development of start-up and fledgling companies by providing entrepreneurs with an array of targeted resources and services. These services are usually developed or orchestrated by incubator management and offered both in the business incubator and through its network of contacts. A business incubators main goal is to produce successful firms that will leave the program financially viable and freestanding. A Business Incubator is a facility designed to assist businesses to become established and sustainable during their start up phase. Typically, they do this by providing- shared premises, business advice, business services, access to investor, market and international networks, mentoring and a full-time, hands- on management team. Business incubators are projects designed to help new businesses develop and successfully launch. The main goal of a business incubator is to encourage the development of new business. By assisting a local entrepreneur to start a company in the area, the community is likely to benefit from an increase in the number of available jobs in the area, and the additional revenue that is brought to the city or town as a result of the new business activities. Both elements can help to revitalize a local economy that is somewhat sluggish and thus enhance the quality of life for everyone who lives and works in the area. Business incubation provides workspace and an instructive, supportive environment to entrepreneurs at start-up and during the early stages of businesses. A by-product of a business incubator is the internal dynamics that come from working together in a shared physical space. The joint and cross-discipline learning that takes place and the opportunity to form business networks and contacts are also critical to the launch of successful ventures. The business incubator helps to fill a void that is found in many areas. Not everyone has access to resources that can fund a new business effort until it becomes profitable. Incubator programs help to fill the gap by providing training to entrepreneurs a space to launch the business, and connect the new business owner with others who are in a position to invest in the future of the company. Business incubators are designed specifically to help start-up firms. They usually provide: 1. flexible space and leases, many times at very low rates 2. fee-based business support services, suchs as telephone answering, bookkeeping, secretarial, fax and copy machine access, libraries and meeting rooms 3. group rates for health, life and other insurance plans 4. business and technical assistance either on site or through a community referral system 5. assistance in obtaining funding 6. networking with other entrepreneurs Business incubation has been identified as a means of meeting a variety of economic and socioeconomic needs, which may include Creating jobs. Fostering a community's entrepreneurial climate Technology commercialization Diversifying local economies Building or accelerating growth of local industry clusters Encouraging women or minority entrepreneurship Identifying potential business opportunities Community revitalization Knight classified three types of uncertainty. 1. Risk, which is measurable statistically. 2. Ambiguity, which is hard to measure statistically 3. True Uncertainty which is impossible to estimate or predict statistically. Uncertainty is present in all decisions we make. Four forms of uncertainty: 1) Temporal uncertainty of future or past states, 2) Structural uncertainty due to complexity of situation 3) Metrical uncertainty in measurement, and 4) Translational uncertainty in explaining results All four types may occur in any situation, but one or more usually dominates. Although these types are not necessarily independent, the nature of each is quite different. Level of uncertainty Level of management
Very risky (not able to determine in Top and middle
probabilistic terms precisely) management
High (total uncertainty) Top management
Uncertainty often cannot be reduced by acquiring new data, nor can one afford to obtain that data even if available. Alternatives to seeking better information are to manage the uncertainty with the information on hand or to use a very selective data acquisition program. Uncertainty is addressed by 4 different broad approaches: 1. Ignoring it. 2. Use margins of safety to provide contingencies. 3. Buy insurance to spread the risks. 