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ENTREPRENEURIAL MOBILITY Factors Influencing Mobility. Occupational Mobility. Location Mobility. Let Us Sum Up.

Assessment Questions LEARNING OBJECTIVES On completion of this chapter, you should be able to !numerate the factors that influence entrepreneurs to mo"e from one location to another or from some occupation to the entrepreneurial career. List the factors that ma#e entrepreneurs to mo"e from one occupation to another. $no% the factors influencing entrepreneurs to migrate from pre"ious place to a ne% place to set up their enterprises. Mo"ement and mobility ha"e been an integral part of march of human history all o"er the %orld. In fact, human life s%ings bet%een t%o poles & mo"ement and settlement. 'istory is %itness that human mo"ement is caused by social, economic, political and cultural factors. In present time, the flo% of the s#illed personnel from under&de"eloped and de"eloping countries to de"eloped countries bapti(ed as )brain drain) has been a common feature of human mo"ement caused by economic reasons. !ntrepreneurs, being human beings, do also mo"e from one location to another and also from one occupation to another. Influ* of multinational companies +M,- s. in India and increasing intrapreneurship are the e*amples of locational mobility and occupational mobility of entrepreneurs respecti"ely. Mo"ement of entrepreneurs from and into each location and occupation has certain distinct features of its o%n #ind %hich affect the pace and pattern of entrepreneurship de"elopment. It is to%ards this aspect of entrepreneurship de"elopment, %e no% try to ans%er some pertinent /uestions 0hat factors influence the entrepreneurial mobility1 0hat are the characteristics of the entrepreneurial mobility across the locations and occupations1 2hese issues are dealt %ith in seriatim. FACTORS INFLUENCING MOBILITY 0hat ma#es the entrepreneurs mobile1 2here cannot be a common factor influencing all the entrepreneurs to mo"e from one location to another and similarly from one occupation to another. In fact, different factors influence the entrepreneurial mobility differently. 2hese factors may ser"e as 3pull3 and 3push3 factors. Follo%ing are some important factors %hich generally influence the entrepreneurial mobility in a gi"en situation and time 4. Education: !ducation enlarges one3s thin#ing and understanding hori(ons. It enables one to comprehend conditions more easily and clearly and in a better manner. An educated person can also easily ad5ust %ith the changed en"ironment, hold better discussion and communicate in a more con"incing manner. 2hat an educated entrepreneur tends to be more mobile than an uneducated one is supported by empirical e"idences also. 6. Exp !i nc : An entrepreneur3s past e*perience in business and industry also increases his7her propensity to mo"e. 2he reason is not difficult to see#. An e*perienced entrepre& neur better percei"es the a"ailable opportunities, better analyses his7her strengths and %ea#nesses and also better understands the comple*ities in"ol"ed in running an enter& prise. 2hat the technical e*perience influences the entrepreneurial mobility is indicated by an increasing number of persons %ith technical #no%ledge and e*perience assuming to the entrepreneurial roles at distant places a%ay from their nati"e ones.

