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About this book

Economic development is a priority for all nation-states, whether developing or developed. In recent times, a few among the developing nations – often referred to as the emerging economies – have attracted the world’s attention because of their fast pace of economic growth. While the similarities among these nations (for example the BRICS) in the pattern of their economic growth are highlighted and discussed, the differences are often glossed over. This book, therefore, attempts to present the diverse ways in which entrepreneurship is facilitated in emerging economies, through a compilation of research papers from six different countries (India, China, Singapore, Hong Kong, Nigeria and New Zealand) belonging to the class of emerging economies. The papers included in this book cover a variety of topics related to the creation and management of an entrepreneurial ecosystem, such as intercultural interactions, IPR issues, government policies for SMEs, social entrepreneurship, opportunity identification, green entrepreneurship, employee entrepreneurship, symbiotic ventures and social capital, social fluidity mapping for reducing failure stigma, green awareness in the corporate world and among entrepreneurs, venture capital for growth, immigrant entrepreneurs, entrepreneurial success and life satisfaction, among others. The contributions are supported by an introductory chapter that provides an integrative framework by unifying the diverse patterns of economic development in the different countries under various institutional inadequacies as a process of “muddling-through to development”, necessitated by the non-systematic development of the ecosystem for new venture creation. This book is indeed a must-read for those interested in understanding the process of entrepreneurship and economic development in emerging economies.

Table of Contents

Frontmatter

Introduction

Frontmatter

Chapter 1. Emerging Economies: Muddling Through to Development

Abstract
Though ‘emerging economies’ is one of the widest used terms in discussions on global economies, it takes different meanings in different contexts to suit the main issue under discussion. An operational definition that could serve as a general description of this group it that they are low income, rapid growth countries using economic liberalization as their primary engine of growth under severe constraints of institutional deficiencies. The size and character of this group kept changing to accommodate the needs of the issue under discussion. Currently there are two main sub-groups within the conglomerate group of Emerging Economies (EE), namely: the developing countries in Asia, Latin America, Africa and the Middle East and the transition economies in the former Soviet Union and China. While it is often predicted by ‘economy-watchers’ that EE will be a major economic power in about 30 to 50 years, their growth and development are constrained by institutional deficiencies, which are summarized in this paper (based on a comprehensive survey of the literature) under the following sub-headings: (1) Underdeveloped institutions, (2) Unclear and inconsistent policies, (3) Inadequate governance, (4) Disjointed infrastructure (5) Limited funding options (6) Inhibiting culture, (7) Personalized networks, (8) Ill-funded and ambivalent education system, and (9) Reluctant internationalization. The overall impact of these inadequacies is that entrepreneurs have to overcome several constraints for setting up and growing their ventures. Hence much of their innovativeness would be exercised on devising the means to overcome these constraints rather than in designing, developing and marketing innovative products and services. Thus they tend to develop a style of muddling through towards venture creation and growth.
Mathew J. Manimala, Kishinchand Poornima Wasdani

Entrepreneurial Ecosystem

Frontmatter

Chapter 2. An Empirical Analysis of the Singapore Entrepreneurship Ecosystem: A Case Study For BRIC Economies to Ponder

Abstract
This paper examines the current status of entrepreneurship take-up rate amongst tertiary students and graduates in the Singapore environment. A study was conducted recently—incorporating a questionnaire survey, one-on-one interviews, secondary research and a stakeholders’ analysis in the entrepreneurship ecosystem . In this paper, the author hypothesizes the disconnection amongst social attitudes, public policies, integration factors and market size amongst others—as roadblocks that might have affected the growth of a world-class knowledge-based enterprise pool. He is also concerned that traditional norms of targeting salaried jobs as careers had caused prevailing situations of unemployment and underemployment amongst tertiary graduates. His strategies proposed include marrying “knowledge practitioners” to an enterprise mechanism as the solution to build financial self-sufficiency and self-esteem.
Raymond Keng Wan Ng

Chapter 3. The Impact of Ethnicity on Entrepreneurship: A Global Review and Lessons for Nigeria

Abstract
The impact of culture on entrepreneurship attitude has been subject of several studies all over the world and arguments have been proffered both ways. Unfortunately studies on the subject are rare in sub-Saharan Africa, especially in Nigeria. This paper seeks to review and synthesize studies that allude to the impact of culture on entrepreneurial attitude, with a view to extending the findings to the entrepreneurial attitudes of Nigeria’s three major ethnic groups : Hausa, Yoruba and Igbo. It is a literature survey type, identifying those attitudes in various cultures that bring out the best in each ethnic group’s entrepreneurship. It finds that positive cultural attitudes from all ethnic groups in a nation are worthy of emulation by the other ethnic groups for best practices in entrepreneurship. The study recommends that positive entrepreneurial cultural attributes identifiable among the three major ethnic groups in Nigeria should be publicised for the benefit of all prospective Nigerians entrepreneurs.
Kabiru Isa Dandago, Yusha’u Ibrahim Ango

