Entrepreneurship in India
The state of entrepreneurship in India
Entrepreneurship development in India took off in the early 2000s and has been a transformative force for the nation's economy. This momentum has been fueled by the growth of the Indian economy, increased access to venture capital, the advent of incubators, and a vast reservoir of talent. India is ranked fourth out of 51 countries in terms of the quality of its entrepreneurship ecosystem according to the Global Entrepreneurship Monitor (GEM) National Entrepreneurship Context Index (NECI). This score has significantly improved from its 2021 position, where India was ranked 16th. India has emerged as a global epicenter for the startup landscape, securing the third position with over 90,000 startups and 107 unicorn firms valued at $30 billion, following only the United States and China, as published by Mint.
The subcontinent has been rolling out government schemes for entrepreneurship development in India, like the Startup India Action Plan that provides legal support, better regulations, tax benefits, and economic stimulus through the ‘Fund of Funds’ initiative to provide financial and infrastructural support to emerging businesses. Several other national flagship schemes such as Make in India, Stand-up India (which provides bank loans to support Scheduled Caste, Scheduled Tribe, and women entrepreneurs in establishing new enterprises), and Digital India have been introduced to encourage the growth of more efficient and highly skilled micro, small, and medium enterprises.
Entrepreneurship development programmes in India
Entrepreneurship Development Programmes (EDPs) in India are initiatives designed to nurture and enhance entrepreneurial abilities, providing participants with the skills, knowledge, and support needed to establish and grow successful businesses. These entrepreneur development programs are often organized in Polytechnics, technical institutions, or business schools, focusing on the youth and other business builders looking to set up industrial or self-employed ventures.
Entrepreneurship development programs (EDPs) in India have been initiated by institutions such as SIET (State Institute of Education Technology), Small Industry Development Organization (SIDO), Small Industry Services Institute (SISI), Industrial Development Bank of India (IDBI), and Technical Consultancy Organizations (TCOs). Recognizing the pivotal role of entrepreneurial skills in business success, the Indian government has actively promoted and supported various programs to foster and nurture entrepreneurial talent.
Here are some entrepreneurial development programmes in India:
Industrial Motivation Campaigns (IMCs): These are two-day events aimed at identifying and motivating individuals inclined towards self-employment or starting their own business. The focus is encouraging attendees to establish a Mid-Sized Enterprise (MSE) and providing relevant information on available support and sanctions.
Entrepreneurship Awareness Programmes (EAPs): Conducted multiple times throughout the year, EAPs aim to inform and inspire the youth about entrepreneurship. They focus on imparting knowledge about various facets of industrial activity essential for creating micro and small enterprises (MSEs). The curriculum of EAPs covers a range of skills, including project profile preparation, marketing techniques, product/service pricing, export opportunities, infrastructure facilities, financial institutions, cash flow, accounting, and product costing.
Entrepreneurship-cum-Skill Development Programme (E-SDP): E-SDPs are intensive training programs designed to enhance the technical skills of potential entrepreneurs, the existing workforce, and new workers and technicians of MSEs. These programs are tailored to cater to the skill development needs of socially disadvantaged groups and are organized across various regions, including less developed areas.
Management Development Programmes (MDPs): MDPs focus on enhancing the decision-making capabilities of entrepreneurs to boost productivity, efficiency, and profitability. These short-duration programs cover various managerial functions and are tailored to industry needs and participant requirements.
Young entrepreneurs in India
More than half of India’s population is under 30, as reported by the UN World Population Prospects 2022. Of this large portion of youth, GEM says that 14.2% of 18 to 34-year-olds are involved in entrepreneurial activity in India. Additionally, approximately 50% of its youth are deemed employable in 2023, showcasing a significant pool of potential innovators who can leverage entrepreneurship. Entrepreneurial activity among young entrepreneurs in India is driven by motivation to earn a living because of job scarcity and a vision to make a difference. The nation's youth are not just seeking jobs but are increasingly becoming job creators themselves.
Here are some of the youngest entrepreneurs in India trailblazing across industries:
Pravas Chandragiri - Soptle
At just 19, Pravas Chandragiri launched Spotle, an innovative SaaS-driven B2B retail commerce platform. It empowers FMCG producers to digitalize their operations, streamline daily tasks, and enhance their business efficiency while expanding sales to retailers in different regions by maximizing their capacity. Hailing from Balasore, Orissa, Pravas's early experiences at age 12 with a family-owned Kirana store gave him insights into the challenges local retailers and manufacturers face. During his 12th grade, he embarked on an entrepreneurial path, linking regional manufacturers with retailers. This venture connected over 1,200 Kirana stores across nine Odisha districts and introduced them to 20+ regional Indian brands. In 2021, he founded Soptle, which has enlisted over 80,000 retailers and manufacturers.
