Managing resources for entrepreneurship”



Faculty of Commerce and Management Studies J. N. V. University, Jodhpur Supervised by Dr. (Mrs.). Meeta Nihalani M.B.A., Ph.D Submitted by Swati Surana M.B.A. (Semester 4th)



This is certifying that Term Paper titled


resources for entrepreneurship”

Has been satisfactorily completed by

As a partial fulfilment of Term Paper work for MASTER OF BUSINESS ADMINISTRATION During academic year 2007-2009

Supervised by
Dr. (Mrs.). Meeta Nihalani MBA, Ph.D

Submitted by
Swati Surana
M.B.A. (Semester 4th)


It gives me immense pleasure in submitting this term paper “Managing

resources for entrepreneurship”. I am grateful to Dr. (Mrs.). Meeta Nihalani
Head, DMS J.N.V.University, Jodhpur under whose guidance I have had privilege of doing this dissertation work. She took an active interest in my work and had an encouraging influence over me. She has been a ladder of inspiration with the concrete support and strength without whom the term paper would not have been completed.

Miss.Swati Surana M.B.A (SEM-4th)


Anything Possible

Table of Content
1) Introduction 2) Concept of Entrepreneurship 3) Resource Managed by Entrepreneur 4) Constraints faced by a Business 5) Land as resource managed by Entrepreneur 6) Innovation and Entrepreneurship 7) Capital management 8) Demand and supply management 9) Managing Labour 10) Knowledge Management 11) Conclusion 12) Bibliography


“Your time is limited, so don’t waste it living someone

else’s life. Don’t be trapped by dogma - which is living with the results of other people’s thinking. Don’t let the noise of other’s opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.” Steve Jobs, co-founder of Apple and Pixar
One question we’ve all been asked is “What do you want to be when you grow up?” Many times, our answer to this question involves positions or careers in which we work for other people. Have you ever considered a career in which you are your own boss? This kind of career is known as entrepreneurship. An entrepreneur organizes and runs a business that is appealing to his or her own interests and abilities. Because we live in a free enterprise system, or free market system, in the India, we as individuals can establish our own businesses and compete in the market economy. Entrepreneurship, the word has 3 components:

Entre: Enter; Pre: Before; Neur: Nerve Center “Size does not guarantee survival in business. Even large firms can disappear or get eaten up by other firms. Millions of small firms close down each year. It is the spirit of entrepreneur which keeps the business The Concept of Entrepreneurship
Entrepreneurship is a process undertaken by an entrepreneur to augment his business interests. It is an exercise involving innovation and creativity that leads towards establishing his/her enterprise. One of the qualities of entrepreneurship is the ability to discover an investment opportunity and to organise an enterprise, thereby contributing to real economic growth. It involves taking of risks and making the necessary investments under conditions of uncertainty and innovating, planning, and taking decisions so as to increase production in agriculture, business, industry etc.

Entrepreneurship is a composite skill, the resultant of a mix of many qualities and traits – these include tangible factors as imagination, readiness to take risks, ability to bring together and put to use other factors of production capital, labour, land, as also intangible factors such as the ability to mobilise scientific and technological advances. A practical approach is necessary to implement and manage a project by securing the required licences, approvals and finance from governmental and financial agencies. The personal incentive is to make profits from the successful management of the project. A sense of cost consciousness is even more necessary for the long-term success of the enterprise. However, both are different sides of the same coin. Entrepreneurship lies more in the ability to minimise the use of resources and to put them to_ maximum advantage. Without an awareness of quality and desire for excellence, consumer acceptance cannot be achieved and sustained. Above all, entrepreneurship today is the product of teamwork and the ability to create, build and work as a team. The entrepreneur is the maestro of the business orchestra, wielding his baton to which the band is played.





Process of action


Definition of entrepreneurship
“The entrepreneur shifts economic resources out of an area of lower and into an area of higher productivity and greater yield.” Jean Bapiste Say (19th Century Economist) “The function of entrepreneurs is to reform or revolutionize the patterns of production . . . By exploiting an invention or, more generally, an untried technological possibility for producing a new commodity or producing an old one in a new way, by opening up a new source of supply of materials or a new outlet for products, by reorganizing an industry and so on.” Joseph Schumpeter (20th Century Economist) “The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.” Peter Drucker (Management Guru Who is an Entrepreneur? An entrepreneur is a person who organizes and manages a business undertaking and assumes a risk for the sake of profit. Operating a business takes certain skills. Few people have all the skills needed to run a business, but they can compensate for their

weaknesses by hiring staff or consultants and by becoming more knowledgeable through education or training.

Resource managed by Entrepreneur
You can assess your business skills by evaluating past jobs, volunteer work, positions in organizations, and personal traits. Consider your experiences and qualifications under each of the following headings. 1. Organization and planning: setting and attaining goals, managing time commitments, and keeping work schedules. 2. Handling money: determining budgets, securing loans, raising funds, keeping financial records, and completing income tax forms. 3. Selling ideas and products: determining sales quotas and projections; presenting projects for committees, organizations and/or administrative groups; direct selling to customers or clientele; handling criticism and rejection. 4. Management: experience in managing all or part of a small business or an agency; serving as director or major officer of an organization. 5. Working with people: mediating or arbitrating between people with opposing views when the situation requires; organizing and planning large public events; assuming officer or executive secretary positions in an organization, and/or handling complaints for an organization or company; getting along well with most people. 6. Ability to take risks: taking moderate, calculated risks in\ varied situations (situations where the chance of winning was not so small as to be a “gamble” or so large as to be a “sure thing” situations where there was a reasonable and challenging chance of success). 7. Willingness to lead and to work alone: being self-disciplined; handling situations which were ambiguous and full of uncertainty as to the job requirements; working calmly and efficiently in the midst of an emergency or crisis. 8. Personality traits: taking the initiative in situations requiring it; accepting and accomplishing more than your share of the work; willingness to work hard even if the financial rewards are slow in coming; establishing high standards of performance and raising them once they are met. 9. Knowledge of products and/or skills in the service offered by your business or in producing your product: willingness to do self-study, research, and planning to improve business operations.

New Concept of Entrepreneur

“The critical ingredient is getting off your butt and doing something. It’s as simple as that. A lot of people have ideas, but there are few who decide to do something about them now. Not tomorrow. Not next week. But today. The true entrepreneur is a doer, not a dreamer.” Nolan Bushnell, founder of Atari & Chuck E. Cheese’s
The term “entrepreneur” has been defined as one who detects and evaluates a new situation in his environment and directs the making of such adjustments in the economic systems as he deems necessary. He conceives of an industrial enterprise for the, purpose, displays considerable initiative, grit and determination in bringing his project to fruition, and in this process, performs one or more of the following: i. Perceives opportunities for profitable investments; ii. Explores the prospects of starting such a manufacturing enterprise; iii. Obtains necessary industrial licenses; iv. Arranges initial capital; v. Provides personal guarantees to the financial institutions; vi. Promises to meet the shortfalls in the capital; vii. Supplies technical know-how. Entrepreneurship is the propensity of mind to calculate risks with confidence to achieve a pre-determined business or industrial Objective. In substance, it is the risktaking ability of the individual broadly coupled with correct decision--making. Characteristics of Entrepreneurs 1. Mental Ability – It consists of intelligence and creative thinking. Entrepreneur must be reasonably intelligent, and should have creative thinking and must be able to engage in the analysis of various problems and situations in order to deal with them. 2. Clear Objectives – An entrepreneur should have a clear objective as to the exact nature of the business, the nature of the goods to be produced and subsidiary activities to be undertaken. 3. Business Secrecy – An entrepreneur must be able to guard business secrets. Leakage of business secrets to trade competitors is a serious matter, which should be carefully guarded against by an

entrepreneur. An entrepreneur should be able to make a proper selection of his assistants. 4. Human Relation Ability – The most important personality factors contributing to the success of an entrepreneur are emotional stability, personal relations, consideration and tactfulness. An entrepreneur must maintain good relation with his customers if he is to establish relations that will encourage them to continue to patronize his business. He must also maintain good relations with his employees if he is to motivate them to perform their jobs at a high level of efficiency 5. Communication Ability – It is the ability to communicate effectively. Good communication also means that both the sender and the receiver understand each other and are being understood. An entrepreneur who can effectively communicate with customers, employees, suppliers and creditors will be more likely to succeed than the entrepreneur who does not.