Chapter 4. Economic Implications of Intellectual Property Rights in Evolving Markets

Abstract
The liberalisation of economies across the world has drawn worldwide concentration towards the significance of intellectual property and its protection, as also its role in stimulating growth (Alikhan and Mashleshkar in Intellectual property and competitive strategies in 21st century. Aditya Books Pvt. Ltd, New Delhi, p. 125, 2006). By tradition, policy choices in IPR are a matter of national discretion because intellectual property law applies solely within designated territories. Most countries have different levels of intellectual property enforcements based on their perceptions about its implications on the economic indicators of the country.Here it becomes important to understand the interface between market structures , competition laws and intellectual property. Various economics scholars have investigated the strength of the intellectual property system prevalent in various countries and their specific indicators such as foreign direct investment s, growth of gross domestic product , rise in technology transfer , trade flows and joint ventures.The paper discusses various economic implications, especially areas cited above. The research uses literature as well as primary data to accomplish its objectives. The quantitative data was collected with the help of a questionnaire survey. The respondents for the same were 320 eminent academicians from the fields of economics and social sciences, economists in government departments and experts on policy making. The questionnaire comprised 80 items under various constructs that emerged from the review of literature.As the set of variables was large, the need for data summarisation was felt in order to identify a smaller set of representative variables while retaining the nature and character of the original variables. The technique of factor analysis was adopted since it is an appropriate interdependence technique and fulfils the objectives as above.
Rajesh Asrani

Chapter 5. Factors Affecting Capital Structure of Indian Venture Capital-Backed Growth Firms

Abstract
Entrepreneurship is considered as an engine for bringing about positive changes in the form of socioeconomic welfare (Kortum and Lerner 2000). However, it is a well-established fact that, one of the major constraints faced by entrepreneurs is access to finance. Self-financing is usually not sufficient and collateral-based debt funding is not always available. Information asymmetries prevailing between investors and entrepreneurs, uncertainty related to the future of the product, and bleak exit prospects of the investor severely curtail a new venture’s prospects of receiving finance (Chan , 1983; Amit et al. 1990). In recent years, equity financing in terms of venture capital has emerged as one of the alternative sources of financing for new ventures. The most accepted form of definition for venture capital includes investment in young firms which are very risky but promise a great return. (Gompers et al. 1998 ). Recent research in venture capital indicates a trend toward venture capitalists’ preference toward late stage deals (e.g., Gompers and Lerner 2001). Since a large volume of venture capital is flowing into growth stage firms, it becomes essential to understand the various factors that venture capitalists consider before investing in a particular firm which is in its growth stage. Earlier research has focused mostly on analyzing the criteria used by venture capitalists to select a new venture based on human capital, attractiveness of markets, uniqueness of products etc. However, this chapter seeks to identify the various financial indicators that venture capitalists consider before funding growth firms . One way to do this is to analyze the capital structure of firms which receive venture financing later. The basic objective of this chapter is to understand whether the determinants of capital structure of a firm has a major role to play in the access of venture capital later in its life cycle. The finance literature comprises of numerous studies that focus on the determinants of capital structure of firms. However, there do not exist many studies which talk about the determinants of capital structure of a firm which is financed by venture capital. This chapter is based on the Indian context. It uses the static trade-off theory, pecking order theory, and agency theory to explain the financial structure of firms which receive venture capital subsequently. This chapter draws from the capital structure literature to carve out the variables, i.e., tangible assets, profitability, size, volatility, growth opportunities etc. that affect the capital structure of firms which receive venture financing later. Propositions are drawn on the basis of this reasoning and a conceptual framework is put forth that tries to identify an optimal capital structure strategy for Indian growth firms that seek venture capital.
Swati Panda

Chapter 6. Bridging the Cross Cultural Transformational Li (Distance Measure) at Huawei Technology India Pvt Ltd