Ritesh Agarwal - OYO Rooms
Ritesh started OYO Rooms at the age of 24 to build what would today become a leading chain of hotels, homes, and spaces that provide affordable and good quality services. Following his education, he enrolled in a Delhi-based college but decided to leave and became part of the Thiel Fellowship initiative, supported by the technology investor Peter Thiel. He received a $100,000 grant from the fellowship, which catalyzed his entrepreneurial venture. OYO operates in 500 urban regions across India, the United States, China, Nepal, Japan, Sri Lanka, the United Kingdom, Malaysia, and Saudi Arabia, with 450,000 listings.
Kaivalya Vohra and Aadit Palicha - Zepto
Following his education in India, Kaivalya Vohra joined Stanford University to study computer science engineering. Yet, both Vohra and his fellow student Aadit Palicha decided to leave the university when their courses shifted to an online format after the pandemic hit. At this point, they opted for a break from their academic pursuits and chose to chase their ambition of establishing their e-grocery venture. Amid the lockdown (in 2021), they launched Zepto, which has emerged today as one of the top platforms in the e-grocery segment. Within nine months since the launch, Vohra and his co-founder, Aadit Palicha, propelled Zepto, an app offering grocery delivery in under 10 minutes, to an impressive valuation of $900 million. Today, the company is valued at $1.4 billion, making it the first unicorn of 2023.
What are the challenges faced by entrepreneurs in India?
Lack of capital or financing: While India has a burgeoning entrepreneurial ecosystem, securing adequate funding remains a significant challenge. There needs to be greater emphasis on the next generation of reforms to ensure the availability of abundant foreign and domestic funding for entrepreneurs. The Government of India (GoI) could further relax regulations and provide more incentives to attract foreign funds, especially for startups.
Regulatory environment: While the Government of India has taken several initiatives to boost entrepreneurship, there are still challenges from a policy and regulatory perspective. For instance, starting a business in India requires multiple permissions from various government agencies. Regulations related to labor laws, intellectual property rights, and dispute resolution are stringent. Fewer and simpler regulations should ensure ease of doing business for young companies so companies can focus on growing rather than statutory abidance. Additionally, the Indian government should focus on reducing the compliance burden for entrepreneurs, decriminalizing minor civil offenses, and removing redundant laws.
Awareness and accessibility: Despite various initiatives under the Startup India Initiative, many startups in India are not registered or recognized by the Department for Promotion of Industry and Internal Trade (DPIIT). This means they cannot access the host of benefits the government provides, which could significantly aid their growth and operations. The government should ensure proper training and platforms for startups, encouraging them to register and avail of these benefits.
Infrastructure: Despite substantial government investments in areas like transportation, roads, and airports, there remains a deficiency in fundamental infrastructure elements, such as consistent electricity supply and high-speed internet, in numerous regions across the nation. These limitations can pose challenges for entrepreneurs in establishing and expanding their businesses.
The future growth of entrepreneurship in India
The future of entrepreneurship in India is poised for a transformative journey in the coming decade. As major cities like Bangalore, Mumbai, and Delhi have traditionally dominated the startup scene, the next ten years will witness a burgeoning entrepreneurial spirit in Tier-II and Tier-III cities, driven by enhanced infrastructure and digital connectivity. As per a study by Nasscom, the startup landscape in India is projected to generate over 1.25 million direct employment opportunities by 2025. This growth could be attributed to the government's emphasis on fostering a digital economy, implementing tax breaks, and establishing government-backed incubators, facilitating a favorable climate for entrepreneurial ventures and innovative endeavors in the years to come.
The government has also launched numerous initiatives and financial resources to promote innovation in areas like agriculture, healthcare, and sustainable energy to spur the growth of new ventures.
India boasts one of the most rapidly expanding economies worldwide, with a 7.2% GDP growth in the fiscal year 2022-2023. Efforts by the government to enhance infrastructure, promote digital connectivity, and advance financial inclusion have spurred the rise of sectors such as e-commerce and fintech. This economic surge and a vast and ambitious middle class present a substantial market opportunity for startups.
Entrepreneurship in India holds immense potential to reshape the socio-economic landscape, and stakeholders are urged to amplify this potential by investing in and collaborating with the entrepreneurial ecosystem.
Are you a government, corporation, university, or NGO looking to drive entrepreneurship?
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