Entrepreneurship in India


The new dean of the Harvard Business School, Indian-born Nitin Nohria, recently made this statement about Indian Engineers:

Indian companies have always had very strong engineering base, but no major global product yet identified as being developed in India.

This is actually quite astonishing when you consider that India has some of the best technical universities in the world. These IIT’s are so renown that most Indian students hope to get into an IIT over MIT.

In the past, many of these IIT graduates sought greener pastures in the United States and Western Europe. That’s where the jobs were. So the U.S.A. economy and workforce benefited greatly from these educated expats.

But recently, as the economic picture in India has been growing rapidly, many of these engineers have stayed in India to work for or start major companies. The fact that these companies, as Nitin Nohria notes, have not created a major global product may say more about the culture than the skills of the workforce.

In my own experience as a web developer, there have been times where I have relied on Indian contractors for aspects of my work. Now, I am relying on a very small base of workers here, and this could be true for particular workers in any country, but when I asked these Indian contractors to do very specific coding tasks, they excelled. When I asked them to be creative (ie. develop a logo based upon a few ideas), I could never use what they provided because it was that bad. I learned quickly that India is not the place to go for creativity.

Three years ago, I accompanied Jim Beach of The Entrepreneur School and a number of fellow students to India for a two-week trip to study entrepreneurship levels in India. The further goal was to determine if the Indian Government was helping or hurting entrepreneurship. Our conclusion was that the Government was taking some steps in the right direction, but that as a whole, the extensive bureaucratic process was taking its toll on entrepreneurial levels. We were continually told by businessmen and educators that the best thing the Indian Government could do would be to get out of the way.

In our meetings with students, educators, and businessmen, we saw a spark in the Indian people and a big desire to succeed. So, is the bureaucratic process stopping the next big thing coming from India, or is it something within the culture? Indian levels of entrepreneurial activity have been steadily decreasing over the past few years. So if it is a cultural barrier, how do you get beyond the wall?

Perhaps India is already breaking down barriers in another industry. The movie industry. Bollywood. Perhaps innovation in the entertainment industry will spark a cultural shift that will permeate other businesses and industries.

The skilled labor force is there. Venture Capital firms are present in India. The desire to succeed is strong. The missing component here is innovation and thinking outside the box.

What are your thoughts on why we have not seen a major global product developed in India? Use the comment box below to share your thoughts.

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Author: Erik Rostad
Erik Rostad is the owner of EPR Creations, a website development company based out of Atlanta, GA. Erik's background is in International Business and he has traveled the world for music, business and for fun.

4 Responses to 'Entrepreneurship in India'

August 24, 2010, 2:36 pm

You have done a pretty good analysis of the entrepreneurial ecosystem in India and the one big reason why we haven’t seen a major global product coming out of India is the cultural barrier which somehow doesn’t breed innovation. Being from the one of the hyped Indian Institutes of Technologies, I have observed that despite having the talent and adequate opportunities not much innovation comes out of even these institutes because traditionally we Indians have been risk averse. However, I believe (and definitely could sense) that next generation of ground breaking innovation will come from India especially to ameliorate the conditions of its 40% of the population which still lives below poverty line. Thus, I also don’t agree with you that “Indian levels of entrepreneurial activity have been steadily decreasing over the past few years” as I believe that people in India are coming up with some unique concepts and building some great companies to resolve some of the complex issues of our times.

August 24, 2010, 2:42 pm

Thanks Ankit. The comment regarding declining entrepreneurship rates in India actually comes from the Total Entrepreneurship Monitor report which measures entrepreneurial activity as a percent of GDP. The numbers have been declining over the last decade:

2003 – 17.9%
2006 – 10.4%
2007 – 8.5%
2008 – 6.9%

However, I do agree with you that the seeds for innovation are being sown in the new generation.

Bill Winans
August 30, 2010, 2:27 pm

I just spent the last few months living in India and working for an Indian IT firm. This article is definitely on track in saying that there is a lack of innovative thinking in Indian businesses. Much of this comes from the cultural restraints put on people through the entirety of the Indian education system. People are taught at a very young age to respect and honor the very high power distance that is ever-present in almost every institution in India. As a result of this power distance, people are discouraged from questioning authorities and thus never develop creative problem solving skills both in school and in the workplace. As with anything, there is a positive and negative side to how these traits have manifested themselves in the business world. On the plus side, there is a large talent pool in India that is highly educated and process oriented. For this reason, the population is primed to work in areas of engineering and information technology, utilizing delivery models that focus on large teams of people. In areas of entrepreneurship and business leadership, there is still a ways to go before the general population can learn to excel in these areas.

July 19, 2011, 6:00 am

It was a awe-inspiring post and it has a significant meaning and thanks for sharing the information.Would love to read your next post too……



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