Entrepreneurship and India
Date: Wednesday , August 29, 2007
Indian entrepreneurship is second to none and activity levels are at an all time high. According to the Global Entrepreneurship Monitor 2006, one in every ten Indians is engaged in some entrepreneurial activity or the other. Of this, opportunity based entrepreneurship (70 percent) is significantly higher than necessity based.
A lot of entrepreneurship activity is centered on the IT and BPO industry; but, there are a few outstanding examples in other fields. These companies have successfully exploited a product, service, or business model to create a step change in the market structure. This new breed of entrepreneurs made their own rules and revolutionized the way business was done. They used a winning combination of customer insight, industry knowledge, and out of the box thinking to create winning innovations. While Ambani’s Reliance Communications made mobile telephony affordable to the common man, Captain Gopinath’s Air Deccan made air travel as commonplace as travel by train and Biyani’s Big Bazaar changed the face of retail in India. Tata Motors with their $2,000 car promise to do the same to the auto sector. Steve Ballmer once said, ”I worry more about disruptive business models than competitors”.
Entrepreneurs are driving the growth of the Indian economy. For the first time in 200 years, India is getting back its position as an economic power. With GDP growing at 8+ percent, experts are expecting the Indian economy to overtake developed countries in the decades to come.
The Indian entrepreneur is thinking big and aiming high. The recent spate of global acquisitions by Indian industry leaders has forced the business community the world over to sit up and take notice of Indian economic power. The Tata-Corus deal set the tone for the year and was followed by Birla’s acquisition of Novelis. With the Indian rupee up against the dollar and the global economy as playing field, we can expect to see more such deals in the future.
There is enough reason to be optimistic about India’s entrepreneurial energy. However, we need to create an ecosystem that will foster and support early stage entrepreneurs. This will enable a scalable and sustainable model for creating a new breed of entrepreneurs in the years to come.
Access to seed capital is one of the key areas of potential investment. Venture Funds have entered the Indian market, but these funds are more focused on ‘growth capital’ rather than ‘seed capital’. While associations such as TiE are seeking to bridge the gap, there is an urgent need to build a network of angels willing to support a young business.
Our educational system rewards ‘remembering’ as opposed to ‘learning’ with limited scope for creativity. Engineering schools focus on imparting fantastic technical skills while business schools focus on pure management techniques. This ensures a strong ability to replicate ideas and reverse engineering and reinforces our dependence on a cost based competitive advantage. Schools in the West have a greater focus on leadership and entrepreneurship. Our educational system needs a revamp to be able to create more leaders and entrepreneurs. The focus of entrepreneurship needs to move to innovation, including process innovation, product innovation, management innovation, and business model innovation to win in the global market.
The rapid pace of globalization and growth of the Indian economy offer tremendous opportunities for entrepreneurs. We have heard stories of people who succeeded ‘in spite’ of the system. It is now time to build an ecosystem which will enable Indians to succeed ‘because’ of the system. This ecosystem will form the bedrock for the evolution of India Inc into an undisputed leader of the global economy.