INDIAN ENTREPRENEURS: AN EMPIRICAL INVESTIGATION OF ENTREPRENEURS AGE AND FIRM ENTRY, TYPE OF OWNERSHIP AND RISK BEHAVIOR

Shailendra Kumar Rai

The main purpose of this paper is to present an empirical analysis of the sequence relating the firm entry, type of ownership and risk behavior which in turn depends upon the age of the entrepreneurs. The data is drawn from 70 entrepreneurs engaged in Small Scale Industries (SSIs) in the industrial clusters of Varanasi district. Entrepreneurs are examined in terms of personal characteristics. Owners age is a major determinant of the form of organization and the financial capital structure of small businesses. Reliance upon debt capital to finance business startup is clearly associated with age of the entrepreneur. The empirical analysis also brought out the shifting patterns of entrepreneurial mix in the society. Contrary to the earlier belief that older the entrepreneur higher the entry into the business, the data supports the notion that entrepreneurship is evolving as a worthy career option for young India.

INTRODUCTION

he term entrepreneur originated in French economics as early as the 16th century where it was originally used to refer to military leaders, architects, contractors and organizers of musical or other entertainment. Thus, the term in its early phase had nothing to do with the economic entrepreneur of today. Cantillon (1755; cited by Killey, 1971) the originator of the economic concept of entrepreneur, defined entrepreneur as one who buys factors of production at certain prices and sells his products at uncertain prices, thereby bearing non-insurable risk that may arise due to depressed demand for his product. The term Entrepreneur has been defined by different scholars in different ways. Important among them are Schumpeter (1951) and McClelland (1961) who defined entrepreneur as an innovator. Knight (1921) defined entrepreneur as someone who acts in the face of uncertainty. Mill (1954) defined entrepreneur as a risk bearer. Say (1803) and Usher (1954) regarded entrepreneur as a coordinator. Thus, the leading authorities in the area of social sciences have not been unanimous in defining the terms entrepreneur. In a nutshell, the term entrepreneur can best be explained as a person who innovates on all fronts on a regular basis, works under uncertainty, bears the non-insurable risk and combines and manages the factors of production.
Journal of Services Research, Volume 8, Number 1 (April-September 2008) 2008 by Institute for International Management and Technology. All Rights Reserved.