Constraints faced by a Business

Technology constraints
Technology is any method of producing a good or service. Technology advances over time. Using the available technology, the firm can produce more only if it hires more resources, which will increase its costs and limit the profit of additional output.

Information constraints
A lack of information is called uncertainty. It occurs because the collection of information has an important alternative cost. That’s why a firm never possesses complete information about the quality and effort of its work force, current and future buying plans of its customers, and the plans of its competitors. The cost of coping with limited information limits profit. 

Market constraints

What a firm can sell and the price it can obtain are constrained by its customers’ willingness to pay and by the prices and marketing efforts of other firms. The resources that a firm can buy and the prices it must pay for them are limited by the willingness of people to work for and invest in the firm. The expenditures a firm incurs to overcome these market constraints will limit the profit the firm can make. These are of the few constraints which are discussed here. But there are many constraints faced by an enterprise in day to day working of an organization and initial set-up of enterprise. . The production is possible due to the cooperation of the various factors of production, popularly known as land, labour, capital, market, management and of course entrepreneurship. To produce goods and services requires resources

. Economic resources are scarce relative to the infinite needs and wants of people and businesses operating in the economy. It is important to use these resources efficiently in order to maximise the output that can be produced from them.




LABOUR technology


Land as resource managed by entrepreneur

is one time investment and its cost whether purchased or taken on rent are huge. So an entrepreneur should be very alert will making decision about location of enterprise as success of firm largely depends on the land/location.”
Land is the natural resources available for production. Some nations are endowed with natural resources and exploit this by specialising in the extraction and production of these resources - for example - the development of the North Sea Oil and Gas. Only one major resource is for the most part free - the air we breathe. The rest are scarce, because there are not enough natural resources in the world to satisfy the demands of consumers and producers. Air is classified as a free good since consumption by one person does not reduce the air available for others - a free good does not have an opportunity The factory or plant is an individual building or premises that produce manufactured goods. A company may own several factories, probably in different locations. The industry comprises many factories, or plants, and a number of independent companies. Industrial location is primarily concerned with the sitting of a single factory, rather than the whole industry, although the location of the industry is in itself a locational factor. The concepts of site and situation play separate roles, although we may use the word site in relation to location when we are really looking at the situation of the factory. The site of a factory, or group of factories, is the actual physical location, or block of land. These are some basic location information an entrepreneur should look in before setting up of enterprise: • • • • • • plentiful supply of flat land, access to transport, power and water, availability of labour, and Capital and finance facilities. Fertility of land if enterprise is related to agriculture Nearness to the market for fast consumable products

Need for enterprise location

The need for plant location arises under the following circumstances: 1. When a new enterprise is to be established. 2. In the case of established enterprise, the need for enterprise location arises when expansion, decentralization and diversification is undertaken to meet the increased demand for its products. 3. Whenever the existing factory is not in a position to obtain renewal of lease. 4. When an undesirable location is to be abandoned. 5. When the tendency of shifting the market, depletion of raw materials, changes in transportation facilities, new processes requiring a different location are observed in a factory. 6. When a new branch or branches are to be opened for increasing the volume of production or distribution or both.

Innovation and entrepreneurship
"If you can imagine it, you can do it." – Walt Disney “The important thing is not being afraid to take a chance. Remember, the greatest failure is to not try.” -Debbi Fields, founder of Mrs.

Fields Cookies

All of us have shown the qualities of innovative thinking and entrepreneurship in some sphere of activity or the other, be it in our personal life or professional domain — whether in handling a medical crisis at home or a major social event in the family. These are all small instances of entrepreneurship, which lead to value addition in whatever sphere of activity that they have manifested themselves in. Most of the fascinating instances of innovation and entrepreneurship can be viewed from an entirely commonsense point of view. How many of us knew that Scotsman Dunlop’s first tyre was not only inspired by the flexibility of a garden hose, it was a piece of garden hose wrapped around a wheel! Two major innovations — chain drive mechanism and rubber pneumatic tyre — towards the end of the nineteenth century gave us the modern bicycle.

Human imagination has no boundaries and indeed human civilization has been driven forward down the ages through human ingenuity — through discoveries, inventions and innovations. A Swiss engineer, Georges de Mestral, was trying to discover a better fastener for clothes. After walking in the woods, one day he noticed burrs sticking to his clothes. Using a magnifying glass he found that tiny barbs from plants had hooked onto the threads of the fabric he was wearing. After eight years of experimenting, he designed two pieces of fabric: one with tiny hooks, the other with tiny loops, which would adhere when touched but could be ripped apart. Velcro was patented in 1957. In the real world of the economic, political and corporate market place that we live and earn our living in, homegrown instances of entrepreneurship are presented with new challenges even as they offer new opportunities, with new vistas opening up, thanks to technological evolution of the world around us. Innovation Defined Innovation is a process of taking new ideas through to satisfied customers. It is the conversion of new knowledge into new products and services. Innovation is about creating value and increasing efficiency, and therefore growing your business. It is a spark that keeps organizations and people moving ever onward and upward. "Without innovation, new products, new services, and new ways of doing business would never emerge, and most organizations would be forever stuck doing the same old things the same old way." In the 21st century, it’s the very nature of innovation that has changed: it’s happening faster, it’s more open and collaborative, and outdated concepts around tightly controlled intellectual property are giving way to a more enlightened emphasis on sharing intellectual capital. For most of us as technologists, engineers and scientists, that’s why it’s exciting as well as a great challenge to be a part of the current wave of innovation — because, in today’s world, technology is leading human evolution. This brings us to the elemental question — can we define innovation? Innovation — a multi layered concept Innovation is not just breakthroughs in space science, cloned animal farms or satellite communication. It can be more modest, incremental — just better than the previous alternative — a better value proposition. The process of innovation has been around for a long time. In fact, its part of the evolution processes itself — not just the evolution of technology or the evolution of business — but the evolution of humanity. In some ways, at the dawn of the human civilization the ability to create and control fire was a massive innovation. It transformed human beings into social creatures. And

this probably happened, as most innovations do, because one individual chose to look at a problem differently than everyone else. If we look around us, we would find myriad examples from the mundane safety pins and bicycles on the one end of the spectrum to the very hi-tech nanotubes, composites, aerospace sciences, technology convergence in telecommunication, etc. Innovation — key drivers Innovation consists in the purposeful and organised search for changes and essentially means monitoring certain resources for innovative opportunity — both within and outside of the enterprise / business. A creative idea that can enhance the quality of life, can bring to the people hitherto unforeseen benefits and a fulfilment of a need. 1. Market need It is important to understand that the ultimate objective of innovations is not to establish technological superiority. The underlying objective of any innovation is maximisation of returns on a constrained resource by improving products and processes and creating a market for it. In the 1920s, Charles Birdseye was puzzled with the problem of keeping frozen meat from becoming damaged by the cells becoming punctured by slow forming ice crystals. During a trip to Labrador, Birdseye watched how native people froze fish quickly. He developed a fast freezing process that reduced crystal formation and started selling small packages of frozen vegetables that still bear his name. Consider what convergence of technology has done: An example is the iPod — a pocket-sized ultra-light, hard-drive-based device that includes technical specifications, video clips, interactive demo, and availability information. A wide range of features in an iPod makes it more attractive compared to an MP3 player, for example, greater memory capacity and extra features. Accessories used in the iPod can convert it from a mobile CD player to a video player, photo album and much more.

