NEW DELHI – India known for its talent tank, most of them who work for big organizations like NASA, Microsoft and the tech bellwethers and manufacturing giants it has produced over the years. Though India has seen many entrepreneurial ventures, it is still the worst for entrepreneurship in Asia, according to a Gallup poll. The reasons behind this are pointed to be widespread corruption, government hurdles, lack of funding and poor technology and training, which results in low efficiency and high start-up costs in India. So what are the major factors that let down India in this poll? Let’s take a sneak peak
Willingness to take the risk of running a business is not a common trait among Indians
Qualities required in entrepreneurs such as business thinking, optimism and persistence are common among Indians. But the most important part which is the willingness to take the risk of running a business is rare.
The report said, “More than 60% of the Indian population possesses personality traits that are crucial for success as an entrepreneur – such as business thinking (69%), optimism (66%), and persistence (65%) – which suggests a wealth of entrepreneurial capacity. However, willingness to take the risk of running a business is not a common trait among a majority of Indians.”
Reliable support from honest and efficient government institutions is essential
According to the poll, around 46 percent of Indians say the government is the biggest hindrance in starting a business. More than seventy percent believed corruption is widespread in the government. More than sixty percent agreed that corruption is widespread in business. This view was particularly high among current business owners (72 percent) and those planning to start a business in the next 12 months (80 percent).
Entrepreneurs need more diversified, localized funding at the initial stage
The most helpful factor in becoming an entrepreneur in India is access to financial support. The study said, “The key problem for entrepreneurs seems to be less about the availability of funding and more about finding the right type of funding.
The majority of existing venture capital funds for start-ups are focused on export-oriented IT or mobile solutions.” There are only very few venture capital funds facilitating startups that offer the high-demand products and services in the healthcare or energy sectors in India’s massive domestic market.
Foreign investors need to understand India’s business culture
Another problem with funding is that the foreign investors pay no attention to India’s unique market demands, talent supply and business culture. They often make wrong assumptions based on what has worked well in their home countries.
Additionally, in Indian startups there is a lack of angel funding and investor participation in companies’ management. Venture capitalists in India prefer to only finance expansion of existing businesses, rather than funding a start-up from scratch.
Indian entrepreneurs need more access to training and mentorship
The report also said that only 22 percent of Indians who plan to start their business in the next 12 months have access to formal or informal training to start a business – which is much lower than the Asia average of 44 percent. Also there are not many entrepreneurs who offer their success stories for the young entrepreneurs to learn.
Finding trusted partners is another big problem
According to the survey, only 16 percent of Indians say that a non-relative can be a trusted business partner. Also there is a lack of judicial infrastructure to protect the trusting relationship between entrepreneurs and business partners or between