Entrepreneurial and it’s need in India

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There are only two important factors for the growth of any economy in this competitive world. They are 1) Entrepreneurship and 2) Innovation. The best example of the above factors is the recovery of Germany post-World War, and, more recently, Israel’s status of a developed economy have all been driven by Entrepreneurship and Innovation.

Now-a-days, they have become even more important for India because of its demographic dividend and it can only be realized with the rapid creation of employment and income generation opportunities.

In the late 1880’s, because of leading position in the fields like trade, Mathematics, Astronomy and Philosophy India was considered an innovation driven country and India accounted for 25 % of world GDP (Gross Domestic Product) which was the largest in the world. But due to the Colonization and at the beginning of 1990’s India was facing bankruptcy so India’s share of world GDP was down to 2%.

The last two decades have given us a glimpse of what entrepreneurship can do for the country. In barely 20 years, the Indian IT services Industry, driven by first generation, middle class entrepreneurs, has grown from its early stages to around $88 billion, creating 11.7 million jobs 2.8 million directly and additional 8.9 million indirectly, and accounting 25% of our exports and 7.5% of our GDP.

Now-a-days the Telecom Industry are rising like a rising in prices of fuel and is the best example where a first generation entrepreneur is now India’s largest and amongst the world’s leading telecom service provider (by subscriber base) with over 200 million subscribers.

Impact of entrepreneurship:

 As you can see from the above graph, both private and public sector enterprises have not been able to generate employment in the last 10 years, and are unlikely to do so in the future.

Public sector activity range from delivering social security, administering urban planning and organizing national defense. In the last few years, public sector is expected to add only a small number of jobs in the coming years.

Private sector includes state agent, shop keeper, banker and it is not likely to drive employment in the coming years as automation, digitization, and productivity increases reduce the need for manpower.

Also Agriculture, which is India’s backbone employs that nearly a half of India’s employed, has been stagnant in total number of persons employed.

If a country like India want to create wealth, employment and economic growth then it is necessary that we should create an entrepreneurial eco system.

As per our analysis, by 2022 there would be a large number of ventures that could be spawned, and there could be around 2500 successful high growth ventures generating revenues of over $200 billion per annum – which is good contribution to GDP and creation of employment at the same  scale as projected for IT and ITES (IT Enabled Services) industry.

In the Indian context, entrepreneurship is critical not just for job creation but also to solve some of India’s chronic developmental issues.

If we promote entrepreneurs then we can solve some of the development issues like Affordable healthcare, clean water and sanitation, post harvest agricultural processing and robust infrastructure development.

Many Industries or sectors which promise to provide significant opportunity for successful entrepreneurship include

  • Manufacturing such as electronics, chemicals, auto-components, food processing, etc.
  • Technology such as e-commerce, mobile value added services such as those related to financial inclusion, etc.
  • Healthcare ranging from diagnostic centers, medical tourism, pharmacy, etc, personal care services, infrastructure maintenance services, water and waste management and other clean-tech solutions
  • Education services such as content services, test preparation, vocational education, etc.

The one sector which provides opportunity for new businesses is Manufacturing and allied services For example by 2020 car production of India is expected to grow over four-fold and to support this growth, similar robust growth is needed in the auto components sector.

Potential sectors of entrepreneurship growth

Key Sectors

Sub-Sectors

Recent example of VC invested companies

Manufacturing andallied services Auto components, electronics, chemicals, metals, etc Century Metal Recycling, Jamna Auto Industries,Biltube, Esdee Aluminium, Amara Raja Batteries
Technology Online services (such as ecommerce, digital content, advertising, etc) and mobile and convergence services(Applications, etc.) Flipkart, InMobi, Sourcebits, Ybrant, ValueFirst, Druva
Healthcare andrelated services Medical equipment and tourism, hospitals, diagnostic centers, pharmacy Aravind Eyecare, Eris, XCyton, Radiant Life Care
Luxury and personalcare service Gyms, spas, hotels, restaurants Primus, Humming Bird, Indian Cookery
Education Content services, test preparation, vocational training Pristine, Career Launcher, K12 Techno Services,Vienova
Infrastructure Infra services (operations and maintenance of highways, railways, ports, airports etc.), alternativeenergy solutions (renewable power generation wind, solar, biomass), water and waste management andother clean-tech solutions Selco, Applied Solar Technologies, PromptRenewables, d.light, Orb Energy, WaterHealthInfrastructure International, Waterlife India

But promoting such entrepreneurship will require infusion of capital both in the form of equity and debt through angel investors, incubators, venture capital funds and banks and financial institutions.

If we want to bring impact on India’s key development issues such as sanitation, clean drinking water, affordable healthcare then we estimate that around $55 billion would be needed over the next decade.

If we want to improve India’s entrepreneurship rank from 74 to top 20 on the Global Entrepreneurship and Development Index (GEDI) ranking then the ecosystem would need enablers such as catalytic government policy and regulatory environment, established businesses fostering entrepreneurship, a culture which promotes risk taking, and collaboration forums to connect various stakeholders.

The major benefits of Entrepreneurship are not only going beyond job and income creation but also it promotes innovation, productivity improvement and significant advances in human development. Increased income levels, social and financial equity improve living standards in the long run, along with improvements in health, education and happiness.

If we want to improve our living standards then we have to closely linked Entrepreneurship to equitable economic development and this will increase in level of happiness and satisfaction, leading to social harmony and reduction in crime.

Apart from improving incomes, Entrepreneurship also leads to long term improvement in healthcare and education which leads to innovative solutions in the country.

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