On a different plane, in the field of education, the mode of imparting education has undergone a revolutionary change and there’s a clamour for implementing distancelearning programmes by world-renowned colleges and universities due to three major reasons:

More importantly the outreach is enhanced by technology. 2. Economic growth

In a number of countries today, innovation has become one of the key factors propelling economic growth and enhancing social benefits. According to the Growth theory by Robert Solow, technological progress and innovation is the greatest engine of economic growth. Recent studies indicate that technological progress is now responsible for up to half of the growth of the US economy.


• •

The convergence of communication and computing technologies; The need for information age workers to acquire new skills without interrupting their working lives for extended periods of time; The need to reduce the cost of education.

3. Leverage talent – human resources and knowledge management Today we live in an era of such rapid change and evolution that leaders must work constantly to develop the capacity for continuous change and frequent adaptation. They must recognise people’s innate capacity to adapt and innovate. Technological innovation has become a major driver of progress. Innovation relies on intangibles, such as creativity, knowledge and experience. These intangibles are the most valuable resources of our time, much as raw materials were, during the early times of industrialisation. What if we can use augmented reality to see the world through someone else’s eyes? What if we can use robotics and information systems to help an ageing population stay involved and independent? There are a lot of possibilities. Forces that make innovation important in today’s world:
• •

Need to increase the pace of innovation: Research alliances between firms in highly innovative activities, such as biotechnology. Need to improve the technological base: Globalisation has made it necessary to project the innovative capabilities of nations, regions, industries and firms. Innovation has become a major tool in the race to create jobs and increase incomes.

Indicators of innovation may well be on the horizon and come to be used as regularly as those now published regularly to provide information on incomes, population or public health. 4. Creation of an unforeseen benefit — "disruptive" innovation One of the important properties of innovation is that of ‘discontinuity’ and it can have a deep social and economic impact. "Disruptive innovation" means one needs to often deal with the unexpected, like:
• • •

Unforeseen changes in industry structure / market structure, etc; Changes in demographics, changes in perception, and meaning; New knowledge — scientific and non-scientific.

Commonplace examples could be: Product Typewriters Lighting Imaging Discontinuities Manual to electric, to dedicated word processors, to personal computers Oil lamps to gas, to incandescent lamps, to fluorescent lamps, to light emitting diodes Daguerreotype to tin type, to wet plate photography, to dry plate, to roll film, to electronic imaging, to digital

electronic imaging Technological discontinuities can dramatically change the future of a company often resulting in either loss of market share or in extreme circumstances, bankruptcy. In the field of architecture — consider the arch; till the Romans invented the arch, man’s creations remained small. This is because the materials used, like wood or stone had limitations. Yet man craved for creating taller buildings, needed bridges over rivers and difficult terrains. With the creation of the arch, man was no longer a slave to the form. Now the form was man’s domain. Longer bridges, bigger and taller buildings, all came from this wondrous innovation. 5. Strategic R&D A great idea can only get us started. In the changing global scenario and propelled market demand for newer and better products, to stay at the leading edge and to compete with more dynamic industrial economies as well as the newly emerging economies there is a need for:
• • • •

Strong science and technological links with the best research in the world; Incentives for knowledge transfer; Business R&D; High standards of education — imperatives of knowledge driven economy.

According to a new global innovation study by Booz Allen Hamilton, R&D productivity and not R&D investment is the real challenge for global innovation. Growing market competition, not growing R&D spending, is what drives innovation. A successful innovation policy is a competition policy where companies see innovation as a cost-effective investment to differentiate themselves profitably. R&D spending by companies in developing nations is relatively small, but growing rapidly. While companies headquartered in North America, Europe, and Japan account for 96.8 per cent of the Global Innovation 1,000’s R&D spending, and are likely to remain dominant players for the foreseeable future, companies with headquarters in China, India, and the rest of the world are turning up the volume on R&D investment. How do we acknowledge that everyone is a potential innovator? How can we evoke the innate human need to innovate? It is possible to create organisations full with people who are capable of adapting as needed, to work with the innovative potential that exists in all of us, and to engage that potential to solve meaningful problems. Sources of Innovation • • The incongruity • Innovation based on process need

• Changes in industry structure or market structure • Demographics • Changes in perception, mood and meaning • New knowledge • Knowledge-base innovation

Global companies in pursuit of innovation
Innovation in business and businesses engaged in innovation will be the key. Ideas and ideation will drive business and enhance quality of life for future generations. Here are some illustrative examples:

Microsoft The ongoing innovation in their products helps them gain competitive advantage. Things like the Windows Media Audio format, for example, which, when it was introduced, made big strides in compression and quality. The Tablet PC has taken the older notion of "pen computing" and through new technologies for inking, recognition and annotation, has helped to create a new category. The Smart Personal Objects Technology (SPOT) represents a new way to think about bringing connected intelligence to everyday objects such as watches.

MIT The Deshpande Center for Technological Innovation at MIT is engaged in projects like growing human liver cells for drug testing, and creating a new material for computer displays. Grants are awarded for determining technical feasibility of breakthrough ideas. IBM Believe in exploring new ways of working with an ‘ecosystem of innovators’ to solve societal challenges. Some examples of innovations over the past fifty years are: 1. Carbon nanotube technology 2. Chip technology 3. Magnetic disk storage 4. One-transistor dynamic RAM (DRAM).

Sony Consider the Walkman. Akio Morita felt that individuals should enjoy the music of their choice, anywhere, anytime, without disturbing others. This innovation in personal audio systems set in to motion an incredible revolution in the entertainment sector — this enabled them to tap into a larger market.

Innovation in Asia is on the rise, technology being a great leveller An interesting example is that of Vimicro. The Chinese chip manufacturer holds some 400 patents and is the world’s leading supplier of PC camera processor chips, proof of Chinese innovation, making a transition from "manufactured in China" to "designed in China". Innovation involves experimentation and risk taking. Risk of failure often justifies potentially high returns from successes that are an incentive to innovate in the first place. Hence, failures cannot and should not be a deterrent. Take the example of the (American) General Electric Company, it failed in computers but has been a successful innovator in three totally different fields — aircraft engines, engineered inorganic plastics and medical electronics. What are the factors common to the success stories in innovation? First and foremost we see that personal gain is not the prime driver of innovation. What is the engine of innovation? What is the prime mover? The innovator can see what success can mean and he is passionate about his goal. Innovation and entrepreneurship — ideally must coexist Entrepreneurship is essentially about people and their ability to evaluate new opportunity and to bring about a match between innovation and market needs. The French economist J B Say stated more than 200 hundred years ago that the entrepreneur "shifts economic resources out of an area of lower and into an area of higher productivity and greater yield". Be that as it may, enterprise in today’s competitive world and dynamic times represents something larger in terms the scale of the impact of the enterprise. Enterprise is perhaps what McDonalds have achieved. They have taken advantage of the eating out habit; used the traditional fare and achieved stupendous value addition — creating management tools for value creation for the customer across the country and international borders, making the American style outdoor dining habit a global phenomenon. This is undoubtedly entrepreneurship. The study, ‘The Innovation-Entrepreneurship Nexus’, written by Advanced Research Technologies, United States, has demonstrated that mere innovation without entrepreneurship generally doesn’t lead to a remarkable economic impact. The findings of the research indicated that entrepreneurship tended to be high in regions where innovation was high. Entrepreneurs can lead to a healthy linkage between inventors, innovation and economic growth. Economists say that besides focusing on economic development through the use of technology, there is an urgent need to support entrepreneurs so that innovations can be translated into jobs and economic growth. India – imperatives for innovation and entrepreneurship

As Indian companies strive to become globally competitive on cost and quality, the need is to recognise and pursue innovation as a tool for sustainable advantage in products, processes, business models, organisations. Innovation in India could be seen in three distinct phases: 1. Infrastructure build-up phase (1947 – 60s) 2. Re-orientation phase (1960 – 80s) 3. Market orientation phase (1990s onwards) Post liberalisation in 1991 came the reality of intensified competition, which meant that innovation had to be integrally woven into a firm’s strategy and had to derive and sustain competitiveness through innovation. India continues to spend less in comparison to that of the other developing countries like China, Brazil and Korea (they all invest more than 1 per cent). A recent study shows that R&D expenditures by most developing countries is far lower than that of most developed countries