214 Indian Entrepreneurs In the 21st century, especially after the adoption of new economic policy (NEP), entrepreneurship has assumed a more significant role in the economic development of India. Under the impact of rapidly changing business environment, the role of entrepreneurship extends beyond increasing per capita output and income; it is increasingly expected to work as a catalytic force for economic development. Rapid changes and progress across wide range of industries has taken place. India, a country of billion plus people with tremendous cultural, linguistics and religious diversity, has tried to modernize its society and transform its economy within the framework of a functioning democracy. During the last one and a half decade, the Indian economy has been growing at a rate of 7-8 per cent per annum. Foreign exchange reserves have crossed of $ 178 billion (RBI, 2007) and rapid changes and progress across wide range of industries has taken place. Indian economy is witnessing a situation wherein, an ascending economic trajectory, continuously rising foreign exchange reserve, reduced rate of inflation, global recognition of the technological competence, energy of 540 million youth, umbilical connectedness of 20 million people of Indian origin in various parts of the planet, global interest to R&D investment etc have all come together and it apparently looks as Indian economy is poised for growth. Therefore, in the light of the changes mentioned above, it is high time to explore its impact on entrepreneurship. OBJECTIVE OF THE STUDY The present work has been an endeavor to highlight the important features of the entrepreneurs engaged in SSIs in the industrial clusters of Varanasi district. The study stresses on the individual differences, background characteristics of the firm and risk-taking behaviors of the entrepreneurs and how it might be related to the performance of the firms and answer to questions such as: Whether entrepreneurs age determines the entry into the industry; initial capital invested; and type of ownership? The main purpose behind choosing Varanasi as centre of study is that the district is well served by a number of technical institutions. The Institute of Technology, Banaras Hindu University (BHU), Industrial Training Institutes and polytechnics provide excellent training facilities to the students. BHU having a number of disciplines of technology produces hundreds of technocrats every year specializing in electrical, chemical, electrical, computer, metallurgical and other branches of engineering. Therefore, human resources to run industries is plentiful. The district has a network of rail and road and connected with all the important cities of the country directly. Wheat, rice and potato are the main product of the district. Its commercial crops include oilseeds,
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sugarcane and pulses. All these can form the basis for several agrobased industries. However it is estimated that only 8 per cent of the district population has been engaged in the industries leaving ample scope for further employment in the industrial sector. Thus, the study will reveal the entrepreneurial characteristics among the youth of the city and state. This paper is organized as follows. The next section reviews previous studies. It is followed by a discussion of the methodology for the estimation. The data used for the analysis and the estimated results are presented next. They are followed by the concluding remarks. REVIEW OF LITERATURE One of the most important units of observation for analyzing the determinants of entrepreneurship has been at the level of the individual. Empirical tests of the model of income choice have focused on personal characteristics. For example, using U.S data, Evans and Leighton (1989a, 1989b and 1990) link personal characteristics, such as education, experience and age as well as employment status, of almost 4000 white males to the decision to start a new firm. Other studies, such as Bates (1990) also using U.S data, and Blanch flower and Meyer (1994), emphasize human capital in the income choice. Storey (1991, p.177) concluded that, the consensus is that time series analysis point to unemployment being, ceteris paribus, positively associated with indices of new firm formation, whereas cross-sectional, or pooled cross-sectional studies appear to indicate the reverse. Attempts to reconcile these differences have not been wholly successful. They may reflect possible specification errors in the estimating equations, since none include all the independent variables which have been shown to be significant in the existing literature. In particular, we suggest that more attention is given to the issue of taxation, savings and state benefits than has been the case in the past. In the European context, Foti and Vivareli (1994) analyze selfemployment data in Italy and find out that unemployment has a positive impact entry into self-employment. Ritsila and Tervo (2002) found the existence of a positive and non-linear effect of personal unemployment on the likelihood of an individual to become an entrepreneur. However, DE Wit and Van Windens (1989) findings suggest that the probability of self employment is positively influenced on the earnings differential between self-employed and wages from employment, having a relatively high score on an IQ test applied at the age of 12, and the employment status of the father (being self-employed). Colombo and Delmastro (2001) examine the characteristics of high-tech entrepreneurs in Itlay. In
