would include training existing entrepreneurs as well as for new start ups.

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