TATA’S as pioneers and entrepreneurs – an illustration Creative thinking and foresight were demonstrated way back in the 19th century by the founding father of the Tata Group, Jamsetji Tata. He envisioned hydroelectric power as a clean source of energy hundred years on, the world continues its debate on Kyoto protocol, sustainable development and clean development mechanism. His concept of welfare and community development around a steel plant was far ahead of his times; we all know how corporate social responsibility has been rapidly integrated in recent times into the corporate balance sheet of companies worldwide. Tatas have nurtured innovative ideas and displayed entrepreneurial spirit in venturing into new geographies, market segments, and product areas. To cite some instances of innovative / novel endeavours by the Tata Group:

Tata Motors

An exciting project is the ‘people’s car’, which would sell for around $2,200 (about Rs 1 lakh). A number of incremental innovations mark the project, like the possible use of bolted or glued panels instead of welded bodies. Indigo — the first sedan designed and manufactured in India. This technology (as is used the world over) allows Tata Motors to meet customer needs in different segments with a single base model.

Titan Edge from Titan — the ultra slim wristwatch that is only 3.5mm thick and 30m water-resistant is a path-breaking design concept. No other company selling mass produced watch is slimmer than this.

Tata Steel Developed low phosphorus steel from high phosphorus ore.

Tata BP Solar

The sun, sand and sea (water) are all inexhaustible sources of renewable and clean energy. It will play a significant role in the years ahead in terms of innovative harnessing and applications for the benefit of the larger mankind. Conclusion We are living in an era rife with challenges and complexities. It is an era of development and competition; the world is advancing towards informationisation, gridification, globalisation and knowledge driving. Technological innovation will expand fresh development space for humans in aerospace, ocean, deep earth, virtual cyberspace, etc. Science ethics and science and technology development will bring man into a new stage of circular economy and sustainable development. Nevertheless, man is facing new challenges. Pressure from population, resources, ecology and environment is increasingly building; while pushing forward the progress

of human civilization. Science and technology poses a challenge to human ethics as well. Organisations must be imbued with the entrepreneurial spirit, wanting innovation, actively promoting it, considering it both a necessity and opportunity. Innovation is strongest in cultures where tinkering is not just allowed but encouraged. In the eighteenth and nineteenth centuries, the European countries were master innovators. The twentieth century belonged to the innovators of America and Japan. The twenty-first century has already been called the Asian century. Countries such as India are poised to become significant knowledge economies and must take on the challenge of looking at making innovations work in the context of developmental imperatives. However, technology must be relevant, affordable and innovative and necessarily multidisciplinary to grapple successfully with the problems of developing countries. Innovations will be the mainstay for societies to forge ahead and the level of our engagement in research and development activities coupled with appropriate applications in the frontier areas of nanotechnology, healthcare and biotechnology, material sciences, alternative sources of energy will determine a nation’s place in the new global order. The world will always need innovators and innovations; it is not a destination but an endless journey and the spirit of entrepreneurship will continue to be a great enabler.

Capital Management
The term business finance refers to the assets, liabilities, capital, revenue and expenses of the business. For you, "expenses" may or may not literally include taxes, but however you want to slice it, taxes and tax considerations obviously have a big impact on how businesses are organized and run. Financial analysis is defined as the process of discovering economic facts about an enterprise and/or a project on the basis of an interpretation of financial data. Financial Analysis also seeks to look at the capital cost, operations cost and operating revenue. The analysis decisively establishers a relationship between the various factors of a project and helps in maneuvering the project’s activities. It also serves as a common measure of value for obtaining a clear-cut understanding about the project from the financial point of view. An analysis of several financial tools provides an important basis for valuing securities and appraising managerial programmes. Financial analysis is vital in the interpretation of financial statements. It can provide an insight into two important areas of management-return on investment and soundness of the company’s financial position. David Hawkins observes that the analyst evaluates results against the particular characteristics of the company and its industry. He seldom expects answers

from this process; but he hopes that it should provide him with clues as to where he should focus his subsequent analysis. Internal management accounts provide information, which is valuable for the purpose of control. The information is made available in the form of accounting data, which may be manifested as financial is made accounting statement. A financial analysis reveals where the company stands with respect to profitability, liquidity, leverage and an efficient use of its assets. Financial reports provide the framework within which business planning takes place. They are the key through which an effective control of a business enterprise is exercised. It is the process of determining the significant financial characteristics of a firm. It may be external or internal. The external analysis is performed by creditors, stockholders and investment analysis. The internal analysis is performed by various departments of a firm.

Significance of Financial Analysis
Financial analysis primarily deals with the interpretation of the data incorporated in the Performa financial statements of a project and the presentation of the data in a from in which it can be utilised for a comparative appraisal of the projects. It is, in effect, concerned with the development of the financial profile of the project. Its purpose is to find out whether the project is attractive enough to secure funds needed for its various constituent activities and once having secured the funds, whether the project will be able to generate enough economic values to achieve the objective for which it is sough to be implemented. It deals not only with the financial aspects of a project but also with its operational aspects. As such, it is necessary to undertake such an analysis not only in the case industrial project but also in the case of non-industrial project. Analysis of financial statements has become very significant due to the widespread interest of various parties in the financial results of a company. In recent years, the ownership of capital of most public companies has become broad-based. A number of parties and bodies, including creditors, potential suppliers, and debenture-holders, credit institutions like banks, industrial finance corporations, potential investors, and employees, trade unions, important customers, economists, investment analysis, taxation authorities and Government have a stake in the financial results of a company. Various people look at the financial statements from various angles. A number of techniques have been developed to undertake analysis of financial statements in order to reach conclusions about the financial health, profitability and efficiency of an enterprise and also to compare an enterprise with other similar undertakings. The technique of ratio analysis is the most important tool of financial analysis. It helps in comparing the performance of various companies and judges their financial soundness.

Utility of financial analysis
Utility of Financial and Accounting Statements Financial statements play a vital role in the internal financial control of an enterprise. These should, therefore, be properly constructed, analysed and interpreted by executives, bankers, creditors and investors. These financial components are tightly intertwined with each other and with the operational decisions made by the business.

Capital purchases and assets.

Almost all businesses need to acquire and use fixed assets. That acquisition, of course, can be through purchasing or through renting or leasing. Purchase and lease decisions in turn require ROI analysis and financing decisions. Then, once an asset is acquired, it must be recovered, or expensed, over time to reflect its depreciation and plan for its replacement. The financing and cash flow decisions involved in acquiring assets will affect both business operations and owner finances, especially in proprietorships, partnerships and closely held corporations.

Capital structure.

Capital structure refers to how much of the business financing is through owner equity and how much is through debt or other liabilities and how it is done, that is, the mix of financial instruments and ownership vehicles. Business capital requirements and owner decisions influence the capital structure, which in turn influences the owner's personal finances. Entrepreneurs must decide how much of their own capital to invest in the business, how they will be "paid" for that capital (in profits, wages, interest, or other ways) and how procuring capital through loans will affect their own financial well-being.

Working capital.

This is a tough concept for many entrepreneurs to grasp. It is capital used to finance the flow-through, what goes into the business and what goes out of the business--not the fixed or tangible assets of the business. It is used to pay for inventory and to provide cash for other items necessary to the day-to-day running of the business. Any business that must pay a supplier or an employee before providing a product or a service to its customers or must provide a product or a service to customers before receiving payment needs working capital to make this happen. Working capital is part of the total capital required to run a business--and

the most dynamic part. Insufficient working capital can choke business operations--insufficient inventory, inability to offer satisfactory customer purchase terms, inability to pay employees or suppliers. It is very common for a business and its entrepreneurs to underestimate its need for working capital. The usual result is that the owner must kick in more capital from personal finances--or accumulate more debt. Working capital mismanagement is a common cause of personal financial failure for entrepreneurs.

