In order to solve many problems today, there is a need of entrepreneurial activity on a large scale both in the private and the public sectors. There is a great importance of entrepreneurship in the economic practice in Mauritius and the question readily arises: What is the significance of entrepreneurship in the economy and how does it develop?
Entrepreneurship is not for everyone. It is risky and is filled with uncertainty. An entrepreneur has to learn to manage the ups and downs, that is, the successes and failures related to any business enterprise. One must be passionate and totally committed to a long-term success and a true and career oriented entrepreneur can and will never give up easily.
Entrepreneurship has a wide range of meanings. Before defining this concept, it is very important to define what is meant by an entrepreneur and an enterprise.
DEFINITION OF ENTREPRENEUR
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The word entrepreneur originates from the French word, entreprendre, which means 'to undertake'. An entrepreneur is a person who starts and operates a business enterprise. He or she takes all the risks involved in the operation of the enterprise. According to Economics, an entrepreneur is considered to be among the factors of production. It is considered as the fourth factor of production among land, labour and capital.
Washing machines, ATMs, credit cards, ready to eat food are all examples of entrepreneurial ideas that got converted into products and services. Entrepreneur has been defined by different individuals and one among them is:
David McClleland (1961): An entrepreneur is a person with high need for achievement. The person must be energetic and a moderate risk taker.
DEFINITION OF ENTERPRISE
An enterprise is normally started by an entrepreneur. Entrepreneurship is a process of creation. In this process, there is the presence of an actor and an act. The actor is the entrepreneur and the act is the entrepreneurship. The result of the act is called the enterprise. An enterprise is a business that is set up to realize goals and objectives. The main goals for any type of enterprise are to maximize profits. An enterprise is created to produce goods or to provide services to its potential customers. Enterprises are formed to help an economy to a great extent as they create employment and help to improve the economy.
DEFINITION OF ENTREPRENEURSHIP
Entrepreneurship is a process of action an entrepreneur performs to build up or establish his enterprise. It is a creative activity which involves the ability to create and build something from practically nothing.
Entrepreneurship can also be described as the attitude of mind to seek opportunities, take calculated risks and derive benefits by setting a business venture. The process of entrepreneurship comprises of numerous activities such as conception, creation and running an enterprise.
According to Peter Drucker, entrepreneurship is defined as a systematic innovation, which consists in the purposeful and organized search for changes, and it is the systematic analysis of the opportunities such changes might offer for economic and social innovation.
Entrepreneurship is applicable for both small and big business and to economic and non-economic activities. Entrepreneurship is a dynamic and risky process. It is considered as risky because there is a huge amount which has been invested to start up a new business. The entrepreneur does not know whether the business will make a profit or not.
Entrepreneurship can also be defined to calculate risks with confidence to meet the goals and objectives of the enterprise. The process of entrepreneurship is usually undertaken by an entrepreneur.
RISE IN ENTREPRENEURSHIP
Rs 500,000 Grant are offered for Business Women
In a bid, Rs 500,000 are offered to empower women entrepreneur and to have a rise in women participation in doing business. The Ministry of Business, Enterprise and Cooperatives is providing a grant of Rs 500000 to the Mauritius Women Entrepreneurs Cooperatives Federation. This grant is being given so as to empower women entrepreneurs and to increase women participation in doing business. This is an important step that is taken as it will help to improve the quality of the products and services.
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Therefore, if the Ministry continues to provide such an initiative then there will be a rise in entrepreneurship. Many women will be interested and will be able to start up their own businesses and hence there will be an increase in the number of women participation in involving and doing business. The economy will run in more effective and efficient way as women also will contribute in the welfare of Mauritius.
Level of employment rise up to 249500 in 2011
There has been a considerable increased in the number of job creation through the creation of small businesses. In fact, small business is thought to be the engine in job creation in Mauritius since 1990. The number of jobs in small firms has actually risen up to 140,000 to reach up to 249,500 in 2011. This means that there has definitely been a rise in entrepreneurship which helps the individuals to have a job in the economy.
Small and Medium Enterprises are given Rs 3 Billion
This is a project to grant loans of Rs 3 billion which will spread over the next three years to small and medium enterprises. There are fourteen commercial banks which have agreed to participate in giving loans to these small and medium enterprises. The small and medium enterprises will be offered Rs 1 million each year.
However, the quota each bank will be allocated will be determined by the Bank of Mauritius. The main elements of this scheme are:
1. An interest rate of 8.5%
2. An exemption for all costs
3. An "equity fund" amounting to Rs 50 million will be established to cover all risks.
Moreover, the banks are given a deduction on taxes if the small and medium enterprises fail to pay their loan or if the entrepreneur experiences a bad debt. The commercial banks will, in advance, have the approval of the Mauritius Revenue Authority regarding the exemption from tax on the bad debts.
Small and Medium enterprises have recently get Rs 1.3 billion funding
Recently, small and medium enterprises have received Rs 1,292,915,639 worth of credit from the fourteen commercial banks during the period of 1 December 2011 to 31 July 2012. A total of 743 loan applications under SME Financing Scheme were received by banks during the period, out of which only 41 were rejected. This means that 702 applications were approved for a loan in order to start the business. This shows that there is a rise in entrepreneurship as more and more people are interested in opening and operating their own small business.
Small and Medium Enterprises Development Authority (SMEDA)
This is an enterprise which promotes the development and growth of small and medium enterprises in Mauritius. SMEDA helps and provides the necessary potential support for existing small and medium enterprises with a view to allow them to start new enterprises. According to SMEDA Act 2009, the small and medium enterprises can be engaged in any legal activities having an annual turnover less than Rs 50 million. SMEDA provides the following incentives and facilities to the small and medium enterprises:
Business Facilitation and Counseling
SMEDA is responsible for providing a business idea and help in guiding the individuals on the preparation of business plan. SMEDA also provides advice on the ways and procedures to set up the enterprise. It gives information on the financial schemes and it helps in the registration of the business.
Entrepreneurship Development Training
SMEDA is responsible to arrange and develop special training programs for potential entrepreneurs. The entrepreneurs get the opportunity to get skills development programs on how to manage and take the risks of operating their enterprises. For instance, at times they get training in handicraft, fancy jewellery, garment and fashion design, woodcraft, curtain making and so on.
SMEDA provides marketing advice and marketing research. The marketing strategy and plan includes activities such as organization of fairs and crafts jobs. All these are organized so as to promote the products and to make more individuals aware of the products made or services provided by the entrepreneurs.
Genuine Mauritian Product Logo
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SMEDA has added one more advantage that helps the Mauritian entrepreneurs to a great extent. A new logo known as the Genuine for all "Made in Mauritius" goods are introduced to protect the local goods from an unfair competition and to encourage people to buy the products that are made locally.
Business activities on the rise
The number of business licenses increased by about 4%, from 102,424 in December 2010 to 106,667 in December 2011. During this period, 6730 new licenses were issued, the majority of which were in the wholesale and retail trade, repair of motor vehicles, personal and household goods. Among 6730, only 2487 licenses were cancelled. This means that there is surely an increase in entrepreneurship.
Between December 2011, the total number of business activities, computed as the number of licenses and registrations after adjusting for activities that are both registered and licensed increased by around 128,671 to 133,723. The district of Plaines Wilhems had the highest number of business activities of 37,046, followed by the district of Port Louis while the district of Savanne had the smallest number of activities.