Entrepreneurs Pedal The Virtuous Cycle Of Growth
India’s priorities are to be questioned. We are disproportionally spending more resources in supporting the job seeker, and not the job creator. Policymakers need to recognise that entrepreneurship is the driving force of the economy and focal to employment creation. It is the catalyst of innovation and sustainable growth. Entrepreneurs create and fulfil unsatisfied demand, propelling consumption, investment and growth.
The ability of the government to create jobs is limited; the big industries haven’t, and can’t solve India’s job problems either. A crore invested by the large companies creates no more than ten jobs. This number is 250 for the MSE sector, with a higher multiplier. India’s primary employer and the feeding bowl (agriculture) is no longer able to add to its ‘underemployed, disguised’ and ‘value reducing’ labour force. The services sector, which grew phenomenally, capitalising on ‘educated and cheap’ labour, is now staring at stagnation and diminishing returns, unable to absorb additional labour. The manufacturing sector is the new hope. But has a mountain to climb.
Entrepreneurship requires intensity and quality. Such has been the apathy of policymakers that ‘entrepreneurship’ is the last recourse for many. The dice is loaded against them. They start with almost no capital, in a very ‘hostile’ environment and with headwinds. There is acute shortage of skills, and expertise. Infrastructure has for decades been the big elephant in the room.
The reluctant entrepreneur starts micro and remains small. Over 70 per cent of them fail to survive year one, only a quarter live to fight in year three. Most don’t make it, those who are still running, go off the track and make easy meat. This is a setback. The economic cost is eternal as lenders, collaborators and enablers suffer. The social cost to the economy is intangible and difficult to measure. The price another generation lost.
However, the minuscule who survive do scale up and thrive. Many more can bloom, under a nourishing ecosystem. The government needs to institute policy measures to nurture entrepreneurship and create an entrepreneur-enabling ecosystem. Most government programmes are poorly planned and badly implemented. The detached approach hasn’t helped either. Sample this:
l Start-up and Stand-Up India: aimed at providing a 360-degree approach to enable startups is floundering.
l Make in India: a roadmap to a manufacturing hub is stumbling, without the critical backward and forward linkages.
l Atal Innovation Mission: lacks the holistic ecosystem.
l TREAD: a ‘financial assistance for procurement’, and ‘purchase preference’ programme lacks the teeth to augment their effort.
l STEP & PMKVY: badly planned, and much worse, implemented.
All the above have just remained initiatives. There are institutions to monitor, but none to ensure implementation. Fasal Bima must inspire the government to provide a ‘safety net’. Insurance goes against the very grain of entrepreneurship; but we are far away from an enabling ecosystem.
It is impossible to dampen the Indian entrepreneurial spirit. These driven, creative individuals compete against the best in the global market. They battle adversity every day, all the way; and win. The 1991 reforms had freed markets for products. Now is the time to unshackle the business. Revamping and developing robust, pragmatic and sustainable policies will strengthen and accelerate the entrepreneurial ecology.
The government must be a facilitator and a catalyst alike, ensuring that the entrepreneurial journey is fostered, nourished and sculpted for the long haul.
