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ENTREPRENEURSHIP-MOTIVATIONAL FACTORS

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EntrepreneurshipEntrepreneurship is the professional application of

knowledge, skills and competencies and/or of monetizing a newidea, by an individual or a set of people by launching an enterprisede novo or diversifying from an existing one , thus to pursue growth

while generating wealth, employment and social good.

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Prominent Motivation Triggers Independence Market Opportunity Family Background New Idea Challenge

Dream Desire(to be anentrepreneur)

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MOTIVATION

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Internal factors (such as Independence, Challenge and Dream Desire,i.e. the ideathat by nature, man cannot but be an entrepreneur) cumulatively account for the

bulk of the total motivating triggers (42%). This lends credence to the argumentthat the entrepreneurs are driven more by their own inner drive rather than byexternal conditions.

market opportunity as an additional motivating factor has also shown a steady riseover the last two decades. This fact gives rise to the argument that macroenvironment plays a crucial role in influencing the initial decision of an individualto become an entrepreneur.

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Motivation Variations according totime periods

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Variations According to Time Periods: The NKC study found that marketopportunity has become an increasingly significant motivating trigger since theeconomic liberalization gathered momentum. 28% of those in the sample whostarted enterprises during 1991-99 and 22% of those starting after 2000 citedmarket opportunity as the main motivating factor, compared to 11% of those

starting enterprises before 1991. Simultaneously, independence has increasingly become a significant motivating factor since the turn of the century primarilymotivating 12% of those starting new enterprises before 1991; 19% of those doingso during 1991-99 and 35% of those starting out after 2000. The study also noticedthat family background has served less as a motivating factor after the launch of economic reforms from primarily motivating 31% before 1991 to influencing

14% during 1991-99 and 12% after 2000. (See Figure 2.6.)

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Motivation Variations according tofamily background

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Variations According to Family Background: The study foundthat independence is the most powerful motivator for the first-generation entrepreneur (33%), while it has almost no significancein motivating second generation entrepreneurs (only 4% amongthose second generation entrepreneurs in the same business and

only 3% for the second generation entrepreneurs in a differentbusiness). Predictably, family background is the prime motivating factor

among the second generation, whether in the same familybusiness (74%) or in a different one (34%), though the extent towhich it serves as a motivation trigger varies significantly. Further,family background is a more significant motivator for the secondgeneration compared with the first generation. This may bebecause the second generation entrepreneur is more likely to beinfluenced by a family environment that extols Entrepreneurship,

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Motivation-Variations According to Age

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Variations According to Age: Idea-driven motivators are more significant for entrepreneurs above the age of 35 and exert a minimal influence on those below 35.Further, market opportunity is a far significant motivating factor for the below-35age-group compared to those above that age.

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Motivation-Variations According toGender

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Variations According to Gender: For female entrepreneurs,the independence derived from Entrepreneurship, as well as theidentification of a marketable idea are the most importantmotivators (25% each). Male entrepreneurs on the other hand,were found to be most significantly influenced by family

background (24%) with independence (21%) coming a closesecond as a motivating trigger.

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Motivation-Variations According toLevels of Work Experience

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Variations According to Levels of Work Experience: The studyfound that levels of work experience significantly influencedmotivational triggers.

It found that family background became less significant withincreasing levels of work experience. While this was the most

significant trigger for those entrepreneurs who started out withoutwork experience, it was the least important motivational factor forthose with more than 10 years experience, for whom otherfactors such as market opportunity and challenge were moresignificant.

Independence was the least important trigger for thoseentrepreneurs who started out without work experience and themost important factor for those with 5-10 years of workexperience before starting out as entrepreneurs; it was also asignificant trigger for those with at least some work experience.

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The study found that market opportunity did not act as a significant trigger forthose who started out without any work experience but became, by far, the mostimportant trigger for those with more than 10 years work experience. The studyalso found that there was a strong correlation between previous work experienceand business idea origin, thereby impacting the nature of enterprise. Among thosewho had work experience, 53% started enterprises in fields related to those in whichthey had previously worked (as distinct from merely replicating the business idea of their former employers). Thus, the study found instances of a person employed inan IT company starting ones own IT venture, a person with experience in the medialaunching his/her own event management company, and so on. While working asemployees, these entrepreneurs identified market gaps and designed innovativeproducts or services, which enabled them to become entrepreneurs.37

Idea driven triggers are very important, but they were found to be of greatersignificance for those who start out without any work experience (21%) than forthose with substantial work experience (13%).

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Motivation-Variations According toRegion

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Variations According to Region: The most significantmotivating trigger for Entrepreneurship was found to be wideranging across regions from family background being the primetrigger in Ahmedabad and Kolkata to market opportunity servingas the most important motivator in Bangalore. Gujarat has been a

traditional trading and business hub that may explain greaterinfluence of family background as a prime trigger. In West Bengal,the seeds of Entrepreneurship were sown by migrants belongingto traditional business communities from Rajasthan. On the otherhand, Bangalore, an IT hub and a centre of educational excellence,has emerged as an attractive centre for knowledge

Entrepreneurship, driven by increasing market opportunity.Chennai and Pune have also been educational centres of repute,which may explain the preeminence of idea-drivenEntrepreneurship in these cities. Interestingly, entrepreneurs fromHyderabad valued independence as a trigger more than otherfactors.