ENTREPRENEURIAL MOBILITY

Factors Influencing Mobility.

Occupational Mobility.
Location Mobility.
Let Us Sum Up.
Assessment Questions

LEARNING OBJECTIVES
On completion of this chapter, you should be able to:
 Enumerate the factors that influence entrepreneurs to move from one location to
another or from some occupation to the entrepreneurial career.
 List the factors that make entrepreneurs to move from one occupation to another.
 Know the factors influencing entrepreneurs to migrate from previous place to a new
place to set up their enterprises.

Movement and mobility have been an integral part of march of human history all over the
world. In fact, human life swings between two poles - movement and settlement. History is
witness that human movement is caused by social, economic, political and cultural factors. In
present time, the flow of the skilled personnel from under-developed and developing
countries to developed countries baptized as "brain drain" has been a common feature of
human movement caused by economic reasons. Entrepreneurs, being human beings, do also
move from one location to another and also from one occupation to another. Influx of
multinational companies (MNC s) in India and increasing intrapreneurship are the examples
of locational mobility and occupational mobility of entrepreneurs respectively.
Movement of entrepreneurs from and into each location and occupation has certain distinct
features of its own kind which affect the pace and pattern of entrepreneurship development.
It is towards this aspect of entrepreneurship development, we now try to answer some
pertinent questions: What factors influence the entrepreneurial mobility? What are the
characteristics of the entrepreneurial mobility across the locations and occupations? These
issues are dealt with in seriatim.

FACTORS INFLUENCING MOBILITY

What makes the entrepreneurs mobile? There cannot be a common factor influencing all the
entrepreneurs to move from one location to another and similarly from one occupation to
another. In fact, different factors influence the entrepreneurial mobility differently. These
factors may serve as 'pull' and 'push' factors. Following are some important factors which
generally influence the entrepreneurial mobility in a given situation and time:
1. Education: Education enlarges one's thinking and understanding horizons. It enables one
to comprehend conditions more easily and clearly and in a better manner. An educated
person can also easily adjust with the changed environment, hold better discussion and
communicate in a more convincing manner. That an educated entrepreneur tends to be
more mobile than an uneducated one is supported by empirical evidences also.
2. Experience: An entrepreneur's past experience in business and industry also increases
his/her propensity to move. The reason is not difficult to seek. An experienced entrepre-
neur better perceives the available opportunities, better analyses his/her strengths and
weaknesses and also better understands the complexities involved in running an enter-
prise. That the technical experience influences the entrepreneurial mobility is indicated
by an increasing number of persons with technical knowledge and experience assuming
to the entrepreneurial roles at distant places away from their native ones.
3. Availability of Facilities: A tendency is noticed among the entrepreneurs to move from
the areas with no or less facilities to the areas with more and better facilities. Heavy
concentration of industries in Okhla, Ghaziabad and Faridabad near Delhi represent such
examples. The reason lies in the fact that these areas have proximity to various agencies,
facilities like transport, communication, power, market, etc.
3. Political Conditions: Evidences are available to cite that the entrepreneurial mobility is
influenced by the political factors also.

For examples, the well-known enterprising Punjabi community, lost almost everything
during the partition and were compelled to move to every nook and corner of the country in
the pursuit of profit opportunities and shaped their lucks. Similarly, the Marwaris known as
the most 'footloose' community in India also left their home and hearth long ago compelled
by the historical circumstances.

5. Size of Enterprise: Larger business houses are found more mobile than smaller ones.
Initially, the entrepreneurs try to consolidate their business position at a place, scale the
commanding heights in the area, attain the dominating position and thereafter try to
successfully seize the business opportunities elsewhere. The Indian business giants /houses
like Tata, Birla, Dalmia etc. represent such examples.
Although one may add more factors to this list, yet the said factors seem to be the
common ones influencing the entrepreneurial mobility.
Having known the factors influencing the entrepreneurial mobility, it seems in the
fitness of the context to look at the dimensions of the entrepreneurial mobility. Hence, in
what follows is the occupational and locational mobility of the entrepreneurs.

OCCUPATIONAL MOBILITY
This section tries to address an interesting aspect of entrepreneurship. Was that occupation
the same of occupation of the entrepreneurs’ families, i.e., the occupational mobility? In
simple words, the occupational mobility denotes movement or changes in occupation. This
may take place in two forms. It may be a movement of a son/daughter from the principal
occupation of his/her father or it may be a drift in one’s own occupation during his/her
occupational career. The first type of movement is called as 'inter-generation movement' and
the latter type of change as ‘intra-generation occupational movement’. The mobility is called
‘horizontal’ when it takes place between the occupational classes of the equal rank or vertical
when it occurs between classes of unequal rank.