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216 Indian Entrepreneurs particular, they identify differences in the characteristics found between the internet sector and other ICT industries. Their findings suggest that entrepreneurs who started firms in internet based businesses are systematically younger than their counterparts in other ICT industries. Thus, over the decades, many studies have been conducted on the relationship between the entrepreneurs human capital and the post-entry performance of new or entrepreneurial firms. These studies generally demonstrate that the entrepreneurs age, education, work experience, and other factors, have a positive effect on the post-entry performance. Among all these, age of the entrepreneur is very important because on the one hand, age increases individual ability to exploit opportunities. On the other hand, however, opportunity costs and therefore reluctance to bear risk increases with age. The empirical evidence on the effect of age on new firm formation is controversial (see Reynolds, et. al.; 1994 for a survey). Age has also been shown to correlate positively with entrepreneurial firm performance (Birley, 1987). Among them, Cressy (1996) emphasizes the role of the entrepreneurs human capital, especially his or her age, and suggests a model that assumes the probability of a new firms survival is an increasing function of an entrepreneurs age. In a study of 71 small business owners, it was found that risk-taking propensities depended on the following factors: age, education, years of business experience, span of life and size of the business (Schwer and Yucelt, 1984). On the other hand, the life cycle approach to business development (Kimberly and Miles, 1980; Scott and Bruce, 1987) suggests that the risk-taking propensity of the entrepreneur decreases over time; when the entrepreneur makes a transition to business manager, then by definition, he or she becomes less of a risk taker and instead assumes a caretaker role. Several researchers in the typology field (Cooper, 1997; Chell and Haworth, 1992; Miner et al., 1992; Westhead, 1990; Birch, 1987; Smith, 1967) have found in these studies is that risk-taking propensity varies according to personality type. Sinhas (1996) treatise covered human factors in entrepreneurship effectiveness. The study revealed that successful entrepreneurs were relatively younger in age, technically educated and had some business background in the family. Thus, the link between the development of a preference for an entrepreneurial career and factors such as parental role models (Scherer et al., 1989), education and employment history (Cooper, 1973), age of the entrepreneur and family life cycle stage (Petrof, 1981), socio-cultural (Terpstra et al., 1993) and economic factors (Gould and Keeble, 1984) have all been explored in the literature (see Garavan et al. 1997 for a review). However, only a few fragmented studies have
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concentrated mainly on entrepreneurs age which in this paper is hypothesized to have an impact on firm entry, ownership and risk. RESEARCH METHODOLOGY The data in respect of the 70 sample units have been gathered at both the place with a common schedule of questionnaire. The schedule has been pre-tested and suitable modifications have been made after eliciting the opinions of entrepreneurs and experts. The primary data has been collected with the help of questionnaire which has been designed by keeping in view the objectives of the study. The questionnaire includes both closed ended and open ended questions which have been formulated with a view to encourage the entrepreneurs to express their attitudes and feelings. The primary data have been collected through of interviews with the entrepreneurs. It has also been supplemented with secondary data. Keeping in view the objectives of the study, the following hypotheses have been tested. H1: Older the entrepreneur higher the probability of entering into the industry. H2: Entrepreneurs age determines the form of organization. H3: Younger the entrepreneur, higher the risk-taking attitude. H4: Younger the entrepreneur lesser the investment. H5: Entrepreneurs who are younger in age are likely to be predominantly innovative in Schumpeterian sense. H6: Young entrepreneurs are more optimistic about future prospects of their business than the older entrepreneurs. This paper examines whether the probability of an entrepreneurs entry into industry, his/her risk taking behaviour, choice of form of organization, initial capital investment are related to the entrepreneurs age. QUANTITATIVE ANALYSIS AND RESULTS Table-1 presents the age-wise classification of sample entrepreneurs. It has been noticed that there were a large number, i.e., 37 (out of 70) of entrepreneurs who were below the age of 30 years at the time of starting industrial units. The largest number of them (27.2%) was up to 25 years in age closely followed by the age group of 26-30 years (25.7%) and 36-45 years (20%) in that order. It may also be seen from the table that majority of entrepreneurs at Ramnagar industrial estate entered into the business after completing 30 years, while entrepreneurs at Lahartara industrial estate were quite young.
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218 Indian Entrepreneurs As regards the entrepreneurs status in the business and the age of entry into entrepreneurship, 36.2 per cent of the proprietor entrepreneurs started their industrial units before they were 25 years old, which fact however is quite significant, while this percentage was only 15.7 per cent in the case of partnership firms and 23.1 per cent in the case of company. Entrepreneurs who run the company entered this field at a relatively older age probably because at younger ages they kept themselves busy with other businesses. Table 1: Cross-tabulation between Entrepreneurs Status in the Business and Age
CITY LAHAR TARA Age Up to 25 26-30 31-35 36-45 45-50 Above 50 Up to 25 26-30 31-35 36-45 45-50 Entrepreneurs Status in the Business Owner Partner Director 8 3 1 5 5 1 2 1 1 2 3 1 19 12 2 5 2 4 2 1 2 1 5 4 4 2 2 1 17 7 11 Other 1 1 2 Total 12 11 3 4 4 1 35 7 7 8 10 3 35

