“Successhas many fathers, but failure is an orphan”
Entrepreneurs fail. Entrepreneurs succeed. Yes, their ecosystem does play a role in both. But those who claim to have a role in the success of entrepreneurs will do well to remember that they have more to do with them failing than succeeding.
In the socialist-approach policies that we have, especially with an aspirant free-markets capitalist economy, we have many examples of successful entrepreneurs – of various sizes of enterprises and scale. These individuals have risen, with varying levels of struggles, and despite all obstacles of outdated rules and laws, control-focused regulations and the over-zealous keepers. Their success does not necessarily mean that they brokejn any of these rules and regulations. But it surely means that they spent more time in complying with these outdated rules of engagement, which have taken their attention away from their potential customers and newer markets.
Academic research over the years has shown that the conventional mechanism of bureaucracy has been to have control, or at least influence, over the citizenry. It has grown to believe that it needs to 'approve' of what citizens are doing. To a larger effect, more than the political class, the bureaucracy might have come to believe that the citizens need to kowtow to them. This parochial mindset turns even the simplest of procedures into an Olympic-sized maze through creative wordings. These procedures can be overcome, of course, if one approaches the bureaucracy through the right channels.
Let’s take an example – the government, in issuing a license, does not contribute anything to the R&D, production, marketing, and the exports of any goods or services. Not even when the government delicenses these elements. At the former instance, the entrepreneurs figure out the ways to deal with the paperwork, process and even people who act as gatekeepers. In the latter, they use these energies on core business development.
*Risk, Reward, Recognition
Every entrepreneur must take the essential risk – that of the business model itself – of how the enterprise is financed, its marketing, sales, assets, scale, time to market, strategy, etc. The entrepreneurs’ ability to access financing for their business is a function of finance regulations and market risk acceptance. In a non-crony capitalist market, this would be a pure function of the marketplace, would it not?
Yes, no formal research has captured this yet, except when it is done off-the-record to document the pain and travails of a successful entrepreneur’s journey. In general, for the sake of propriety and the need to survive the pressures of the ecosystem, none of the stakeholders would talk ill of any troubles or the trouble mongers.
Nurturing entrepreneurship has to be a basic necessity of economic development globally. The predominant metaphor for fostering entrepreneurship as an economic development strategy is the “entrepreneurship ecosystem.” Politics surely, can enormously impact business. However, one should not confuse ‘governance’ with ‘bureaucracy’. Governance is essential for a stable society.
The motivation for supporting an entrepreneurial ecosystem depends on the stakeholders. For the governments, job creation and tax revenues could be objectives. For academic institutions, knowledge generation, and possibly endowments from donations may be the benefits. For entrepreneurs and investors, wealth creation may be the benefit. For business enterprises, innovation, talent retention, reputation may be the benefits. But all the stakeholders must benefit in order for an entrepreneurship ecosystem to be self-sustaining and successful.
Public governance
Regardless of their role based responsibility, does bureaucracy have any skin in the game in entrepreneurship? Their discretionary authority comes handy, but at whose cost? Generally, bureaucracy is structured in a way that they don’t face the public wrath if they are not supportive, but politicians do pay the price during subsequent elections. Can the system of electoral politics add something to the process of policy formulation where they leverage the knowledge of people who understand the issues and have their skin in the game?
The downside of a heavy handed bureaucracy in killing Entrepreneurship is greater. New- age theories suggest that public management can innovate in a way that administrators can act as catalysts to entrepreneurs. Theoretically it is possible, as it is about cultural change and mindset shift – both of which are the hardest to change in any organisation.
However, for the officialdom to claim credit for successful entrepreneurship is like a mother claiming credit for an infant’s ability to consume food. It only hurts the entrepreneurs who simmer in silence, wallow in inner circles of their friends, and bear the nonsense with grit. After all, a mother has to play her role. No mother claims credit for feeding her child!
Dr. Srinath Sridharan - Corporate Advisor, Author, Policy Researcher
Twitter : @ssmumbai