Wither entrepreneur?

With the world witnessing a shift in the global economic power balance, a recent report by Goldman Sachs has projected that the Indian economy will be the third largest in the world by 2050. Another research by Citibank projects that India will be the largest economy of the world by the same time. Whatever may be the view, and however much one may believe or disbelieve the research findings, the fact of the matter remains that India, in the future, will be in the league of the largest economies. However, these reports seem quite ironic in front of the ground realities that an entrepreneur has to face in India.

 

The world witnessed how the Indian government handled the economy till 1991 when it faced the worst of its crisis. Some numbers have been positive surely. India’s GDP, which was Rs 4.7 lakh crore in 1970-71, reached Rs 10.8 lakh crore in 1990-91 and a gargantuan Rs 48.8 lakh crore in 2010-11. The per capita income also rose from Rs 8091 in 1970-71 to Rs 11,535 in 1990-91 to Rs 41,129 in 2010-11. Indian exports have gone up from $2.1 billion in 1970-71 to $18 billion in 1990-91 and to a whopping $245 billion in 2010-11. In all this, the entrepreneurship class has been the one that has contributed significantly to India's growth. 

 

A report by Global Entrepreneurship Monitor revealed in 2003 that “12.5 per cent of the total working population [in India] was involved in opportunity-based ventures, compared to 5.5 per cent in China”. The biggest advantage of having entrepreneurs has been that they have excelled in adversities even when the government has acted more as a stumbling block than as a facilitator.

 

Another startling fact is that the government has succeeded in building good infrastructure, schools and hospitals in places where industries have emerged – and not necessarily vice versa. Cases in point are places like Gurgaon, Noida, Rajarhat, Nagpur, Surat, to name a few, where the burgeoning industries have forced the government to start providing infrastructure. Clearly, this was not how it was supposed to be. Industries were supposed to be encouraged by providing necessary infrastructural support. Even today, in cities like Gurgaon and Noida, public transport is either nonexistent or pathetically shameful, what to say about other infrastructural issues. Not surprisingly, as per their 'Ease of Doing Business' report, India ranks a pathetic 132 out of 183 countries.

 

However, the journey is still not over and far from being lost as India can do a lot to encourage entrepreneurs. For that, the policy makers need to focus on creating a conducive environment. A starting point could be easing the financing route for entrepreneurs. A study done by the National Knowledge Commission in 2008 revealed that 99.4 per cent of the entrepreneurs said they became entrepreneurs because they didn’t want to do a routine job. Of these, 63 per cent were self-financed entrepreneurs. The survey further revealed that “bank loans accounted for start-up finance for 22 per cent of the entrepreneurs” out of which 42 per cent respondents said that “it was difficult to obtain finance at the start-up stage.” 

 

Secondly, we need to groom entrepreneurship behaviour starting from school education itself. As many as 95 per cent of the entrepreneurs agreed in the above mentioned report that education is a critical success factor in grooming an entrepreneurial orientation. Only large scale growth in small scale entrepreneurship can be the solution for equitable growth in India. The faster our polity understands that, the better for India.