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Killing of Entrepreneurism in India

Mr. Vinod Kumar. K | Posted On Saturday, November 27,2010, 10:08 AM

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Killing of Entrepreneurism in India

 

 

Killing of Entrepreneurism in India

Skilled youth are increasingly opting to start their own businesses and become young entrepreneurs making a place for themselves in the market, regardless of challenges. With brilliant business plans and strategies, many have succeeded in their effort to start their own business. Primarily it is their vision and foresightedness. There is a huge increase in the number of people who are coming forward to start something of their own.

Problems Faced by Entrepreneur

Below mentioned are the major problems faced by young entrepreneurs in India.

  • Political Instability

  • High Inflation

  • Lack of Capital

  • Government Support

  • Support from the Family

  • Infrastructural Facilities

  • Lack of experience

  • Inadequacy of Information

Political Instability

Political stability is very much important for a country’s economic strength. Only in a steady and stable economy new entrepreneurs can experiment their ideas and become successful. Political Instability does not encourage an investor to invest in the economy even if he has invested, he might decide to take it back due to the existing unfriendly economic climate. Political and economical stability of a country is the back born for the growth of the country. 

High Inflation

Inflation is an economic condition distinguished by a general and continuous rise in the price level over a period of time. In other words inflation means the decrease in value of money therefore high inflation impacts very badly on budding entrepreneurs. Since the purchasing value of money has reduced they have to pump in more and more money to start up something of their own.

Lack of Capital

Capital is the most important asset which is required to start a business. The amount you need to invest for starting a new organization is called as capital. Normally capital inadequacy is a major problem faced my most of the young entrepreneurs. The initial capital for the take-off of the business may not be adequate.

Government Support

Government has a very important role in imparting entrepreneurial traits in youth. It is not only about imparting the skills more over it has to support them in all the ways by providing the necessary support. Giving consultation services, making available soft loans, all these things will help the potential entrepreneurs in taking their ideas forward.

Support from the Family

Generally in India relationships are backed with more sentiments and attachments. Parents want their child to be a doctor, engineer or in any other safer jobs. Since there is risk involved in being an entrepreneur, parents discourage their children from entering into this field. If your parents are not supportive, (not only financial, moral support is also very important) you may not be able to take an initiative to start a new venture. Basic changes should happen from the grass root level. Parents should encourage and motivate their children in taking initiative to start business; they should never try to kill the entrepreneurial skills of a budding entrepreneur.

Infrastructural Facilities

Real estate is one of the fastest growing sectors in the country. Taking commercial space in a convenient place of the city is just out of reach for a common man. The cost has been increased to a greater extend. Out of your initial investment a major portion will go towards Infrastructural Facilities. This may hamper or hinder the development of entrepreneurial activities.

Lack of Experience

For young entrepreneurs lack of experience is always a hurdle to successfully implement their ideas. Innovation, enthusiasm and experience help a person to become a successful entrepreneur out of these traits experience is an important factor which makes a person to take the right decision at the right time. If somebody lacks this, which will adversely affect his/her entrepreneurial initiative. There are many situations in an organization’s life cycle which demands experience to solve the issues. Taking a decision without knowing or anticipating the real impact of it will end up in complete destruction of the business.

Inadequacy of Information

A new entrepreneur should make proper research and analysis of his business plan before he/she start investing on it. Collection and analysis of relatively dependable, reliable and authentic data will facilitate and enhance forecasting and planning. It is important to point out that the entrepreneur may not be conscious of the existing forces of law of demand and supply that directly or indirectly affects consumers' behavior instead he should be concerned about the future. But getting the market information to do the research is not that easy, unavailability of right information at right time is effecting the budding entrepreneurs to a greater extend.

See Also: Venture Capital In India

Steps to help Young Entrepreneurs

We have already discussed about the hurdles a budding entrepreneur has to overcome to become a successful entrepreneur. Some remedial measures from the government and the society can help them to overcome these difficulties. Following are the various areas where we need to support the young entrepreneurs to overcome the basic difficulties in setting up an organization.  

  • Young entrepreneurs should have access to free advice and guidance on both basic and advanced queries about starting a business. 