ABSTRACT
The rapid growth of Information Technology globally fuelled by innovation and customer demands propelled companies to globalize. India witnessed several global technology giants thriving on Indian soils during this phase and Huawei Technology India Pvt Ltd (HTIPL) was one such. Huawei entered India in 1999 to set up a software R&D center and take advantage of the availability of skilled IT professionals and the potentially high evolving telecom market . Indian engineers who had built a reputation for being technically superior in software and quality process skills were to be HTIPL’s cash cow. Huawei’s strategy was to combine the strengths of Indian engineers with that of the Chinese hardware design and system integration. Being new to India, attracting and retaining talent was a challenge especially in the initial start-up stage and once the initial stage of hiring people was crossed grooming talent was an equally daunting task. Though most of the HR functions like training, performance management, employee relations, and compensations were fairly similar to that of most of the other MNCs in India, HTIPL had unique practices which set it apart in establishing the organization as one that created and sustained a high performance work culture .The case is set in 2007–2008 when a transformation to reorganize and align with China’s HR practices and culture was to be designed and implemented and rolled out at HTIPL in India.
Bidipta Das, Menaka Rao, Vasanthi Srinivasan

Social Networks for Entrepreneurship

Frontmatter

Chapter 7. How Do Entrepreneurs Benefit from Their Informal Networks?

Abstract
The networks of an entrepreneur constitute a key resource channel for him. This follows from the perspective of viewing social networks as a resource channel thereby giving rise to the concept of ‘Social Capital’. The relationship an entrepreneur shares with fellow beings in entrepreneurial, alumni, and ex-colleague networks can also be a source of social capital for an entrepreneur. Through these networks, an entrepreneur can immerse himself in the business/social environment and seek to exchange certain tangible and intangible benefits. There are various kinds of professional networks that an entrepreneur would interact in. We call such networks as ‘Entrepreneurial Networks’. Industry bodies, interest groups, etc., also come under this category of networks. The networks that an individual builds by virtue of belonging to his/her school /college alumni association is called ‘Alumni networks’. Many entrepreneurs have past experience in various capacities in companies. In that process they would have worked with a many colleagues. Such colleagues constitute the ‘Ex-colleague networks’ of an individual. The goal of this study is to investigate and compare the benefits that entrepreneurs derive from their entrepreneurial network, alumni network, and ex-colleague network. The benefits considered are mentoring, information, visibility, technical help, contacts, and reputational endorsements. Friedman Test and Wilcoxon Signed-Rank Test is used to compare benefits that entrepreneurs derive from their entrepreneurial network, alumni network, and ex-colleague network. The results show that ex-colleague networks of an entrepreneur are the most useful in terms of the benefits that entrepreneurs derive in the form mentoring, information, technical help, contacts, and reputational endorsements. Entrepreneurial networks are useful to entrepreneur since they provide a forum for entrepreneurs to make their companies visible to the world. Entrepreneurs rarely derived benefits from their Alumni networks.
B. Sharada, Parameshwar P. Iyer

Chapter 8. Conceptualizing the Process of Opportunity Identification in International Entrepreneurship Research

Abstract
This paper introduces a conceptual framework that extends the current notions of opportunity identification and exploitation in international entrepreneurship research. Drawing on entrepreneurship and strategic management literature we highlight that opportunity identification is a path dependent and an individual centred process that is positioned on learning, knowledge and capabilities of the decision makers. The proposed model offers testable propositions to prepare the ground for future empirical research.
Indujeeva K. Peiris, Michèle Akoorie, Paresha Sinha

Chapter 9. Symbiotic Venture and Social Capital: The Effects of Market Orientation on Small Entrepreneur Firms in China

Abstract
Adopting a perspective of social capital theory, we study the effect of market orientation on the stability of symbiotic ventures in an emerging economy. Focusing on a subset of these ventures, namely symbiotic small–large firm venture, we show that firms’ market orientation has a positive effect on trust, which is considered as a piece of important social capital. And this social capital, in turn, has a positive effect of the stability of the symbiotic ventures. Moreover, social capital also has a positive effect on the sharing of resources among the partners, which should also influences stability of symbiotic venture in the future. Finally, personal relationship, which is often an important factor for marketing success in emerging market , also has a significant and positive relationship with the stability of the venture alliances. This paper concludes with a discussion of the implications for academic researchers and practitioners.
Ji Li, Zhenyao Cai, Hong Zhu, Tao Liu, Shengping Shi

Chapter 10. Social Fluidity Mapping System—A Way to Reduce Social Stigma in Business Failures

