Entrepreneurship Profile OF INDIA

EFCs (Entrepreneurial Framework Conditions), which affect how likely it is for a country to fare in attracting new entrepreneurs, can be used to gauge the state of entrepreneurship in various economies. India has a low rate of entry into entrepreneurship with TEA (Total Early-stage Entrepreneurial Activity) of 9.9%. India lists insufficient profitability at 33% and difficulties obtaining financing at 27% as the primary reasons for entrepreneurial failure (Saraf and Banerjee 2015). The growth of the middle class in metropolitan centers has made it a popular business location. Increasing middle class also comes with affluence and increased purchasing powers, vibrant stock models probably a young workforce base that supports the entrepreneurship. India has regional imbalance in TEA rates and ratios of early-stage entrepreneurs. Provinces like Odisha, Delhi and Assam have the highest ratio of early-stage entrepreneurs in relation to their population sizes where Maharashtra and Pradesh have the lowest concentration of early-stage entrepreneurs (Shukla, Tanuku, Bharti & Dwivedi, 2016). The elevated population of the consumers, a vibrant economy and youthful workforce has made India a good for environment for doing business. According to 2013 GEM findings on India, TEA for males was higher than for females at 13.2% and 6.4% respectively (Shukla, Tanuku, Bharti & Dwivedi, 2016). In terms of employment, majority of early-stage entrepreneurs at 55% are not expecting to engage new employees within the following five years. In comparison to other countries at her development level, India appears to be below average on job expectations, internationalization and innovativeness. Foreign investors are attracted to India by the above virtues and the government’s input of building the nation’s image globally. India strives to be an entrepreneurship hub and thus entrepreneurs are increasingly venturing its corridors of industrialization enhancing not only business. This paper aims to review the entrepreneurial profile of India as mirrored in the Global Entrepreneurship Monitor Report for 2016/2017.

2.0 India’s Economic and Entrepreneurship Background

Over the recent past, the Indian economy has improved significantly with her Gross Domestic Product (GDP) approaching 10%. The GEM Report 2013 (Saraf & Banerjee 2015) provides the EFCs (Entrepreneurial Framework Conditions) that include financial support, specific regulations, and market openness among others. India’s constraining EFCs include research and development (R&D) transfer, education and training, government policy and programs. The ease of starting and doing business in India has improved in the World Bank Ratings which placed India at position 134 out 189 countries worldwide. Improvements have been made to boost entrepreneurship. Huge talent pool, emergence of the middle class and cost competitiveness has encouraged business growth furthermore attracting more investors. In addition to the large consumer base and increasing middle class, efforts towards liberalization of government policies, education and training to enhance capacity building, and restructuring of incentives were encouraged (Saraf & Banerjee 2015). India experiences multifaceted growth almost in all her sectors of the economy. The multifaceted economic growth has enabled the country to develop buildings and infrastructure that favor entrepreneurship. Growth in services such as water supply, electricity connection, gas supply and other housing utilities are on the rise at over 10%. Services delivery and expansion in hotels, trades, communication infrastructures and transport segment are insightful for development. The manufacturing industries have expanded by over 5% this entails the mining subdivision with about 3% and the construction segment to like 2% growth (Slavica, Amorós, & Arreola 2014).

India compares to BRICS countries of China, Brazil, South Africa and Russia in her economic growth. Just like China, India is fast growing with its economy outperforming some recent past projections. The Gross National Income (GNI) has improved despite India remaining a middle income economy (GEM Consortium 2005). The projection, however, by the World Bank places the country as an upper middle income country in next 20 years. India is projected to match the current Chinese financial performance if it maintains its current growth rate (Schwab & Sala-i-Martín 2014). India’s economy is factor-driven as such is the growing need for public and social infrastructure and institutions that are enabling factors for the business growth and entrepreneurship. The social drivers of the financial performance ensure that every individual is able to access education and health facilities (Saraf and Banerjee 2015). Some negative factors as mentioned by Saraf and Banerjee (2015) include less desirable career choice when compared to BRICS countries. The more favorable regions for entrepreneurship are the Western India, which is more favorable, and then followed by South and North India which are about average in entrepreneurial attitude and climate. India has a substantial gap between the perceived opportunities at 41% and perceived capabilities at 56% indicating that people are not identifying right business opportunities or opportunities are drying up (Saraf & Banerjee 2015). In addition, the TEA (Total Early-stage Entrepreneurial Activity) is 9.9% in India which is a lower rate compared to BRICS, Algeria and other factor-driven economies with 21% TEA (Saraf & Banerjee 2015).

2.1 Discussion of Rationality and Justification of Measures Adopted

The economic growth in India is fast as such businesses and venture capitalist see an opportunity investing and gaining from the robust Indian market. Starting a business in India is easier than before with a reduction in the business/limited company registration days. The use f technology has improved the processes of doing business including digital applications used in tax registration. India has partnership in terms of trade and investor recommendations with BRICS countries. The network has opened up the Indian market and business opportunities to even a wide global spectrum. Entrepreneurial activity is directly connected to increased economic activities where innovations in service/product offering as well as attaining market efficiency are critical ingredients towards improving entrepreneurial environment. As such India can supply its products to the markets all over the world. Entrepreneurship growth has helped the country improve on the people’s standards. Multinationals in India operate differently with the established corporate hubs present in the country which offer special zones with models enabling business growth.