4. Directly understand and manage the uncertainties. Central State Others SSI Board KVIC(Khadi & Village Commission ) SIDO(Small Industries Development Organisation) NSIC( Nat. Small Industries Corporation Ltd) NSTEBD (The Nat. Sc & Tech Dev. Board) NPC(National Productivity Council) NISIET(Nat. Institute for Small industries Extension and training) IIE (Indian Institute Of entrepreneurship) EDI (Entrepreneurship Development Institute) Constituted in 1954 to facilitate the coordination & inter-institutional linkage for the development of the SSI sector. The Union Industry Ministry is the chairman of the Board, it has State industry Ministers; select members of the parliament; secretaries of various departments of the Central Govt, financial institutions, public sector undertakings, industry associations and eminent experts in the field. The board operates in the following areas: Policies and programmes Industry development in a specific region. Credit facilities, modernisation. Industrial sickness. A body created by the act of the parliament. It is charged with planning, promotion, organisation and implementation of the programme for the development of khadi and other village industries in the rural areas in co-ordiantion with other agencies. Its functions also involve building up a stock of raw material for supply to producers, creation of common service facilities for processing of rawmaterial; provision of services for marketing the goods produced. Established in1995. Provides vital services for promotion to SSI 1) machinery and equipment(purchase system) Supply of machinery, value of which would not exceed Rs 30 million. 2) Machinery and equipment- lease 100% finance facility; tax rebates. 3) Financial Assistance Five financial assistance schemes operating at Delhi, Mimbai, Ahmedabad, Bangalore, Goa. Facility of marketing, raw material purchase, and exports. 4) Assistance and procurement of rawmaterial Import of raw material Providing Scarce material on priority basis. Supplies through NSIC godowns. Established in 1982 by the Govt of India Under the Deptt. of Science and Technology . Its an institutional mechanism aimed at promoting knowledge driven and technology intensive enterprise. Aims at converting job seekers to job creators through Science and Technology Intervention. Major objectives: 1. To promote and develop high end entrepreneurship for S&T. 2. To facilitate and conduct various informational services relating to promotion of entrepreneurship. 3. To act as policy advisory board with regard to entrepreneurship. Major Activities: 1. Training programmes 2. Institutional mechanism 3. Information dissemination. Established as an autonomous body functioning under the supervision of the Ministry of Industry. Primary role is to act as a catalyst in enhancing the productivity of all sectors of the economy. NPC is administered by a tripartite Governing Council (GC) which gas equal representation from the industry, govt. and trade unions. Minister for industry is the ex-officio president and is chaired by the Secretary for Industrial Development. NPC is active in the field of consultancy and training. It also has specialised division to provide tailor-made solutions to agriculture and industry. NPC has a role to play in undertaking various entrepreneurship development programmes. Member of the APO(Asian Productivity Organisation), Tokyo, an umbrella body of all productivity councils on the Asian Region. Has a role to play in manpower assessment, wage fixation, etc. District Industries Centre (DIC) State Financial Corporation(SFC) State Industrial Development Corporation State Small Ind. Dev Corp (SSIDCs) Regional Rural Banks. State Cooperative Banks. Initiated in 1978 as a centre sponsored scheme, later in the year 1993-94 the central sponsorship was withdrawn. Developed with the aim of providing employment opportunities especially in the rural and backward areas. Services Economic investigation of local resources. Raw material provision. Credit facility arrangement. Consultancy services. Set up under the Companies Act 1956 as wholly owned undertakings of the State govt. Facilities provided 1. Land development. 2. Infrastructural facilities. 3. Term loans. 4. Promotional facilities. Set up under the Companies Act, 1956 as state govt undertaking. SSIDCs are operationally flexible Services: Procurement and distribution of raw- material. Supply of machinery on hire purchase basis . Construction of industrial estates. Seed capital facility. Established under the SFC Act, 1951 Aim is to finance and promote small and medium enterprise in their respective states. Financial assistance can be provided in the form of term loan, guarantees, seed capital assistance, etc. Tailor made schemes for artisans, SC/ST, Women, ex-servicemen, etc Set up on October 2, 1975. The banks provide credit to the weaker sections of the rural areas, particularly the small and marginal farmers, agricultural labourers, artisans and small entrepreneurs. Initially, five RRBs were set up on October 2, 1975 which were sponsored by Syndicate Bank, State Bank of India, Punjab National Bank, United Commercial Bank and United Bank of India. The major objective is to develop rural economy by providing credit and facilities for the development of agriculture, trade, commerce, industry and other productive activities in the rural areas. RRBs are expected to make credit available to rural households. To take the banking services to the doorstep of rural masses. To make available institutional credit to the weaker sections of the society who had by far little or no access to cheaper loans. To mobilize rural savings and channelise them for supporting productive activities in rural areas. To generate employment opportunities in rural areas and bring down the cost of providing credit to rural areas. The co-operative banks arrived in India in the beginning of 20th Century