Abstract
The research explores the social stigma associated with the failure of entrepreneurial activity by means of escape velocity. Negative publicity, lack of financial intermediation, disgrace among the stake-holders and lack of social immunity causes social stigma. The research explored the effectiveness of the Social Fluidity Mapping System (SFMS) followed by the entrepreneurs in the context of reducing the social stigma. The affinity created by the entrepreneurs with the society under the corporate social responsibility programme is well thought-out as the social fluidity for the purpose of research. The results contented that the social fluidity mapping is established on the basis of social cohesion theories. It also builds enterprise image. It leverages the social networks to develop business rapport. It establishes alliance strategy to reduce risk and build community funding system to reduce the financial turbulence. High escape velocity ratio leads to reduce the social stigma. The success of social fluidity mapping depends upon the leveraging the social network that creates entrepreneurial structural relationship among the stake holders. The customer reliability is no longer a significant competitive advantage, but trust among the society is a competitive advantage for an entrepreneur to reduce the social stigma related with business failures.
P. Baba Gnanakumar

Sustainable Entrepreneurship

Frontmatter

Chapter 11. Green Entrepreneurship in India: Global Evaluation, Needs Analysis, and Drivers for Growth

Abstract
Green entrepreneurship must be embedded in the present industrial paradigm to have sustainable growth. The top ranking companies of the world have started turning green through corporate social responsibility and other business drives. It is indispensible for manufacturing, supply chain, information technology, and retail companies to resort to green practices. Thus, the potential of green entrepreneurship in near future is huge, both for new entrants and the established ones. This chapter includes in-depth analysis of positive and negative aspects of starting and running green business. Study has outlaid problems relating to the rigid procedural requirements encountered by the entrepreneur in starting a green venture. A clear picture of prevalent financial scenario viz., the role of venture capitalism, angel funding, and banks is investigated to highlight opportunities for Foreign Direct Investments (FDI) in green sector in India. Government, university, and corporate R&D in the sector have been thoroughly scanned. Technology Business Incubators (TBIs) have been surveyed to find out their contribution to the Green Sector Development in the country. Government policies, programs, and subsidies for green entrepreneurship development have been critically analyzed. Close surveillance has enabled categorization of government procedures and regulations as facilitators/barriers for entrepreneurship. Role of early stage/entrepreneurship/technology education in creating entrepreneurial attitudes for green sector has been evaluated against the global benchmarks. This chapter summates the viewpoints of academicians, industrialists, entrepreneurs, practitioners, and government officials to draw the important conclusions. All the necessary elements, i.e., literature viz. white papers, articles, case studies; instrument viz. surveys, interviews, site visits; analysis viz. statistical analysis, factor analysis have been adopted. This chapter deeply researches the aspects relating to India and it caters broadly to those of some other emerging economies. It has been figured out that there is both lack of support and knowledge about green entrepreneurship. The existing infrastructural and informational gap could be met to great extent by developing a public–private partnership model. Whole some the chapter is full of argumentation, analytics, definitions, comparison and contrast, cause and effect, reports and data, and lastly interpretation to draw the conclusions.
Ashish Sharda, Abhishek Goel, Ankit Mishra, Satish Chandra

Chapter 12. Green Awareness by Corporates and Entrepreneurs in India: A Case Study of Pune City in Maharashtra State

Abstract
Antoine W. van Agtmael of the International Finance Corporation first coined the term Emerging Market way back in the early 1980s. Whilst striving to start an equity fund for developing countries, he discovered that there is a stigma attached to the term ‘developing countries’ and is synonymous with lack of progress. Consequently he could not attract funding. To overcome this problem, he coined the term ‘emerging market’ so that they would be associated with ‘progress, uplift and dynamism’ (Economist, Sept, 2008). In current times, the developed markets’ growth rate has slowed down considerably. So companies are looking at emerging economies in order to improve their sales and consequently their growth rates. Further, emerging economy countries have about 75 % of the world’s population. These countries have a better growth in income as also consumer purchasing power. They have low-cost, large untapped high-quality sources. This has resulted in a paradigm shift in international business. Consequently, many entrepreneurial and business enterprises have started operations in these emerging economies. The authors wish to study whether these businesses pay attention to conserving natural resources through green business endeavours. Today, uncontrolled business activities have considerably harmed our ecological system leading to global warming and depletion of natural resources. The world has now slowly woken up to the need for following green practices both in day to day activities as also businesses. India, as one of the BRIC nations, also is seeing a lot of entrepreneurial and business activity. It is therefore imperative to note the amount of weightage given by business houses to green business measures that will be eco-friendly. For the present study, the methodology adopted was a survey of the kind of measures that corporates in Pune follow in order to get an idea of whether Indian businesses are aware of the need for having entrepreneurial eco-friendly systems for maintaining a more sustained environment. A structured questionnaire was administered to proprietors of small businesses in the major busy areas of Pune to find out whether restaurant owners and shopkeepers are aware of global warming and whether they are contributing toward a green environment. Both primary and secondary resources were used to determine whether businesses big or small are adopting green business endeavours. It was found that many of the well-known corporate houses have initiated green ventures. For e.g., Mahindra has started its green technology drive. Tata Motors has reduced its oil consumption through conservation, recycling and reuse of industrial oils. The company was the first to introduce radial tyres for enhancing fuel efficiency. New technology in the manufacturing process of companies such as the New IBF Factory, Tata Marcopolo Motors Limited and Eastern Complex facilities has improved productivity as well as quality which indirectly translates into less consumption of resources or less carbon footprint. A study of these companies along with some newspaper reports of polluted rivers and flooded gutters in Pune indicates that while some well-known companies have realised the importance of green business practices for both sustainable ecological environment and also a positive corporate image, many business houses still need to be educated and brought round to conforming to legal norms of enforcing environment-friendly practices and social corporate responsibility. Only then can India hope to encash on its present economic growth for long-term, sustainable development.
Pradnya Chitrao, Asha Nagendra

