Final Paper -ANIL-2019-IIPM-Sustainable Entrepreneurship and its Viability.pdf (original) (raw)

Sustainable Entrepreneurship and its Viability - A Conceptual Overview from Odisha

Anil K Barik, Ph.D
SAIL, Rourkela Steel Plant, Odisha ,India - 769011
Email : anil.sailrsp@gmail.com

Abstract

: Purpose - The purpose of this paper is to analyse the drivers as well as Govt. Scheme operating towards sustainable entrepreneurial practices in MSMEs, operating in Odisha. The secondary objectives are to explore the relationship between these drivers and to draw out the implications for policy and practice besides finding the awareness regarding entrepreneurial education for entrepreneurship development and the linkage between entrepreneurship development and technical education.

Design/methodology/approach - There is a growing interest in the role that entrepreneurship can play as a catalyst to accomplish economic and social development objectives, together with growth, innovation, employment, and equity. The paper is informed by the literature on sustainable entrepreneurship, and on the drivers of pro-environmental practices in SMEs. It reports on the results of an exhaustive multi-level empirical study, which investigates the environmental practices of SMEs in Odisha. This case study/review was carried out to determine ways for invigorating technical, vocational education and training through entrepreneurship education.

This paper emphasizes the prevailing Governmental scheme for entrepreneurship development and strategies suggested to build up the culture and the plausible reasons for gap for entrepreneurship towards breaking new ground by deploying solutions for rapid, sustainable and resource-efficient growth are also discussed.

Findings - The study identifies that coercive, normative and mimetic isomorphic pressures concurrently drive sustainable entrepreneurial activity in the majority of MSMEs. These pressures are exerted by specific micro and macro-level factors, ranging from international customers’ requirements to individual-level values of owners and managers. It also reveals the catalytic effect of Technical education not only to boosts the capacity of innovation but also nurtures the innovation and entrepreneurship among the students of engineering college in Odisha.

Practical implications - The evidence suggests that, in countries where formal institutional mechanisms have less of an impact, intermediary organisations can perform a proto-institutional role that helps to overcome pre-existing barriers for sustainable entrepreneurial activity…

Originality/value - This paper provides new insights into sustainable entrepreneurship and motivations for environmental practices in an under-researched developing economy with special reference to Odisha state in India. .

Paper type : Case Study /Research Paper

Key words

Entrepreneurship, Sustainability, Competitive, Innovation, Strategies, MSME

Introduction:

Sustainable entrepreneurship is a concept that combines elements from both sustainability and entrepreneurship, and its emergence has adopted a new aspect to the prediction of entrepreneurship. Enterprises with sustainability-driven approach contribute towards improving the environmental quality and social well-being in ways that are equally accommodating.

An entrepreneurial activity can only be labelled sustainable, if there is an equal blending of the 3Ps (People, Planet, Profit) -which called ‘triple bottom line’. Sustainable entrepreneurship is about a combination of economic, social and environmental value creation.

The need for engineering entrepreneurship education has been well reported in the past two decades. However, most research and educational efforts focus on the design and implementation of engineering entrepreneurship programs. There is a gap in assessment practices and there are several reasons for this. (Pittaway, L. & Hannon, P. 2009).

Enterprise education is highly important for engineering both diploma and degree level course. Technical and Vocational Education Training (TVET) refers to the educational processes that involve the study of technologies and related sciences and the possession of practical skills and knowledge aimed at discovering and developing the individual for employment in various sectors of economic and social life (Moss & Liang,1990)

Defining sustainable entrepreneurship

Shepherd and Patzelt (2011) offered the following definition ‘sustainable entrepreneurship is focused on the preservation of nature, life support, and community in the pursuit of perceived opportunities to bring into existence future products, processes, and services for gain, where gain is broadly construed to include economic and non-economic gains to individuals, the economy, and society’

According to Spencen et al (2011) sustainable entrepreneurship is ‘An innovative, market oriented and personality driven form of value creation by environmentally or socially beneficial innovations and products exceeding the start-up phase of a company’.

Entrepreneurial Skills in Technical Vocational Education and Training

The only way to empower the youth is to provide them with adequate and qualitative education in order to make them job creators and eradicate poverty (Sekena, 2004). Many countries of the would including Nigeria have considered Technical Vocational Education and Training (TVET) as relevant in equipping young people with technical skills that would enable them engage in productive lively hoods. However, the United Nations Education Scientific and Cultural Organisation (UNESCO) section for Technical and Vocational Education and Training (TVET) in 2006 observed that TVET programmes have not lead to increased employment, despite the obvious need for technical and vocational services. This might be due to dearth of wage employment opportunities for technically trained man power (Saba et.al ,2013).

