History Of Entrepreneurship In Mauritius Business Essay

History Of Entrepreneurship In Mauritius Business EssaySeveral measures and policies have been implemented since independence regarding SMEs, the priority of the government of maximizing social welfare has been considered through the creation and promotion of enterpriserial businesses. The origins of SMEs in Mauritius begins in the 1960s when Mauritius was experiencing a timid industrialization change-over with the primary(prenominal) objective of supplying the local market with imported goods and helping the kingdom to gain a certain autonomy. At that time, the government was encouraging the production of assorted types of commodities such as manufacturing of blades, electrical bulbs, batteries, soap, welding and steel work for construction, refining edible oils, plastic industry, food canning, industrial poultry breeding, yogurt manufacturing, biscuits, shoes and so on for the domestic market. The Ministry of Commerce and Industry stooled the Small Scale Industry Unit (SSIU) i n 1976 which in 1983 became the Small Industry learning memorial tab permit (SIDO), the primary aim of such company was to provide general advice and guidance to small businesses and in 1988, the Small Scale Industry (SSI) experienced a h whizzst change-over through the presentation of the Small Scale Industries Act. This act promoted the development of the SSI by adopting a legal definition of SSI, voluntary registration of SSI, duty exemption on production equipment and the setting up of an advisory board. The Industrial Expansion Act 1993 consisted of the SMIDO Act which was considered as the next landmark in promoting entrepreneurship in Mauritius, the idea was to establish a textile for consolidating, expanding and enhancing the competitiveness and developing a SME sector. The government implemented a Ministry of SMEs in December 2003 and two years after the Small Enterprises and work Development Authority (SEHDA) was created following the union of the SMIDO and the Nation al Handicraft Promotion Agency (NHPA). The SEHDA main objective was to promote a more effective and economic use of available resources allocated to the entrepreneurial sector in Mauritius. The SEHDA Act 2010 was replaced by the Small and moderate Enterprises Development (SMEDA) Act and this was the latest development with regards to the SME policy framework in Mauritius. The SMEDA nowadays works under the aegis of the Ministry of Business, Enterprise and Cooperatives and represent one of the most well-known organizations promoting entrepreneurship in the Mauritian economy.Definition of entrepreneur and entrepreneurshipWho is an entrepreneur?The term entrepreneur has been defined in various forms over the past years based on professional experience of mortals or based on observations and researches made to understand what an entrepreneur is. According to the Irish-French economist Richard Cantillon (1725), an entrepreneur is someone who accepts to pay a certain price for a commod ity (for instance materials) and to sell it at another price thus deciding about the practical use of resources while consequently admitting the risk of enterprise. The French economist Jean-Baptiste Say (1803) utter that a business person is an economic agent who regroups all factors of production- land, labor, and capital and produces a product as such shifting economic resources out of an eye socket of lower productivity to a higher one. The American management consultant Peter Drucker (1964) stated that an entrepreneur is one who looks for and respond to change, thus enjoying opportunities by converting a source into resource. Another definition implied that an entrepreneur is an individual starting a brisk business in a rude(a) market where no one before has started business, this was stated by W.B. Gartner in 1985. Thus it can be seen that the definition of an entrepreneur varies according to time and according to observations and perceptions of people who considers it as principally individual making money by accepting to take risks to achieve his/her goal.But in commit to understand clearly the concept, a simpler but leave definition should be considered and as such, an entrepreneur is an individual who decides to take the risks of managing a business and especially manipulating factors of production such as land, labor and capital for the saki of making profit. The main characteristics that an entrepreneur should possess are