Modi’s promise for Indian entrepreneurs

The recent political developments in India have set in motion a range of changes aimed at galvanizing the bureaucracy, alleviating the concerns of industry and improving public sentiment. So far, signals sent out by Prime Minister Narendra Modi have helped reignite belief among corporations and ordinary citizens that the country is back on the road to sustained high growth.

I have been looking with particular interest at announcements that show Modi wants to boost Indian entrepreneurship. The most significant announcement so far has been the setting up of a Ministry of Entrepreneurship and Skill Development, under the Union Government in New Delhi. Questions, however, still remain. What will it take to bring more entrepreneurs forward? How can India break the perception that its entrepreneurs lack what it takes to achieve scale and go global?

The answers are complex. It will require a wide range of participants to make India more entrepreneur-friendly. Bureaucratic procedures and processes for approvals and licences need to get much simpler if India is to become a country where it is easy to do business. Entrepreneurs need to spend more time developing and marketing products, and managing operations – not chasing papers for approvals in government offices.

An encouraging development came when Modi exhorted bureaucrats to “think creatively and take risks to overcome administrative paralysis”. Risk-taking is not an attribute we traditionally associate with bureaucracy, but knowledgeable and calculated risk-taking can help ease the system and enable entrepreneurs to get groundbreaking ideas through. There are already several shining examples of Indian companies that have gone global thanks to innovative products and smart business strategies, often in spite of the most trying situations. These companies stand apart, not just for their out-of-the-box thinking or willingness to take risks, but for their attitude of participation and openness.

In the Indian context, strict hierarchy within organizations must give way to an open and transparent work environment where new, radical ideas are welcome – and, most importantly, where failure is not punished. The fear of failure and retribution are major impediments to innovative thinking and risk-taking. Top management must show its commitment to entrepreneurial behaviour within the organization. A good way to exhibit this is by making a failed project not an end in itself but something that holds valuable lessons for the future; or by recognizing individuals for the calculated risks they took and not just for the successes they achieved.

When entrepreneurship education started in the 1980s, it was focused on self-employment. Today, it must live up to the national agenda of employment generation rather than individual wealth creation. The top business schools are preparing students for entrepreneurship, and a new breed of young entrepreneurs are setting up their own ventures. Some are offering students “deferred placements” so that they can come back to the institute after a couple of years if their venture fails. We now need to replicate these successful entrepreneurship education models across the rest of the country.

Equally crucially, perceptions about entrepreneurship need to change. Indian society must overcome its deep-rooted tendency to value the status quo over risk-taking behaviour and see entrepreneurship as merely the pursuit of materialism. Many of these perceptions have changed since the 1990s, when entrepreneurs in the field of information technology emerged as role models for the middle class. This set of entrepreneurs came from middle-income families who used their knowledge and skills (rather than family wealth and political connections) to turn a company around. Today, several young people in India are starting their own ventures after university or leaving their comfortable, well-paying jobs to follow their dreams.

The Indian government’s historic 2014 budget is committed to investments in entrepreneurship and innovation. It has launched a new cell dedicated to “incubation and new ideas”, providing equity and soft loans to start-up companies to the tune of RS10,000 crores (more than US$2 billion), and is also committing RS100 crores to start-up village entrepreneurship. Maybe the journey to true innovation and entrepreneurship has begun. We still have miles to go but the future looks very bright indeed.

Author: Keshav Murugesh, Group CEO, WNS Global Services

Image: An employee works on his laptop at the Start-up Village in Kinfra High Tech Park in the southern Indian city of Kochi. REUTERS/Sivaram V