Indian entrepreneurs love being own boss, while Chinese make money
By siliconindia   |   Friday, 06 August 2010, 23:14 IST   |    8 Comments
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Indian entrepreneurs love being own boss, while Chinese make money
Bangalore: Even though both the countries welcomes the entrepreneurial activities more than they were 10 years ago, there is a huge difference in the entrepreneurial perspective, the overwhelming majority of Indian entrepreneurs name "being my own boss," while the most popular response in China is earning more money. In this way, Indian entrepreneurs more closely resemble the Western model: American entrepreneurs were more likely to cite "owning my own company" than "building my wealth" as the main reason they launched a business, reports a recent survey conducted by YouGov. According to the survey the decision to start businesses also different in both the countries, nearly half of Chinese entrepreneurs give importance to the state's efforts to promote and manage enterprise. 23 percent of Chinese entrepreneurs say that what they learned in school or at the university prompted their decision, whereas just 9 percent in India feel so. Chinese business owners cite pro-business actions by the government or pro-business messages in the media at three times the rate of their Indian peers. Indian entrepreneurs paint a more relational and organic picture. 21 percent cite family expectations as the source of their entrepreneurship compared to 9 percent in China, and 27 percent of Indians cite the inspiration they glean from knowing another entrepreneur, compared to 18percent in China. This difference in inspiration and motivation manifests itself in many ways. The relational Indian model of business start-ups is evident in enterprise financing, where 49 percent of business owners rely on family resources to start their enterprise, compared to only 25 percent in China. Chinese entrepreneurs are much more dependent on banks, with 49 percent taking out loans compared to 27percent in India. In listing factors important for starting a business, Indian entrepreneurs place nearly as much value on internal personal qualities, such as creativity and the ability to take risks in the face of adversity, as they do access to finance. Access to information and knowledge, for instance, is more important to Chinese entrepreneurs than being creative. This suggests that Chinese entrepreneurs believe business success depends on external market conditions that can be known and manipulated, whereas Indian entrepreneurs regard success as the result of their internal ability to adapt to changing conditions. There are also significant differences in how entrepreneurs see themselves relating to their policy environments. In India, 81percent of business owners say that jugaad, the ability to improvise and find ways around prohibitive rules and institutions, is important to business success. In China, 93 percent of business owners say guanxi, the networks and relationships (primarily with the state) necessary to succeed in business, are important to their own success. Generally, enterprising individuals in India believe they succeed in spite of the state, while in China they think they succeed through their connections to it. The survey results uncover an unfolding experiment on how best to foster business creation in developing countries. So far, our findings suggest entrepreneurship in India is marked by a kind of sustainability that is less evident in China. Because India's entrepreneurs have succeeded amid dysfunctional government and financial institutions by developing a kind of independent and experimental ingenuity, it stands to reason that the enterprising class would prosper even more were India to reduce barriers to business and clean up corruption. In China it is unclear what will happen if state efforts are no longer sufficient to entice and groom the entrepreneurs its economy needs.