enthusiasm, intelligence, creativity, determination, courage to take risks, communication skills, human relation abilities, business secrecy, administrative ability, ability to manage pressure, take skills, technical knowledge, problem-solving skills and so on. Entrepreneurs are classified based mainly onFunctional characteristics being innovative, imitative, skeptical, cautious, or resistant to change.Development angle- being eager for expansion, survival, efficient, or concentrated only on local trading.Types of entre preneurial business- manufacturing, wholesaling, retailing, or service business.Nine personality types of entrepreneurs- being an improver, advisor, highly qualified, highly creative, visionary, analyst, optimistic, leader, determined.Types of motivation- motivated by profit, rewards, and self-fulfillment.Types of area- urban or rural entrepreneursTypes of gender- male or women entrepreneurs.What is entrepreneurship?The term entrepreneurship has also been defined by some researchers, economist and consultants where different meanings have been developed in order to clarify what it is really. According to the economist Joseph Schumpeter in the 1930s, entrepreneurship employs the concept of gale of creative destruction where past innovations on the market are replaced by new ideas thus implementing new concepts for boosting economic growth. The two American economists Peter Drucker (1970) and Frank H Knight (1921) stated that entrepreneurship deals with taking risks for the sake of ma king money , the acts of free enterprise is practically subjected to no guarantee that the individual will be able to challenges the market uncertainties. Entrepreneurship is considered to be a major driver of economic growth for a country according to the American economist David B. Audretsch, in Mauritius for instance, SMEs re greatly participating in the development of the country, especially in reducing poverty and unemployment.But for now, let us define what entrepreneurship is really. It is the process of increasing business interests by adopting creativity and innovation in a way to set up an enterprise. It is the action of an individual involve in minimizing the use of resources and taking risks in order to generate profits. In Mauritius, free enterprise is usually referred to as Small Medium Enterprises (SMEs) where a small enterprise is defined as a business generating an annual turnover of around 10 million rupees and medium enterprise is defined as a business having an annual turnover of not more than 50 million rupees. The SMEDA in collaboration with the Ministry of Business, Enterprise and Cooperatives aims at promoting emergence and competitiveness of SMEs, advising the Ministry regarding how to discover the SMEs sector and implementing acquit programmes.http//www.sbmgroup.mu/images/653_200_sme.gifIncentives for entrepreneurshipFor the past decades, there have been many incentives and give births given to enterprises for the promotion of the SME sector in Mauritius. The Ministry of Business, Enterprise and Cooperative has been working with different institutions to be able to provide the most services possible to small and medium enterprises, the budget 2012-2013 has considered financial services which include the release of Rs 3bn of loans from the banking sector to SMEs till 2014 at an interest rate of 3% above the repo rate that is 8.5 % and processing appeals and related charges will be renounced. Here is a list of the different institu tions and support schemes given to entrepreneurs.Small and Medium Industries Development Organization (SMIDO)Export Credit Guarantee Insurance abstractJoint effort of SMIDO and SICOM LtdProtects the exporting SME against failure of vendee to pay all export transactions after shipmentPays 85% of the invoice value to the policyholder in cases of defaultExport service Schemefiscal support to enable SMEs forward samples of their products abroad to prospective buyers50% refund on tonal patternfreight subject to a maximum of Rs. 2000 twice a yearStart-Up SchemeFinancial support of up to a maximum of Rs. 100,000 to entrepreneurs to set up their enterpriseProspective recipients have to enter Business Plan CompetitionTraining, Consultancy and Benchmarking apply new and develop latent Skills, and Knowledge of entrepreneurs in various areas/fields through Training programmes, workshops and seminarsCompany analysis and guidanceBusiness Counseling and entropyInformation and guidance to pote ntial and existing