Summarily, An entrepreneur with the mind-frame to solve an exact, particular sustainability problem (widely known as Sustainability Entrepreneurship, note the difference from Sustainable Entrepreneurship, which this paper focuses on) can be beneficial once an opportunity arises that the entrepreneur can put to use, but until then, the situation may remain the same - resources may still be used up in uneconomical ways, and it is a flawed way to conduct sustainable operations, however well-meant it may be. Sustainable Entrepreneurship, on the other hand, strives to set a universal mindset to practice sustainable methods throughout the organization, from internal personnel to purchased goods from partners, from top to bottom.

Sustainability Entrepreneurship versus Sustainable Entrepreneurship

Sustainable entrepreneurship sees the focus on the internal processes and everything surrounding the outputs of a business, while sustainability entrepreneurship focuses on opportunity fulfillment in the market.

Schaltegger et al (2011) described sustainable entrepreneurship as “an innovative, market-oriented and personality driven forms of creating economic and societal value by means of break-through environmentally or socially beneficial market or institutional innovations” .

In general terms, there are two key perspectives on sustainable entrepreneurship. On the one hand, there are those academics that believe that any entrepreneurial activity must be subordinated to the relationship between sustainable entrepreneurship and the triple bottom line. Their researches are mainly published in sustainable management journals (Parrish and Foxon, 2009). They concluded, “innovators and entrepreneurs will consider sustainable development as one of the greatest business opportunities in the history of trade” (Hart and Milstein, 1999).

Viability

As per the conglomerate view of various English dictionaries,the word of viability is defined as “capable of living, developing, or germinating under favorable conditions”. It describes its prefix as if it was a living, prosperous, growing entity which is why it was a perfect global definition to a company that is at minimum covering all costs, continuing to grow in size and output and makes a positive return in turnover. Effectively, in economic terms, this would be seen as being profitable over years in time, or profitable to remain out of financial danger for years. Moreover it can be defined as making a positive return before taxes.

According to Leonaris Rey (2011), sustainability practices are related to the viability of sustainable entrepreneurship. However, her research results shows, there is no strong association between the three pillars of sustainability and viability. This in turn also shows that there is no negative association in actively pursuing sustainable measures and viability in SMEs. Thereby it can be concluded that there are no grounds for belief that pursuing a sustainable means of operation will result in company failure, and should not be a reason for SMEs to reject sustainable entrepreneurship.

What could Entrepreneurship do for Sustainable Development?

Entrepreneurship is seen as an alternative to unemployment and poverty which could be the panacea for development (Bogan & Darity, 2008) .

Initially entrepreneurship was detected as establishing a business with people using their own capital. Nowadays, entrepreneurship and small businesses are the basics of economy, responsible for breakthrough innovations that influence the growth of free market economy and its general performance . (Sahin & Asunakutlu, 2014; Sharma et al., 2013).

SMEs’ involvement in sustainable development can be considered as an entrepreneurial act. The sustainability market is in its development phase in industrialized nations and still quasi-non-existent in developing countries. This market presents not only uncertainties but also opportunities to those who can recognize them. Moreover, several studies demonstrate that adopting sustainable strategies and integrating them at the core of the strategic activities creates value for stakeholders and preserves wealth for future generations (Spence et al., 2011).

Shepherd & Patzelt (2011) opined that Sustainable Entrepreneurship embodies the objective to enhance social wealth, with the goal to create profit, and to ensure financial viability to pursue other opportunities that may arise to be exploited outside the realm of the social objective.

Mair and Marti (2006) advocate that ‘while economic value creation is seen as a necessary condition, it is more important to ensure financial viability and business longevity’.

Parrish (2010) suggests that the values and motives that give rise to sustainability entrepreneurship, based on equanimity between self, other people, and nature, result in specific organizing tensions that have the potential to challenge the viability of enterprises that embody these values. However, he indicates that the distinct competencies and cognitive patterns of sustainability entrepreneurs, derived from the same values and motives, enable these organizing tensions to be effectively overcome. Following this argument, he concludes that the use of perpetual reasoning is a key feature that ultimately distinguishes sustainability entrepreneurs.

Types of Entrepreneurship :

Five types of entrepreneurs;

1. Administrative entrepreneurship : It is the joint efforts of both the general management and scientific technical personnel to identify areas for R&D\mathrm{R} \& \mathrm{D} and the development of new products, techniques or the improvement of existing ones.
2. Opportunistic Entrepreneurship : Ability to catch at the right time the fruits of the internal as well as external technological developments.
3. Incubative Entrepreneurship: This is nothing but the ability to initiate and nurture new venture developments within the original company with special care.
4. Imitative technical Entrepreneurship: This stresses the replication or creative imitation of innovative technical achievements made by another firm - done with appropriate modifications and refinements in case protected property right are involved.
5. Acquisitive Entrepreneurship: This is the ability of the internal management/entrepreneurs to acquire competitors technical capabilities.

