Some entrepreneurs came into limelight recently with their big success stories. The small number of these big success stories in entrepreneurship gives a feeling that entrepreneurship is new in India. There could be nothing further than the truth.

1. Beyond The Hype Of
Entrepreneurship In India
P Vijay Kumar,P Vijay Kumar,
Writes for SME Resource Center of Small andWrites for SME Resource Center of Small and
Medium Entity Promotion in HyderabadMedium Entity Promotion in Hyderabad
1 out of 12

2. Some entrepreneurs came into limelight recently with their big success
stories. The small number of these big success stories in entrepreneurship
gives a feeling that entrepreneurship is new in India. There could be nothing
further than the truth.
2 out of 12

3. The reality check – Is entrepreneurship new?
From the independence period, self-employment existed as #1 employer in
India. A sheer need to survive forced many into self-employment and
subsistence entrepreneurship, which means a hand-to-mouth business
earning less than required for basic existence. Almost every type of major
employment from farming, LIC agencies, grocery stores, fruit vendor, auto
rickshaw, electrician, plumber, carpenter, hair cutter, and beauty saloon is
self-employment. Low per capita income countries typically tend to have
many self-employed people, whereas thriving economies have more people
working as employees.
3 out of 12

4. Beyond the Hype – Why is entrepreneurship so high in
India since independence?
Entrepreneurship is very high in India for many social, political and economic
reasons. Also, most agrarian economies have high self-employment and a
significant non-professional workforce in low paying jobs. The creation of a
viable middle class requires at least an industrial economy.
4 out of 12

5. Very few government jobs
After independence, a limited number of public sector companies existed as
government of India was still in the process of building PSUs. As a result, there
were very few government jobs, which existed in India after independence. In
addition, there were few private sector companies that existed in India after
independence. This scarcity of jobs for educated persons led to forced self-
employment.
5 out of 12

6. No meaningful jobs in traditional businesses
There were no meaningful jobs for educated persons in traditional businesses
in the post independence period. Traditional businesses do not operate in a
professional manner and the environment in such businesses is typically not
conducive to educated people.
6 out of 12

7. Farming mindset fueled entrepreneurship aspirations
A farmer has a tendency to be one’s own boss. A farmer does not work for
others. In many parts of India, the rural hired hand is called “salaried” and the
term “salaried” has a negative connotation; it means someone who is not
enterprising, unskilled person from a not so great family background. A typical
farmer’s mentality is to take pride in being independent and self-employed.
For generations, this mindset continued and fueled entrepreneurship
aspirations.
7 out of 12

8. Private sector prior to 1991 reforms was not actively
encouraged
Private sector in India before the 1990’s faced many bureaucratic hurdles,
thus it did not grow fast enough to create jobs for the people seeking
employment. During 1950-91 due to industrial licensing / socialistic agendas,
private sector was not actively encouraged and had stunted growth. The
government itself did not consider the private industry very kindly. People
could understand the mood of the government and did not want to join
private sector as everyday could be an uphill journey against the might of the
government bureaucracy / prevailing public opinion. This environment
affected growth of professional private businesses and led to insufficient job
creation in the private sector.
8 out of 12

9. Private sector prior to 1991 reforms was not actively
encouraged-Continued
If you see the movies of Amitabh Bachchan in 70’s and 80’s when he was
Bollywood superstar, the common theme was the lack of meaningful jobs in
educated India. The frustration of the educated Indian and the role of the
angry young man played by Amitabh Bachchan strongly connected with the
audience and made him a super star. The common scene in many movies of
this time was the educated person holding a degree and roaming from office
to office for a job till his boots get holes in them.
9 out of 12

10. Inability to work in organizations
In the earlier generations people were mostly into self-employment, which
mostly didn’t required any interpersonal skills and awareness levels of
teamwork. The younger generation grew up seeing this generation. Even if the
younger people aspired to join PSUs and private sector jobs, they lacked the
interpersonal skills and awareness levels to get and keep the job in such
organizations. Their inability to get adjusted to work in teams made many
educated people unfit to work in organizations. This also led many people to
get into forced self-employment.
However, the real development in India is the growth of decent paying, good
profile jobs in professional private sector companies.
10 out of 12

11. Inability to work in organizations-Continued
Many multinational companies also entered the Indian market and tens of
lakhs of respectable jobs have been created. Contrary to what is the general
perception, the reality is that it is not the growth of entrepreneurship that we
are seeing today. The reality is the aggressiveness and the determination with
which Indians have let go off the self-employment mindset to join the
professional work force as employees.
In fact, this trend is such a strong trend that currently the professional
employees and corporate taxes (mostly from PSU’s and professional private
companies) account for more than 50% of the taxes collected by the Indian
government.
11 out of 12

12. About SMEPH
Smeph.net is a website about
Small and Medium Entity Promotion in Hyderabad that contains exclusive
articles, webinars, white papers & latest industrial updates to support and
guide professional SMEs run their businesses successfully. The
SME Resource Center has comprehensive collection of articles covering
expertise information for small and medium businesses.
Thank you for spending your precious time in reading this article!
12 out of 12