Have you ever thought why there is more number of “employee” sets of working population than “entrepreneur” set of population? The reasons lie in two things: Personal attributes and the socio-economic ecosystem around us. I shall highlight the role of each of these factors here in this article. In this article you should also be able understand that the personal attributes can be acquired and that the socio-economic set-ups can be changed. Both these factors act independently in flourishing entrepreneurship, as well as overlap in many ways too, in order to shape the entrepreneurship on the whole.
Role of Personal Attributes:
Discovery of Entrepreneurial opportunities is a function of distribution of information in the society, continuous technology advancement and the evolution of ecosystem for supporting entrepreneurship.
Other than these variables, some subjective human attributes also play a vital role in attuning you to discover entrepreneurial opportunities. These variables are:
- Tolerance towards uncertainty and ambiguity
- Risk appetite
- Scanning and analyzing behavior of available information
- Superior information scouring and processing abilities
- Need for achievement and definition of success
Those who possess the above said attributes are highly likely to be entrepreneurs; whereas those who do not, are destined to be employees. Whether the above-mentioned attributes are rooted instinctively in people or not, depends largely on an economy’s socio-cultural setup. An economy’s cultural set-up and traditions make a difference in upbringing right from childhood, and therefore it gets pre-decided whether a child will develop into an adult who possesses the key variables to turn out into an entrepreneur or not.
But the magic of open-mindedness and keenness to get education at any age, may well take you to the realms of your dreams. If you dream to be an entrepreneur, then you can get yourself educated in Entrepreneurship. You can mould your attitude and utilize much of the free-flowing knowledge on “how to be an entrepreneur”. You should get into the art and science of this discipline. India is a perfect example here. Many of the entrepreneurs that you read about are first generation entrepreneurs. How could they do it?
Skewness in available information to a set of people can decide who will be an entrepreneur. If any person cannot necessarily know all the information available, then obviously it is wrong to identify some people as more likely than others to be an entrepreneur. Some argue that usually attributes of people who have turned into entrepreneurs are similar to the attributes of the business involved. In other words, you can be an entrepreneur in the industry where you have worked. But this is not a rule. It has been noted that attributes of people who discover opportunities are different from attributes of opportunities that they discover.
In an equilibrium market with complete information, it is assumed that everyone possesses the same kind of information and hence the opportunities are visible to all and one at the same time. But this is seldom the case. When information flow is not complete, then the business strategies [especially the product or service offering and its price] of entrepreneur ventures will be based on some element of ‘guess-work’. The higher the weightage of any ‘guess-work’ the higher is the risk of failure and/or a higher chance for miniscule carving of share in the market’s pie. In effect, this offshoots another opportunity for an entrepreneur who comes in with better information analysis, reduces the ‘guess-work’ and allocates resources optimally. Such a set-up can capture the maximum market share.
To really call a gap in market an opportunity it is important to see if it has value as a business. For assessing whether the gap has value or not, it is important that the entrepreneurs validate their business idea, minimize the ‘guess-work’ about the market’s behavior and allocate their resources for reaping profits.
In my opinion, the greater flow of information through penetration of Internet increases the set of people who are more likely to be entrepreneurs. Ideas are many and ability to spot gaps is also inherent in us. But if you ignore the idea validation [which I call as discovery process for a gap to be defined as valuable opportunity], then you are taking to gambling and odds will be against you as far as success is concerned. To be an entrepreneur you should be a function defined as follows:
F = {Higher tolerance towards uncertainty & ambiguity, Higher risk-appetite, Superior analytical skills, Superior & expansive scouring of Information, High need for achievement}
Role of Socio-Economic Set-up:
Social mindset is equally important for entrepreneurship to flourish, as it allows higher acceptance of risk-takers who fail. This is important, as the failures are analogous to high-risk entrepreneurship ventures. Other than the variables highlighted earlier, which are of utmost importance, I would say the second set of variables [importance wise] would be a socio-cultural set-up, which comprise of:
- Moral support from friends and families when taking risks and/or when entrepreneurial venture does not succeed.
- Acceptance by the corporate India back into the employee stream.
If the above factors send positive vibes into our economy and society at large, then the “fear factor” gets mitigated, giving tremendous boost to Entrepreneurship on the whole.
 About Mridula: Mridula is a freelance writer. She writes on Entrepreneurship and has worked for a start-up in the past. To know more check out her profile at LinkedIn/Mridula Velagapudi |