Characteristics of Entrepreneurship:

An assessment instrument was designed to measure the entrepreneurial mindset of engineering students. Such an instrument is needed to measure the growth in engineering entrepreneurship mindset of engineering students who pursue programs focused on developing such a mindset (Harichandran et.al., 2016).

Entrepreneurial behaviors as the learning outcomes grouped into the following four categories

• Engineering Thought and Action:

Apply creative thinking to ambiguous problems, Apply systems thinking to complex problems Evaluate technical feasibility and economic drivers, Examine societal and individual needs

• Collaboration: Form and work in teams, Understand the motivations and perspectives of others
• Communication: Convey engineering solutions in economic terms, Substantiate claims with data and facts
• Character: Identify personal passions and a plan for professional development, Fulfil commitments in a timely manner, Discern and pursue ethical practices, Contribute to society as an active citizen

Govt. of India Initiatives for Entrepreneurship Development:

Name of Schemes

1. Prime Minister’s Employment Generation Programme and Other Credit Support

Schemes
i. Prime Minister’s Employment Generation Programme (PMEGP)
ii. Performance and Credit Rating Scheme
iii. Credit Guarantee Trust Fund for Micro & Small Enterprises (CGTMSE)
iv. Interest Subsidy Eligibility Certificate(ISEC)
2. Development of Khadi, Village and Coir Industries
i. Science and Technology Scheme
ii. Market Promotion & Development Scheme (MPDA)
iii. Revamped Scheme of Fund for Regeneration of Traditional Industries (SFURTI)
iv. Coir Udyami Yojana (CUY)
v. Coir Vikas Yojana (CVY)

• Skill Upgradation & Mahila Coir Yojana (MCY)
• Development of Production Infrastructure (DPI)
• Domestic Market Promotion Scheme
• Export Market Promotion
• Trade and Industry Related Functional Support Services (TIRFSS)

1. Technology Up gradation and Quality Certification

A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship
(ASPIRE) through QMS&QTT
i. Building Awareness on Intellectual Property Rights (IPR)
ii. Lean Manufacturing Competitiveness for MSMEs National Manufacturing Competitiveness Programme (NMCP)

iii. Credit Linked Capital Subsidy for Technology Upgradation
iv. Marketing Support / Assistance to MSMEs (Bar Code)
v. Entrepreneurial and Managerial Development of SMEs through Incubators
vi. Enabling Manufacturing Sector to be Competitive
vii. Design Clinic for Design Expertise to MSMEs
viii. Technology and Quality Upgradation Support to MSMEs
2. Marketing Promotion Schemes
i. International Cooperation
ii. Marketing Assistance Scheme
iii. Marketing Assistance & Technology Upgradation(MATU)
iv. MSME Market Development Assistance (MDA)
3. Entrepreneurship and Skill Development Programme
i. Assistance to Training Institutions (ATI)
4. Infrastructure Development Programme
i) Micro & Small Enterprises Cluster Development (MSE-CDP)
ii) Tool Room
iii) TCSP
5. Schemes of NSIC
i. Single Point Registration Scheme
ii. Credit Facilitation through Bank Tie-up
iii. Raw Material Assistance & Credit

Govt. of Odisha Initiatives for Entrepreneurship Development

Entrepreneurship is characterized by the ability to organize, manage and assumes the risks of a business enterprise with aim to generate wealth, employment and social good. Entrepreneurship serves as the genesis for developing a vibrant micro, small and medium enterprise (MSME) sector which is an indispensable component of competitive economies. Entrepreneurship also has the potential to promote inclusive growth through empowerment of women, disadvantaged sections as well as educated unemployed youth.

Odisha MSME Department formulated a Development Policy in 2016 through a consultative process involving stake holders including Industry, Associations, Financial Institutions, Experts and Government Departments concerned with an objectives to Encourage new manufacturing capacity, Provide a conducive eco-system for promotion and growth of MSMEs in potential sectors, to provide opportunities to local entrepreneurial talent

Entrepreneurship Development Models of Odisha

Decades of 1980-2000 experienced a considerable growth and development of small and medium enterprises (SMEs) in Orissa. De-licensing, direct foreign investment, trade liberalization, policy reforms etc. were the innovations made. Protectionist attitude and subsidy culture were almost eroded. Investments were made cheaper. But, competition was intensified and gradually made complex. This posed challenges for SMEs to adjust to the changes, affiliating them to large industries. Policy changes attempted to raise preparedness of SMEs to share the market, develop inter-industry competition, render production of quality products and services. Govt. adopted several

models of developing entrepreneurship. Mostly used 9 models are;(Source : The final draft of the Odisha Entrepreneurship Development Policy 2014 http://www.msmeodisha.gov.in ]

