National Knowledge Commission

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Entrepreneurship National Knowledge
Commission19th January, 2009New Delhi
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Defining Entrepreneurship

• Key components
• Professional application of knowledge, skills and
  competencies and/or of monetizing a new idea
• By an individual or a set of people
• By launching an enterprise de novo or
  diversifying from an existing one (distinct from
  self-employment as in a profession/trade)
• To pursue growth while generating wealth,
  employment and social good

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Why Entrepreneurship

• Growing significance and visible impact in India
• Wealth Creation
• Employment Generation
• Critical to growth and development
• NKC study undertaken to explore facilitating
  triggers

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Methodology

• One-on-one interviews
• 155 entrepreneurs
• 45 other stakeholders Finance (including VCs
  and Angels), Education, Incubation, Chambers,
  Associations etc
• From Pune, Kolkata, Ahmedabad, Chennai,
  Hyderabad, Bangalore, others (NCR, Mumbai)
• Review of policy literature
• Personal narratives from entrepreneurial icons

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Key Finding

• Prominent Entrepreneurial Triggers
• Individual motivations
• Socio-cultural factors
• Access to Early Stage Finance
• Education and Skills
• Business Environment

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Findings Motivation

• Key Motivations - Independence, market
  opportunity, family background, new idea,
  challenge, dream desire
• 99 of entrepreneurs did not want to be in a
  routine job

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Findings Socio-cultural Factors

• Crucial indicator 74 of entrepreneurs received
  family support
• Variations in family support according to Region
  Ahmedabad most supportive
• Gender as a factor Two-thirds of female
  entrepreneurs said gender did not make any
  difference

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Findings Finance

• Majority self-financed 63
• Access to bank finance Very difficult at
  start-up stage, comparatively easier at growth
  stage

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Findings - Skills

• One in three entrepreneurs find it difficult or
  very difficult to find employees with the right
  skills

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Findings Business Environment

• Problems faced by entrepreneurs

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Finding Best Practices in India
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Supportive Business Environment

• Make it easier to conduct business by
  consolidating and simplifying processes,
  improving delivery time and curbing corrupt
  practices
• Make Single Window Clearance meaningful
• Introduce a Single Composite Application Form for
  all clearances
• Introduce a Single Unique Company Number for
  company, tax and social security registrations

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New Institutional Mechanisms

• Set up commercial courts to deal with commercial
  disputes and to speed up contract enforcement
• Introduce Limited Liability Partnerships (LLPs)
• Establish a Global Technology Acquisition Fund
  for Intellectual Property (IP)

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Facilitate Information Flows

• One stop shops, web based portals and
  information handbooks
• Publicize risk management tools
• Increase awareness of the Credit Guarantee
  Scheme and Central Plan Scheme Monitoring System

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Access to Finance

• Incentives for Seed Capital Funding
• Establish a secondary market for smaller
  companies, which provides exit options to the
  seed stage investor and value addition for the
  entrepreneur
• Create new instruments and institutions for
  start-up funding, involving multiple stakeholders
  (public and private)

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Business Incubation

• Develop and put in place a comprehensive policy
  to increase quantity, enhance quality and
  increase access to financing

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Building Synergies
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Education

• Enact Uniform legislation for publicly funded
  research
• Grant IP rights to universities/research centers
• Entitle inventor to a share of the royalties from
  commercialization
• Enable PhDs/researchers to set up commercial
  entities
• Encourage universities/research organizations to
  establish commercial enterprises based on new
  inventions

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Vocational Education and Training

• Modernize Vocational Education and Training/Skill
  Development by formalizing
• Performance based training and assessment
• Innovative delivery models
• Incentives to states
• Skills in spoken and written English as a
  priority
• A transparent industry based certification system
• A transparent rating system for VET institutions

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Entrepreneurship Ecosystem
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Thank You