Source: E-mail dt. 2.1.2012
Managerial Challegnes & Linking Innovations in Entrepreneurship
Mrs. T. UshaRani, M.Com., MBA., M.Phil., (Ph.D)
HOD & Assistant professor – Commerce
Sir Krishna Arts
The establishment and development of Small and Medium Enterprises is a resourceful input leading to the rapid development of economic and social prospects. A motivated SME’s sector establishes a strong foundation to increase the standard of living and reduce poverty. There must be a rigorous and continuous need to improve the factors that furnish a affable entrepreneurial climate to exceed major obstacles. Maintaining technology, business and knowledge as buzzwords, the rapid advancements in the streams of science and technology are leading towards knowledge entrepreneurs and technology driven enterprises. The social and economic indicators has influenced in the abrupt development of Indian economy setting a bright future in country’s education and GDP statistics. Knowledge based industries are likely to acquire maximum prominence facilitating support to SME by the government in the next decade. The major essence is to focus Human Resource Development support with the establishment of appropriate mechanisms towards Technology Business Incubators in the era of globalization.
Key words – Incubators, entrepreneurship, venture capital.
The establishment and nurturing of Small
and Medium Enterprises (SME’s) is a vital input in creating dynamic market
economies in the economic and social development of transition countries.
Entrepreneurs are the key drivers and inhibitors of economic growth,
innovation, regional development and job creation. A strong highly motivated
SME’s sector provides a strong foundation to increase standards of living and
to reduce poverty. Despite being recognized internationally the importance of SME’s,
they still face major challenges in many especially in developing countries
In order to establish strategic plans for small and medium enterprise development, it has been necessary to establish some business development sectors to bridge the gap between private and public sectors, since private sector development relies on a partnership between the private and public sectors. Since, Business and Technology go hand in hand and hence they can be separated. Technology, Business and knowledge are becoming the buzzwords of the new millennium. As the technology is leapfrogging for beyond the expected, enormous activities are in progress in research and development for new and newer technologies day by day, resulting into the emergence of new areas of technology. These rapid developments in the field of science and technology are also leading towards a new class of knowledge entrepreneurs and knowledge/technology driven enterprises, which important factor for the economic development of nations and a source of value-added employment generation. At the same time, the process of globalization, establishment of World Trade Organization, high quality standards and environmental considerations, imposition of trade barriers by developed countries, information technology revolution continues to adversely affect the conventional/traditional competitive advantage of the small and medium enterprises in the developing countries and a threat for survival in the marketplace.
Indian Economic Picture
Future vision on Indian SME sector
In the present scenario dynamic world “change” is the only permanent thing. The process of change has accelerated in most recent years due to macroeconomic transformation both in house as well globally. In the present situation the two big global economic forces which are competing for world attention are (a) the advent of a new economy due to information and communication technology and (b) due to globalization increased instability and uncertainty. With the formation of WTO, a new trade environment is emerging and a large number of items are now under Open General License (OGL). In the recent times there has been reduction in import duties. These have thrown a challenge before the SME sector which warranted them to be more competitive and efficient to face the international competition successfully. Further, consumer’s choice, preference and their quality are varying a lot. To cope up with these changes, the SME sector will have to undergo many internal and external transformations.
Change in the technological requirement
The competitiveness of any economy depends on how efficiently all the resources in the process of production are utilized and how efficiently these are marketed, hence the entire chain of production and marketing has to be efficient. Many of the items produced in the small-scale sector are becoming redundant because of the change in consumers choice, preferences and also due to change in new technology. The entry of foreign products/services has given consumers a wide choice of hi-tech and good quality products at competitive prices. This means that the process of production has to be cost efficient and meet quality needs of the consumers. This improvement can come through the use of latest technology. Hence, the need for change in technology is more relevant for SME’s than large units.
Sourcing of technology
Products, processes, designs, machinery, tools, testing, equipment, technical training, consultancy, upgradation, etc. which depend on technology is considered one of the most important factor of industrial process. In the SME sector, technology is mainly sought in the form of processes and product know-how. The different sources from which technology flows into the SME’s are government institutions, local suppliers, foreign suppliers, R&D institutions, industries etc. Recent studies on sources of technology for SME’s have found that the entrepreneurs obtained technological knowledge mainly from local suppliers. Technology identification, acquisition, transfer, adoption and upgradation are some of key issues in relation to technology management relevant to SME’s.
