'...then preparing oneself for the long haul is also essential.'
'Identifying and holding onto values gives you strength to withstand the difficulties enroute.'
'Taking care of your physical, mental, and intellectual well-being gives you the strength to stay the path.'
As per the reports, out of the 594 million entrepreneurs in the world, India's contribution is 104 million, with China and the United States having 64 million and 54 million entrepreneurs respectively.
Reports also say that entrepreneurs, mainly in the MSME sector contribute 30% of India's GDP while it is 43.5% to 50% in the US and 80% in China.
Dr Raj Krishnan Shankar is professor of entrepreneurship and strategy at the Great Lakes Institute of Management. Before joining Great Lakes, he was an associate professor of entrepreneurship at Nord University, Norway.
Dr Shankar who was on the panel of experts on national entrepreneurship set up by the ministry of external affairs, recently, published a study on Building Entrepreneurial Legacies: Understanding The Role Of Family Owned Businesses.
"As an individual trying to do entrepreneurship, you need to see whether there is a fit between you as an individual and the opportunity you are trying to go behind," the professor tells Rediff's Shobha Warrier.
The first of a two-part interview:
How do you describe the entrepreneurial scene in India? In the global ranking, India is at the 19th position while the US, China, UAE and Germany hold the top spots...
Entrepreneurship is perceived as a buzzword today. There is a little bit of fad and fashion associated with it.
Because of this, a lot of people want to try their hand in entrepreneurship but without proper self-assessment of whether they are fit for entrepreneurship at all.
The perception today is, anybody can be an entrepreneur.
Because they are not fit for entrepreneurship, there are a lot of failures.
Still they tend to stay in the business for a long time.
This is not good for entrepreneurship.
Today, if you are not a deepfake start-up, if you are not a start-up that can scale up fast, if you are not a start-up that can have high valuation quickly, then, people don't give attention to those start-ups.
The problem is, everybody wants to be the next Flipkart, or Ola or another EV start up where the valuation is soaring fast.
For an economy, you need more broad-based entrepreneurial action. We need entrepreneurship of all sizes and scale.
You said those who are not fit for entrepreneurship become entrepreneurs. It is said that 9 out of 10 start-ups fail not just in India but globally.
Is it because they are not fit for entrepreneurship?
Start-ups fail for a variety of reasons. One of the most important reasons is, person-opportunity-fit.
While there are a lot of opportunities in India, every opportunity is not your opportunity.
As an individual trying to do entrepreneurship, you need to see whether there is a fit between you as an individual and the opportunity you are trying to go behind.
For example, if a person doesn't have risk-taking ability, I would not prefer him to start a high-growth start-up. Rather, he should go for a small business that fits his personality.
What happens in most cases is, when the person and the opportunity don't fit properly, they make poor decisions.
In many times, they don't exit the business also at the right time. They hang around keeping it alive.
Is it because of the passion they have for the idea, or hope?
It is more hope than passion. Then, there is this fear of failure.
Even today, even though a lot has changed in this country, fear of failure haunts people.
In India, exit is seen as an end, and that is the problem. That is why they do not want to stop the business and exit. They somehow want to keep it alive. It is like they want a successful exit, or no exit at all.
They should realise that exit is not an end; it is an opportunity to reallocate your resources and energy to a better opportunity.
This is also because exiting a business is still not acceptable by society at large as society looks at exit as failure.
Only within the entrepreneurial ecosystem, people understand what exit is but that is a small part of society.
This is where the real challenge lies.
Then, we need to encourage entrepreneurs to do more experimentation. Experimentation is when we do things without knowing the outcome. But we make students do experiments knowing very well what the result is going to be.
We need a change in the mindset.
We need to encourage students to do more experimentation. Let us acknowledge that a field experiment is very valuable for society.
There was a time entrepreneurs used to say their family never approved of them becoming entrepreneurs but today, many entrepreneurs say this has changed to a great deal.
How much do you say society as a whole has to change so that entrepreneurs are willing to experiment?
Now that we have a lot more incubation centres and tinkering labs, we can make it more organised and institutionalised so that we allow people to have the joy of experimentation.