RAM NAGAR

Total Age

Total

Promotion of a business is surrounded with uncertainties and the entrepreneur has to perform in an unsure environment. The entrepreneur has to confront many such uncertainties such as; will the proposed product be accepted in the market? Does the product have demand and how long the demand will last? Will the entrepreneur be able to yield reasonable profits? Will the necessary technology be available locally or to import? Will there be an assured supply of raw materials throughout the year? What kind of skilled and unskilled manpower will be required? Will labour with these skills be available or not? What will be the cost of labour? How much government regulation and control is there in the concerned sector? Will there be any difficulty in fulfilling with the legal formalities? What will be the source of initial capital etc? Before making his/her efforts to start the business, the entrepreneur has to seek pros and cons to the factors mentioned above and take important decisions in that light. A crucial decision at this stage, whether to go further on with the proposal or to drop is made. A good decision will make the prospects of the entrepreneur very bright and vise-versa. Therefore, two things
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are very important at this stage-first, whether it will be feasible or not and second whether the proposed business will be profitable or not. To find out the answers of the above two questions, the entrepreneur should undertake a comprehensive study of the market, which is also known as feasibility study of the project, and take decisions in their light. In the questionnaire, one question was included to find out whether the entrepreneurs included in the study have undertaken any feasibility study or not? If they had, whose help did they seek? If they did not seek anybodys help what were the reasons for that? Who are the entrepreneurs undertaking the feasibility study through other agencies? And in what business, the feasibility study has been undertaken, etc? The replies to our queries are presented in Table-2. It can be seen from the table that in both the estates under study, 94.2 per cent of the entrepreneurs took on feasibility studies of their projects which is quite significant. Only 4 (2 each of the estate) had not undertaken any kind of feasibility study. Table 2: Age of the Entrepreneurs at the time of Undertaking of Feasibility Study
CITY

Undertaking of Feasibility Study

Not undertaken Self 10 11 1 4 2 1 29 5 4 5 5 2 21 Friends/ relatives 1 1 1 1 Professional 1 1 1 3 2 3 5 1 11

Total

LAHAR TARA

Age

Up to 25 26-30 31-35 36-45 45-50 Above 50

1 1 2

12 11 3 4 4 1 35 7 7 8 10 3 35

RAM NAGAR

Total Age

Up to 25 26-30 31-35 36-45 45-50

1 1 2

Total

Raising the funds is probably the most important factor in the establishment of a business unit. Money is required to take service of a professional to prepare a project report, buy a plant with required machines and infrastructural facilities, purchase raw materials, sell the products, invest in the expansion of the unit etc. However, it is not easy to raise funds required particularly for small business units whose financing is of a different type because of certain reasons such as, (a)
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220 Indian Entrepreneurs small business lacks business experience and management capabilities, (b) environmental pressure makes small business highly vulnerable, (c) due to its small size and the poor financial position of the owner they are always not able to provide collateral required, (d) capital market is always out of reach for them and (e) risk associated with the small industry is very different. That is why the problem of small business is of special type and different from large business in nature. Therefore, small business entrepreneurs have to depend upon institutional and non-institutional sources for financing his/her unit because their own savings are limited and he cant approach capital market directly. Thus, small business depends more on non-institutional sources such family, friends and venture capitalists and less on institutional sources. In the light of the above, we have tried to study here the financing pattern adopted by sample units. Our enquiries revealed that initial capital investment was below Rs. 5 lakhs in 32.8 per cent cases, Rs 2550 lakhs in 25.7 per cent cases, Rs. 10-25 lakhs in 17.2 per cent cases and Rs 5-10 lakhs in 14.2 per cent cases and the above Rs 50 lakhs in the remaining 10 per cent cases. Thus, from the standpoint of the size of capital investment, most of the sample units are small. It is also noted that capital more than Rs 25 lakhs was invested in 35.7 per cent of the units. Estate-wise, it is observed that greater amount of capital was invested enterprises located in Ramnagar industrial estate (in 20 per cent cases) than in the enterprises of Lahartara estate (in 15.7 per cent cases). It is also noted that 7 out of 7 entrepreneurs invested more than 50 lakhs in their unit at Ramnagar whereas no one was found who invested above 50 lakhs in Lahartara. Thus, entrepreneurs of Ramnagar industrial estate are far ahead from the entrepreneurs of Lahartara industrial estate as far as investment of capital is concerned (Table-3). So far as the initial capital invested in the business and the age of entry of entrepreneurs is concerned, Table-3 shows that 52.6 per cent of the entrepreneurs who started their industrial units before they were 25 years old invested than Rs 5 lakhs in the business. The enterprise with a capital of Rs.50 lakhs and above were 7 of which 3 each were started by the entrepreneurs who entered into the industry between the ages of 31-35 and 36-45. However, one unit with total investment of Rs. 1 crore and above was set up by the entrepreneur who entered the industry between the age of 26-30 years. Estate-wise, it is noticed that in Ramnagar the greater amount of capital was invested and it was distributed in all the groups whereas investment was limited and ranging between 5-50 lakhs only in Lahartara.