Several factors like one’s freedom of choice, motivation, efforts of an individual and
opportunities available in the society determine one's occupational mobility. Till the
nineteenth century, the occupational structure in India was mainly influenced and determined
by one’s birth in a particular family or caste. But in the present times, the multifarious
activities created by the application of modem technology require specific skills to man them.
It is now widely realized that particularly in the case of urban occupations, the
required skills cannot be acquired by giving mere traditional training defined by castes,
traditions and customs. In consequence, the occupational structure has tended to drift from
the caste structure to the technology structure.
Keeping this fact in view, an attempt has been made to trace the empirical evidences
on the occupational mobility from grandfathers to the fathers of the entrepreneurs in a study
of 50 entrepreneurs conducted by the author in the Kumaun Division of Uttar Pradesh.
 Table below bears data on inter-generation occupational mobility.

TABLE: Inter-Generation Occupational Mobility

Occupation of the
Paternal Grandfather’s Occupation Total
Entrepreneurs’
Business and
Fathers Farming Profession Not known
Industry
Farming 6 * 3 * 9 (18)
Profession 4 9 2 1 16(32)
Business &
5 2 16 2 25(50)
Industry
Not Known * * * * *

50(100
Total 15(30) 11(22) 21(42) 3(6)
)

N.B. : Figures in parentheses denote percentage to total.

It is noticed from the above Table that there is some evidence of occupational
inheritance or stability, i.e. the tendency to follow one's own father's principal occupation.
To quote, out of 47 grandfathers, 30 fathers of the entrepreneurs followed their father's
occupation. Yet, their inheritance is very much evident in the traditional occupations. For
example, of the 21 business and industry owner grandfathers, 16 sons (76 per cent) stayed in
their father's occupations. Likewise, the occupational inheritance is also well observed in
other occupations like profession and farming.
In spite of the above-observed occupational stability, there is definitely some degree
of occupational mobility as well. For instance, of the 15 farmer grandfathers, two-thirds (9)
have drifted from their father's main occupation. A comparison of the 21 business and
industry grandfathers with their 25 business and industry owner sons dearly reveals that
seven sons of 5 farmer and 2 professional grandfathers have changed their occupations
towards business and industry. The change in occupation is, thus, from the primary to the
secondary occupations. This suggests that drifting from the traditional occupations like
farming seems an essential first step towards industrial entrepreneurship.
As regards intra-generation occupational mobility, i.e., the change in the occupation
of entrepreneur himself/herself, the next Table reveals that out of the 50 entrepreneurs, more
than nine-tenth entrepreneurs (46) have had changed their occupation from non-industry to
industry. Nonetheless, what is particularly noticeable is that the professionals were the
maximum (34 per cent) who changed their occupational career towards industry followed by
those who entered directly (26 per cent). Thus, what reveals from the above occupational
mobility can be put as such that the occupational mobility takes place from farming (primary
occupation) to profession and then to industry in the case of intergeneration occupational
mobility and from profession to industry (secondary occupation) in the case of'
intrageneration occupational mobility.
Family Occupation vis-à-vis the Last Occupation of the Entrepreneurs

Last occupation
of the
Entrep. before Family Occupation of the Entrepreneurs Total
entering
manufacturing
Landlor
Profession Business Industry
d
Landlord * * * 1 1(2)
Unpaid Family
* * 1 4 5(10)
worker
Profession 4 1 3 9 17(34)
Business * 1 7 2 10(32)
Industry * * * 4 4(8)
Entered
1 2 3 7 13(8)
Directly
5(10
Total 4(8) 14(28) 27(54) 50(100)
)

N.B.: Figures in parentheses denote percentages to the total.

Other studies have also revealed that though business community still constitutes the
dominant source of entrepreneurship, people from technicians, lawyers, business executives
and Government servants are also swelling the ranks of entrepreneurs. This new class of
entrepreneurs is characterised by better education and technical knowledge.
Medhora reported that the caste system and its obligations reduced occupational
mobility, technical change and innovation in India. However, the political, social and
economic changes taking place during the post-Independence period have eased such rigidity
and, in turn, helped occupational mobility.