Cash flow.

This is the bigger picture for working capital. Does the business have enough cash to meet its ongoing business needs? Does it generate enough cash through operations to replace assets, pay its owners, and fund its growth? Poor cash flow leads to inadequate business resources. It can cause an assortment of financial problems, from decreases in owner returns to severe shortages of capital that must be met eventually by the owners. Cash flow becomes especially critical when the owners must replace key assets or as they're implementing important growth and competitive strategies. Many a business has declined or failed because of inadequate cash flow to replace assets or to execute key competitive strategies-and these problems almost always come back to the doorstep of the entrepreneur.

Risk management.

Any business faces various financial risks. Customers don't always pay, interest rates don't always stay the same, tax rules change, sources of funds don't always come through as expected, owners or investors can leave and the list goes on--all with obvious personal financial consequences.

Personal Finances managed by Entrepreneur
For now it's sufficient to say that personal finances include the income and expenses and the assets and liabilities of the individual entrepreneur and his household. Within those parameters, individual personal finance includes managing cash and money, setting short- and long-term goals, and putting plans in place to achieve those goals. Here are some important pieces to the personal financial puzzle and how they relate to the operations and especially the finances of the business:

Cash and money management.

Just as in the business, the key to a financially healthy and secure household lies in managing day-to-day money flows--income and expenses. Here we talk about the use of personal budgets and banking and credit to manage family finances and lay bricks in place to achieve longer-term goals.

Income from business.

Every entrepreneur has to decide when, how, and how much to be paid from the business. This key decision obviously impacts personal finances, but it is also important to the financial health of the business. The amount and timing of such

payments should be right for both the entrepreneur and the business. Also, it should generally--but not always--be done in a way to minimize tax impact. The amount and regularity of income from the business must, of course, be accounted for in the personal financial budget. "Payment" may be in forms besides cash-benefits, retirement savings, or use of assets. However entrepreneurial compensation is structured, it must be thought through carefully.

Management and growth of personal wealth.

We mentioned income, but income most surely doesn't translate directly to wealth. Just ask the thousands (millions?) of entrepreneurs and other individuals with substantial incomes but little to show for them. The slogan is "Make it, keep it, grow it"--but many never get past "make it." Why? Poor money management-lack of awareness, commitment and control--gets in the way of keeping it, and poor or inattentive use of investing and savings vehicles gets in the way of growing it. Now, we know that most entrepreneurs are too busy to be very active investors, but we will offer some investing basics to help savvy entrepreneurs figure out where to stash their cash.

Risk management.

Just as in business, your personal life involves risks, including loss of income, health problems, liability, and loss of property. Risk management isn't just about insurance, although insurance is an important tool used to manage risk. Entrepreneurs and their families incur the same risks as other people, but business owners may face some additional risks--and may also have some other alternatives to help manage them.


If you're a corporate or public service employee, your fringe benefits--insurance coverage, retirement, bonuses, discounts, use of facilities, etc.--are usually fairly well defined upfront or at least defined as a set of choices. When you're an entrepreneur, the sky's the limit, at least within the law. The business can provide your benefits; if it is large enough, it can take advantage of group plans and rates. Good entrepreneurial personal finance means choosing the right combination of benefits to get you the most personally, while not compromising the business and while minimizing total taxes.

Retirement planning.

"Retirement planning" means figuring out how much you need for retirement and how you will achieve that "number" or goal; "retirement plans" refer to the specific savings vehicles you use to move toward achieving that goal. The first is a matter of pure planning and number crunching; for the entrepreneur, it must include an exit strategy, a way out of the business. The second is really part of the "benefits" package--choosing the right retirement savings package to maximize savings and tax advantages for both you and your business. There are many choices, complex choices that depend on both the finances and the operations (specifically, number and type of employees) of the business.

Transition and distribution planning.

Sooner or later, for financial or other personal reasons, every entrepreneur needs to figure out an exit strategy from the business. Needless to say also, sooner or later, we all die. In personal finance, estate planning concerns the preparation to transfer assets and decision-making authority to others. When a business is involved, the process is first more complex and second should usually start earlier. If something happens to you, what happens to the business? If something happens to one of your partners or key employees, what happens to the business? And what happens to your personal finances as a result of these events? Should you sell your business? When and why? How do you maximize your personal wealth as you close the doors? Again, many, many choices--all begging for careful planning.

Demand and Supply Management
When starting a business, it is very important to consider supply and demand as a factor for predicting the success of your entrepreneurial venture. You might have a great idea for a business, yet if no one is willing to purchase your goods or services, then your chances of failure are higher. For e.g.: If embroidery business had been the third business of its type in any community, it would not have been successful because there would have been an abundance of embroidery businesses. However, since it is first only embroidery business in the area, entrepreneur has been able to meet community’s demand for embroidery work. Supply and Demand Another important aspect of our economy is scarcity, better known as the law of supply and demand. You see this law in action (or hear of its effects) every time there is a major sports or entertainment event. The tickets are sold out in hours and at substantial prices. Why are people willing to pay so much? Because there are many who want to attend the event and few seats available. In other words, the demand is greater than the supply. In such circumstances, price becomes the mechanism for sorting out consumers. In a free enterprise system, those who have the money and are willing to spend it will reap the benefits. If customers demand a good or service that is not readily available, then a scarcity exists.

Demand is the quantity of goods or services that consumers are willing to buy. For example, if every consumer demands a new DVD player during the holiday season, but the stores cannot get shipments in, then a scarcity will be created. The prices will skyrocket because a few people are willing to pay more money to get the DVD player in time for the holidays. In other words, the lower the supply and the higher the demand, the higher the price. The DVD supply provides an example of shortage, as it relates to the supply and demand curve. Major companies may want to create a shortage during the holiday season by limiting supplies so that they can maintain a higher price. For example, Microsoft introduced Xbox prior to a holiday season. Many young people

added this game to their wish list, only to discover that the game would not be released until two weeks before Christmas. This deadline or short notice created a demand for Xbox, yet the supply available from Microsoft was limited, creating a shortage. The Xbox sold for a higher price, because the demand was high and the supply was low. In a few years, the Xbox will be much cheaper to purchase, because the supply will have increased, making it readily available. In addition, the demand will probably decrease because other games will come onto the market. Demand decreases and supply increases, causing prices to decrease as well. This same concept was used several years ago with Cabbage Patch dolls. Mattel advertised these dolls prior to Christmas. Many children requested them for Christmas, but the supply was limited. A shortage was created, and the public demanded the items. Therefore, people were willing to pay higher prices. Now Cabbage Patch dolls are no longer available or demanded, and many people paid a high price for an item that is nearly worthless today.

Supply is the amount of a good or service that producers are willing to provide. In our DVD player scenario, if every store had plenty of DVD players to sell, yet no one was buying them, then the stores would probably lower the price in order to reduce inventory. In other words, the higher the supply and the lower the demand, the lower the price. This is an example of surplus, as it relates to the supply and demand curve. For example, the Xbox is readily available today; therefore, the supply has increased, and the demand has decreased. Prices will be lower as a result. As with the Cabbage Patch dolls, after Christmas the supply increased, but the demand decreased. There was now an overabundance, so the stores had to lower prices drastically in order to clear inventory.

There is a point in supply and demand in which they are equal, known as equilibrium. Equilibrium is the point in price at which the consumer is willing to buy. There fore it is the entrepreneur who through market analysis analyse the exact demand and supply of particular product, so the various resource can be managed and arranged accordingly. They turn demand into supply by recognizing consumer wants and acting upon them. Because of the growing popularity of embroidered business clothing and school items, we were able to address this embroidery demand.

