Challenges Faced by Young Entrepreneurs in India
Before 1991, Indian business success was a function of ambition, licenses, government contacts and an understanding of the bureaucratic system. Decisions were based on connections, rather than the market or competition. Business goals reflected a continuation of the ‘Swadeshi’ movement. Pre-1991 policies were inward looking and geared towards the attainment of self-reliance. During this era, entrepreneurship was subdued, capital was limited and India had very few success stories. As well, society was risk averse and the individual looked primarily for employment stability.
In 1991, the Indian government liberalized the economy, thus changing the competitive landscape. Family businesses, which dominated Indian markets, now faced competition from multinationals that had superior technology, financial strength and deeper managerial resources. Thus, Indian businesses had to change their focus and re-orient their outlook outward. A few existing Indian business families adapted to the new economic policy while others struggled.
Key observations from a study by Gallup suggest that nearly 60% Indians possess strong entrepreneurial qualities – optimism, business-mindedness, persistence. Yet most Indians shy away from starting their own businesses. Do we ever wonder why? A look around may be sufficient to see what proves to be a hindrance to the entrepreneurial spirit.
Some reasons that can be identified are:
1. Bureaucracy- The word bureaucracy comes from the French word bureau, which refers to an ‘office’ and the Greek suffix kratos, which means ‘power’ or ‘rule.’ So, bureaucracy refers to the ‘rule of the office’.
Firstly, there are a large number of procedures to be followed and clearances to be obtained to start and operate a business.
Secondly, each of these procedures can take an obnoxiously large amount of time. Bureaucratic potholes ensure that a good number of days are spent running from one table to another, from one department to another to get the
In 1991, the Indian government liberalized the economy, thus changing the competitive landscape. Family businesses, which dominated Indian markets, now faced competition from multinationals that had superior technology, financial strength and deeper managerial resources. Thus, Indian businesses had to change their focus and re-orient their outlook outward. A few existing Indian business families adapted to the new economic policy while others struggled.
Key observations from a study by Gallup suggest that nearly 60% Indians possess strong entrepreneurial qualities – optimism, business-mindedness, persistence. Yet most Indians shy away from starting their own businesses. Do we ever wonder why? A look around may be sufficient to see what proves to be a hindrance to the entrepreneurial spirit.
Some reasons that can be identified are:
1. Bureaucracy- The word bureaucracy comes from the French word bureau, which refers to an ‘office’ and the Greek suffix kratos, which means ‘power’ or ‘rule.’ So, bureaucracy refers to the ‘rule of the office’.
Firstly, there are a large number of procedures to be followed and clearances to be obtained to start and operate a business.
Secondly, each of these procedures can take an obnoxiously large amount of time. Bureaucratic potholes ensure that a good number of days are spent running from one table to another, from one department to another to get the