8. A"ai#a$i#it% o& Faci#iti ': A tendency is noticed among the entrepreneurs to mo"e from the areas %ith no or less facilities to the areas %ith more and better facilities. 'ea"y concentration of industries in O#hla, 9ha(iabad and Faridabad near :elhi represent such e*amples. 2he reason lies in the fact that these areas ha"e pro*imity to "arious agencies, facilities li#e transport, communication, po%er, mar#et, etc. 8. Po#itica# Condition': !"idences are a"ailable to cite that the entrepreneurial mobility is influenced by the political factors also. For e*amples, the %ell&#no%n enterprising ;un5abi community, lost almost e"erything during the partition and %ere compelled to mo"e to e"ery noo# and corner of the country in the pursuit of profit opportunities and shaped their luc#s. Similarly, the Mar%aris #no%n as the most 3footloose3 community in India also left their home and hearth long ago compelled by the historical circumstances. <. Si( o& Ent !p!i' : Larger business houses are found more mobile than smaller ones. Initially, the entrepreneurs try to consolidate their business position at a place, scale the commanding heights in the area, attain the dominating position and thereafter try to successfully sei(e the business opportunities else%here. 2he Indian business giants 7houses li#e 2ata, =irla, :almia etc. represent such e*amples. Although one may add more factors to this list, yet the said factors seem to be the common ones influencing the entrepreneurial mobility. 'a"ing #no%n the factors influencing the entrepreneurial mobility, it seems in the fitness of the conte*t to loo# at the dimensions of the entrepreneurial mobility. 'ence, in %hat follo%s is the occupational and locational mobility of the entrepreneurs. OCCUPATIONAL MOBILITY 2his section tries to address an interesting aspect of entrepreneurship. 0as that occupation the same of occupation of the entrepreneurs> families, i.e., the occupational mobility1 In simple %ords, the occupational mobility denotes mo"ement or changes in occupation. 2his may ta#e place in t%o forms. It may be a mo"ement of a son7daughter from the principal occupation of his7her father or it may be a drift in one>s o%n occupation during his7her occupational career. 2he first type of mo"ement is called as 3inter&generation mo"ement3 and the latter type of change as ?intra&generation occupational mo"ement>. 2he mobility is called ?hori(ontal> %hen it ta#es place bet%een the occupational classes of the e/ual ran# or "ertical %hen it occurs bet%een classes of une/ual ran#. Se"eral factors li#e one>s freedom of choice, moti"ation, efforts of an indi"idual and opportunities a"ailable in the society determine one3s occupational mobility. 2ill the nineteenth century, the occupational structure in India %as mainly influenced and determined by one>s birth in a particular family or caste. =ut in the present times, the multifarious acti"ities created by the application of modem technology re/uire specific s#ills to man them. It is no% %idely reali(ed that particularly in the case of urban occupations, the re/uired s#ills cannot be ac/uired by gi"ing mere traditional training defined by castes, traditions and customs. In conse/uence, the occupational structure has tended to drift from the caste structure to the technology structure. $eeping this fact in "ie%, an attempt has been made to trace the empirical e"idences on the occupational mobility from grandfathers to the fathers of the entrepreneurs in a study of <@ entrepreneurs conducted by the author in the $umaun :i"ision of Uttar ;radesh.

2able belo% bears data on inter&generation occupational mobility. 2A=L! Inter&9eneration Occupational Mobility Occupation of the !ntrepreneurs> Fathers Farming ;rofession =usiness Industry ,ot $no%n 2otal Farming A E F < B 4<+8@. ;aternal 9randfather>s Occupation ;rofession B C 6 B 44+66. 2otal

=usiness and ,ot #no%n Industry 8 B C +4D. 6 4 4A+86. 4A B 64+E6. 6 B 8+A. . 6<+<@. B <@+4@@

,.=. Figures in parentheses denote percentage to total. It is noticed from the abo"e 2able that there is some e"idence of occupational inheritance or stability, i.e. the tendency to follo% one3s o%n father3s principal occupation. 2o /uote, out of EG grandfathers, 8@ fathers of the entrepreneurs follo%ed their father3s occupation. Het, their inheritance is "ery much e"ident in the traditional occupations. For e*ample, of the 64 business and industry o%ner grandfathers, 4A sons +GA per cent. stayed in their father3s occupations. Li#e%ise, the occupational inheritance is also %ell obser"ed in other occupations li#e profession and farming. In spite of the abo"e&obser"ed occupational stability, there is definitely some degree of occupational mobility as %ell. For instance, of the 4< farmer grandfathers, t%o&thirds +C. ha"e drifted from their father3s main occupation. A comparison of the 64 business and industry grandfathers %ith their 6< business and industry o%ner sons dearly re"eals that se"en sons of < farmer and 6 professional grandfathers ha"e changed their occupations to%ards business and industry. 2he change in occupation is, thus, from the primary to the secondary occupations. 2his suggests that drifting from the traditional occupations li#e farming seems an essential first step to%ards industrial entrepreneurship. As regards intra&generation occupational mobility, i.e., the change in the occupation of entrepreneur himself7herself, the ne*t 2able re"eals that out of the <@ entrepreneurs, more than nine&tenth entrepreneurs +EA. ha"e had changed their occupation from non&industry to industry. ,onetheless, %hat is particularly noticeable is that the professionals %ere the ma*imum +8E per cent. %ho changed their occupational career to%ards industry follo%ed by those %ho entered directly +6A per cent.. 2hus, %hat re"eals from the abo"e occupational mobility can be put as such that the occupational mobility ta#es place from farming +primary occupation. to profession and then to industry in the case of intergeneration occupational mobility and from profession to industry +secondary occupation. in the case of3 intrageneration occupational mobility.

