Analysis of Entrepreneurship in an International Context: India

This report provides an in-depth analysis of entrepreneurship within the context of India, focusing on the factors that contribute to a conducive environment for small and medium enterprises (SMEs). It begins by examining the evolution of the Indian economy and the government's role in fostering entrepreneurial development through policies and infrastructure. The report identifies key issues impacting SME growth, including fragmented policies, funding challenges, inadequate infrastructure, and weaknesses in intellectual property rights. It then explores the critical role of SMEs in national development, highlighting their contributions to GDP, employment, exports, and poverty reduction. The report also discusses government initiatives aimed at supporting SMEs. The conclusion summarizes the key findings and implications for promoting entrepreneurship in India.

Entrepreneurship in an
International Context

Table of Contents
Introduction................................................................................................................................2
Country chosen and conducive environment for entrepreneurship............................................2
Critical issues for developing SMEs within a country- national barriers..................................3
Role of SMEs in national development.....................................................................................5
Conclusion and implication........................................................................................................5
References..................................................................................................................................6

Introduction
A conducive ecosystem is foremost essential through a robust regulatory regime within any
country in order to nurture the development of technology, innovation and growth of start-ups
and small and medium enterprises to usher in entrepreneurial development (Gupta et al.,
2014). Within any economy the role of government is essential for bringing stability and
enhancement in policies for making macro environment conducive to develop
entrepreneurship. In this report, the conducive factors and critical problems faced while
developing SMEs within the country has been given. The country which has been chosen
within this assignment is India.
Country chosen and conducive environment for
entrepreneurship
From the colonial times to modern Indian economy, India has opened its economy from
being closed; and right now, the youth who are more in India, wants employment. There is
increasing limitation on number of jobs for the youth, and there are no employment guarantee
programs provided by the government (Suresh and Ramraj, 2012). Hence, it falls on the
private organisations, through innovation to generate more jobs and employment. The
programs offered by the government is conducive for the people who are involved in labour
intensive organisations, which donot have any linkage with innovation. However, the main
target of the government is to reduce poverty and harness the innovation and technology
within India, through proper and rapid social and economic transformation, ability to develop
more job environment and creating policies conducive for a robust regulatory environment
(Suresh and Ramraj, 2012). The innovative and conducive environment should be able to
develop better entrepreneurship and growth and job opportunities, for the youth of the
country.
The innovative system of India, is complex and vast, and has various knowledge producers,
like technology and science institutions, innovating individuals, academia, and involving
knowledge users, and he government from independence has given more efforts in investing
in these subjects (Gupta et al., 2014). The government has also prioritised science,
technology, research development, and on IT infrastructure; and various councils and
research units under various ministries have been formed, that is to cater around arioso
institutions, and areas across the country. These research councils include council of

scientific and industrial research, Indian council of agricultural research, Indian council of
medical research, defence research and development council and other organisations (Desai,
2009). There are also other publicly funded organisations which are also involved in
innovation, research and technology, related to various industries like oil, gas, steel, coal,
railway, communications, irrigation and other activities. There are also more than 1200
different state funded and private research organisations. The innovative ecosystem of India s
currently facing different issues. In spite of these problems, the knowledge economy and
commercial economy of the country needs to be developed further (Desai, 2009). Of late, the
Indian government has started making its macro environmental conditions like political,
economic, social , technological and legal parameters more friendly towards developing
entrepreneurship and birth of stary up industries. The government has started understanding
the need for such SMEs for the growth of the national economy, boosting economic
development and developing infrastructure and job creation (Javalgi and Todd, 2011). As a
result, there have been policy upgradation, economic restructuring, for improving the
conditions for the SMEs to grow.
Critical issues for developing SMEs within a country-
national barriers
Various reform have been made by the government of India, to modernise the labour market
in order to make entrepreneurial environment more conducive. This is being done in order to
create a sustainable business environment, providing basic rights to labours along with wage
and social security reforms for those being employed in the SMEs (Lucky, 2011). The
development for entrepreneurship brings into its ambit reforms within infostructure
development, employment policies, financial institutional credit policies, which can bring in
better accountability and inclusive growth for the economy. Job creation is vital as India adds
more than 10 million youth every year into the workforce, which necessitates reforms and
changes in the environment for bringing better stability for the growth of entrepreneurship.
There have been various flagship initiatives developed like digital India, make in India, skill
India, smart cities projects and others; which encourages attraction of global investment and
birth of entrepreneurial activities further (Javalgi and Todd, 2011). Make in India is the main
initiative for the development of entrepreneurship, through massive skilling of people and
youth, by matching their different skill sets, through skill India programs. The government

