Entrepreneurship & India
Date: Wednesday , May 02, 2007
With TiECON’s annual and regional (East) events approaching within a month, entrepreneurship is in the air for Indian community. Even though TiE has grown from being “entrepreneurship for Indus entrepreneurs” to “all-encompassing entrepreneurs” organization, somehow TiECON is still a must attend event for Indian entrepreneurs in the U.S. On this occasion, we bring to you yet another success story of India based entrepreneur in the IT services area—Atul Nishar the Chairman of Hexaware. As a late entrant to the IT services industry, Hexaware is a story of entrepreneurial gumption and Nishar’s eye for niches that turned every handicap into an opportunity of growth.
Indian tech industry has produced several great entrepreneurs in IT services and BPO arena. However, in tech-products for Indian market there are not more than 15 startups. We always thought this scarcity of product companies is negative and a dampener for India to become at IT superpower. But Prof Amar Bhide of Columbia University School of Business presents a contrary thesis in his research.
Bhide makes the case that for a developing nation like India, optimal role of entrepreneurs may not be to create technological innovation to increase productivity. In developed economies, most resources are already in or near their highest-valued use; and any increase in their productivity requires new technologies. Without new technologies, economic growth winds down and business life stagnates in developed countries. However in developing economy like India, increases in living standards do not require U.S-style technological innovation. The actual productivity of its resources is below that of developed economies—since the technologies in wide use in India are inferior to the technologies already introduced and extensively used in developed economies. Thus, it’s most cost effective to get proven technologies from developed countries and large enterprise may be much more suitable to invest and profit from it then an individual entrepreneur. Prof Bhide envisions role of entrepreneur in creating complimentary goods and services to make these technologies suitable for local use. That creates profitable businesses but not to the scale where U.S. based VC’s will be lining up to invest.
However, there is a one area, which is lacking capital and guidance, and can contribute significantly to the growth of India: village based micro businesses. Still more than 80 percent of India’s population lives in villages, and as success of Grameen bank has amply demonstrated, micro finance is very cost effective to help reduce poverty. This is where we need U.S. entrepreneurs to help India. We have more than 600,000 villages in India and ample opportunities for local entrepreneurs to provide goods and services will help alleviate the living standard of masses. They need small amount of investments and some mentoring for starting and growing their businesses. We need to adopt a village model to help local “wanna be” entrepreneurs to succeed.
I hope this is food for thought as we celebrate success of Indian entrepreneurs in U.S. and India, and some times wonder how we can help our mother country.