Fa)i#% Occupation "i'*+*"i' t, La't Occupation o& t, Ent! p! n u!' Last occupation of the !ntrep. before entering manufacturing d Landlord Unpaid Family %or#er ;rofession =usiness Industry !ntered :irectly 2otal . B B E B B 4 <+4@

Family Occupation of the !ntrepreneurs Landlor

2otal

;rofession B B 4 4 B 6 E+D.

=usiness B 4 8 G B 8 4E+6D.

Industry 4 E C 6 E G 4+6. <+4@. 4G+8E. 4@+86. E+D. 48+D.

6G+<E. <@+4@@.

,.=. Figures in parentheses denote percentages to the total. Other studies ha"e also re"ealed that though business community still constitutes the dominant source of entrepreneurship, people from technicians, la%yers, business e*ecuti"es and 9o"ernment ser"ants are also s%elling the ran#s of entrepreneurs. 2his ne% class of entrepreneurs is characterised by better education and technical #no%ledge. Medhora reported that the caste system and its obligations reduced occupational mobility, technical change and inno"ation in India. 'o%e"er, the political, social and economic changes ta#ing place during the post&Independence period ha"e eased such rigidity and, in turn, helped occupational mobility. LOCATIONAL MOBILITY 2he early theories of industrial location carried out the analysis on a simple frame%or# %here the locational and spatial di"ersifications %ere simply determined by an ad5ustment bet%een location and %eight distance characteristics of inputs and outputs. 2he reason is that the then industrial structure %as hea"ily dominated by the natural resource base and consumer&oriented industries. =ut, o"er the period, the "ery consideration for locating industries in a particular region has undergone a considerable change. So, the early theories of industrial location ha"e become improper to e*plain industrial location. -onsideration of the a"ailability of natural resources in the choice of industrial location has declined and the industries are li#ely to be established e"en in those areas %ith poor natural endo%ment. 2his holds especially true in the case of industries that are not hea"ily biased in fa"our of ra% material source for their location. It is seen that such industries are gaining increasingly greater importance in the industrial map of India during the recent decades. It is not al%ays possible to e*plain the entrepreneurial mobility to a particular location independently %ith the help of anyone factor. In fact, se"eral considerations influence an entrepreneur to mo"e to a particular area7location to establish his industry. And in this lies the significance of studying the entrepreneurial mobility from one place to another. As stated earlier, mo"ement and settlement ha"e been an integral part of human history all o"er the %orld. 'o%e"er, it is obser"ed that some

communities are more mobile than others. For e*ample, Mar%aris, ;un5abis and Sindhis ha"e been found the most mobile mo"ing to each and e"ery comer of India to carryon business acti"ities. Mo"ement of entrepreneurs to different regions helps reduce regional imbalances in economic de"elopment. And in this lies the need for probing into the factors influencing entrepreneurial mobility bet%een the regions. As a matter of fact, all entrepreneurs are not mobile. Only a handful of entrepreneurs are mobile. 2he degree of the entrepreneurial mobility depends upon factors li#e a"ailability of ra% material, infrastructure and labour, nearness to mar#et, their o%n resources, e*perience, #no%ledge and information, socio&political situation, etc. A sur"ey of the entrepreneurial mobility in India re"eals a definite pattern of mobility. :uring the initial stages of Industrialisation due to limited capital resources, poor information net%or# and lac# of supporting conditions, entrepreneurs tended to set up their industries either at or near their places. 2he entrepreneurs from =ombay, -alcutta and Ahmedabad %ho set up their industrial units at these places are e*amples of such locational mobility %ith narro% spatial hori(on. 2his e*plains the reasons for hea"y concentration of industries in these areas. 0ith e*pansion in their si(e and increase in their resources, e*perience, information flo%s, etc., the entrepreneurs are more mobile from local to metropolitan places. 2his trend goes on. 0hen the entrepreneurs become, in due course of time, highly resourceful, greater degree of mobility occurs e"en cutting across the national boundaries. Inflo% +M,- s. and outflo% +,II s. of entrepreneurs in and from India respecti"ely are e*amples of such mobility %ith e*panding spatial hori(ons. Let us also study the locational mobility of entrepreneurs %ith empirical e"idences. 2able belo% bears data on entrepreneurs> ma5or considerations for selecting location of their enterprises. 2A=L! !ntrepreneurs3 Most Important -onsideration for Selecting the Location of Industries Entreprene urs (in J. 'ome Land <6 9o"ernment Incenti"es D A"ailability of Ia% Material 6 A"ailability of Labour E A"ailability of Mar#et 4@ A"ailability of Infrastructure Facilities 6@ Others E 2otal 4@@ It is re"ealed from the abo"e 2able that ?home land> factor, i.e., to start the industry at one3s nati"e place, has been considered as the most important factor for locating industries in the area. ?A"ailability of infra structural facilities> ran#ed the second important consideration in determining the industrial location. Mar#et has been considered to be another important consideration for selecting the location of industry. 'o%e"er, the ?go"ernment incenti"es> could not influence significantly the entrepreneurial mobility. 2his can be e*plicated on t%o grounds. On - the hea"y preference accorded to the homeland factor in the location of industries suggests that enterprise is not a freely mobile factor, %illing to mo"e to any place for only marginal ad"antage. S cond- possibly more Considerations