LOCATIONAL MOBILITY
The early theories of industrial location carried out the analysis on a simple
framework where the locational and spatial diversifications were simply determined by an
adjustment between location and weight distance characteristics of inputs and outputs. The
reason is that the then industrial structure was heavily dominated by the natural resource base
and consumer-oriented industries.
But, over the period, the very consideration for locating industries in a particular
region has undergone a considerable change. So, the early theories of industrial location have
become improper to explain industrial location. Consideration of the availability of natural
resources in the choice of industrial location has declined and the industries are likely to be
established even in those areas with poor natural endowment. This holds especially true in
the case of industries that are not heavily biased in favour of raw material source for their
location. It is seen that such industries are gaining increasingly greater importance in the
industrial map of India during the recent decades. It is not always possible to explain the
entrepreneurial mobility to a particular location independently with the help of anyone factor.
In fact, several considerations influence an entrepreneur to move to a particular area/location
to establish his industry. And in this lies the significance of studying the entrepreneurial
mobility from one place to another. As stated earlier, movement and settlement have been an
integral part of human history all over the world. However, it is observed that some
communities are more mobile than others. For example, Marwaris, Punjabis and Sindhis
have been found the most mobile moving to each and every comer of India to carryon
business activities. Movement of entrepreneurs to different regions helps reduce regional
imbalances in economic development. And in this lies the need for probing into the factors
influencing entrepreneurial mobility between the regions.
As a matter of fact, all entrepreneurs are not mobile. Only a handful of entrepreneurs
are mobile. The degree of the entrepreneurial mobility depends upon factors like availability
of raw material, infrastructure and labour, nearness to market, their own resources,
experience, knowledge and information, socio-political situation, etc. A survey of the
entrepreneurial mobility in India reveals a definite pattern of mobility. During the initial
stages of Industrialisation due to limited capital resources, poor information network and lack
of supporting conditions, entrepreneurs tended to set up their industries either at or near their
places.
The entrepreneurs from Bombay, Calcutta and Ahmedabad who set up their industrial
units at these places are examples of such locational mobility with narrow spatial horizon.
This explains the reasons for heavy concentration of industries in these areas. With expansion
in their size and increase in their resources, experience, information flows, etc., the
entrepreneurs are more mobile from local to metropolitan places. This trend goes on. When
the entrepreneurs become, in due course of time, highly resourceful, greater degree of
mobility occurs even cutting across the national boundaries. Inflow (MNC s) and outflow
(NRI s) of entrepreneurs in and from India respectively are examples of such mobility with
expanding spatial horizons.
Let us also study the locational mobility of entrepreneurs with empirical evidences. Table
below bears data on entrepreneurs’ major considerations for selecting location of their
enterprises.

TABLE: Entrepreneurs' Most Important Consideration for Selecting the Location of

Industries

Entreprene
Considerations
urs
(in %)
Home Land 52
Government Incentives 8
Availability of Raw Material 2
Availability of Labour 4
Availability of Market 10
Availability of Infrastructure Facilities 20
Others 4
Total 100
It is revealed from the above Table that ‘home land’ factor, i.e., to start the industry at one's
native place, has been considered as the most important factor for locating industries in the
area. ‘Availability of infra structural facilities’ ranked the second important consideration in
determining the industrial location. Market has been considered to be another important
consideration for selecting the location of industry.
However, the ‘government incentives’ could not influence significantly the entrepreneurial
mobility. This can be explicated on two grounds. One, the heavy preference accorded to the
homeland factor in the location of industries suggests that enterprise is not a freely mobile
factor, willing to move to any place for only marginal advantage. Second, possibly more
important, the accumulation of capital may be a necessary but not sufficient condition for
establishing an enterprise. Because, fiscal concessions and financial assistance on soft terms
cannot possibly compensate for the lack of infrastructure facilities like transport,
communication, power, etc. Likewise, the availability of raw material, labour, development
of an area and the cheaper land have not been comprehended as important influencing factors
to make entrepreneurs move to such areas. The marginal influence of availability of cheap
labour in influencing entrepreneurial mobility can be explicated on two grounds. The first
reason may be the dearth of skilled labour particularly in backward areas due to lack of
vocational training institutes. The second reason may be the availability of cheap labour not
appealing to the small entrepreneurs requiring the minimum quantum of labour force to man
their small-scale enterprises.
The Indian economic development is characterised as ‘imbalanced regional
development’. While a few areas (urban) are developed, the remaining vast (rural) area
remains under-developed even after more than 50 years of our political freedom. The
Government of India has endeavoured to reduce imbalances in regional development or
promote balanced regional development by decentralizing her economic activities to these
underdeveloped areas. One way to initiate and promote economic development of backward
and under-developed areas is to establish industries in these areas. The entrepreneurs are
considered the agents of change. Given the lack of local entrepreneurship in backward and
under- developed areas, only the outside entrepreneurs are expected to establish industries in
these areas. Thus, these outside mobile entrepreneurs can serve as initiators and pace setters
for starting industries in backward and under-developed areas. The same justifies the
significance of entrepreneurial mobility.

LET US SUM UP
Human life swings between two poles - movement and settlement. Various factors like one's
education and experience, availability of facilities, political conditions, etc. influence the
entrepreneurs to move from one occupation to another and from one location to another.
Occupational mobility takes place in the forms of ‘inter-generation occupational mobility’
and ‘intra-generation occupational mobility’. Given the limited resources and information,
the entrepreneurs tend to establish their units at their own places. i.e., homelands. With
increase in their resources and information flows, the spatial horizons of the entrepreneurial
mobility tend to expand from local to regional, national and international arena.

ASSESSMENT QUESTIONS
1. What do you mean by entrepreneurial mobility? What factors do influence the
entrepreneurial mobility?
2. 'The rate of entrepreneurial mobility in India has been tardy and slow.' Explain.
4. What is meant by locational mobility of entrepreneurs? What factors do cause such
mobility?
5. 'Entrepreneurs are agents of change'. In the light of this statement, explain the role of
entrepreneurial mobility in promoting balanced regional development.
6. What do you understand by the occupational mobility of the entrepreneurs? Give a brief
account of the occupational mobility of the Indian entrepreneurs. What factors inhibit the
occupational mobility of entrepreneurs?

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