How India can nurture its entrepreneurs
Experts list out what troubles Indian entrepreneurs
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"Given the same resources, an Indian entrepreneur would survive longer than one in California," says Professor Philip Anderson, who teaches entrepreneurship at the international business school, INSEAD.
Thanks to their tenacity and the spirit of jugaad, Indian entrepreneurs shine in the global marketplace. Yet on a global index of 'Ease of Doing Business' recently released by the World Bank, India ranks 133 out of 183 countries. It shows that given a more conducive environment, Indian start-ups could do much better.
Business Today's Taslima Khan asked five experts to discuss the problems Indian entrepreneurs confront and what can be done to reduce them.
Thanks to their tenacity and the spirit of jugaad, Indian entrepreneurs shine in the global marketplace. Yet on a global index of 'Ease of Doing Business' recently released by the World Bank, India ranks 133 out of 183 countries. It shows that given a more conducive environment, Indian start-ups could do much better.
Business Today's Taslima Khan asked five experts to discuss the problems Indian entrepreneurs confront and what can be done to reduce them.
WHAT AILS INDIAN ENTREPRENEURS
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Help young people to help themselves
providing sufficient incentives for a start-up
Six years ago, Bhausaheb Janjire, 26, a domestic worker in Pune and the son of a bonded farm labourer, took an astonishing step. He raised Rs 50,000 in seed capital to start a telecom components business. His venture now has a turnover of Rs 10 crore, employs over 300 people, and exports to markets in West Asia and Myanmar. Shailender Singh, 28, who ran a attachakki business in a Haryana village, took a small loan 10 years ago to start a new venture.
Today, Singh is the CEO of a human resource development firm, and has trained and outsourced 3,000 people to large companies. Increasingly, bottom-of-the-pyramid young entrepreneurs in urban and rural India are climbing up the value chain, from income generation to self-employment to entrepreneurship.
Today, Singh is the CEO of a human resource development firm, and has trained and outsourced 3,000 people to large companies. Increasingly, bottom-of-the-pyramid young entrepreneurs in urban and rural India are climbing up the value chain, from income generation to self-employment to entrepreneurship.
Job seekers at the grassroots are becoming wealth and job creators, mirroring the success stories of their better-known brethren in the hi-tech sectors. Still, highly successful micro-entrepreneurs like Janjire and Singh are just a handful.
Young people in general have relatively little money and experience, or even access to social networks that could be useful for business. But they are energetic, creative and eager to learn. The right kind of programmes can go a long way in fostering their potential provided they get sufficient incentives to start off. At present, there are few programmes tailored to meet their unique needs. We need a national agenda to provide them the skills they require to get started.
Stakeholders such as the private sector, financial institutions, the government and even society at large need to work together in a public-private partnership mode to fill the gaps. Capability mentors such as NGOs and educational institutions should identify skills and capabilities; programme designers like government agencies should provide the framework for startups through friendly policies and infrastructure; and scaling facilitators like the private sector and financial institutions should provide capital and business strategies.
Capability mentors: NGOs should act as counsellors and motivators for potential entrepreneurs. Educational and vocational institutes need to provide them with practical knowledge. Entrepreneurship training should focus on short, functional modules that impart hard and soft skills using information technology and mobilebased learning tools. Partnerships with the private sector are also needed to develop programmes based on market realities.
Programme designers: While the government has started according priority to skill development through initiatives like the National Skill Development Corporation, entrepreneurship training is also vital. Local governments from the panchayat level can offer space and utilities for incubating micro-entrepreneurs.
Scaling facilitators: Corporates can play a significant role by providing business advice to budding entrepreneurs, and by helping them integrate into the value chain. Financial institutions need to develop specialised instruments for ]entrepreneurs who do not have access to security and collateral. Social venture funds, a nascent field in India, need to cater to youth with viable business ideas that may have a longer incubation period.
The author is Executive Vice President of Bharat Yuva Shakti Trust, a corporate initiative to promote entrepreneurship
Young people in general have relatively little money and experience, or even access to social networks that could be useful for business. But they are energetic, creative and eager to learn. The right kind of programmes can go a long way in fostering their potential provided they get sufficient incentives to start off. At present, there are few programmes tailored to meet their unique needs. We need a national agenda to provide them the skills they require to get started.
Stakeholders such as the private sector, financial institutions, the government and even society at large need to work together in a public-private partnership mode to fill the gaps. Capability mentors such as NGOs and educational institutions should identify skills and capabilities; programme designers like government agencies should provide the framework for startups through friendly policies and infrastructure; and scaling facilitators like the private sector and financial institutions should provide capital and business strategies.
Capability mentors: NGOs should act as counsellors and motivators for potential entrepreneurs. Educational and vocational institutes need to provide them with practical knowledge. Entrepreneurship training should focus on short, functional modules that impart hard and soft skills using information technology and mobilebased learning tools. Partnerships with the private sector are also needed to develop programmes based on market realities.
