A STUDY ON PROBLEMS OF YOUNG ENTREPRENEURSHIP IN INDIA

1 2
Dr.G.Yoganandan A.Raj naveen chander

ABSTRACT

The study focuses on the problems that young entrepreneurs have in the business. Young people are
unemployed and the job opportunities for the youngsters have become very low in this competitive
world and youth unemployment rate is growing at alarming speed. Young people face major
economic problems in the society.Young entrepreneurs have excess problems like bringing out
ideas, financial requirements and implementing the products to the market when compared to
experienced entrepreneurs. Finding employees for the business is a complicated job for the young
entrepreneurs and also the decision making process for the young entrepreneurs will make them
fatigue due to lack of experience.

Keywords: Young entrepreneurs, Problems, Economic development, Innovation.

1
Associate Professor, Periyar Institute of Management Studies (PRIMS), Periyar University, Salem11.MailId:
g_yoganandan@yahoo.com .Ph No:8870338773
2
Research Associate (RGNIYD) Major Research project (MRP), Periyar Institute of Management Studies (PRIMS),
Periyar University, Salem-11. Mail Id:rajnaveen367@gmail.com. Ph No:9994818393
Introduction:

Youth is the Future of every nation and inheritors of the society. If the youth population is high in
the country there will be high growth in the every progress of the society but in recent years many
young people are unemployed and the job opportunities for the youngsters have become very low in
this competitive world. Many young people face major economic problems in the society. Youth
unemployment is a major problem faced by most of the countries in the world. Youth
unemployment rate is growing at alarming speed [ CITATION Fra \l 16393 ]. Bygrave and Hofer
in1891 defined the entrepreneurial process as involving all the functions, activities, and actions
associated with perceiving of opportunities and creation of organizations to pursue them [ CITATION
San11 \l 16393 ].

Who is an Entrepreneur?

An entrepreneur is a person who manages and organizes a business enterprise and ready to take risk
for obtaining profit in the business. Any person who starts and operates a business is an
entrepreneur. An entrepreneur has to acquire skills and motivation to start the business or enterprise
of his own[ CITATION Yog162 \l 16393 ].An entrepreneur is the person who endures to take risk, unites
several factors of production; to exploit the perceived opportunities in order to induce demand,
create wealth and employment [ CITATION Han12 \l 16393 ].

Role of Young Entrepreneurs

Young people may not seems to be a likely group for entrepreneurs due to their in experience and
lack of finance but they have interest in entrepreneurship and many young people feel that the self-
employment is feasible to them [ CITATION Vil10 \l 16393 ] . Young entrepreneurs are motivated and
involved in the entrepreneurial activities and also they have different approaches and ideas to run
the business [ CITATION Man12 \l 16393 ].

Many businesses that run by the young people do not naturally grow, survive or provide sustainable
incomes. This reveals that most of the businesses have larger difficulties in growing and
surviving.When compared to the experienced entrepreneurs, young entrepreneurs have lower
survival rates in the business administration. However young people’s businesses have the growth
potential in average than old entrepreneurs in the business [ CITATION Jac15 \l 16393 ].
Different types of entrepreneurs

There are different types of entrepreneurs but the research focus on two types of entrepreneurs:
“innovative entrepreneurs and replicative entrepreneurs” innovative entrepreneurs start a new
business venture with new business structure and also with new ideas, new schemes and bring new
products in the market and implement new marketing techniques and strategies and give new
services to the customers. Whereas replicative entrepreneurs have unique selling of the products in
the existing markets and also they are benefited by introducing their product in a well-established
market [ CITATION Ale14 \l 16393 ].

In the business world there are different types of entrepreneurs, the entrepreneurs may belong to any
type but every entrepreneur does not have same problems in the business, likewise young
entrepreneurs have excess problems like bringing out ideas, financial requirements and
implementing the products to the market etc, in making the business successful [ CITATION Moh08 \l
16393 ].

FACTORS AFFECTING ENTREPRENEURIAL DEVELOPMENT

There are various Factors that affect the entrepreneurship development in the business. The study
focuses only main factors that affect entrepreneurship among young people.

Economic Situation:

Economic Situation is one of the most important factors that affect the entrepreneurship in
developing the business. Capital plays a major role for starting the business/ enterprise. When the
capital investment of the business is increased, the profit of the business will also be increased this
leads to speed up the process of capital formation of the business. The young entrepreneurs have to
come up with good capital investment in the business that makes the profit high [ CITATION Nic14 \l
16393 ].

