Innovation based Entrepreneurship in India-A Development Perspective

ABSTRACT

India is a developing economy, enjoying the youngest youth population of the world. But if we analyse the country’s contribution in area of entrepreneurship, it is very little. Entrepreneurship leads in generating employment and utility products and services for the society and economy. This entrepreneurship deficiency in the country is also the major cause of unemployment. In the era of industrialization, liberalization and globalization, most of the world’s developed countries are enjoying thebenefits of Innovation through contribution of Technology based Innovation and Entrepreneurial Culture. This paper aims not only to analyse the essence of Innovation but also to analyse the technology based Innovation essence in Entrepreneurship for the development of the country. This research paper is based on various secondary data collected from government reports and academic literature.

Keywords-Innovation, Technology Based Innovation, Entrepreneurship.

INTRODUCTION

It is clear that India has a long way to go before building a mark on the world map as a developed and prosperous nation. The dream can be realized by improving the quality of life of its masses which can only be done by generating employment for them. The gap of demand and supply of jobs can only be met by promotingentrepreneurial activities in Indian society. As in the era of globalization there is need mutual linkage of technological Innovation and Entrepreneurship. It is marked that Indians have launched new ventures with talent in the past and theystill possess the fire. Opportunities are in plenty and the country is rich with resources. The difficult challenge lies in optimizing resources and overcoming the hurdles to not only join the league of successful and developed nations but rather set an example for other developing nations.Globally India is conceived as a country with dislike to innovation and entrepreneurship. The condition aggravates with the fact that we traditionally have had a little amount of investments in our R&D facilities.

According to NKC (National Knowledge Commission, Govt. of India), in the year 2007-08, we had only 0.93% of GNP being spent on R&D with the lion’s share going into strategic (military) development. This can be further substantiated by the fact that on one hand the R&Dexpenditure of all Indian industries taken together is less than that of a Single Japanese company - Sony while on the other hand, 12% of the world’s total R&D expenditure in 2005 was done by China. (Report 2007, National Knowledge Commision, Govt. of India)

According to NKM (National Commission of India), Entrepreneurship Report 2008, Entrepreneurship is defined as “Entrepreneurship is the professional application of knowledge, skills and competencies and/or of monetizing a new idea, by an individual or a set of people by launching an enterprise de novo or diversifying from an existing one (distinct from seeking self employment as in a profession or trade), thus to pursue growth while generating wealth, employment and social good”.

According to NKM, Innovation Report 2007, Innovation is defined as a process by which varying degrees of measurable value enhancement is planned and achieved, in any commercial activity.

Review of Literature

The importance of entrepreneurship and innovation for the growth of economy requires the unleashing of an epidemic that spreads the entrepreneurial virus to anyone. Applying the principles of Contagion in Social network, the diffusion in the media of stories and interviews of entrepreneurs will facilitate the creation of context susceptible to the propagation of the entrepreneurial virus, provided that a catchy message is delivered using effective design and Production (Gladwell, 2000).

In context to weakness of Entrepreneurship, Komisar’s(2001) novel “The Monk and The Riddle”, illustrates the weakness of entrepreneurs that seek risk capital finanacing with a business plan based on the general market information very little understanding of reality.

The international leverage strategy proposed by Ray (2004),can be applied to promote innovative business that require an international infrastructure and financing structure to fully exploit their innovation potential .This methods can apply to R&D businesses as well as to market opportunities, and the internationalization of local concepts. In this way the entrepreneur avoids country specific limitations and develops his/ her enterprise in an innovation based economy (Lorenzo Vicen, 2011).

Bailleti.Tony (Feb, 2012) concluded in his research article titled “Technology Entrepreneurship–Overview, Defination and Distinctive aspects” that technology entrepreneurship has become important global phenomenon. It is perceived as necessary for growth, differentiation and competitive advantage at the firm, regional and national levels. Bailetti (2012) also illustrates that Technology Entrepreneurship appeals mainly to leaders and top management teams of small and large firms who use technology to create, deliver and capture value for their stakeholder’s personnel of regional, economic development agencies that attract investments in produce technologies and talent to a particular geography.

Innovation is often called as the “Lifeblood of businesses”. In this continuation of contribution towards innovation literature, Jesbank & Raza (Feb.2014) illustrated in conclusion of article titled “Collaborative Idea Management –“A driver of continues innovation “that an organization has to be mindful of the three components in the innovation triangle-strategy, leadership and culture –While implementing a collaborative idea management solution. Each of the three parameters helps in establishing a sustained innovation environment.

Research Objective

  • To analyse the essence of Innovation based Entrepreneurship in India.

Research Methods

  • This is a conceptual research paper based on secondary data. In this the need of technology entrepreneurship in India have tried to connect with secondary data collected from various sources such published journal and government reports.

Concept of Entrepreneurship, Innovation based Entrepreneurship i.e. Technological Entrepreneurship

Job creation and employment is at the centre of the rationale provided by governments and publicly funded organizations for investing in services to support entrepreneurs to launch and grow technology start ups. So for job creation and sustainability of businesses traditional entrepreneurship approach is not sufficient. For the job creation sustainability innovation based i.e. technology entrepreneurship must be focused.

According to Tony Bailetti (2012), Technology entrepreneurship has more to do with collaborative production based on a shared vision of future changes in technology.