Managing labour

Has evolution made managing people difficult or easy???? today’s workforce becoming increasingly diverse and organizations doing more to maximize the benefits of the differences in employees, Human Resource managers are evolving from the “old school” sideline players to the front-line fighters and Organizations are relying on managers to get the people who get the job done, and of course, make the company money. Have you all noticed recently that even politicians have started requiring the services of HR managers??? So as for entrepreneur also it has become necessary to manage the human resource efficiently to make profits. “Trust people, treat them like adults, enthuse them

by lively and imaginative leadership, develop and demonstrate an obsession for quality make them feel they own the business, and your work force will respond with total commitment”.
Tom Peters A question comes to our minds why this sudden focus on people management? Well people have always been central to organizations, but their strategic importance is growing in today’s knowledge-based business world like never before; this is largely because an organization’s success increasingly depends on the knowledge, skills, and abilities of its employees, particularly as they help establish a set of core competencies which distinguish one organization from its competitors. As entrepreneurs, face the challenge of implementing positive change within company. Here are 10 employee-related resolutions which should be considered for managed of human resource: 1. Develop and share goals with your employees. Identify where you want your company to go and how you can get there. The goals should be specific, measurable, attainable, realistic and timely. Next, make sure that every employee knows and understands what to do to achieve those goals. 2. Clarify roles and job descriptions.

Identify specifically what each person does and should be doing. Ensure that everyone knows how his or her efforts contribute to the organizational success. Unclear roles lead to conflict, disappointment, hard feelings and decreased morale. You can easily avoid these negatives when job descriptions are accurate and clear. 3. Develop an employee volunteer program. Gather a group of employees and think of ways your company can "give back to the community." Employees will see this as a positive step your organization is taking to assist others. This is usually a great morale booster, too. You've been making an impact on your company; now you can do the same for your community. 4. Manage by walking around. Get out of your office. See what your employees are doing. Talk with them so they know you're interested in their work. Discover how well people are getting along with each other. Identify frustrations that employees have with each other and with their work. Get to know them as human beings, not just employees. Be available to answer questions, clarify options and interpret company goals. Become a valued resource to them. 5. Address potential sources of conflict before they erupt. Talk with your employees and identify what gets in the way of their achievement. It could be resources, tools, budgets, processes or even managers. Your task is to find these bottlenecks and remove them. Apply proven techniques to lower tensions and build a positive work environment. 6. Survey the corporate climate. Pinpoint the strengths and limitations of your organization. These could be your people, your management structure, the way employees are treated and managed, the clarity of goals, roles, process and systems, and the effectiveness of personal interactions. Then take action to improve the situation. 7. Involve employees in plans for organizational change. Form a team to address the issues discovered in your survey. Before implementing any changes, convene groups of employees to discuss the need for changes and how those changes will be implemented. Make sure employees feel involved in the process. Participation will reduce resistance to the changes. 8. Identify your stars and reward them. Everyone likes to know when they're doing a good job. The compliments validate their efforts and document their success. Make sure that your top performers know you appreciate their work and that you reward them with money, recognition or advancement.

9. Develop a management training program. Build your future managers now; don't rely on chance. Identify the core competencies that have led to success in your current managers and leaders. Then develop those factors in other employees so that you have a continual supply of qualified individuals managing and leading your organization. 10. Offer a periodic social hour. This will allow employees to develop collegiality, share ideas in an informal atmosphere and get to know one another. This can be done inside or outside of the work place. This usually leads to increased employee satisfaction and interest in working with others.

“People are the primary source of competitive advantage. At the end of the day we bet on people, not strategies”.

Knowledge management
“A former President of the United States said that where knowledge spreads, wealth spreads; and to diffuse knowledge in the world is to diffuse wealth in the world. Those words were spoken by President Rutherford B. Hayes on May 15, 1878, and they are as true today as they were 124 years ago. Those who acquire knowledge have a better opportunity to acquire wealth, and the truly knowledgeable human being also desires to be a better neighbour, citizen and student of the world”……
How much time do the people in our organizations spend looking for information? Knowledge management can change this search time into highly effective work time. Knowledge management is one of those ephemeral terms that seem to mean nothing and everything simultaneously. During the past couple of years, it has been variously identified with document management, business intelligence, collaborative computing, corporate portals, and any number of buzzwords. But rather than a single product, knowledge management encompasses a business strategy aimed at taking advantage of a company's existing base of information, experience, and expertise.

Defining Knowledge Management
Knowledge is a fluid mix of framed experience, values, contextual information, and expert insight that provides a framework for evaluating and incorporating new experiences and information. It originates and is applied in the minds of knower. In

organizations, it often becomes embedded not only in documents or repositories but also in organizational routines, processes, practices and norms. A working definition of knowledge Sometimes we can solve a problem, make a decision or perform some task because we know what is the correct solution, alternative or behaviour; we have the information we need to act. Sometimes we know how to solve that problem, make that decision or perform that task; we have the knowledge we need to be successful. Sometimes we know who can help us with the solution, decision or task; we can identify the expert and the expertise we need to get the right answers. Knowing what, how and who in support of the key processes and strategies of an enterprise is the knowledge of interest to knowledge management. Types of knowledge This “what, how and who” is sometimes fully documented, written down, communicated or recorded in some explicit format. Other times, it is just in our heads, an understanding that we possess in some tacit way, based on our experience or learning. In most organizations, about 20% of the knowledge required for the successful operation of that organization is explicit; the remaining 80% are tacit. Knowledge management deals with these two types of knowledge, tacit and explicit. It often seeks to make the tacit knowledge of an individual or group explicit, so that it can be more readily shared with others. As new knowledge is acquired, it becomes part of the tacit knowledge base of the learner who subsequently adapts it and applies it as needed to solve new problems, make new decisions or perform new tasks. With experience and continued learning, the tacit knowledge matures and evolves into new knowledge, which remains tacit within the individual or group until they document it in some fashion, making it explicit

Social Capital, Knowledge Processes and Entrepreneurial Success

Social Capital Of firm

Knowledge Creation /Acquisition

Knowledge Assimilation

Knowledge Exploitation

Knowledge Processes of firm

Entrepreneurial Success

Knowledge Management Framework The management of knowledge consists of the application of the normal management functions - planning, design, supervision and reporting - to the processes that: identify, collect, adapt, organize, apply, share and create knowledge

Knowledge management framework
Why we need knowledge management now Why do we need to manage knowledge? Ann Macintosh of the Artificial Intelligence Applications Institute (University of Edinburgh) has written a "Position Paper on Knowledge Asset Management" that identifies some of the specific business factors, including:
o o o o o o o

Marketplaces are increasingly competitive and the rate of innovation is rising. Reductions in staffing create a need to replace informal knowledge with formal methods. Competitive pressures reduce the size of the work force that holds valuable business knowledge. The amount of time available to experience and acquire knowledge has diminished. Early retirements and increasing mobility of the work force lead to loss of knowledge. There is a need to manage increasing complexity as small operating companies are trans-national sourcing operations. Changes in strategic direction may result in the loss of knowledge in a specific area.

To these paraphrases of Ms. Macintosh’s observations we would add: o Most of our work is information based.

