India seems to be doing better than it was a couple of years ago. The Modi government has been launching one initiative after another, supporting the country's business and economy. While some initiatives struggle to make much of an impact, most are working wonders for India.
The 'Make in India' program, for example, promotes India as a manufacturing hub for the world. The Modi Government is marketing this campaign globally and the impact is evident. Huawei and Celkon plan to make phones, Saab will make single-engine aircrafts and Freudenberg will make lubricants and more - in India. More citizens will find gainful employment and India's GDP will get a boost.
Unfortunately, entrepreneurs are struggling. The Prime Minister acknowledged the contribution of small businesses to India's economy in a letter dated 31st March 2015 and launched a handful of programs to support micro and small businesses, but that might not be enough. In a barrier-free and competitive world, entrepreneurs need to scale-up and go global.
India's entrepreneurs are coming up short - they seem to have the spirit but not the right tools.
Pinpointing our shortcomings
The 2015 Global Entrepreneurship Index (GEI) puts India at rank 104, falling 13 places from the 2014 rankings, below countries like Gambia, Benin and Liberia. The rank is calculated basis scores achieved on 14 'pillars' and India scores really low on most of the pillars. We scored a 0.11 on the 'Opportunity Start-up' pillar for example, indicating that most start-ups here are necessity start-ups.
Opportunity start-ups, the report suggests, are started to exploit a good opportunity, to increase income, or to fulfil personal aims, which contrasts to those started by people who have no other options for work. It is believed that opportunity entrepreneurs are better prepared, have superior skills, and earn more than necessity entrepreneurs.
We score a mere 0.12 on 'Internationalisation', which is another important pillar. The report suggests that internationalization is a major determinant of growth, and most would agree. However, most new ventures in India find it extremely difficult to cross the border into another state, let alone another country.
It would surprise most people who expect small businesses to bid for international projects with more ease in a world connected by technology. Let me add to your surprise. We score just 0.11 on the 'Technology Absorption' pillar. Despite being a major exporter of IT services, we're not hitting any home runs when it comes to using technology to drive our entrepreneurial ventures.
India has to find a way to create more opportunity entrepreneurs and broaden their horizons.
A regional perspective
The Amway-Indicus India Entrepreneurship Report 2014 compares the entrepreneurial attitude, infrastructure support and supportive governance in the different states. To understand how new enterprises can be nurtured and India's GEI score can be improved, an understanding of the factors highlighted by the Amway report goes a long way.
The report points out that states like Bihar, Jharkhand and Assam, which are ranked high in entrepreneurial attitude, are lagging behind when it comes to infrastructure support and supportive governance. Alternatively, it shows that economically developed states that offer an enabling environment foster the entrepreneurial spirit and rank higher.
Starting a venture isn't easy. It not only takes hard work, dedication and persistence, but also needs a certain degree of skill and mentorship - at least for first-time entrepreneurs. The report suggests that there is a lack of awareness regarding the facilitating role that can be played by organizations for encouraging entrepreneurship and facilitating skill development.
The fact that the report pegs the Gujarat at rank 1, in the Current Entrepreneurial Confidence Index as well as the Future Entrepreneurial Readiness Index, lends hope to citizens about the development of entrepreneurship in the country, given that the erstwhile leader of the business-focused state is now at the helm of affairs of the nation.Suggest a correction