Programme designers: While the government has started according priority to skill development through initiatives like the National Skill Development Corporation, entrepreneurship training is also vital. Local governments from the panchayat level can offer space and utilities for incubating micro-entrepreneurs.
Scaling facilitators: Corporates can play a significant role by providing business advice to budding entrepreneurs, and by helping them integrate into the value chain. Financial institutions need to develop specialised instruments for ]entrepreneurs who do not have access to security and collateral. Social venture funds, a nascent field in India, need to cater to youth with viable business ideas that may have a longer incubation period.
The author is Executive Vice President of Bharat Yuva Shakti Trust, a corporate initiative to promote entrepreneurship
Tap rural potential
'B-schools should help new entrepreneurs'
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The winds of liberalisation have not touched much of rural India, especially as far as creating an environment for entrepreneurship is concerned. In the hinterland, the process of registering and getting the certificates and various other permissions to embark on a start-up is still so slow and full of corrupt intermediaries that many budding entrepreneurs run out of patience and give up. There is a solution: instituting a time-bound process. If no objection is received within a specified period, the applicant should be allowed to assume formalities have been completed.
Rural areas also face an acute shortage of skilled workforce. The establishment of the National Skill Development Corporation, or NSDC, has done little to ameliorate the situation. For instance, in Gujarat more than 70 per cent of positions for faculty in government polytechnics have not been filled. This lackadaisical attitude is thwarting the development of appropriate skills at the grassroot level.
Rural areas also face an acute shortage of skilled workforce. The establishment of the National Skill Development Corporation, or NSDC, has done little to ameliorate the situation. For instance, in Gujarat more than 70 per cent of positions for faculty in government polytechnics have not been filled. This lackadaisical attitude is thwarting the development of appropriate skills at the grassroot level.
Non-availability of power for long stretches is another factor that puts rural entrepreneurs at a major disadvantage. In Uttarakhand, for instance, entrepreneurs in Khatima get electricity for only three to four hours a day and that too with frequently fluctuating voltage.
For entrepreneurs in remote areas, transporting goods is yet one more headache. They often have to use passenger buses. There are schemes to facilitate rural transportation, but there is no helpline or clearing house to assist entrepreneurs at this task.
Some of these problems may be intractable, but there is still much the government can do to encourage entrepreneurs. For instance, every Collector and Project Development Officer should hold a weekly clearing house for entrepreneurs to sort out all their problems right away or before the next meeting. The workshop facilities of industrial training institutes and polytechnics, as well as those of engineering, agricultural, pharmacy and other colleges should be made available to entrepreneurs at night at concessional rates. There should also be a network of common workshop facilities for highquality fabrication, design and manufacture in every taluka. Retired engineers from the Army and other public and private sector units should be invited to these workshops.
B-schools should be encouraged to help entrepreneurs both in developing their plans and getting finance. District-level innovation venture funds should be set up to encourage investments in risky enterprises.
The Honey Bee Network and the National Innovation Foundation, or NIF, which identify and nurture grassroots innovation in the country, can play a very useful role by linking innovation, investment and enterprise through its large network of innovators. Unfortunately, there is very little angel funding and incubation support at the districtlevel, and very little mentoring by the existing entrepreneurs or industry associations. But things can be changed by getting the relevant agencies more energised and setting them time-bound goals. We need retired bureaucrats and managers to offer their experienced services for free or on some basis of deferred payment to budding entrepreneurs.
The author is the founder of Honey Bee Network and Vice Chairman of the National Innovation Foundation
For entrepreneurs in remote areas, transporting goods is yet one more headache. They often have to use passenger buses. There are schemes to facilitate rural transportation, but there is no helpline or clearing house to assist entrepreneurs at this task.
Some of these problems may be intractable, but there is still much the government can do to encourage entrepreneurs. For instance, every Collector and Project Development Officer should hold a weekly clearing house for entrepreneurs to sort out all their problems right away or before the next meeting. The workshop facilities of industrial training institutes and polytechnics, as well as those of engineering, agricultural, pharmacy and other colleges should be made available to entrepreneurs at night at concessional rates. There should also be a network of common workshop facilities for highquality fabrication, design and manufacture in every taluka. Retired engineers from the Army and other public and private sector units should be invited to these workshops.
B-schools should be encouraged to help entrepreneurs both in developing their plans and getting finance. District-level innovation venture funds should be set up to encourage investments in risky enterprises.
The Honey Bee Network and the National Innovation Foundation, or NIF, which identify and nurture grassroots innovation in the country, can play a very useful role by linking innovation, investment and enterprise through its large network of innovators. Unfortunately, there is very little angel funding and incubation support at the districtlevel, and very little mentoring by the existing entrepreneurs or industry associations. But things can be changed by getting the relevant agencies more energised and setting them time-bound goals. We need retired bureaucrats and managers to offer their experienced services for free or on some basis of deferred payment to budding entrepreneurs.
The author is the founder of Honey Bee Network and Vice Chairman of the National Innovation Foundation
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