entrepreneurship in developing economies

Transcription

SCHOLARS WORLD -INTERNATIONAL REFEREED MULTIDISCIPLINARY JOURNAL
OF
CONTEMPORARY RESEARCH
Online: ISSN 2320-3145, Print: ISSN 2319-5789
ENTREPRENEURSHIP IN DEVELOPING ECONOMIES
(A NEED FOR COMPETENCIES DEVELOPMENT)
RAJARAM NATHAJI WAKCHAURE,
(M.Com.,M.A.(Eco.),M.Phil., Ph.D., G.D.C&A)
HOD, Dept. of Post Graduate in Commerce
(Savitribai Phule Pune Vidyapith)- MS-India
ABSTRACT
Entrepreneur of developing economy perceive a short window of opportunity where he
has to manage the uncertainty while recognizing that certain risks cannot be influenced by
their action. The paper analyses the challenging situation faced by advanced economies
due to economic turmoil, similarly discusses the developing economies as factor driven
economy and their position in global competitiveness index. Hence a need to develop
entrepreneurial competencies from traditional model to a more dynamic innovation model
with new approaches like transformational entrepreneurship, scale up not start up policy,
Social entrepreneurship and reverse innovation in what way will prove fruitful to
developing economies is discussed towards the end of the paper.
Keywords:
Factor Driven Economy, Transformational
Entrepreneurship, Scale Up, Search Funds
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Entrepreneurship,
Social
Volume. III, Issue II, April 2015 [65]
OF
INTRODUCTION:
Entrepreneurship is the pursuit of opportunity beyond resources controlled (Howard Stevenson). Pursuing
opportunity beyond resources controlled emphasize on whatever I do in my day to day work I need to be
inventive, creative, opportunistic & persuasive, because you rarely have enough resources to realize your
dreams. Training & Development competencies can add a punch to the same especially for the entrepreneurs
of developing economies who are in pursuit of success with meager resources. “Pursuit” implies a
relentless focus. An entrepreneur is in a hurry & as the time passes it consumes limited resources available
with him. “Opportunity” implies that a novel idea includes Pioneering a truly innovative product. Devising
a new business model, creating a better or cheaper version of an already existing popular product or
targeting an existing product to new set of customers “Beyond Resource Controlled” projects constraints,
many entrepreneurs bootstrap: they keep expenditures to minimum level, they invest their own time &
necessiary own funds, because they face considerable risk such as Demand Risk, Technology Risk,
Execution Risk & Financial Risk. Hence the entrepreneurs have a herculean task to manage this uncertainty
while recognizing that certain risks cannot be influenced by their actions. Global growth remains historically
low for second year running with major centers of economic activity particularly large emerging economies
& key advanced economies-expected to slow in 2013, confirming the belief that the global economy is
troubled by slow & weak recovery. The income gap between advanced economies & emerging developing
economies is closely faster than expected (Global Competitiveness Report).
Recent Developments such as danger of property bubble in China a decline in World Trade & Volatile
Capital flows in emerging markets could derail the recovery & have a lasting impact on the global economy.
This in itself is a challenge for developing economies to cope up with such a situation & innovate their
entrepreneurial activities.
Competitiveness is set of institutions, policies & factors that determine the level of productivity of the
country & in turn sets the level of prosperity that can be earned by an economy (World Economic Forum).
Although the productivity of a country determines its ability to sustain a high level of income, it is also one
of the key factors explaining an economy’s growth potential.
In line with the economic theory of stages of development the GCI assumes that economies in first stage are
mainly Factor Driven & compete based on their factor endowments – primarily low skilled labor & natural
resources. Companies compete on the basis of Price & Sell basic products or commodities with their low
productivity reflected in low wages. Maintaining competitiveness at this stage of development linges
primarily on 4 pillars above.
Similarly the developing economies like India which is grouped in factor driven economy faces a dilemma as
to how they will transform into efficiency driven economy with such a unpredictable business environment, in
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fact India is in transition mode from factor driven economy to efficiency driven economy. Here there is a need
to change the model of entrepreneurial development of traditional nature like that of (Schumpeter) –
Advocating entrepreneur as innovator who introduces something new, Achievement Motivation of
(McClelland) is not enough to cope up, similarly (Harbison) emphasis on managerial skill & creativity will
alone not be successful in the changed Business Environment. (Hagen) Advocates creative innovation goes on
to describe entrepreneur as problem solver interested in practical & technological realism.
Fastest developing economies of the world China & India are struggling to make a mark in competitiveness
position, while China (29th) is leading BRICS ahead of second placed Brazil (48th) by almost 20 ranks. India
ranks 59th overall slipping further lost 10 places once ahead of Brazil & South Africa.
These economies need to change their entrepreneurship development training & learning model:
TRADITIONAL MODEL:
The basic foundation of entrepreneurship development programme model starts with stimulation in order to
let the person set or reset the objectives of business, prepare for unforeseen risk, communicate effectively
with a broad vision. It helps in strengthening his passion for integrity, honesty & comply with law which is
the key to success in the long run & a guarantee to sustain in adverse conditions.
INNOVATIVE MODEL:
Developing economies are in dilemma weather to go for a traditional Entrepreneurial Development System
or do something different, the reason is validated from the fact that there have been variations in
International Business since last six years, ever since subprime crises came inflicting a recessionary trend in
US & effecting the world closely nitted with US in terms of Business.
ENTREPRENEURS FACE CATCH – 22 SITUATIONS:
Entrepreneurs bring a change in themselves while facing a Catch – 22 situations, where in a given situation
desired outcome is impossible to attain. Here entrepreneurs intelligently apply innovative tactics to tackle
this Catch – 22 situations;
1. Lean experimentation, allows them to resolve risk quickly, with limited resource expenditure.