  • Young people lack access to capital, which is very much needed to start a new venture, since they lack experience, getting venture funding will also be difficult for them. 

  • Young entrepreneurs need the help of good colleagues who are ready to give their heart and soul to the business to get the things done in proper time.

  • Some young entrepreneurs’ feel that the limit of business is only restricted to science and technology, there is no scope for businesses outside science and technology fields. Understanding the real scope of business is very much important.

  • Understanding the market from all the angles is essential for the growth of an entrepreneur. It may be hard for young entrepreneurs to understand certain markets.

  • Support from the family is another vital element to nurture the entrepreneurial traits in a person. Financial and moral support from the parents and relatives is essential for the successful accomplishment of the business ideas.

  • Young entrepreneurs may face difficulty in finding other business owners or aspiring entrepreneurs who share their ideas and interests.

  • At the most basic level, since many young people lack a credit history or hold large student loan debt, start-up capital may be virtually impossible to obtain.

  • Young people need help in understanding how to leverage their credit and how to be disciplined with money when starting and running a new business.

Total Entrepreneurial Activity Ranked by Country

Below given table shows the country wise total entrepreneurial activity as a Percent of GDP.

Country

Average

Country

Average

Country

Average

Peru

30.60%

Australia

11.90%

Latvia

7.00%

Uganda

31.50%

Iceland

11.50%

UAE

8.50%

Bolivia

29.80%

Mexico

11.30%

Finland

5.90%

Venezuela

22.80%

Malaysia

7.75%

Iran

9.00%

Angola

22.70%

United States

10.60%

Turkey

5.90%

Philippines

20.40%

Kazakhstan

9.40%

Denmark

5.50%

Thailand

20.10%

Canada

8.90%

Croatia

5.70%

Colombia

20.40%

Ireland

8.70%

Singapore

5.72

Indonesia

19.30%

Norway

8.30%

Italy

5.40%

Dominican Rep.

18.20%

Serbia

7.00%

Germany

4.90%

Jordan

14.30%

Czech Republic

7.90%

Netherlands

5.30%

Ecuador

17.20%

Egypt

7.90%

Hong Kong

4.70%

Jamaica

18.90%

Greece

7.60%

France

4.60%

New Zealand

15.70%

Poland

6.90%

Slovenia

4.60%

Macedonia

14.50%

Switzerland

6.90%

Sweden

4.30%

China

14.90%

Portugal

6.60%

Taiwan

4.30%

South Korea

12.20%

South Africa

6.40%

Romania

4.30%

Chile

13.50%

Spain

6.30%

Austria

3.90%

Argentina

13.30%

Israel

6.30%

Russia

3.80%

Brazil

13.00%

Bosnia & Herz.

5.40%

Belgium

3.40%

Uruguay

12.20%

Hungary

6.60%

Japan

3.20%

India

12.10%

United Kingdom

6.00%

Puerto Rico

3.10%

Source: International Entrepreneurship

  • World Average = 10.6%

  • Africa Only (15.6%)

  • Asia Only (11.2%)

  • Europe Only (6.4%)

  • North America Only (13.4%)

  • South America Only (19.2%)

  • Mid Eastern Only (11.8%)

Future of Entrepreneurship in India

In these days both the Central Government and different State Governments have started showing more interest in promoting the importance of entrepreneurship. Individuals are being encouraged to start new businesses and are being provided with many supportive measures to facilitate the creation process like;

  • Tax incentives

  • Buildings

  • Roads

  • Communication system

Since politicians are realizing how enterprises create jobs and boost the economic output of the region the encouragement by the central and state governments will continue in future as well. Every state government should develop its own innovative industrial strategies for nurturing entrepreneurial activity and timely development of the technology of the area. The states should have their own state-sponsored venture funds, where a percentage of the funds have to be invested in the new initiatives of young entrepreneurs.  

In India what we lack when it comes to entrepreneurship is support from the society. Society’s support is critical in providing both motivation and public support. Media has a major role in the development of societal support. In short we can conclude that only a collective support or encouragement can give birth to a successful entrepreneur.

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