But even though a lot more physical facilities are available, it is time to strengthen the facilitation and teaching community so that they should encourage tinkering.
We should also show entrepreneurship as a career option especially to undergraduate college students. Let them use the experience and then go for higher education, if they want.
What about the entrepreneurial ecosystem? What is the difference between the US, China and India? The UAE which was not in the entrepreneurial scene at all is placed at the 3rd place after the US and China...
It is important for the ecosystem where various institutions work as partners. We have great institutions but all work individually, there is no inter-connectivity.
If you take Stanford or Singapore, the advantage they have is, you have an engineering institution side by side with a management institute and a design institute. And they do events together and create ventures together.
Because of the collaboration, there is vibrancy in the entrepreneurial scene.
Whereas in India, we have pockets of excellence. For example, there is IIT Madras which is very good at technology. You have an IIM Ahmedabad or Bangalore somewhere else. All these institutions are doing their own good things and there is no collaboration.
The number of times these schools collaborating with each other should be multiplied. This will create strength in the ecosystem.
It is like the web; the more interconnections you have, the stronger the web.
Similarly, what we need is more interconnection between our academic institutions, industrial body and the government.
Multiple institutions should come together, and there should be exchange of ideas, exchange of knowledge with cross functional teams between different disciplines. We need this kind of liberality.
If there is no interconnection, you cannot crack big ideas.
How important are entrepreneurs for the economic growth of a country?
Entrepreneurs are absolutely essential. No economy can grow without entrepreneurs.
The main reason why entrepreneurs should exist is because they create jobs.
You get the feeling that it is the large companies that are generating more jobs. No.
If you look at the number of jobs across economies, you will see that new jobs are coming from entrepreneurs and entrepreneurial action.
And especially in a country like India where we are talking about demographic dividend, and more and more people entering the employment scene, job creation is the biggest challenge now.
Entrepreneurs come up with new ideas and new spaces. When they create new ventures, they also create job opportunities for more people.
The only thing I am concerned about is the kind of jobs the new start-ups like Swiggy, Zomato, etc are generating. I am not saying they are not important; they are important.
But we need to employ the educated meaningfully, according to their education and qualification.
We need to ALSO create jobs that are of higher quality.
It is always said that more than unemployment, the bigger problem India suffers from is under-employment...
Yes, under-employment is a bigger problem.
Start-ups are essential but we need to push start-ups to be more innovative, more creative in their approaches so that they create jobs of every type. It can't be only of one type.
More than the number of jobs, we have to track the nature of jobs.
Another mistake we do is we compare entrepreneurship to just start-ups.
Large companies, family businesses and smaller businesses with good capital also should be encouraged to take up entrepreneurial projects.
For example, at Great Lakes, we started a family business programme as specialisation last year. The idea came when we saw a lot of students in the previous batches coming from family businesses who wanted to grow or diversify their family business.
I feel we should look at that as entrepreneurial action.
Also, the existing companies should start working with start-ups and in the process, they can give more ideas.
At the corporate level, we should look at corporate entrepreneurship as a potential form of creating new opportunities where the creating higher order jobs is possible.
All start-ups cannot create higher-quality jobs, but corporate start-ups have the resources and ability can.
For this, corporates and start-ups should start working together like corporate incubators or corporate accelerators. In fact, both will benefit from this collaboration.
IMAGE: Professor Raj Krishnan ShankarTips for entrepreneurs from Professor Raj Krishnan Shankar
1. Read widely. It helps increase opportunity citing and ideation.
2. Experiment deliberately. Ensure you design at least one experiment every week. Preferably set it up for failure.
3. Network wisely. We all have limits to how many meaningful relationships we can maintain. Choose carefully.
4. Find a Mentor respectfully. This is not a person who speaks to you by the hour. He cares, challenges and transforms you, but doesn't keep any expectations in return. You will reward him disproportionately.
5. Prioritise values and well-being. If entrepreneurship is a marathon, then preparing oneself for the long haul is also essential. Identifying and holding on to values gives you strength to withstand the difficulties enroute. Taking care of your physical, mental, and intellectual well-being gives you the strength to stay the path.
Feature Presentation: Aslam Hunani/Rediff