entrepreneursAssist entrepreneurs to prepare or update a comprehensive business planMonitoring of business and advicefeasibleness Study Grant SchemeGrant equivalent to 50% of the costs of a feasibility study for a viable projectMax. amount allow Rs. 75,000Study is to be undertaken by an approved consultant/consultancy firmMauritius Industrial Development Authority (MIDA)Export Business Support SchemeFinancial support for participation in trade missions organized by MIDA funding of up to 75% of cost of stand and 25% refund on the cost of air ticketsFinancial support for participation in other trade shows funding of up to 60% of cost of stand and 25% refund on the cost of air ticketsInternational Credit Checking avail 50% refund on the cost of each search effected, subject to a max. of 5 company checks per annumSME order Centre Virtual Exhibition CentreShowcase and Communicate products of SMEs to both local and foreign buyers.Industrial Buildings/ EstatesRent al of industrial buildings tailor-made for SMEsOverseas securities industry TestingFree testing of products in selected marketsAssistance, Advice and InformationAdvice on Development of Promotional ToolsAdvice on Export DocumentationProduct Information in selected marketsAssistance in Market ResearchTrade Information CentreAssistance and guidance for marketing tripsLoans offered by the Development Bank of Mauritius (DBM Ltd)SchemeMax. Quantum AllocatedMax. Loan sum upInterest Rate(per annum)Term(years)Start-ups90% of cost of projectRs 200 0008%4Financing of Production Equipment70% of cost of equipmentRs 3 m10 11%5Technology Improvement Scheme60% of cost of projectRs 1 m9%6Working smashing70% of cost of stockRs 400 000 to Rs 1 m10 12%4Business Sector70% of project costsRs 3 m12%5 winding of Office Commercial Space70% of project costRs 3 m12%7Construction of Industrial Building60% to 90% of project costsRs 3 m11.5% to 12%10Printing Publishing60% of cost of new equipmentRs 3 m10 %5Local Newspaper60% of the cost modernizationRs 2 m8%5General Service70% of cost of projectRs 3 m12%5Freeport Sector75% of working capital requirementsRs 1 m12%5ICT Sector75% of cost of projectRs 1 to 5 m8%5Joint Venture with Overseas PartnersRs 1 m10%6Export Development Fund(for Overseas Market Surveys and Participation in Trade Fairs)70% of project costRs 100 0003%3Selected Investment SchemesScheme/CertificateQualifying ActivitiesKey IncentivesExport Enterprisehttp//smido.intnet.mu/images/bullet.gifManufacture of goods principally for exportsNo customs duty or VAT on crank materials and equipmentCorporate tax revenue of 15%No tax on dividends and capital gains60% remission of customs duties on buses of 15-25 seats50% exemption on the normal registration fee for the purchase of land and buildings50% relief on personal income tax for 2 expatriate staffPioneer attitude Enterprisehttp//smido.intnet.mu/images/bullet.gifActivities involving above average technology and skillshttp//s mido.intnet.mu/images/bullet.gifActivities likely to enhance industrial and technological developmentNo customs duty on raw materials and equipment as per schedule listCorporate tax of 15%No tax on dividendsStrategic Local Enterprisehttp//smido.intnet.mu/images/bullet.gifManufacture of goods for local markethttp//smido.intnet.mu/images/bullet.gifActivity likely to gain ground economic, industrial and technological developmentCorporate tax of 15%No tax on dividendsSmall and Medium Enterprisehttp//smido.intnet.mu/images/bullet.gifManufacturing activity subject to an investing in production equipment not exceeding Rs 10mNo customs duty on production equipment and raw materials as per schedule listCorporate tax of 15%Freeport Enterprisehttp//smido.intnet.mu/images/bullet.gifOperations in the Freeporthttp//smido.intnet.mu/images/bullet.gifGoods for export onlyhttp//smido.intnet.mu/images/bullet.gifStorage, assembly, redistribution and logisticsNo Corporate taxNo tax on dividendsNo cust oms duty on raw materials, goods and production equipmentReduced port handling charges for all goods destined for re-exportBarriers to entrepreneurship in MauritiusDevelopment of entrepreneurs in MauritiusList of organizations engaged in promoting entrepreneurshipSmall and Medium Enterprises Development Authority (SMEDA)Mauritius Industrial Development Authority (MIDA)Development Bank of Mauritius ( DBM)Board of Investment (BOI)Mauritius Freeport Authority (MFA)Association Of Mauritian Entrepreneurs ( AME)Human Resource Development Council (HRDC)Conclusion