2. Staged investment allows entrepreneurs to address risk sequentially.
3. Partnering allows entrepreneurs to leverage other organizations resources.
In order to face the challenges of New Millennium there is a need to develop competencies in entrepreneurs
who already have a base & do not invest heavily on these who are just stepping in as young entrepreneurs,
going to do some smart work with the resources of state. This situation looks more affordable & is likely to
give more concrete results, then entrepreneurs stepping in taking risk & doing something New / Innovative.
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TRANSFORMATIONAL ENTREPRENEURSHIP:
Slow decline of Industries Manufacturing in developed nation’s recent failures of financial capitalism across
the globe indicated to search for new model of economic growth. Developing Economies can transform their
present strength of entrepreneurs with technology meeting social impact. That is if combine tools &
methodology of Technology entrepreneurship with world centric value system of Social Entrepreneurship
become primary source of Socio Economic Value Creation.
This movement can be called as Transformational Entrepreneurship.
In US last few decades saw all Economic growth & Job growth came from high growth technology
companies like earlier Amazon, Google etc & in last 10 years Facebook, Twitter, Zynga etc. Intelligent
entrepreneurs building meaningless ventures just for faster economic growth to accumulate wealth must be
carefully checked before it turns malignant leading technology entrepreneurs to commit economic atrocities
committed by financial sectors.
Entrepreneurs of developing economies can implement transformational entrepreneurship mode by aligning
technology & socio economic value creation to be successful in their transition from phase 1 to 2 for India &
from phase 3 to 4 for China etc.
SOCIAL ENTREPRENEURSHIP:
Stepping in will fill the moral void by refocusing energy & resources on important social problem.
The New Model intends to figure out & unite scalable tools of technology entrepreneurship with moral ethos
of social entrepreneurship.
Hence Transformational Entrepreneurs will earn their name by creating innovative solutions to world’s
biggest problems that are scalable, sustainable, systematic social entrepreneurs will find what is not working
& solve problem by changing system, persuade entire society to take a leap. They are ultimate realists
concerned with practical implementations. Present ideas user friendly Vinoba Bhave (India) land gift
movement, redistribution of 7 million acres of land in India to untouchables & landless, Florence
Nightingale (U.K.) founder of modern nursing. John Muir (US) naturalist & conservationalist, established
the National Park System.
Mohd Younus (Bangladesh) founder of Grameen Bank & its growing family of social venture businesses. Tom
Szaky (Terra Cycle) turning waste into profit, purchased waste for 1 dollar segregated & used for profitable gains.
FOCUS ENTREPRENEURSHIP POLICY ON SCALE UP NOT STARTS UP:
“Would you allocate more of societies resources to giving birth to babies or to raising children well”.
There is a need to think seriously especially the developing economies of the world where the sickness in
industry is quiet high. There needs to be a transformation in policy of entrepreneurship towards scale up &
not start up & then the specific training module where a qualitative training to go for scale up of these units
performing from a very average to high growth industries.
Recent economic turmoil world over have unleashed a new wave of startup programme like Start up
America, Start up Russia, Start up Britain hardly any country lacking start up programme but equating such
a start up with developing economies as well is a bit too harsh & in fact for developing economies the
development of competencies in entrepreneurs will give a boost for extraordinary value creation by
acquiring, repurposing, spinning off, recombining underutilized & undervalued assets.
SEARCH FUNDS:
In fact entrepreneurs of developing economies can adopt a new entrepreneurial vehicle to carry forward their
mission by acquiring undervalued companies, family businesses which are unmanageable units which are
unmanageable due to its growth, large corporations which are on road to sickness but are self sufficient in
other aspects. The development programmes can be launched to utilize such funds lying idle unutilized or
underutilized in their own country as well as some other country. Entrepreneurs trained to catch the
opportunity will go long way to restrict a startup programme.
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REVERSE INNOVATION:
Developing Economies badly need to alter their approach & focus their attention on Innovation for emerging
markets rather than focus on developed market. GE have opened one of world’s largest Welch Technology
R&D centre in Bangalore (India) where in 4500 scientists are working day & night only to develop product
catering to Indian market & its character of easy accessibility quality & low cost.
GE is interested in solving India’s problems with India specific products.
The entrepreneurs if properly trained can very well cater to the indigenous needs of developing economies.
In absence of proper entrepreneurial development model the entrepreneurs are going for startups & hence
increase burden on the state due to failure rate, but instead if focus is on the needs of own country instead of
worldwide the solution of availability, accessibility & low cost product will be solved.
CONCLUSION:
Training & Developing competencies of entrepreneurship of developing economies is the need of the hour
as they are in pursuit of success with meager resources. Entrepreneurs face a Catch – 22 situation due to lack
of global competitiveness because their economies are factor driven. Transforming it to efficiency driven
economy will not do with the start up model hence entrepreneurial development by training them for
enhancing competencies by way of transformational entrepreneurship, with technology & social aspiration
combined to surge ahead under social entrepreneurship. The focus of entrepreneurs of developing economies
should be on scale up rather than start up & in pursuit of this they can utilize & help themselves with search
funds available to be exploited. Finally the entrepreneurial focus should be on emerging markets as is the
character of developing economy rather than focusing on developed markets whose requirements are quite
higher than developing markets.
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entrepreneurship in developing economies

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