Musings of an intermittent entrepreneur!

Hey all,
First, sorry for not being able to post for a while - School and Spring Term 1 is back in vengeance and bleak economic conditions are adding to the already packed schedules.

In any case, here's an insightful post from a very dear friend and colleague of mine - Vijay Nandakumar, on the topic of 'Entrepreneurship in India'. Vijay is a budding entrepreneur and have had a very interesting experience with starting and leading his venture in India from scratch. A dynamic leader with significant expertise in variety of topics in healthcare industry - from procurement and distribution to clinical development operations. Before starting his MBA at Duke, Vijay was a Development Technologist in the Clinical Immunology department of Mayo Clinic. Here you go!

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Entrepreneurship in India is a mixed bag, at least from my experience. While it is fairly simple to form an organization (It does not take a huge investment to register yourself as a corporation), the real challenge is in growing and sustaining it. In short, it is difficult to make money in India unless you understand the way the country functions. India, as many may be aware is a land of contradictions. You have bipolarity in almost every imaginable way. Case in point; tremendous GDP growth paralleled by an equally vicious growth in poverty levels and unemployment. A land with a rich cultural history yet increasingly imitating the west. Hugely talented national sports teams yet under performing at every available opportunity. You see where I am going. This contradictions creeps in to the corporate world too. The institutional structure that is in place to protect businesses is solid yet the ground reality is nothing short of shocking. Inspite of these contradictions, India has marched commandingly in the 21st century and is heading to be a power to reckon with. While the nation has also evolved to encourage entrepreneurial activity at some level, I strongly believe that there are still a few fundamental pillars that need to be addressed for entreprenuership to blossom completely.

The main blocking agent for entrepreneurship in India is the lack of good practices for innovation management. While there is no dearth of ideas, most die for lack of resources. There is not a well organized venture capital or invester society that actively scouts for innovation. While this trend has started to change, this area is still highly fragmented. The awareness and success of VCs and Angel investors hold the key for evolution of entrepreneurship in the country. The other major downer is the lack of strict IP protection. This scenario must change for India to develop as a knowledge powerhouse at the global level. Addressing these two issues at the deepest level will start the ball rolling in the right direction.

There are also a few idiosyncrasies that will do better with a change. Unlike other industrialized nations, India has a very unique political landscape that somehow manages to limit the institutional framework to theory. It is people in power, rather the "current" people in power (There are hundreds of significant political parties in India) who set the rules. The problem is that the government just sets the policies and does not proactively take part in the construction process. The troubles for an unlucky entrepreneur can start right from the minute he/she steps in to a government office to start the incorporation process. Not that all government officials are corrupt or inefficient, but the system in its entirety is broken. The young and budding entrepreneur can be made to go in circles to get one's firm incorporated if the governing official does not get what he wants above and beyond the regular fees. Assume that you are lucky and either got to work with one of the few upright officers or had the resources to muster enough cash to get through the process. The real deal starts now. How do you sell the product or service. The key to success in India is simple. It is the proverbial "Network". As with many Asian cultures, business in India is driven largely through personal-level interactions between the related players. Thus, it pays to investing in time to develop the critical networks that are essential to succeed in the country. Its network or bust.

Having said that, entrepreneurship in India has been largely growing in the past decade. The government has started introducing self-employment help schemes and there has been a rapid expansion of "Special Export Zones" that has fostered the manufacturing sector. Also, the increasing foreign direct investments (FDI) has contributed to more entrepreneurs to come out of their shells. The awareness of entrepreneurship is also at an all time high with news channels carrying programs on budding entrepreurs in the nation. CNBC's "Young Turks" is one such program that tracks the success of people who made their own destiny and serves as an inspiration for aspiring entrepreneurs. In summary, the picture looks just right to indulge in an own venture in India and with the world becoming increasingly flat, the opportunities will only grow.

India should make the right moves to protect and foster her entrepreneurs. Why? Just ask China!

--Vijay.
vijay.nandakumar@fuqua.duke.edu