Chapter 13. Social Entrepreneurship—Building Sustainability Through Business Models and Measurement of Social Impact

Abstract
Social entrepreneurship is gaining unprecedented momentum in the recent years and it is overwhelming to learn how social entrepreneurs are able to create both social and economic value overcoming all odds and sustain and grow their ventures. Social enterprise can be a for-profit or a not-for- profit venture in their constitution. This research study presents a comparative case analysis of four social ventures two of them are not-for-profit organisations and depend mainly on philanthropic partners for funding. The other two are for-profit social ventures and create products and services which are commercially viable. Three of the founders are Ashoka fellows and one is a national award winning social entrepreneur, all based in India. Irrespective of the nature of enterprise, developing a viable business model is crucial for the sustainability of the venture. Analysis of these organisations’ business models reveals different patterns. The findings suggest that successful social entrepreneurial organisations proactively create their own ways to partner with multiple stakeholders who share their social vision ; deploy resources effectively as an integral part of the business model; and integrate the target group into the social value network.
Shinu Abhi, Vasanti Venugopal, Sandeep Shastri

Micro-Entrepreneurship

Frontmatter

Chapter 14. Implications of Driving Factors for Entrepreneurship: A Case Study for Immigrants, Ethnic, and Religious Minorities’ Entrepreneurship in Pune City

Abstract
The city of Pune has witnessed the emergence of business initiatives from minority communities like Muslims, Sikh, Sindhis, Marwardis, Jains, and others who continue to display high rates of entrepreneurship. This chapter attempts to examine the driving factors influencing ethnic and religious entrepreneurship. Through empirical study the researchers intended to find out whether ethnic minority entrepreneurship depends on the socioeconomic and ethno-socio characteristics of the immigrant people. Ethnic minority’s decision to enter entrepreneurship is generally influenced by different factors such as historical factors, market conditions, clusters, geographical factors, strong cultural factors etc. They choose entrepreneurship because of their cultural predictions toward self-employment in favor of working for someone else. The residential clustering of members of the same ethnic community in a neighborhood, known as an ethnic enclave, contributes to the creation of entrepreneurial opportunities. Ethnic enclaves create niche market opportunities for serving the local ethnic population motivating entrepreneur’s to enter into new businesses. Main objective of this research is to study the various driving factors for entrepreneurship among the ethnic and religious minorities and to analyze whether ethnic minority entrepreneurship depends on the socioeconomic and ethno-socio characteristics of the immigrant people. An exploratory research design was adopted and data was collected from Pune region majorly from communities like Muslims, Sikh, Sindhis, Marwaris, Boharis etc. Random sampling method was used to select database. Responses were collected from 183 entrepreneurs.
Mahesh L. Abale, Sonal Muluk, Poonam Rawat

Chapter 15. Success and Life Satisfaction Among Women Entrepreneurs in Micro enterprises

Abstract
Many entrepreneurship researchers share the opinion that entrepreneurship is a positive force which enhances employment generation and promotes new products and services to meet the needs and wants of their clients. However; emphasis on entrepreneurship within micro enterprises is limited. Hence, an attempt was made to identify and assess entrepreneurial attitude orientation and competencies and skills among women entrepreneurs in micro enterprise leading to entrepreneurial success and ultimately life satisfaction. Multivariate analysis technique like Factor Analysis and Structural Equation Modeling (SEM) were conducted to identify the entrepreneurship success related factors. The findings showed a direct relationship between entrepreneurial attitudes related constructs and entrepreneurial competencies related factors, leading to entrepreneurial success, and life satisfaction among micro entrepreneurs.
Latha Krishnan, T. J. Kamalnabhan

Backmatter

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