Availability of Labour:
Labours availability is a significant factor for the entrepreneurial growth. The right type of workers
availability for the business is intricate which affect the entrepreneurship in growing. The
excellence and magnitude of the labour raise the appearance and growth of the entrepreneurship.
The Young entrepreneurs have to be enthused in selecting the labours for the business [ CITATION
Law12 \l 16393 ].

Raw Materials:

Raw materials are the major ingredients for manufacturing any products in the business. The
shortage of raw material badly affects the entrepreneurial development. Without sufficient supply of
raw materials no business can run properly and the growth of the entrepreneurship is affected. The
young entrepreneurs have to import sufficient and adequate supply of raw materials for the product
to be established among the customers and also in the market [ CITATION GSN13 \l 16393 ].

Compelling Factor:

Many people take decision due to coercion rather than willingness because of their situation or
family environment, likewise some of the entrepreneurs including young people may be forced to
become an entrepreneur whether the business is successful or not. If any of the entrepreneurs is in
this situation they do not independently, they do not take right decision in right way, and they may
not be able to utilize the funds properly for the business activities. This leads the business in a
critical situation to survive and also it affects the entrepreneurship development [ CITATION Lag12 \l
16393 ].

Government attitude:

Government plays a major role in the progress of entrepreneurship. The government regulates the
activities of the business. Favourable response of the government simplifies the growth of the
entrepreneurship, but the unfavourable response of the government affects the formation and
growth of the entrepreneurship. The entrepreneurs have to drive the business within the concessions
and confines set by the government. Government has to manage proper allocation of fiscal power
between the public and private sector [ CITATION Sun91 \l 16393 ].

OVERALL PROBLEMS OF YOUNG ENTREPRENEURS

Financial Problems:

Young people have financial barriers to start their own business venture. Most of the youth do not
have support for saving money which can be utilized for the business purpose, so they need to raise
their capital through the family, friends or any financial institutions to make the business run. In this
case they may not get sufficient funds for the business and they have many difficulties in get going [
CITATION Pre15 \l 16393 ].

Social Repudiation:

The Family members and friends may not understand the situation of the young people in the
business and they refuse to support them. Many people will criticize the ideas of the young people
which will affect them to grow in the business. If the ideas implemented by the young entrepreneurs
in the business become unsuccessful the society may blame them as lack of experience [ CITATION
Tri15 \l 16393 ].

Hiring Employees/staff:

Hiring the employees for the business is not an easy task. Finding the employees with ability, skills,
and attitude is a complicated job for the young entrepreneurs in the business. If the
company/business is situated in the small town there is difficulty in finding the suitable workers or
employees because top talented people are shifting to the remote cities to improve their own
employment outlook [ CITATION Bri13 \l 16393 ].

Decision Making:

Generally, entrepreneurs are forced to make many decisions in their daily business life. The young
entrepreneurs who are new in the business may feel complex in the decision making process.
Decision making process is a fatigue for the young entrepreneurs that they will experience if they
are not prepared for the new level of stress in the business [ CITATION Yog16 \l 16393 ].

Finding Customers:
Many customers usually look for the branded products to purchase. The young entrepreneurs have
the difficulty in attracting customers towards their products. The life of the young entrepreneurs
seems exciting but they have many complications in making the product success among the
customers. The small marketing budget and global competition makes complicate the effort to
attract or retain customers [ CITATION Yog161 \l 16393 ].

PROBLEMS IN THE BANKS AND FINANCIAL INSTITUTIONS

Finance is the key input for any business. In starting a new business venture the financial
investment mainly comes from the banking, government channels and financial institutions. The
young entrepreneurs have many problems in availing loans from the government organizations and
money-making banks. The Financial sectors will inquire many information and data regarding the
business which the entrepreneurs have to get prepared for producing the documents. When the loans
are raised from the government agencies, the procedure is so difficult and most of the entrepreneurs
will hesitate to claim the loan for the business [ CITATION Jas14 \l 16393 ].

Banks may not consider the entrepreneurship as a major business opportunity for the society and
they explore many new schemes and options such as venture debt, soft loans etc, for starting the
business and also they may not give sufficient capital in which they have to make the business
survive. So they do not get much support for their business. This may lead the business delay or
stop growing in the society[ CITATION ALL \l 16393 ].

Conclusion

Young entrepreneurs are the wheels on which a country can drive its economy. Innovation plays a
major role in growth of the global economy. The Government support for innovation is important.
In India, the population is not only assorted but also huge and the youth population is high in the
country, it is crucial to impart entrepreneur skills in these people. The country’s economic plan
must be encouraging for organizations to achieve efficiency in today’s global market and they will
come out with new visions for the economic growth of a country. Entrepreneurship acts as a
positive force in economic growth of a nation and also it acts as a bridge between innovation and
market place.

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