Organizations compete on the basis of knowledge. Products and services are increasingly complex, endowing them with a significant information component. o The need for life-long learning is an inescapable reality.
o o

In brief, knowledge and information have become the medium in which business problems occur. As a result, managing knowledge represents the primary opportunity for achieving substantial savings, significant improvements in human performance, and competitive advantage. It’s not just a Fortune 500 business problem. Small companies need formal approaches to knowledge management even more, because they don’t have the market leverage, inertia, and resources that big companies do. They have to be much more flexible, more responsive, and more "right" (make better decisions) — because even small mistakes can be fatal to them. Significance of Knowledge Management Knowledge is available and leveraged amongst different parts of the organization – Employees in distant locations are able to collaborate – Activity or process times are positively impacted through the instant availability of knowledge Knowledge Management is information put to work – Human Interaction is the focal point surrounding the collection, distribution and reuse of information – Decision-making is facilitated by the almost immediate availability of information and the tools to analyze it Helps maintain an organization’s intellectual capital – An employee’s knowledge about a customer, solution or process is available to the entire organization – Attrition has less of an impact on the organization since an individual’s knowledge is already captured Knowledge management: a cross-disciplinary domain Knowledge management draws from a wide range of disciplines and technologies.
o o

Cognitive science. Insights from how we learn and know will certainly improve tools and techniques for gathering and transferring knowledge. Expert systems, artificial intelligence and knowledge base management systems (KBMS). AI and related technologies have acquired an undeserved reputation of having failed to meet their own — and the marketplaces — high expectations. In fact, these technologies continue to be applied widely, and the










lessons practitioners have learned are directly applicable to knowledge management. Computer-supported collaborative work (groupware). In Europe, knowledge management is almost synonymous with groupware … and therefore with Lotus Notes. Sharing and collaboration are clearly vital to organizational knowledge management — with or without supporting technology. Library and information science. We take it for granted that card catalogs in libraries will help us find the right book when we need it. The body of research and practice in classification and knowledge organization that makes libraries work will be even more vital as we are inundated by information in business. Tools for thesaurus construction and controlled vocabularies are already helping us manage knowledge. Technical writing. Also under-appreciated — even sneered at — as a professional activity, technical writing (often referred to by its practitioners as technical communication) forms a body of theory and practice that is directly relevant to effective representation and transfer of knowledge. Document management. Originally concerned primarily with managing the accessibility of images, document management has moved on to making content accessible and re-usable at the component level. Early recognition of the need to associate "metainformation" with each document object prefigures document management technology’s growing role in knowledge management activities. Decision support systems. According to Daniel J. Power, "Researchers working on Decision Support Systems have brought together insights from the fields of cognitive sciences, management sciences, computer sciences, operations research, and systems engineering in order to produce both computerised artifacts for helping knowledge workers in their performance of cognitive tasks, and to integrate such artifacts within the decision-making processes of modern organisations." [See Powers’ DSS Research Resources Home page.] That already sounds a lot like knowledge management, but in practice the emphasis has been on quantitative analysis rather than qualitative analysis, and on tools for managers rather than everyone in the organization. Semantic networks. Semantic networks are formed from ideas and typed relationships among them — sort of "hypertext without the content," but with far more systematic structure according to meaning. Often applied in such arcane tasks as textual analysis, semantic nets are now in use in mainstream professional applications, including medicine, to represent domain knowledge in an explicit way that can be shared. Relational and object databases. Although relational databases are currently used primarily as tools for managing "structured" data — and object-oriented databases are considered more appropriate for "unstructured" content — we have only begun to apply the models on which they are founded to representing and managing knowledge resources. Simulation. Knowledge Management expert Karl-Erik Sveiby suggests "simulation" as a component technology of knowledge management, referring to "computer simulations, manual simulations as well as role plays and micro arenas for testing out skills." (Source: Email from Karl-Erik Sveiby, July 29, 1996 ) Organizational science. The science of managing organizations increasingly deals with the need to manage knowledge — often explicitly. It’s not a surprise that the American Management Association’s APQC has sponsored major knowledge management event.

Entrepreneurs contribute to the economic cycle of success. As entrepreneurs, they do the following:

They provide venture capital by gathering resources to initiate their business. We were able to attain state grants to assist in the purchase of equipment totalling more than $10,000. The initial start-up costs would have been too high without this outside assistance. Many times, individuals have to borrow money or seek bank loans in order to obtain their venture capital. If a young entrepreneur were to establish a restaurant or catering business, he or she would need to seek a physical location (a building) and purchase kitchen equipment as venture capital. They provide jobs, not only for themselves, but also for other individuals who help in the business endeavours. As the business expands and grows, the entrepreneur realizes that he or she can’t work and manage the business 24 hours a day, 7 days a week. So the entrepreneur will seek additional employees to lighten the workload. They change society by incorporating creative ideas to answer consumer needs and wants. We were able to introduce personalized embroidery designs to businesses in our community. The businesses responded positively to this creative idea, thus contributing to the success of our embroidery business. On a more general basis, when McDonald’s introduced the drive-through concept to fast-food restaurants, they changed society’s idea of “eating out” to include “in-home fast-food convenience.” Many other fast-food establishments, such as Hardee’s, Burger King and Wendy’s, accepted this concept and changed society’s idea of eating out forever.

Creating Indian Entrepreneurs. A recent Mckinsey & Company-Nasscom report estimates that India needs at least 8,000 new businesses to achieve its target of building a US$87 billion IT sector by 2008. Similarly, in the next 10 years, 110-130 million Indian citizens will be searching for jobs, including 80-100 million looking for their first jobs. This does not include disguised unemployment of over 50% among the 230 million employed in rural India. Since traditional large employers- including the government and the old economy player-may find it difficult to sustain this level of employment in future, it is entrepreneurs who will create these new jobs and opportunities. Today’s knowledge based economy is fertile ground for entrepreneurs, in India. It is rightly believed that India has an extraordinary talent pool with virtually limitless potential to become entrepreneurs. Therefore, it is important to get committed to creating the right environment to develop successful entrepreneurs. To achieve this, India must focus on four areas. 1. Create the Right Environment for Success: Entrepreneurs should find it easy to start a business. To do so, most Indians would start slow with capital borrowed from family and friends, the CEO playing the role of salesman and strategist, a professional

team assembled months or perhaps years after the business was created, and few, if any, external partners. Compare this with a start-up in Silicon Valley: a Venire Capitalist (VC) or angel investor would be brought in early on; a professional management team would drive the business; a multifunctional team would be assembled quickly; and partnerships would be explored early on to scale up the business. A major challenge for India is to create a handful of areas of excellence- the breeding ground where ideas grow into businesses. For example, Gurgaon and Hyderabad for remote services, or Bangalore for IT. One way of strengthening these areas is to consider the role of universities and educational institutions-places where excellence typically thrives. 2. Ensure that Entrepreneurs have access to the Right Skill: A survey conducted by McKinsey & Company last year revealed that most Indian start-up businesses face two skill gaps: entrepreneurial (how to manage business risks, build a team, identify an get funding) and functional (product development know-how, marketing skills, etc.) India can move toward ensuring that the curriculum at universities is modified to address today’s changing business landscape, particularly in emerging markets, and to build ‘centres of entrepreneurial excellence’ in institutes that will actively assist entrepreneurs. 3. Ensure that Entrepreneurs have access to ‘Smart Capital’: For a long time, Indian entrepreneurs have had little access to capital. It is true that in the last few years, several Venture Funds have entered the Indian Market. And, while the sector is still in infancy in India (with estimated total disbursement of less than US$0.5 billion in the year 2003), VCs are providing capital as well as critical knowledge and access to potential partners, suppliers, and clients across the globe. However, India has only a few angel investors who support the idea in the early stages before VCs become involved. While associations such as TIE are seeking to bridge the gap by working at creating a TIE India Angel Forum, this is India’s third challenge creating a global support network of ‘angels’willing to support young business. 4. Enable Networking and Exchange: Entrepreneurs learn from experience-theirs and that of others. The rapid pace of globalization and fast growth of Asian economies present tremendous opportunities and challenges for India. Through planning and focus, India can aspire to create a pool of entrepreneurs who will be the regions –and the world’s-leaders of tomorrow. The Future of Entrepreneurship. Both the Central Government and various State Governments are taking increased interest in promoting the growth of entrepreneurship. Individuals are being encouraged to form new businesses and are being provided such government support as tax incentives, buildings, roads, and a communication system to facilitate this creation process. The encouragement by the central and state governments should continue in future as more lawmakers are realizing that new enterprises create jobs and increase the economic output of the region. Every state government should develop its own innovative industrial strategies for fostering entrepreneurial activity and timely development of the technology of the area. The states should have their own state-sponsored venture funds, where a percentage of the funds have to be invested in the ventures in the states.

Society’s support of entrepreneurship should also continue. This support is critical in providing both motivation and public support. A major factor in the development of this societal approval is the media. The media should play a powerful and constructive role by reporting on the general entrepreneurial spirit in the country highlighting specific success cases of this spirit in operation. Finally, large companies should show an interest in their special form of entrepreneurship-intrapreneurship-in the future. These companies will be increasingly interested in capitalizing on their Research & Development in the hyper competitive business environment today.