The existing entrepreneurship literature, however, describes an entrepreneur as:

i)“An alert individual discovering an existing opportunity” (Shane, 2003; Shane and Venkataraman, 2000).

ii) “An innovative individual who shakes the economy out of its previous equilibrium” (Schumpeter, 1939).

iii)“An experienced individual making judgments about an unknowable future” (Foss and Klein, 2005).

iv)“An individual who believes she has lower information costs than others” (Casson and Wadeson, 2007).

v)“An individual with certain personality traits” (Hood and Young, 1993); and

vi) “A charismatic leader” (Witt, 1998).

Whereas Technology Entrepreneurship is Ways in which entrepreneurs draw on resources and structures to utilize emerging technology opportunities(Liu et al., 2005)

Garud and Karne (2003) stated that “An agency that is distributed across different kinds of actors, each of which becomes involved with a technology and, in the process, generates inputs that result in the transformation of an emerging technological path”

In other words, Technology entrepreneurship involves specialized human resources, tapping into their skills and ability to collaboratively explore and exploit scientific and technological change to benefit the firm. Technology entrepreneurship is best understood therefore, as a joint-production phenomenon that draws from a team of specialized individuals from multiple domains, some or all of whom become embedded in the technology path they try to shape in real time (Garud and Karne, 2003).

Technology entrepreneurship is not about a single individual or the inventions they introduce. It is about managing joint exploration and exploitation, where each individual has roles and responsibilities in collaboratively and cooperatively moving forward toward accomplishing shared goals (Landenberg and Foss, 2011). Technology entrepreneurship is about investing in and executing the firms’ projects, not just recognizing technology or market opportunities.

Theoretical Model andApproach to Innovation & Commercialization-

For the Innovation and Commercialization a traditional Linear Model of Innovation and Commercializationcan help in managing innovation in businesses and firms. As we know thatInnovation Management is also very vital for the success and sustainability of any business and enterprise. For the developing country like India Innovation management has become very essential in order to sustain the Indian businesses in the global competition. Innovation Management indirectly linked in filling the gap between population and employment, because without innovation sustainability of business is very difficult in the era of globalization. So above linear model a type of approach for innovation diffusion and commercialization of product and services with help of Technology Entrepreneurship.

Table 1 -Linear Model of Innovation and Commercialization

AGENT

ACTIVITIES Basic Research Applied Research Development Testing Investment

OUTPUT Discoveries, New Inventions, Plan Prototypes Innovation

Knowledge Blue Prints

STAGE

Source-Based on C. Greenhalgh and M. Rogers, Innovation, Intellectual Property and Economic Growth (Princeton University Press, 2010), p. 97,(Published in Fostering Innovative Entrepreneurship-Challenges Policy Options, United Nations, New York Geneva, 2012, pp-7-8).

Status of India in Innovation Capacity Components Index in Global Competitiveness-

Below table is showing the Innovation capacity of various world countries in global competitiveness on basis of quality of Scientific research Insititution,University industry research collaboration, Availability of scientists & engineers, Utility Patents and Public procurement of advanced technology.

Table 1-Global competitiveness: Innovation Capacity Components Index

Country / Innovation
Capacity
Index / Quality of Scientific Research Institution / University
industry
research
collaboration / Availability
of scientists
& engineers / Utility
patents (per
million of
people) / Public
procurement
of advanced
technology
Rank / Score / Rank / Score / Rank / Score / Rank / Score / Rank / Score / Rank / Score
Brazil / 27 / 4.0 / 43 / 5.13 / 50 / 3.6 / 57 / 4.4 / 58 / 0.5 / 84 / 3.4
China / 25 / 4.2 / 37 / 5.12 / 23 / 4.5 / 52 / 4.5 / 54 / 0.6 / 20 / 4.2
India / 35 / 3.8 / 27 / 5.1 / 45 / 3.6 / 3 / 5.7 / 57 / 0.5 / 88 / 3.4
Japan / 2 / 5.9 / 15 / 5.4 / 21 / 4.6 / 2 / 5.9 / 3 / 260 / 42 / 3.9
South Korea / 9 / 5.3 / 14 / 5.5 / 12 / 5.1 / 19 / 5.1 / 7 / 131 / 2 / 5.1
United Kingdom / 14 / 14.0 / 7 / 5.7 / 9 / 5.1 / 32 / 4.8 / 18 / 55 / 32 / 4.0
United states / 6 / 5.5 / 1 / 6.3 / 1 / 5.8 / 6 / 5.5 / 1 / 262 / 4 / 4.9

Source: WEF 2008

Note: Rank refers to the economy’s global rank on each indicator among 134 economies. ScoresRange from 1, low, to 7 highest, except for utility patents, where the score shows the number ofPatents per million people.

Result

On the basis of Innovation Capacity Index table, it canbe analysed that Innovationcapacity Index of is very low, being having large no.of availability of Scientists and Engineers in the country, this indicates that India’s quality of Scientific research Institutions and university industry research collaboration is not sufficient. It is very surprising that country ranking in world in availability of Scientist and Engineers is very superior but still India is fighting with deficiency of Innovation and Entrepreneurship. For the development of country like ,it is very necessary to infect virus of innovation and entrepreneurship culturein society and university education system , for this technology entrepreneurship must be approached in order to balance the employment and population gap of the country.

Conclusion

After analysing the status of India in Innovation Capacity Component Index ranking in global competitiveness and literature indicates the importance of innovation in entrepreneurial culture.So, it can illustrated that the country which are developed, they are very keen focused towards innovative practices in their system either its is innovation in res research and development activities, social innovation, innovation in education system and an technological innovation in their entrepreneurial culture. For increasing population and greedy demands of jobs now it has become very essential for the country to focus towards technology entrepreneurship and innovation in entrepreneurial culture in order to generate jobs and sustainability of business in global competition.

Reference

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