This Saturday (January 16, 2016) Prime Minister Narendra Modi is scheduled to launch “Start-up India 2016”. The prime minister is also expected to announce various initiatives by his government to foster the culture of entrepreneurship. The response has already been so overwhelming that there were over 200,000 requests for the passes from entrepreneurs across the country. Unfortunately, since the venue will be able to house not more than 1,350 people, many will have to contend with watching the live telecast of the event on Doordarshan. The ultimate question – however – is how far will the initiative succeed?
Even during his tenure as Chief Minister of Gujarat, Narendra Modi laid phenomenal emphasis on developing entrepreneurship apart from attracting Foreign Direct Investment (FDI) through initiatives like Vibrant Gujarat Summit. This was a clever move: while FDI can give push to the market growth, entrepreneurship is the only factor that can help in sustaining it in the long run. However, while he was successful in attracting huge investments, entrepreneurship as a culture isn’t growing at a promising rate. There are three fundamental reasons for the same; namely: Cultural, Academic and Economic.
Cultural: Indian parents lay significant emphasis on education – not as a way to enhance their child’s understanding of the world – but as a ticket to find job, get married and, eventually ‘get settled in life’. The very idea of their children pursuing “business” can be cause for nightmare! For them it doesn’t matter if the remuneration is less lucrative, as long as the pay is steady and is delivered promptly by the employer on a fixed date of every month.
Academic: The second major hurdle is our academia. Here, even today, a great emphasis is laid on memorising instead of understanding. You get no encouragement for asking questions beyond text books – let alone pursuing innovation. To expect ideas like that of a Google, Facebook or WhatsApp to happen in our campuses is a distant reality. Most of the entrepreneurship or business incubation programs are a sham, publicity stunt or scheme of some kind for academic bodies to swindle money through grants from various government or non-governmental funds.
Economic: If an individual is able to keep alive his spirit of entrepreneurship after not-so-encouraging words from his family as well as his professors; the greatest hurdle then is about raising capital. With angel funding still to come of age in India, to get a financial aid from banks is more than a daunting task. You can barely get anything without a substantial collateral or a guarantor.
While our prime minister is committed on withering all possible roadblocks to foster the spirit and culture of entrepreneurship in economic terms; he’ll still have to do a lot more than handling the bureaucracy in government and financial institutions. He’d need to make people accept the fact that greater economic prosperity for individuals, institutions as well as the nation will come only from fostering the culture of, not just entrepreneurship, but also innovation.
Primary reasons for families to discourage from entrepreneurship is: should they fail in their entrepreneurial endeavour there’d be no financial backup. In the west you’ve government funded social security system. Not many in India even understand the idea of social security – which is a system through which you can get government to pay for you and your family expenses until you find prospects of your own. You can afford to take a loss – at least once – in the West owing to this. In India, one failure in business can be catastrophic not just for the individual but for the entire family and friends (should they stand as guarantors).
To overcome the academic challenges; universities must be asked to find more viable ways to assess performance of students by evaluating their understanding of their subjects rather than assessing their capacities to memorise. Blindly following American or British system of education, too, have done no good. Ensuring proper utilization of funds at incubation centres is also critical; besides they must also ensure entrepreneurship incubation as a mandatory component of the education system. Entrepreneurship incubation today is limited mostly to engineering colleges in India; we need to take concrete measures to add entrepreneurship culture to other fields such as life sciences, agriculture, economics, marketing, dairy etc. Our universities, particularly state government run – non medical and engineering – are rotting for lack of innovation, nepotism as well as self-defeating bureaucracy.
It’d also help if governments – state and national – can constitute an annual award for recognizing excellence in entrepreneurship as well as promotion of entrepreneurship on the basis of pure merit.
To this day India has only provided a labour force – often mocked as “cyber coolies” – for global corporations. While we do understand technologies we are far from making credible products from them. We are risk averse, innovation apprehensive as well as courage lacking people. We also misconstrue entrepreneurship to be technology only phenomenon. We need to find a mechanism to learn from Israel which have taken the idea of entrepreneurship to a whole new level. Their entrepreneurs are fundamentally innovators, doing a brilliant job in inventing state-of-the-art products for water harvesting, organic farming, defence equipment, aeronautics, life support, prosthetics and many other fields making the tiny nation a force to reckon with.
Start-up India 2016 can’t be regarded as step in right direction, let alone an “outstanding success”, unless it addresses the, aforesaid, three major hurdles, namely: cultural, academic and economic.