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Table 3: Cross-tabulation between Initial Capital Invested and Age of the Entrepreneurs
CITY Up to 25 LAHAR TARA 26-30 5 2 1 3 11 2 3 1 1 7

Age
31-35 2 1 3 1 2 2 1 1 1 8 36-45 2 2 4 1 4 2 3 10 4650 2 1 1 4 1 2 3 Above 50 1 1 Total 18 5 1 11 35 5 5 11 7 1 1 5 35

Initial Capital

Up to 5 lakhs 5-10 lakhs 10-25 lakhs 25-50 lakhs

7 1 4 12

RAM NAGAR

Total Initial Capital

Up to 5 lakhs 5-10 lakhs 10-25 lakhs Up to 5 lakhs 50-75 lakhs 75-1 Crore Above 1 Crore

3 2 2 7

Total

Capital structure refers to the permanent financing of the firm such as debt, equity and preferences shares. Small business is faced with the problem of designing the capital structure of its firm at the promotion stage. In deciding upon the capital structure, the entrepreneur is guided by his/her own experiences and judgments, as also by the advice of financial and security analysts, financial corporations, bankers etc. Entrepreneur has to take into account the experience of the competiting firms in the industry, the government policy, and the guidelines, the peculiar characteristics of the firm and the industry and state of the economy. Very often, the capital structure at the promotion stage represents a compromise between the desire of the entrepreneur, on the one hand, and the constraints imposed by the environmental conditions, on the other. Therefore, designing the optimum level of capital structure for a new organization is an uphill task for the entrepreneur.

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222 Indian Entrepreneurs It may be noted from the Table-4 that 20 entrepreneurs prefer 1:1 ratio followed by 16 (3:1 ratio), 10 (1:3 ratio), 6 (2:1 ratio), and 4 (1:2 ratio) in that order. Estate-wise, it is observed that entrepreneurs from Ramnagar industrial estate are more risk taker as compared to entrepreneurs of Lahartara industrial estate. This may be because of huge investment they have made in their units. Table 4: Cross-tabulation between Entrepreneurs Age and Debtequity Ratio
CITY Debt-Equity 1:1 LAHAR TARA Age Up to 25 26-30 31-35 36-45 45-50 Above 50 Up to 25 26-30 31-35 36-45 45-50 3 4 2 4 13 2 2 1 2 7 1:2 2 1 3 1 1 1:3 1 3 1 5 1 1 2 1 5 2:1 1 1 2 2 1 1 4 3:1 2 2 2 1 7 1 4 3 1 9 3:2 1 1 2 No Debt 2 1 3 2 3 2 7 Total 10 11 3 4 4 1 33 7 7 8 10 3 35

