Sunday, December 23, 2012

Entrepreneurship in India

One of the most favourable conditions that every one agrees to , for India becoming the developed nation is the demographic advantage it enjoys in the coming years. But the same people also highlight the fact that unless this opportunity is cultured into a practicality through job creation, skill enhancement  and opportunity creation, the fruits cannot be consumed. In this context, GOI has initiated some important programmes in the areas of Innovation and Education.

Innovation can be defined in the Indian context to be a new process or product which helps in making the life of any sector of population productive and fetching. Innovations start with ideas and a good idea,to be successful,should be encouraged. A recent report showing the number of papers published at various international forums confirms that Indians do not lack ideas. But unfortunately , these ideas , though of  Indians , does not benefit India as their origin takes place in foreign countries. One indisputable reason for this 'brain drain' is the lack of opportunities and encouragement in Indian context. To address this unfortunate scenario, Planning Commission of India have formed an expert group on "angel investment and early stage venture capitalism in India ". The report has been submitted by Shri.Sunil Mitra led expert committee in June 2012 and have made an extensive effort to identify and address the problems of  budding entrepreneurs in India.

The title of the report reads "Creating a Vibrant Entrepreneurial Ecosystem in India" indicating that a complete "Ecosystem" is necessary for a success in Entrepreneurship. A typical "Ecosystem" in a market like that of Indian constitutes various elements like finance, entrepreneur-friendly regulations, encouraging societal and familial conditions among others. The report enumerates the stages through which an idea travels in the Indian setting. Typically an Entrepreneur conceives an idea and with some initial investment of his own, builds a prototype of his idea. He then expands his prototype in to a small sized venture with the help pf an incubator(A type of investor). Here after, the investments have to be hefty to scale up and it is in this stage that an entrepreneur  wishes for a supporting environment.

The report identifies 5 important factors for creating a vibrant entrepreneurial ecosystem .viz. Catalytic government policy and regulatory framework, easy access to equity capital and debt, Established businesses as entrepreneurial hubs, culture which encourage entrepreneurship over careerism, Effective and adequate collaboration forums. To meet the above goals, a 'National Entrepreneruship Mission' is recommended on the lines of National Innovation Council. Various roles of this 'mission' are in synchronisation with the goals. Some of the roles recommended for the mission are as follows.

a.The Mission acts as a bridge between various stakeholders such as the Central and state governments, the private businesses, educational institutions etc.

b.While the general approach would be to work in an enabling and coordinating capacity,it would have the lead role in the area of driving the financing part of the ecosystem which is the most critical component.

c.It would also become the nodal point for an entrepreneurship movement and in that capacity, articulate and disseminate the view point of the entrepreneurs amongst all the stakeholders within Government and outside – a capacity that is lacking today.

d.The Mission should ideally be set up under the Prime Minister’s Office which will give it the ability to exercise adequate influence without necessarily, a statutory authority.

e.The Mission would set up appropriate mechanisms and metrics that will allow it to track its impact on the entrepreneurial eco system in the country.

The report also presents some successful case studies of Google and other organisations which have nurtured the talent of Innovation in to a business. According to the employees of Google, One week of a work month is given to them for nurturing their own passions of innovation. The social networking site of "Orkut" was supposed to be an outcome of this "Passion Week" and everyone knows how big a success that site was, for Google.

It was believed that complicated exit regulations and complex entry rules have hampered the ideas in Indian ecosystem. The report quantifies this giving accurate data about the entrepreneurial activity in India today and what would be the outcome if a vibrant ecosystem exists for Indian economy in future. The report also touches the social aspect of India by introducing the terms like "Impact Investing", which could develop both social and financial aspects of Indian economy. Indian economy had hit its zenith in the last few decades owing mainly to IT and ITES sector and this sector ran on the pillars of some tremendous entrepreneurial activity by firms like HCL,Infosys,Bharti and so on. Similar initiatives in other trailing sectors is the need of the hour for Indian economy to become stronger and all-inclusive. Like a sown seed, which requires nurturence in the form of water and manure to sustain, the Innovation policy of India need the support of Entrepreneurship Mission to bear the fruits of human development and economic prosperity.

For Full report : Refer Website of Planning Commission of India.

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