has started these missions and programs in order to make India have high employment
options for the large number of unemployed youth of the country.
However, there are various barriers to the development of entrepreneurial environment which
needs to be elucidated.
 Fragmented policy environment- there have been no such comprehensive innovation
policy and although there are fragmented policies existing, there are no means of
unification of these fragmented policies, resulting in issues of understanding and
failure to implement correctly such policies (Bala Subrahmanya, 2017).
 Inadequate funding of R&D- from 0.88% of GDP the country needs to increase their
budget allocation, and this 63% of the government expenses on research and
development needs to be enhance through more investment, grants and through
foreign direct investment into the various sectors of the country.
 Funding processes are lengthy and difficult- although funding s available from
financial institutions, the process is lengthy and complicated, and not conducive to
innovation or entrepreneurial development. As returns are uncertain, therefore
motivation behind funding decreases (Lucky, 2011).
 Seed funding, angel and venture capitalists- the magnitude of angel deals are lower as
per the number of business required for entrepreneurship to grow in India
successfully, and hence, the regulations often make the investment more cumbersome
and complicated.
 Stakeholders have weak linkages- the linkage between research development and
SMEs industry is weaker; and technology penetration to these small enterprises is
very slow, and due to less funding or mentorship, this weak link reduces the market
development of the SME, limiting capacity for technology penetration (Gupta et al.,
2014).
 Education is non conducive- the education system is focused more on achieving better
grades, and not towards innovation or practical knowledge. Due to lacking
infrastructure, low funding, and good facilities, education system is further degraded,
which reduces the innovation from developing within the country. Some technology
institutions are provided grants and perform research, but this is not the case for all
(Bala Subrahmanya, 2017).
 Villages have poor infrastructural facilities- most of the Indian population lives in
villages. There is less internet, proper connectivity, and less availability of skilled

workforce, improper education system within villages, and rural regions. Hence, this
workforce is mostly converted into manual or agricultural labourers who can yet
contribute to innovation if properly trained and skilled. This reduces potentiality of
the country to develop better SME employee pool.
 Inadequate legal bindings for intellectual property rights- the IP regime in India is
weaker, and innovators risk their innovation being taken away, if proper IP protection
procedure is not followed (Desai, 2009). Moreover patent creation and development is
too lengthy and costly, and having low literacy, the lack of expert help reduces the
effect of IP protection.
 Most entrepreneurs are risk aversive- for starting business no risk is entertained, and
tried tested technology is only used. Instead of following innovative ideas, most are
hesitant and due to low availability of funds, this leads to maximum risk, and lower
returns. These altogether increases the risk for the entrepreneurs.
Role of SMEs in national development
SMEs in India contribute to 8% of the total GDP, and by 2020 this figure is predicted to
reach 20%. Hence SMEs are not only drivers of entrepreneurial development, but increases
employment, enhances the financial development, skills development, infrastructure
development, and others (Pandey, 2018). The 40% of total exports is ushered through SMEs,
and manufacturing output of 45% is through this sector. Moreover, SMEs have been one of
the major contributors behind reducing poverty, reducing unemployment, and income
inequalities. Moreover, the MSME act of 2006, provides various benefits for those SMEs
which registers itself to the act guidelines. Benefits like sanction of bank loans, lower rates of
interest, exemptions from excise duties, SEZ special provisions, direct tax laws exemptions,
subsidies in power tariff, tax subsidies, and capital investment subsidies are also provided.
This is done in order to encourage SME creation within the Indian economic landscape, and
developing the existing and new SMEs with innovation, technological integration, and
improving the rate in which SMEs improve the Indian economy further (Pandey, 2018).
Generation of employment, reduction of poverty, reducing income gap of rural- urban
population, reducing migration, encouragingly local area development, boosting exports,
improving production, reducing pollution, increasing laws for IP, improving purchasing
power of the people, and the quality of lives. These benefits are truly important for the
developing country like India.

Conclusion and implication
The report provides an overview of how enterprises in India have shaped the national
economic environment,. And the factors which are barriers to make the situation in-
conducive for the SME growth to exist in India. The Indian context has been taken
considering the developing state, and the recent encouragement made by government actions
on improving entrepreneurial drive within the country.
References
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Gupta, V.K., Guo, C., Canever, M., Yim, H.R., Sraw, G.K. and Liu, M., 2014. Institutional
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