Why Entrepreneurship Is Important Essay

Why Entrepreneurship

While there are various definitions of Entrepreneurship, there are some common themes. Entrepreneurship involves risk taking, being innovative as well as using knowledge and skills to set up new ventures or diversify from existing ones. Entrepreneurship adds significant value to the economy by creating wealth and generating employment. India has a rich tradition of Entrepreneurship, practiced in diverse ways. Entrepreneurship is embedded in the Indian mindset. After economic liberalization, there has been increased salience of Entrepreneurship in India, particularly in the high growth and knowledge intensive sectors. Entrepreneurship flourishes as a combined result of a number of key triggers such as individual motivations,

Most of the entrepreneurs are self-financed; at the same time, a majority of those who approached banks did receive loans. Yet, there is a widely held perception that it is very difficult to get bank loans at the start-up stage while becoming comparatively easy at the growth stage. While there are new initiatives and schemes, perceptions on bank finance have not improved for entrepreneurs who have started ventures after 2000, most of which are in the knowledge-intensive sectors. It is in these sectors, where the information asymmetries and perceived risk levels are considered higher, that Angels, VCs and PE funds are beginning to fill a crucial market gap and need incentives for more involvement. Improving risk management by developing transparent rating systems and devising information tools are expected to address information asymmetries. Recent financial schemes reflect greater recognition being given to Entrepreneurship. In addition, interesting financial innovations are occurring in the rural and informal entrepreneurial spaces. Seed capital funding needs incentives for greater involvement. Some ideas worth exploring include establishing a secondary market for newer companies; creating new mechanisms for start-up funding, enhancing understanding of the financial aspects of Entrepreneurship among start-ups and improving the business environment for

Three interconnected areas provide possibilities for mutually beneficial synergies through the flow of ideas and wealth, which could generate high level of dynamism. These are: Education (including quality vocational training-skill development), Innovation (generating commercial value through new and improved ideas) and Entrepreneurship. Entrepreneurs generally agree on the utility of education. However, there is potential to improve the relevance of subjects of study. High-tech innovations translating into wealth generating ideas could also improve if more PhDs and research scholars are provided a flexible supportive environment for Entrepreneurship in their institutions. There are major problems of availability of skilled employees. More than a third of the entrepreneurs face problems in both recruiting and retaining employees. As such, VET and skill development is going to be critical for Entrepreneurship and employment generation in India. While recognizing recent government initiatives to significantly raise allocation for education, some suggestions on improving the educational space for Entrepreneurship include the following: improve content and learning methods; introduce Entrepreneurship as a compulsory subject in business schools (also consider