In the 1990s, India exerted greater effort to promote and nurture entrepreneurship and attempts at various levels were taken to directly or indirectly promote entrepreneurship. The attempts made can be categorized under three main categories – removal of state-imposed barriers for starting businesses; availability of finances; education and nurturing. First, entrepreneurship has been encouraged in India by systematic attempts at removal of state-imposed structural and regulatory roadblocks. The granting of licenses and policies on controls and taxation has been cited as one of the major hurdles in setting up and running new businesses. Government over the period has made lot of efforts by providing relaxation in taxes and educating people to make it easier for entrepreneurs to set up businesses. The growth of Bangalore and Hyderabad as hubs for IT companies is a direct outcome of government support in the form of tax holidays for start-ups and sector-region specific sops to start new ventures.
Secondly, the efforts to make finances easily available and at low rates to businesses is also another driving force for promoting entrepreneurship in country. In the current banking paradigm, it is easy for an established businessperson to get finances for starting new ventures or expansion. However, a new entrepreneur wishing to start a new business finds it very difficult to procure basic funds to set up and run a business. The Reserve Bank of India has urged banks to provide funds to small and new businesses. The government of India is also increasing its efforts in this direction. The Small Enterprise Development Bill of 2003 include guidelines for banks and other government agencies to ensure the easy disbursement of loans for new ventures. Subsequently, the lowering of borrowing rates from the banks has also motivated and supported entrepreneurs to run profitable businesses.
A third form of support is the development of entrepreneurial talent in educational institutions. India’s higher education system generates a large number of graduates every year. However, its economy is not in a position to absorb the graduates passing out, leading to an increase in the educated unemployed. In recent years, India has witnessed a swift growth in the population and because of the history of India and its multi-cultural composition, it seems impossible to have a Family Planning policy like that of China in the near future. It is likely that India’s population will continue to grow, which will consequently worsen the employment situation. The so-called entrepreneurs do business mainly for self-employment and are not the “real” entrepreneurs.
Impact of Recession on Entrepreneurship
The global recession has thrown several challenges to world economy. With the collapse of Lehman Brothers, an investment banker, there is jittery across the world to overcome the challenges of slowdown. Is it an opportunity or a threat for entrepreneurship? It all depends on the mindset of the people how they view the scenario. No doubt, there are challenges for changes in the recessionary economic trends and policies. Recession is an excellent opportunity for the laid off people who hitherto had been in their comfort zones. They need to reinvent themselves, explore and experiment entrepreneurship and evolve as entrepreneurs. Since laid off people took a spin in the orbit as employees their experience and expertise can be utilized up to the hilt for reinventing themselves as successful entrepreneurs.
Market for Entrepreneurship Education in India – Recent Trends
The Entrepreneurship Development Program (EDP) in India has a long history. It is designed to help an individual in strengthening his/her entrepreneurial motivation and in acquiring skills and capabilities necessary for playing entrepreneurial role effectively. In the early 1960s, an idea called “Industrial Campaign” took shape, enlarging itself through the years to become a countrywide movement presently known as the EDP. Entrepreneurship development and small-scale industries are inter-related. Most provinces have Small Industries Service Institutes that provide EDPs their trainees are provided with financial support to start their businesses. They also receive exemptions from taxes and are protected from undue competition from big businesses. A variety of trade associations, in addition to the National Small Industries Corporation and Small Scale Development Organization, promote and lobby for small business interests.
Over 100 different departments of various universities and institutions offer specialized courses in entrepreneurship. For instance, Narsee Monjee Institute of Management Studies (NMIMS) conducts a two-year fulltime program on family business management. Most of the courses cover the legal and managerial aspects of entrepreneurship but the motivational aspect taught at NMIMS is equally important since it creates an aspiration and improves confidence levels
Current Market Size and Forecast
In 2010, there were more than 44,000 students receiving Entrepreneurship education in India, growing at astonishing 71% from around 26,000 in 2008. This growth was primarily driven by the recent surge in demand for entrepreneurship programs. Financial crisis and global economic slowdown has resulted in millions of job losses. This has prompted students and young entrepreneurs in opting courses that would help them develop entrepreneurial skill sets. Over the next couple of years, this growth is expected to continue. In 2012, total number of students enrolling for Entrepreneurship education in India is expected to reach almost 55,000. .
- Liberalization and opening up of Indian economy in 1990s pushed entrepreneurship in the country with removal of barriers to start business, easy availability of finance and setting up of institutions for the development of entrepreneurial talent.
- Entrepreneurship education is still at nascent stage in India, with only 44,500 students enrolled for entrepreneurship programs, and this number is expected to grow at a CAGR of 20.4% to reach 54,700 by 2012.
- Revenues from Entrepreneurship education programs reached INR7.9 billion in 2010 and are estimated to grow at a CAGR of 13.7% to INR10.7 billion by 2012.
- In 2010, there were some 1,500 students getting Entrepreneurship education from the institutions that are solely into Entrepreneurship education, while 4,700 students had enrolled to entrepreneurship programs at various business schools and institutions across India.
- Aspiration to do big and independently achieve success has emerged as the top reason driving the growth of entrepreneurship programs, followed by inspiration from Indian and foreign innovators, liberalization and favorable business environment and unemployment.
- Unawareness about the advantages of Entrepreneurship education, shortage of quality educators and absence of quality content has been some of the hindrances for future growth of the market.