1. Strategic Alliance Model for Small & Medium Enterprises (SMEs)
2. Radio Programme Model for Entrepreneurship(RPE)
3. Resource Potential Model for No-Industries District (NID)
4. Enterprise Education Model for SMEs
5. Marketing Model for SMEs
6. Entrepreneurship: A Professional Business Model
7. EDP Models for Orissa: from Management to subject inputs
8. Corporate Instinct Model for SMEs
9. Entrepreneurship Model for Women

WHERE WE ARE ? - Entrepreneurship Scope at ODISHA

Strong economy :

The state’s economy witnessed high growth rates between 2011-12 and 2017-18, with GSDP of the state growing at a CAGR of 10.30 per cent. Cumulative FDI inflows in the state, during April 2000 to December 2017, amounted to US$ 425 million

Strong mineral production

Odisha has emerged as a key state with regards to the mineral and metal based industries. At 32.8 per cent in February 2018, Odisha contributed the largest share of mineral production in India in terms of value*. Value[ Excluding fuel minerals, atomic minerals and minor minerals ]of minerals produced in the state reached US$ 2.71 billion in April-February 2018.

Strong growth in MSME units

The state is home to a large number of MSME units. The state is amongst the top ten states accounting for the highest number of MSME enterprises

Strong power sector

Odisha is the first state in India to have undertaken reform and restructuring initiatives in the power sector. As of August 2018, the state had a total installed power generation capacity of 7,369.10 MW. (Source: Economic Survey of Odisha 2018)

High economic growth

The state’s GSDP grew at a Compound Annual Growth Rate (CAGR) of 10.30 per cent between 2011-12 and 2017-18.

The tertiary sector was the major contributor to the state’s GSDP with contribution of 45.25 per cent during 2017-18.

Policy, fiscal incentives and initiatives

The state offers a wide range of fiscal and policy incentives for businesses under the Industrial Policy Resolution, 2007.

Objectives of the Study

Two fold objective was set,
1.To find the awareness regarding entrepreneurial education for entrepreneurship development

2.To check linkage between entrepreneurship development and technical education Hypotheses: Created, based upon the above two objectives.
H0\mathrm{H}_{0} : Entrepreneurship education is considered as a strong background for entrepreneurship development.
H1\mathrm{H}_{1} : There is a significance relationship between technical education and entrepreneurship development.

Methodology :

A structured Questionnaire was used to identify both the quantitative and qualitative points of view . Analysis of variables responsible towards the awareness of entrepreneurship development through technical education is statistically measured. SPSS ver. 19 is used for descriptive analysis of collected data.

Sampling

The sample consists of 158 respondents of different categories. The respondents were selected on the basis of Stratified Random Sampling Technique. A total 180 questionnaire were administered among Poly technics & Engineering colleges in and around Rourkela and Bhubaneswar . After continuous follow up requests, only 158 responses were received back which were found to be complete and correct. Care has been taken to ensure that the sample covers almost different categories of people.

Findings (Awareness on Entrepreneurship Development)
Descriptives- Table1.3 shows that the standard deviation is highest ( σ=4.412\boldsymbol{\sigma}=4.412 ) in the age group of 51 years and above people and lowest in 31-40 years of age group ( σ=2.709\sigma=2.709 ). It represents that the variation in perception of respondents is more in 51 years and above of age and less in 31 to 40 years of age on awareness of entrepreneurial education for entrepreneurship development

The ANOVA Table-1.4 represents the variations of respondents among the age group awareness of entrepreneurship development dimension. The value points out that there is no significance in perception of respondents between the age group and group awareness of entrepreneurship development dimension as the level of significance shows greater than 0.05 , i.e 0.914 . The mean square value is 1.842 between the groups and 10.590 in within the groups.

Descriptives- Table1.5 shows that the standard deviation is highest ( σ=3.752\sigma=3.752 ) in the people having qualification of BE/BTech people and lowest in the people having qualification of ITI and Intermediate (σ=1.728)(\boldsymbol{\sigma}=1.728). It represents that the variation in perception of respondents is more in having qualification of BE/ BTech and less having qualification of ITI and Intermediate on awareness of entrepreneurial education for entrepreneurship development.

Findings : (on linkage between entrepreneurship development and technical education)

The ANOVA Table-1.6 represents the variations of respondents among the age group awareness of entrepreneurship development dimension. The significance value is 0.003 (less than 1%1 \% ) is

statistically significant. It denotes that there is good relationship between entrepreneurship development dimension with educational qualification variation.

Data Analysis

Report

Descriptives
Awareness on Entrepreneurship Development

ANOVA

Awareness on Entrepreneurship Development

Descriptives

Awareness on Entrepreneurship Development

ANOVA
Awareness on Entrepreneurship Development

Acknowledgement:

Support & encouragement received for Rourkela Steel Plant authority is duly acknowledged.

References:

Annual Report Ministry of Micro, Small and Medium Enterprises, Govt.of Odisha, 2017-18
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