Total RAM Age NAGAR

Total

Table-5 presents the annual income (profits) of the unit. It is noted that 35.7 per cent of the entrepreneurs were earning profit ranging between 4-8 lakhs per annum followed by 31.4 per cent (between 8-15 lakhs), 21.4 per cent (between 2-4 lakhs) in that order. The rest was shared by other income groups. It is also noted that only one entrepreneur was earning 15 lakhs and above. Coming to the individual estates, 45.7 per cent if the entrepreneurs in Ramnagar estate were earning ranging between Rs 8-15 lakhs, whereas only 17.2 per cent of the entrepreneurs had the same level of earnings in Lahartara. It is also noted that only one entrepreneur had earnings of Rs 15 lakhs and above and he was operating in Ramnagar.

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Table 5: Cross-tabulation between Age of the Entrepreneurs and Present Annual Profit
CITY Age Up to 25 26-30 Present Profit Annual Rs 75,000100,000 Rs 1-2 lakhs Rs 2-4 lakhs Rs 4-8 lakhs Rs 8-15 lakhs Annual Up to Rs 50,000 Rs 75,000100,000 Rs 1-2 lakhs Rs 2-4 lakhs Rs 4-8 lakhs Rs 8-15 lakhs Above 15 lakhs 4 4 3 1 12 3 2 2 7 4 4 3 11 1 3 2 1 7 Above 50 1 1 -

31-35 1 1 1 3 1 2 5 8

36-45 3 1 4 1 1 1 2 5 10

45-50 4 4 1 2 3

Total 1 4 9 15 6 35 1 1 1 6 9 16 1 35

LAHAR TARA

RAM NAGAR

Total Present Profit

Total

The analysis of growth would remain incomplete if an attempt is not made to look into the future aspirations of the entrepreneurs as regards their entrepreneurial career. In both the estates, 11.4 per cent entrepreneurs visualized their future prospects to be very bright and 50 per cent as bright. On the other hand, 30 per cent entrepreneurs looked into their future as moderate and 8.5 per cent as doubtful (Table-6). It can also be seen from table that about fifty per cent of the total entrepreneurs earning profit ranging between 4-15 lakhs were young. It is also noted that only one entrepreneur was earning 15 lakhs and above, he belongs to young age group. In the individual estates, almost an equal numbers entrepreneurs from Ramnagar (22) and Lahartara (21) estates regarded their future

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224 Indian Entrepreneurs prospects as very bright and bright, whereas 12 entrepreneurs in Lahartara had moderate expectations, 9 at Ramnagar had such expectation. 2 of Lahartara and 4 of Ramnagar entrepreneurs considered their future prospects as doubtful. In a nut shell, majority of entrepreneurs had bright or very bright visualization of their future which is significant. Table 6: Cross-tabulation between Age of the Entrepreneurs and Future Prospects
CITY Future Doubtful Age Up to 25 26-30 31-35 36-45 45-50 Above 50 Up to 25 26-30 31-35 36-45 45-50 1 1 2 2 2 4 Moderate 4 5 1 2 12 4 1 2 2 9 Bright 6 6 1 3 2 1 19 1 4 5 5 1 16 Very bright 1 1 2 2 3 1 6 Total 12 11 3 4 4 1 35 7 7 8 10 3 35

LAHAR TARA

RAM NAGAR

Total Age

Total

The promotion of an enterprise involves different steps consisting of choosing location and the line of business, selection of a product, etc. Therefore, selection of a product is another step involved in the promotion of an enterprise. In developing countries particularly in India, generally there is lack of knowledge about the market and customer needs and unemployment. Unemployment is a major cause which forces entrepreneurs to start any venture with any kind of product and they do not even think of doing market research on different products. Therefore, an attempt has been made here to find out the extent to which the entrepreneurs of the industrial estates under study were imitation products and technology which have proved successful elsewhere. For the purposes of this study, products have been classified into new, improved and imitated and the entrepreneurs responses are presented in Table-7.
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Table 7: Cross-tabulation between Age of the Entrepreneurs and Type of Product