Monitoring and Measuring SME’s
Small Industries Development Organization (SIDO) under Ministry of Industry formulates and monitors policies and programs, provides business services, establishes product-cum-production development centres for SME’s. Small Industries Development Bank of India (SIDBI), a special financial Institution offers long term credit facility as well offers assistance in marketing and export promotion to SME’s etc., like this many institutions and organizations have offered assistance and advices and at the same time measure and monitor for effective and efficient functioning of SME’s.
Glance at entrepreneurship development in India
Entrepreneurship is a global and
multifaceted phenomenon with significant difference between countries. It has
positive relationship between entrepreneurship and economic growth that
contribute towards the wealth and social development of a nation under the
given technological, industrial and political framework. The government support
for the small firm sector like funding infrastructure and protection from
competition has been withdrawn. Social and cultural norms in
Dominating and influential forces to nurture techno-entrepreneurship
National Science and Technology Entrepreneurship Development Board (NSTEDB)
NSTEDB, established by the Government of India in 1982, is the nodal government agency promoting various mechanisms to promote gainful self-employment in the country and to link idle S&T manpower with the under-utilized institutional credit facilities. The Board is being serviced by a government organization named Department of Science and technology (DST) with major objectives being;
The NSTEDB, jointly with all
Technology Business Incubation (TBI) Mechanisms
Various enabling factors crucial for the success of incubating mechanisms in a country are R&D expenditures, new technologies, R&D, Resources, Technology, Production, Costs and Socio-economic conditions. Start up entrepreneurs need various support services like marketing, business facilitation, technical expertise, resources for financing and business management during their initial phase to enhance its survival. Incubators provide a conducive atmosphere and a range of critical support services and needed facilities to nurture and support a start-up. Various mechanisms like science parks, technology parks, innovation centres, technology business incubators are being experimented world over to catalyze growth of technology based new enterprises. Some of the Indian experiments on Technology Business incubation are presented below.
Technology Business Incubators (TBI)
A TBI helps in incubating knowledge-based start-ups into commercially viable products/services by providing specialized guidance, critical support services, innovative financing and networking support within a conducive environment.
World scenario on TBI
present, there are around 3,000 incubators of various types operational in the
world. In the
Indian scenario on TBI
techno entrepreneurship initiative was started by the Department of Science and
Technology (DST) in 1985 through the establishment of Science and
The TBI’s are aimed at achieving the following objectives:
· Technology commercialization: To provide a platform for speedy commercialization of the technologies developed in the institutes to reach the end-users;
· To provide an interfacing and networking mechanism between academic, R&D institutions, industries and financial institutions;
· To provide value addition through its services provided to its tenants as well as to the existing technology dominated SMEs;
· To provide R&D for industry: It also enables small industry to take up R&D activity and the technology upgradation activities.
Working mechanism of TBI
The various aspects in the successful operation of a TBI are its location, preferably to a knowledge source with some formal links. A well-structured business plan should include the identified focus areas, a good management team, plan for arrangement of financial resources including cash inflow and outflow. It should provide a sophisticated array of services and devise well-defined tenant selection and exit mechanisms.
TBI mechanism for India
Experiences show that a single model does not exists to all
locations. Suitable models are being developed keeping the local needs, climate
and the objectives in view.
TBI’s initially targeted academic institutions/R&D institutions of excellence with areas of focus being information technology, biotechnology, Materials management, agriculture, design, instrumentation and much more. The services rendered by TBI’s involve;
A TBI is also expected to assist the start-up firms with financial support such as venture capital, funding from angel investors and other financing mechanisms and equity participation.
Venture Capital funders in India
In next 10 years, knowledge-based industries are likely to acquire greater prominence and SME’s are likely to come up in the industry. The role of the Government is to facilitate support to SME’s in the era of globalization and to focus on providing human resource development prop up along with establishment of suitable support mechanisms and nurture technology oriented enterprises.
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