India is keen to compete favorably with China in gaining control over the investments and trade worldwide. India is preferred for its remarkable service delivery and thus many firms prefer to contract Indians to undertake services on their behalf. The median age of working Indians is 29 implying that majority of the working population entails young people. The youthful population input is crucial in the attainment of development and prosperity (Shukla & Awasthi 2012). The democratic governance in India is a prime driver of entrepreneurship. The country still enjoys her strengths in the ideals and fundamentals that are intact. The expanded consumer base and stronger institutions have made new businesses flourish in India.

The development of entrepreneurship in India has been robust with the country keen on improvement of living standard among its low class residents, wealth creation and establishing employment opportunities for its population. Increasing entrepreneurship has been crucial in shaping the country’s economic destiny providing the much needed services and earning revenues for the government. Growth in Indian economy is primarily linked to entrepreneurship which is promoted throughout the country. The working majority in India forms an essential part of entrepreneurs who drive the country’s economy. Engaging with the youths for instance is important in the development and enhancement of their entrepreneurial skills. The country’s administration is keen on establishing programs and developing policies that enhance innovation and capacity empowerment. Technological and scientific enhancement is crucial in the government’s agenda and promoting business development. India has to enhance her innovative techniques and ensure that entrepreneurship grows.

The dynamism in the Indian market is set to strengthen with the establishment of business incubation centers and presence of angel investors. Venture capitalists have been instrumental in the development of the business ecosystem as they have enhanced funding. Government sponsorship on the incubators has played significant input to innovation and entrepreneurship (Javalgi & Todd 2011). The institutions ought to enhance the development of more entrepreneurs instead of producing more job seekers on quest for white collar jobs. Ensuring that they youths create their own business which expand the employment opportunities as such ensuring that the unemployment rates reduce. The social values, individual attributes and indicators of entrepreneurship are crucial in the business development in India.

3.0 Critical Analysis of Findings

India provides an enabling environment for doing commerce by cultivating values in trade related activities and creating positive attitudes. Empowering entrepreneurs is crucial in their development and success. India has an enabling culture that is important in ensuring that trade activities thrive and more revenues generated as a result. The ecosystem of doing commerce being value oriented and optimistic for entrepreneurs promotes investments attracting even foreign funding. Indian government has put in place policies that value the cultural makeup and value chain of the country. Establishing favorable grounds for business and ensuring that an attitude that is favorable to commerce is enhanced is crucial for the development of entrepreneurship (Kwon & Arenius 2010). These societal values can be seen in the way individual entrepreneurs prefer starting a new kind of venture they deem befits their needs and satisfaction. When such people progress and become successful, they gain a social status of esteem in their society and become respected. The media also plays a crucial role in painting success in entrepreneurship and highlighting successful entrepreneurs as such enhancing the business like culture. The GEM Report 2016 indicates that societal values on entrepreneurship are held on high esteem across sixty-one economies. Entrepreneurs garner substantial media attention that creates an amble environment for business. Over 42% of the sampled working-age respondents indicated that they had seen entrepreneurship opportunities in their areas (Slavica Amorós, & Arreola 2014).

The Indian adults have in particular shown a positive response towards entrepreneurship and thus prefer business as an employment. The consideration of entrepreneurship as a career of high stakes has influenced majority of the youths to venture into it. About 49% of the adult population considers entrepreneurship as a career desirable and respectful. Media attention to entrepreneurship has improved which is positive to commercial development (Global Entrepreneurship Research Association (GERA) 2017). Younger adults opt for business as a worthwhile undertaking which is important in societal economic progress than before, though much still needs to be done to encourage the youth to venture into businesses. Most youth still take courses that will secure employment in Government sectors, large private sector and multinational corporations rather than those that will enable youths open their own businesses. Entrepreneurship being in India factor-driven has influenced its development and individuals participating in it. Appreciating the entrepreneurs are crucial in fostering their activities and encouraging others to take part in it (Klapper, & Parker 2010).

3.1 Social Attributes towards Entrepreneurship in India

The social values and norms play a big part in shaping the entrepreneurial environment in India. Another implication presented by GEM Report 2014 is the involvement of women who form 34% of the early-stage entrepreneurs. Another social attribute is that specific age groups, especially from 18-44 years are more prevalent in having early-stage entrepreneurial activity. Social motivation in India plays another role in engaging in entrepreneurship where lack of other option for employment or income (31%), 36.5% is motivated by improvement-driven motives while China has 33.2% of the active age group entering entrepreneurship due to necessity-driven motives as compared to 45.4% who cite improvement-driven entrepreneurship (Shukla, Tanuku, Bharti & Dwivedi 2016). The social and gender values of the Indian people have played a significant role in entrepreneurship as distinctive perceptions exists between the females and the males. There are more men than women in India who show a more positive approach towards commerce. The societal and cultural perspective in India essentially accepts entrepreneurship as such gender disparities doesn’t play a significant role in influencing businesses. Women though not much active in business provide support and motivation to their male fellows. Indian heterogeneity is different from other countries in the region. It has a big population with diverse cultural and physical patterns. The distinct features of such individuals include their rituals, creeds and customs which in a way affect their ways of doing business. The aspects of diversity are crucial in the development of different aspects of entrepreneurship. A significant dissimilarity is visible in the varied regions of the country. The west for instance have 69% of its adults supporting free enterprise while in south about 89% supports it. More media attention has been given to entrepreneurship also in the South (GERA 2017).

