It is time to realign policies to support entrepreneurship as business world faces another tough period
By P. S. Bhagvatula
When it comes to entrepreneurship, I am always reminded of a friend from my graduation days. Soon after completing M.Sc. in Botany, my friend, let’s call him Mr. X, enrolled for a PhD course. He discontinued his course due to lack of proper guidance, bought land with the help of his father and started farming at a place nearly 200 kms from Nagpur.
His life as a “well-educated farmer” lasted around four years and he was soon back in the city, unable to bear the criticism of his family members and relatives, who would taunt him for wasting his education.
In the next two decade, Mr. X earned a diploma in fashion designing, ran a unit for kids wear with his friends, sold off his share and set up a travels business, ran a restaurant and currently has his own designing business.
He was a ‘fashion designer’, travel agency owner and restaurateur – all for a few years each!
Once when I asked him the reason for his constant switching of professions, Mr. X blamed pressure from family and relatives, all stunted by the middle class mentality of job security, and forced him to seek a secured job instead of running a business. So to quench his entrepreneurship thirst, Mr. X would start a business, run it for a few years and then take up another one – in the interim leaping from one job to other.
SOCIETY NEEDS TO CHANGE
He never said so, but maybe one day, he will sit down and think of the time he has lost. If he had put in the entire 20 years in one business, he could have achieved a lot!
Agreed, there was no guarantee that he would have succeed but mind it, Mr. X never lost money in any of his ventures and actually quit with the balance-sheet always in the green.
Mr. X’s case is symptomatic of the malaise that has plagued Indian entrepreneurship for decades — the middle class’s fear for risk-taking and turn for entrepreneurship. Barring a few communities in the North and Western part of the country, most middle class people would plumb for a secure job, preferably one with the government.
But how things have changed!
Historically, Indian society and the education system have focused on creating doctors, lawyers, accountants, engineers etc and entrepreneurs for them have been a rare breed. This would seem ironical to many as Indians have been very good traders from ancient times and have links with Gulf and China even when the Western World had no knowledge of these mystic lands.
Agreed, these professionals are a requirement, but so are entrepreneurs. However, after decades of conditioning, the nation is re-aligning itself to the culture of entrepreneurship. We are at the cusp of entrepreneurial success and this opportunity must not be lost for the lack of policies and world-class support systems.
According to reports, entrepreneurship has become a key engine for employment generation, globally. And conditions are favouring small businesses and startups.
Even as policy makers grapple with economic uncertainty and cultural changes, large corporations that traditionally created jobs are biting the dust. According to some reports, in the decade from 2003 to 2013, around 712 corporations disappeared from the Fortune 1000 list. The trend is likely to continue and very few such companies will be around three to four decades from now. They will be replaced by a new breed of risk-takers and innovators, who are already lining up in the form of entrepreneurs. According to a report by the Kauffman Foundation, industrial era companies in the US dismissed more jobs than they created in contrast to high-growth startups that created the maximum number of new jobs between 2000 and 2010. This global trend makes a strong case for supporting Indian start-ups and entrepreneurs as a means to create future employment.
But the hard work starts now for governments and the society, itself. With this new breed of entrepreneurs lining up on the horizon of business world, it is even more important to create a support system that ensures the survival of the start-ups beyond the first five years.
POLICY REALIGNMENT NEEDED
The government is tuning itself to this need. It has recently launched schemes and programs to promote startups. But what is important is that government policy must be attuned to the practical needs, while addressing the pain areas, of Indian entrepreneurs.
The government has to ensure that funding is more easily available to entrepreneurs, create a large pool of experienced mentors and advisers who provide inputs around manpower and resource management, legal and marketing, partnerships and technology; and provide mechanisms to improve access to local and global markets.
Supporting entrepreneurship is a medium to long-term approach. But what is also necessary is that the government policymakers should decide at the earliest what type of entrepreneurship should be prioritized for support so that success and subsequent job creation is assured? Today’s marketplace has become hyper competitive, there are more choices available to consumers and enterprise buyers than ever before.
While the government and business leadership are gearing up to welcome this new breed of entrepreneurs, the society too has to retune itself to this theme.
Otherwise, many more Mr. Xs would lose lot of time, unable to do justice to their business in the absence of atmosphere conducive to entrepreneurship. Mr. X had persevered even for two decades and continued as an entrepreneur, many in this new breed may not be so resilient. And in a couple of decades, they may not have the “job security” to fall back to!