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Entrepreneurial Opportunities in a Knowledge Economy

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Knowledge-driven entrepreneurship is the new buzz-word and will take India further up on its growth path

India is an emerging market in the world today. Its middle class population exceeds the populations of USA and the European Union, and provides a lucrative free-market opportunity.

The development of the world economy reveals that the 19th century belonged to Europe, the 20th century to America and the 21st century is likely to be Asia’s. Goldman Sach has rightly commented that economics of knowledge would be India’s greatest strength and, if exploited properly, would lead India to be one of the world’s three biggest economies by 2050.

India has a network of quality technical institutions across the length and breadth of the country. Indian engineers, scientists, managers and skilled personnel are among the most competitive in the world. A large force of its knowledge workers has shown its intellectual brilliance in economic ingenuity even in the Silicon Valley.

The Indian economy, with its inherent strength in terms of knowledge, backed by a huge market opportunity, can play a leading role in the global markets. The critical input that would play a pivotal role in taking the Indian economy to greater heights would be the entrepreneurial mindset of its human resources.

Liberalization and entrepreneurial opportunities
The process of liberalization that was initiated in 1991 has given a big boost to the Indian economy. This is evident from the economy achieving an economic growth rate of 5.6% during the Ninth Five Year Plan (1997-2002) and approximately 7.5% during the Tenth Five Year Plan, as against a growth rate between 2.8% and 5.5% during the first seven Five Year Plans. The Eleventh Five Year Plan envisages a growth rate of 10%.

The after-effects of liberalization are also evident from the fact that India gained a 0.60% share in world exports during 1995-1999, as against a share of around 0.45% in the eighties. One of the major contributory factors to accelerate the growth of the Indian economy is the emergence of a new generation of entrepreneurs who have released bottled energies, and created new confidence and a feeling that ‘we can do it’. This has given rise to some leading new-generation entrepreneurs, who have created miracles in various fields, particularly in the information technology and knowledge industry.

The liberalization process has given rise to abundant opportunities. These opportunities would require an entrepreneurial spirit and entrepreneurial mindset among the youth in India.

What is entrepreneurship?
Entrepreneurship revolves around innovation and it should not mean inhibition or imitation. It encompasses innovation that gives rise to an idea having potential economic value to prospective customers. It, therefore, requires the founding of an economic organization to pool resources to give a shape to the idea, so as to earn profit under conditions of risk and uncertainty.

The concept of entrepreneurship has undergone change over the years—from emphasis on “profits from bearing uncertainty and risk” (Knight, 1921) to “creation of new organization” (Gartner, 1985) to “the pursuit of opportunity without regard to resources currently controlled, but constrained by the founders’ previous choices and industry-related experience” (Hart, Stevenson, and Dial, 1995).

According to Stevenson, the characteristics that make entrepreneurs thrive are resource mobility, reinvestment in the community, joy in the success of others, and valuing change. Resource mobility is evident in product markets, where, “anyone who doesn’t believe they’re competing against everyone else in the world is crazy.”

Knowledge-driven entrepreneurship
The management practices that will take enterprises further into the new millennium will be knowledge based. The system will be collaborative, and not competitive or even cooperative. Intellectual property and its impact will play a critical role in breeding entrepreneurship. Organizations will be flattered with self-managing knowledge workers contributing to the growth of business entities. The emphasis will be on team effort to solve problems or undertake projects. Cross-boundary learning and knowledge flow will be dominant.

The Indian economy has a major strength in ‘knowledge-driven entrepreneurship’, as it has the third largest pool of scientific and technical manpower. It is this human asset that will play a critical role in the promotion of entrepreneurship in the coming years, provided educational systems play their role in bringing in a change in the mindset of the youth. This will also require making the industry patent-literate, so as to derive full benefit by duly protecting knowledge.

As such, future wars would be fought in the knowledge markets. For the Indian economy, education and healthcare will provide the extra edge and play a significant role in the global markets and derive inbuilt advantage, as far as economic growth and development are concerned.

The size of emerging market opportunities in the IT software industry alone is expected to touch US$ 50 billion (Rs 230,000 crore) in the year 2009. To respond to this challenge, India’s pool of software professionals has to increase from the present level of Rs eight lacs to Rs 21 lacs in 2009.

Competitive edge secrets—21st Century
The twenty-first century has great challenges as well as opportunities for corporate entities, provided they are able to build a competitive edge in a global context. This requires core competence in the minimization of cost for globally-accepted, quality products and services at a opportune time, with appropriate speed and an innovative culture to keep coming out with new solutions to existing and emerging problems. This basically requires a strategic thrust, by translating knowledge into technology to achieve better and improved results. Some of these areas are technology innovation, technology lifecycle planning, developing technological capabilities, managing design, development and commercialization cycle, and linking product and process innovation.

Values of successful Indians in IT industry
Indian industrialists, that too first generation entrepreneurs, dominate the entrepreneurial zeal in India and the Silicon Valley. To name a few—Sabeer Bhatia, Prakash Bhalerao, KB Chandrashekar, Deepak Chopra, Desh Deshpande, Vinod Khosla, Narayan Murthy and Azim Premji. There is a common thread that binds the great achievements of many IT entrepreneurs and is worth understanding. Some of these are—they are all from leading and prestigious institutions, are highly principled, active and aggressive listeners, very clear about goals and priorities, great net workers, committed and hard workers, and are all voracious readers.

Above all they have a philosophy of business geared towards quality and excellence. It is these qualities, coupled with being innovative in their field of operation that has taken them to greater heights and made their dreams come true. Broadly, it has been found that success comes to organizations wherein encouragement is given by the top management to values, new ideas, speed, openness, fairness and, above all, where best corporate governance practices are established.

It has been rightly said that the three keys to high achievement are, "clarity, clarity, clarity," in goals and “passion, passion, passion” in execution. Success in life is largely determined by how clear we are about what it is that we really, really want.

The author is Chief, Entrepreneurship Development and IPR Unit, BITS, Pilani.

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