3.2 Individual Attributes towards Entrepreneurship in India

The intentions of the entrepreneur, fear of failure, perception of individual capabilities and even on opportunities contribute to individual attributes favoring free enterprise. In respect to the factor-driven kind of economies, people outline varied attributes that influence their decision/need to practice free enterprise. Different individuals have distinctive perceived opportunities with regards to the ease of doing business. Whereas some believe that people should have background knowledge, experience and skills in order to do commerce, others are keen on their phobia of failing. The intentions of forming businesses are crucial in their inception and require support for their ideas. The business ideas of people vary across the board encouraging diverse thinking and more opportunities. The threats and opportunities in different localities influence the success of entrepreneurship.

Having the overall idea, skills and funding aids in nurturing the enterprise a person intents to initiate. Understanding the surrounding environment is vital for entrepreneur to identify and understand the contiguous requirements for success. Aspects of flexibility, risk and independence are essential in ensuring that the abilities are categorized in form of innovative kind of thinking, sound judgment and the recognizing of opportunities. Capital is key for business and can be raised independently or with support from the government. India’s rising economy is bolstered by entrepreneurship (Javalgi & Todd 2011). An innovative way of thinking is crucial for entrepreneurs to maneuver over their challenges and become successful in their undertakings (Tang, Kacmar, & Busenitz 2012).

Individual’s belief and perception ought to be enlightened. Perceptions of the people are vital in shaping the choices being made in an economy. India’s continued growth has been instrumental in supporting young entrepreneurs and ensuring that technology is embraced by enhancing innovative learning. Identifying opportunities is important for venture entrepreneurs who are keen on entrepreneurship. This alertness is decisive for business and ensures that nothing is left to chance. The intentions of majority of the entrepreneurs is to provide a prime prediction for the future of their business behavior (Kureger et al. 2000).

4.0 Current Status of Entrepreneurial Activity in India

India is on a right path and if her projection works as planned, she will be a top economic hub in the near future. India is attractive to entrepreneurs as the country’s policies of governance make it easier to trade and do commerce. The mergence or corporate hubs in the country like Special Economic Zones (SEZ) has resulted in paradigm shift in commercial models. Manufacturing companies have expanded their industries to cater for the growing needs of the middle class population. The country has faced several challenges that affect entrepreneurial activity including burgeoning middle class, opening up of key economic sectors, and rising real estate prices (Saraf & Banerjee 2015). India socio-economic factors are promoting to the entrepreneurs who are keen on earning and gaining a societal status. The majority of the working class being young essentially is crucial for future development and sustainability. Entrepreneurs are their own creation as such innovation and skills are based on their input (Baron, 2007).

To be at par, more needs to be done through empowerment and institutions being proactive fore-runners in the formulation of careers which are more pro-entrepreneurship. The good perception of business among both males and females is crucial societal factor that makes commerce tenable. It is vital that free enterprise is cushioned well so as to keep its reputation as a worthy career and not bring shame to individuals in case of failures. Entrepreneurship creates employment for the economy which helps the country fight unemployment crisis. If more people are encouraged to establish businesses, more people are able to get jobs and as such the individual’s livelihood get improved and their living standards get uplifted. Improved living standards courtesy of increased commerce can be done by the government of the day providing incentives and friendly packages for entrepreneurs. Education and training of persons intending to start-up businesses helps in sharpening trading acumen including handling business associated risks (Bosma 2011).

In conclusion India continues as a fast growing economy whose mandate is primarily enabled by way of entrepreneurship. The Global Entrepreneurship Monitor is crucial in creating a comprehensive report on India and how it cooperates with her fellow BRIC counterparts. The report compares different aspects of free enterprise that exist among the different nations of the world. India is a visionary country with a supportive leadership which is keen on improving the livelihood of individuals and their living standards. Entrepreneurship is instrumental in fighting poverty and ensuring that individuals gain equal shares of opportunities and access to socio-economic amenities.

5.0 Appendix

Figure 1: Gross Domestic Product Growth of India (2012-2017)

From Saraf and Banerjee (2015)

7.0 References

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Javalgi, R.R.G. and Todd, P.R., 2011. Entrepreneurial orientation, management commitment, and human capital: The internationalization of SMEs in India. Journal of Business Research, 64(9), pp.1004-1010.

Klapper, L.F. and Parker, S.C., 2010. Gender and the business environment for new firm creation. The World Bank Research Observer, 26(2), pp.237-257.

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Tang, J., Kacmar, K. M., and Busenitz, L. W. 2012. Alertness in the pursuit of new opportunities. Journal of Business Venturing, vol. 27, no. 1, pp. 77–94.