important, the accumulation of capital may be a necessary but not sufficient condition for establishing an enterprise. =ecause, fiscal concessions and financial assistance on soft terms cannot possibly compensate for the lac# of infrastructure facilities li#e transport, communication, po%er, etc. Li#e%ise, the a"ailability of ra% material, labour, de"elopment of an area and the cheaper land ha"e not been comprehended as important influencing factors to ma#e entrepreneurs mo"e to such areas. 2he marginal influence of a"ailability of cheap labour in influencing entrepreneurial mobility can be e*plicated on t%o grounds. 2he first reason may be the dearth of s#illed labour particularly in bac#%ard areas due to lac# of "ocational training institutes. 2he second reason may be the a"ailability of cheap labour not appealing to the small entrepreneurs re/uiring the minimum /uantum of labour force to man their small&scale enterprises. 2he Indian economic de"elopment is characterised as ?imbalanced regional de"elopment>. 0hile a fe% areas +urban. are de"eloped, the remaining "ast +rural. area remains under&de"eloped e"en after more than <@ years of our political freedom. 2he 9o"ernment of India has endea"oured to reduce imbalances in regional de"elopment or promote balanced regional de"elopment by decentrali(ing her economic acti"ities to these underde"eloped areas. One %ay to initiate and promote economic de"elopment of bac#%ard and under&de"eloped areas is to establish industries in these areas. 2he entrepreneurs are considered the agents of change. 9i"en the lac# of local entrepreneurship in bac#%ard and under& de"eloped areas, only the outside entrepreneurs are e*pected to establish industries in these areas. 2hus, these outside mobile entrepreneurs can ser"e as initiators and pace setters for starting industries in bac#%ard and under&de"eloped areas. 2he same 5ustifies the significance of entrepreneurial mobility. LET US SUM UP 'uman life s%ings bet%een t%o poles & mo"ement and settlement. Karious factors li#e one3s education and e*perience, a"ailability of facilities, political conditions, etc. influence the entrepreneurs to mo"e from one occupation to another and from one location to another. Occupational mobility ta#es place in the forms of ?inter&generation occupational mobility> and ?intra&generation occupational mobility>. 9i"en the limited resources and information, the entrepreneurs tend to establish their units at their o%n places. i.e., homelands. 0ith increase in their resources and information flo%s, the spatial hori(ons of the entrepreneurial mobility tend to e*pand from local to regional, national and international arena. ASSESSMENT QUESTIONS 4. 0hat do you mean by entrepreneurial mobility1 0hat factors do influence the entrepreneurial mobility1 6. 32he rate of entrepreneurial mobility in India has been tardy and slo%.3 !*plain. E. 0hat is meant by locational mobility of entrepreneurs1 0hat factors do cause such mobility1 <. 3!ntrepreneurs are agents of change3. In the light of this statement, e*plain the role of entrepreneurial mobility in promoting balanced regional de"elopment. A. 0hat do you understand by the occupational mobility of the entrepreneurs1 9i"e a brief account of the occupational mobility of the Indian entrepreneurs. 0hat factors inhibit the occupational mobility of entrepreneurs1 LLLLLL