CITY LAHAR TARA Age Up to 25 26-30 31-35 36-45 45-50 Above 50 RAM NAGAR Total Age Up to 25 26-30 31-35 36-45 45-50 Total Type of Product New Imitated 2 2 2 6 1 2 3 6 10 8 1 3 2 1 26 2 3 3 4 1 13 Improved 1 1 1 3 4 4 3 3 2 16 Total 12 11 3 4 4 1 35 7 7 8 10 3 35

It may be noted from the Table 7 that 55.7 per cent of the total entrepreneurs included in the study have brought imitated products in the market. 27.2 per cent respondents have brought improved products in the market. The improvement in the products means some alterations in the composition of the product which was already selling in the market with a view to giving more comforts, multiplicity of uses, reduction in costs or an improvement in quality. As against this, only 17.2 per cent entrepreneurs claimed that they have introduced entirely new products in the market which is not highly significant. Estate-wise, it is noticed that 37.2 per cent of Lahartara entrepreneurs brought imitated products whereas 22.8 per cent entrepreneurs of Ramnagar industrial estate brought improved products in the market. However, only 8.5 per cent of entrepreneurs of both the industrial estates introduced new products in the market. DISCUSSION It is interesting to note that in Varanasi a large number of entrepreneurs (37 out of 70) at the time of starting industrial units were below the age of 30 years. This is contrary to the hypothesis that older the entrepreneur higher the probability of entering into the industry. However, in India it is commonly believed that older the entrepreneur higher the entry into
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226 Indian Entrepreneurs the business, because setting up a business was earlier considered as an last option taken after exploring others. Contrary to this belief the data supports the notion that entrepreneurship may be evolving as a worthy career option for young India. Further it is also noted that majority of proprietor entrepreneur were 25 years old at the time of starting the business. However, entrepreneurs who run the company entered this field at a relatively older age probably because at younger ages they kept themselves busy with other business, proving the hypothesis that entrepreneurs age determines the form of organization. With regards to the hypothesis on risk taking attitude it was noted that majority of young entrepreneurs did not conduct the feasibility study. In other words, there is a clear cut relationship between age of the entrepreneurs and undertaking of the feasibility studies. The reasons for getting the feasibility study done by themselves by young people is basically because of optimism, enthusiasm, passion, excitement and confidence that they have on their plans and ideas at the time of starting the unit which increases their the risk-taking attitude. Further, more than fifty per cent entrepreneurs up to 30 years old preferred 3:1 debt-equity ratio, proving the hypothesis that younger the entrepreneur, higher the risk-taking attitude. It is also noted that more than fifty-per cent of the total young entrepreneurs (up to 30 years old) visualized their future prospects to be very bright and bright. Only 8.1 per cent looked into their future as doubtful. This again proves the hypothesis that young entrepreneurs are more optimistic about future prospects of their business than the older entrepreneurs. It was also found that entrepreneurs who entered the industry at a relatively older age invested large amount of money as compared to entrepreneurs who entered at a younger age. This may be because of their experience and ability to mobilize the required funds for the business. It again approved the hypothesis that younger the entrepreneur lesser the investment. However, about fifty per cent of the total entrepreneurs earning profit ranging between 4-15 lakhs were young. It was found that more than two-fifth of the total entrepreneurs brought new and imitated products in the market were young which partially proves the hypothesis that entrepreneurs who are younger in age are likely to be predominantly innovative in Schumpeterian sense. SUGGESTION FOR FUTURE RESEARCH A similar study chould be carried further at state and national level. This will provide reliable database to draw youth to entrepreneurship which in turn will generate employment. Another useful area of study chould be about the potential and financing of the entrepreneurship in different parts of the country.
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Shailendra Kumar Rai Ph.D., is Assistant Professor, Management Development Institute, Gurgaon, India.

Journal of Services Research, Volume 8, Number 1 (April-September 2008)