as an official effort to create a new type of institution based on the principles of co-operative organisation and management, suitable for problems peculiar to Indian conditions. These banks were conceived as substitutes for money lenders, to provide timely and adequate short-term and long-term institutional credit at reasonable rates of interest. NABARD (National Board of Agriculture and Rural Dev) Non Governmental organisations. SIDBI Housing & Urban dev Corporation (HUDCO) Set up in 1928. Initiates measures toward institution-building for monitoring, formulation of rehabilitation schemes, restructuring of credit institutions, training of personnel, etc. Coordinates the rural financing activities of all the institutions engaged in developmental work at the field level and maintains liaison with the government of India , State governments, the Reserve Bank of India and other national level institutions concerned with policy formulation Prepares, on annual basis, rural credit plans for all the districts in the country. These plans form the base for annual credit plans of all rural financial institutions Promotes research in the fields of rural banking, agriculture and rural development Functions as a regulatory authority, supervising, monitoring and guiding cooperative banks and regional rural banks Formed in 1970. Primary objectives: 1. to provide assistance for urban, social sector infrastructure, 2. creation of housing facility, 3. infrastructure for SSI sector. 4. Consultancy services. 5. Technical assistance. Policy initiatives at state and central level. Administratively, the SSI has been divided into various groups (traditional & Modern): 1. Handicrafts 2. Handloom 3. Khadi, village & cotton industries. 4. Coir 5. Sericulture 6. Powerlooms 7. Other small scale industries. The promotional measures cover - industrial extension services - institutional support in respect of credit facilities, - provision of developed sites for construction of sheds, - provision of training facilities, - supply of machinery on hire-purchase terms, - assistance for domestic marketing as well as exports, - special incentive for setting up enterprises in backward areas etc. - technical consultancy & financial assistance for technological upgradation. Industrial Policy Measures 1991 Integrated infrastructure development Participation of state & Central Govt. Support associations to establish counselling and common testing facilities Modernisation/ upgradation programmes. Post 1999 Policy Measures De-reservation Change in investment limit Facilities for foreign participation Market assistance Incentives for quality improvement Rural industrialisation Managerial Financial Structural Setting goals Measuring performance Finding and retaining employees Motivating employees Getting useful business information Low employee productivity Health, safety isuues. Finding apt source of finance Working capital management. Debt pay-off. Not being able to make use of Govt. incentives Unable to control costs Unforseen financial issues Level of competition Govt. policies Absence of diverse buyer market Changing trends Supplier market problems Infrastructural issues Technology upgradation issues Geopolitical issues Internal Inadequate communication Lack of Inter-functional integration. Chaotic delegation of authority and responsibility IFCI Industrial Finance Corporation of India. IDBI Industrial Development Bank of India. SFC State Financial Corporation. SIDCO State Industrial Development Corporation ICICI Institutional Credit and Investment Corporation of India. In July 1, 1948 IFCI was established by the Govt of India. Gives preference for advancing loans to: 1. New entrepreneurs. 2. Projects aimed at exploring new areas of technology. 3. Products aimed at raising the agricultural products. Established in January 1955. Major functions: To assist industrial concerns with loans and guarantees. To assist the formation, expansion and modernisation of the industrial units lying with the private sector. Development of industries in the private sector. Incorporated in 1964 Functions: Co-ordinating agency: Financial assistance. Refinancing. Special assistance through Development Association Funds. Promotional Agency Investment limit: raised form 1 cr to 5 cr. Development of SEZ: EDI: increase training capacities. Micro and small entrepreneurs provided training under management development programme. Sanctioning loans on priority basis. Launching of Technology Development Fund in the states by central govt. Credit Guarantee Fund Scheme for SSI: has been launched to provide guarantee for loans upto Rs. 25lakhs. Setting up of National Commission on Enterprise to recommend measures for improvement in the productivity of enterprises, providing marketing facilities, skill development, etc. SME fund launch by SIDBI. Interest rate is charge at 2% lower than the prevailing rate. Provision of facilities for participation in overseas fairs/exhibitions. Micro and small Enterprise Development Programme: Started in the Eleventh plan. Clusters (which are industrial estates for specific industry as per regional specialisation) are developed.