Nurturing Entrepreneurship in India – Entrepreneurship and India


Entrepreneurship is a critical element in the growth of an economy. It is estimated that there are about 20 million entrepreneurs in the US. India ranked second in Total Entrepreneurship Activity (TEA) according to the Global Entrepreneurship Monitor Report for the year 2002. Subsequently, India slipped in TEA rankings.

For its size, India has lower number of startup entrepreneurs. In spite of the shortcomings, it ranked ninth in the survey of entrepreneurial countries by Global Entrepreneurship Monitor (GEM). India ranks the highest among a group of countries in necessity-based entrepreneurship, which is associated with developing countries. Conversely, it ranks fifth from the bottom in opportunity-based entrepreneurship.

entrepreneurshipLiberalization of economy started by the PV Narasimha Rao government in 1991 and the Information Technology boom of the mid and late 90’s have ushered in tremendous changes and set the stage for a wave of entrepreneurship taking India by storm. The capacity of Indians for entrepreneurship is substantial. However, the society and government have not been very encouraging towards entrepreneurship in India.

One of the major hindrances faced by the Indian entrepreneur is that of capital. It is worth noting that there is greater willingness among people to invest capital in enterprises that are already established than in startups. The number of venture capitalists or angel investors in India is very low. Another factor that has been hindering entrepreneurship in India is the lack of mentors – very few success stories which could inspire youngsters to become entrepreneurs.

By and large, the Indian society is averse to risk. People normally look for long-term and stable employment, such as government and public sector jobs. There is an urgent need to overhaul the physical infrastructure. Social Attitudes, lack of capital, inadequate physical infrastructure and lack of government support are major factors hindering entrepreneurship in India.

There are other factors that have been affecting entrepreneurship in India. The majority of young people coming out of college are inclined towards the IT sector, starving other sectors of critical talent. Most of the talent available in the country is considered to be mediocre and technical talent is scarce. Another factor weighing against entrepreneurship in India is that it is not perceived to be socially glamorous, though the concept is getting accepted slowly.

India’s economy has been growing at a scorching pace. Today, its economy ranks above that of France, Italy and the United Kingdom. Its GDP is the third largest in Asia. Among emerging nations, it has the second largest economy. The liberalization of the economy in the 1990s has enabled a huge number of people to become entrepreneurs. It is to India’s credit that its corporate and legal systems have been operating with greater efficiency. Government needs to make efforts and encourage entrepreneurship by providing training and also facilities, especially in the rural areas.

With a burgeoning middle class, India has a huge potential, which, if tapped, can be a vast market for products and services. Entrepreneurs can prosper by catering to the requirements of this segment. India, with its abundant pool of talent in the IT domain, management, manufacturing and pharmaceuticals, has become the choicest destination for outsourcing of services from all over the world. The scene for Indian entrepreneur is ideal. If he can seize the current opportunity, he can succeed not only in India but also globally.



  1. Dustin Huibregtse on

    Two questions, the first: Is India receiving foreign direct investment to assist in capital? Could you explain the social aspect of entrepreneurship in India more? If found that very interesting.

    How is China?

  2. Social aspect of entrepreneurship in India reflects (Dustin Huibregtse has asked ) confinement of entrepreneurship to few business families in Rajasthan state & Gujrath state.Gujrathies in India by character reflect entrepreneurship & more people are involved in entrepreneurial activities. Other states in India does not reflect so much.Reason could be The very social set up in these states has developed such behaviour.A research book brought by Pof Tripathi of IIMA by name Indian Business families is an attempt to give rational reasons for the behaviour of business families in India.
    Social aspect of entrepreneurship in India reflects less tolerance to ambiguity leading not taking risk which is vital for entrepreneurship. Entrepreneurship development centers are trying to freez such problems by education & training. However the society in India during & after British rule is risk averse.If we seee Indian tradition, Culturally Indians love agriculture, animal husbandary, teaching , spiritual pursuits more than becoming enterprise builders (with exceptions to some who are successful in entrepreneurship. Society’s or people tendency in India is highly risk averse (thoughing it slowly changing.

  3. Eureka! The International Business Plan Competition, E-Cell IIT Bombay

    The Entrepreneurship Cell of IIT-Bombay is organizing EUREKA! The Largest International Business Plan Competition in Asia.

    Prizes worth USD 50,000 are to be won with finalists getting a chance to pitch in front of Indian Angel Network.

    Teams will get a chance to represent India at the Intel-UC Berkeley Innovation Challenge.

    Its simple to participate, just log on to

  4. I beg to differ from Mr. Ganesh. I quote “Culturally Indians love agriculture, animal husbandary, teaching , spiritual pursuits more than becoming enterprise builders (with exceptions to some who are successful in entrepreneurship”. I believe we as indians are collectivistic in our pursuits. At the same time very professional when it comes to business. Social dimension in india is how you as an entrepreneur look at it. People here are not risk averse. They just dont like to make foolish judgement’s. More people are into business these days. Its not restricted to rajasthan or gujrat. Although these are strong industrial belts. Other parts of india like the south – chennai, Andhra pradesh, karnatka have excellent opportunities. India has fabulous opportunities to say the least It was pre 1991 that business in india was restricted to those having a business background. After the economic reforms india has moved up with a blazing speed.Now FDI rules easing. You can only imagine!

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