Present scenario:
Melt down in financial markets has plunged the economies around the world into recessions. At these times, other features start appearing in the economy such as: Investors stepping backward, customers draw the line to their expenditure, and finally revenue falls. But it is a fact that, during the Great depression of 1929, one of the well known companies ‘MOTOROLA’ had a fortune time & expanded worldwide.

What has India done so far?
“India’s vibrant entrepreneurial culture was stifled by restrictive economic policies that seriously undermined development. Recent reforms have injected a new sense of life into India’s sluggish economy”-GORDON CORERA Reports. This report states the problems faced by firms between 1950 and 1991. Despite the effort of former PM. Rajiv Gandhi to bring forth the concept of liberalisation in Indian economy in 1986, India had to wait for five years, for the LPG (Liberalisation, Privatisation, and Globalisation) reforms which was adopted because of a serious macro-economic crisis in both fiscal and foreign exchange sectors of the economy. By this, the well established companies like TATA which had a tight hold in the Indian economy gained a lot and became multi national corporations, but in fact it gave the foreign entrepreneurs to establish their business in India by way of joint ventures etc. And thus the fresh entrepreneurs had a less opportunity and had to face new challenges and so these reforms of Government did not really help the entrepreneurs.

Where does India stand now?
India has been left behind by many Asian economies including countries that were poor as India few decades ago. After the reforms, India’s growth rate now looks set to stabilise at a healthier 6 to 7% a year. One of the interesting fact is that even in closing businesses entrepreneurs in India have to go through a complicated procedure ,and by which India is ranked 133rd in closing businesses.

What India has to consider?
‘Risk is the reward for business’ but then the middle class Indians who are the

majority in the Indian population step backwards in investing in a new business even if they have sufficient knowledge of some business, source of finance and new ideas, this is mainly due to the lack of “safety” which is non –existent. a. Purely indigenous opportunities are not being developed in India. b. The need of incubator funds in India as there is a need of capital to invest in business. c. Source of finance-unclear and complicated. India is ranked 65th in getting credit. d. Lack of managerial skills among the fresh entrepreneurs. They often fail to channelize funds. e. Lack of basic practical knowledge even among few business students, where the learning process cannot withstand the international standards. f. Political factors-corruption, bribery and other crimes, evils.

What has to be done?
a. If India continues on the free market path ,stress education which leads to greater public awareness and accountability, develops its physical and economic infrastructure to facilitate enterprise, the license raj of India will someday be equal that of the U.S. in its effectiveness. b. Policies of financial institutions to support entrepreneurs and set up new firms: Banks and financial institutions should appreciate the specific nature of entrepreneur’s needs and should provide financial help in which the government should take initiative to make the procedure simple. States like Andhra Pradesh thought about this and thus Hyderabad holds a distinguished status of industrial development. c. Setting up of innovation councils and other councils. d. Fresh, young and Women entrepreneurs should be encouraged. e. There should be conducive political conditions in the country. f. Support to entrepreneurs and local communities should be primarily provided in matching grant forms to facilitate the mobilization of local resources and ownership. For instance, rural people of Ludhiana in Punjab produce footballs which are exported to countries known for football matches and such communities should be given support, growth will hang about.

a. Provide the necessary package of support-technical, financial, commercial, legal, and so on-with flexible, autonomous agencies adapting their support and operations to the concerned enterprises.

b. Intellectual property rights (IPR) play an important role in encouraging innovation. It gives a unique recognition for their contribution to the innovation chart and protection of their work. For e.g.: copyrights to software’s and literary works and patents to inventions. c. Incentives are motivation for the workers to work hard and it often leads to innovative ideas and actions leading to innovation. d. The expansion plans must be realistic and provide a reasonable remuneration of the capital invested. e. Role of small and medium enterprises (SMEs) In the new environment, the competitiveness of large firms greatly depends on the efficiency of small firms. It should be up-to-date but at the same time it must be able to meet the needs of both traditional and new product lines. E.g. Silicon Valley in the United States is a very shining example of the contribution of techno-entrepreneurship to the whole world. f. The physical infrastructure in the country should be made adequate as in the supply of professional and commercial services. g. The education system in India should incorporate skill-based learning and the principles of market economy early in the education stage as in the foreign countries. h. Industry investment in R&D should be increased.Government agencies & educational institutions should conduct quality research and development. In India, only few institutions like the IIT’S accomplish this. i. Making the entrepreneurship environment favourable for R&D and innovation. j. Maintaining stable legal conditions. k. Assess the appropriateness, effectiveness, efficiency of the Cooperative Research Centres (CRC) and Research and Development (R&D) l. Techno-economic Surveys and comprehensive surveys regarding the progress in R&D should be conducted. m. Encumbrance of the employees with work beyond their capacity would neither permit the smooth functioning of the firm nor leads to innovation. n. IT revolution through out the country, as in the Malappuram (Kerala) which is regarded as the first computer literate district in India groomed by the Akshaya (eliteracy campaign).

“India will be a technologically advanced country. In evidence thereof, it will import, and not export, talented people”. It will minimize income disparities and economic inequalities, maximize employment by matching employment skills to technology innovation. The entrepreneurship, innovation capacity of India and its global

competency has been well explained with apt examples of present scenario. Now, its well understood that the support of government, the initiative of private agencies, the active participation of public sector, entrepreneurs, politicians and the effort of all citizens can raise the tricolour flag of India to the top position in the ranking of entrepreneurship and innovation development. Moreover India will realize its entrepreneurship and innovation potential. The definition of entrepreneurship has evolved over time as the world’s economic structure has changed and become more complex. Risk taking, innovation, and creation of wealth are the criteria that have been developed as the study of new business creations has evolved. The decision to start an entrepreneurial venture consists of several sequential steps (1) the decision to leave a present career or lifestyle. (2) The decision that an entrepreneurial venture is desirable; and (3) the decision that both external and internal factors make new venture creation possible. There are both pushing and pulling influences active in the decision to leave a present career: the “push” of job dissatisfaction or even layoff, and the “pull” toward entrepreneurship of seeing an unfilled need in the market place. The desirability of starting one’s own company is strongly influenced by culture, sub-culture, family, teachers, and peers. Any of these influences can function as a source of encouragement for entrepreneurship, with support ranging from government support that favour business to strong personal role models of family or friends, Beyond the stage of seeing entrepreneurship as a “a good idea”, the potential entrepreneur must possess or acquire the necessary education, management skills, and financial resources for launching the venture. The study of entrepreneurship has relevance today, not only because it helps entrepreneurs better fulfill their personal needs but because of the economic contribution of the new ventures. More than increasing national income by creating new jobs, entrepreneurship acts as a positive force in economic growth by serving as the bridge between innovation and market place. Although government gives great support to basic and applied research, it has to have great success in translating the technological innovations to products or services. Although intrapreneurship offers a promise of marriage of those research capabilities and business skills that one expects from a large corporation, the results have not been spectacular. This leaves the entrepreneur, who frequently lacks both technical and business skills, to serve as the major link in the process of innovation development, and economic growth and revitalization. The study of entrepreneurship and education of potential entrepreneurs are essential parts of any attempt to strengthen this link so essential to a country’s economic well-being. Bibilography: 1. Entrepreneur Development-New Venture Creation; By Satish Taneja & S.L.Gupta 2. Lectures on Entrepreneurship Development By Dr.B.M. Kacholia of Narsee Monjee Insitute of Management Studies, Mumbai 3. Entrepreneurship-ICFAI Publication

4) Fundamental of entrepreneur By G.S.Sudha 5) www.entrepreneur.com 6) www.wikipedia.com 7) www.knoweledgeentrepreneur.com 8) Entrepreneurship and supporting (http://www.fao.org/DOCREP)
institutions: an analytical approach

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