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Source: E-mail:dt.15.6.2011

 

Entrepreneurship Education in India: Challenges Ahead

 

Dr. P. Ishwara

Reader,

Department of Commerce,

Mangalore University,

Mangalagangotri,

Konaje, Karnataka

 

“Entrepreneurship would not simply be an inherent trait but essentially a skill that can be acquired and developed”

 

The relationship between education and entrepreneurship is apparently more complex than it appears. The high public profile of certain very successful entrepreneurs who did not go to university has given rise to the image that going to university does not make people more entrepreneurial. In fact, one does not need to be a PhD to be a successful entrepreneur but the analyses made in different environments shows that once other socioeconomic variables (such as gender, age, race, previous level of income or business sector) have been taken into account and isolated, the higher the level of education, the higher the predisposition of the person to set up their own business. We might think that if higher education, which is costly in terms of time and money, did not translate into obvious advantages when setting up a new business, it would be difficult to understand how the current boom in specific courses on offer at numerous universities can survive. Sometimes, we might even think that in our society as a whole there are more training opportunities than the number of entrepreneurs. It is not easy to assess the results and significance of role of higher education in developing entrepreneur. All over the world, the range of training programmes that aim to foster the entrepreneurial spirit has grown spectacularly, both in terms of numbers and of heterogeneity. This expansion has been stimulated by the conviction of the role of entrepreneurs as a driving force of economic progress and by a perception that a university education in business science alone does not favour the development of entrepreneurial attitudes in students. In fact, does increasing the group of students who have theoretical knowledge lead to a greater number of entrepreneurs? Much empirical research shows how the spectacular growth in courses run by universities has not been accompanied by a boom in entrepreneurial activity.

 

In many of these cases, the new business is not born in a university incubator or is the result of ideas that came out of a laboratory. Neither is it the extensive range of training courses that has fostered entrepreneurship but essentially the inability of the company where they work to remunerate their innovative ideas adequately. However, entrepreneurship depends unfailingly on a context, on a predisposition and on skills. The study of the education basis of successful new entrepreneurs shows a wise combination between the general mastery of business skills and the specific knowledge of those aspects that favour the feasibility of their business ideas. Certainly, in our societies, the level of technological complexity is growing and new advances increasingly call for a broader knowledge base and training. It is essential, therefore, that the university system is able to respond to this challenge by developing well-designed educational programmes for entrepreneurs.

 

In the 1990s, India exerted greater effort to promote and nurture entrepreneurship. Attempts at various levels have taken place to directly or indirectly promote entrepreneurship. The attempts fall under three main categories: removal of state-imposed barriers for starting businesses; availability of finances; education and nurturing.

 

Current Status of Entrepreneur and Entrepreneurship Education in India

 

In India, most entrepreneurs were single owners, nil employees, and one-person shows with little growth prospects. The so-called entrepreneurs do business mainly for self-employment and are not the “real” entrepreneurs. In order to catch up with the pace of developed countries, India needs many entrepreneurs willing to make their businesses bigger. If the university students with high entrepreneurial potentials get proper training, they will have the best prospects for becoming “real” entrepreneurs. Entrepreneurship is a matter that involves everyone—the government, society, and the educational institutions.

 

Courses in entrepreneurship are the core activity of EE in India. Over 100 different departments of universities offer courses in entrepreneurship. For instance, 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. This program has equipped students with the skills, knowledge, and mind-set to run their family business. ISB in Hyderabad affiliated to non-profit organization Wadhwani Foundation (committed to promoting entrepreneurship), offers entrepreneurial and incubation assistance. ISB has knowledgeable instructors equipped with business experience. In India, many entrepreneurship centers have been founded to coordinate the broad array of activities, programs, and resources within the educational institutions. For example, the NS Raghavan Center for Entrepreneurial Learning in IIM Bangalore (NSRCEL—IIMB) carries out international collaboration projects. The Global Entrepreneurship Monitor (GEM) Project with the London Business School, the Ewing Marion Kaufmann Foundation, and Babson College has been a major project for the last three years. In the case of IIM Calcutta, activities on innovation and entrepreneurship are more practical and driven by students, along with the faculty advisors. These partnerships and centers are also happening in the technical schools as much as in the business schools. The notable names include the Technology Business Incubation Unit Delhi, the SIDBI Innovation and Incubation Centre in IIT Kanpur, and the Society for Innovation and Development (SID) at the India Institute of Science Bangalore, one of the oldest centers in India. In fact SID-IISc’s notable achievement is a project called SuTRA--Sustainable Transformation of Rural Areas--which uses non-edible oils from indigenous neem trees as a substitute for fuel generation. Many ideas are focused on solving the problems of rural poverty, since “innovation is getting compassionate, too.” 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 his/her entrepreneurial role effectively. In the early 1960s, an idea called the 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. The trainees are provided with financial support to start their businesses. They also receive exemptions from taxes and are protected from undue competition from big business. 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.

 

Incomplete Entrepreneurship Education

 

A survey done by the Entrepreneurship Development Institute, India (EDII) in 2003 shows that young people are afraid to start their own business because they are not confident, not capable, and lack knowledge in starting a business. Many people have the opportunity to change jobs or become an entrepreneur if they are properly trained. The students in India are not satisfied with the “hands-on” support of their university in the founding process. The EE in the higher education system should, therefore, satisfy the need for entrepreneurship by: selecting + motivating + training + supporting. Unfortunately, the present EE in India just concentrates on related courses. Moreover, the so-called entrepreneurship courses are similar to the general business courses. But general business management education has no significant influence on entrepreneurial propensity (Hostager and Decker 1999). The findings of a survey on business owners in India suggest that management education is not an important driver of entrepreneurial attitudes (Gupta 1992). There is a demand for education programs specifically designed to expand students’ knowledge and experience in entrepreneurship. The contents and teaching methods have to be differentiated between entrepreneurship and traditional business courses. Besides offering the courses in entrepreneurship, some educational institutions also organize entrepreneurship related activities. But these activities are not much different from each other and are not supportive of their educational programs. For example, almost every IIM has its own incubator, but those incubators are mainly designed for outside entrepreneurs.

 

Difficulties towards Start-ups

 

Starting a business in India is costly in terms of the time required and the cost involved. While it takes just five days to start a business in the United States and just two days in Australia, in India it takes as long as 89 days. What really hurts is that even in neighbors Pakistan, Nepal, and Bangladesh, it takes just 24, 21, and 35 days respectively to do so. The reason for such delay is bureaucratic—too many rules and regulations, and too much paperwork (Ashish Gupta, 2004). On average, it would cost an entrepreneur nearly half of his/her total income (49.5% of the gross national income per capita) to set up a business, which is 100 times more than what is needed to set up a business in the United States. Again poorer countries Bhutan, Pakistan, and Sri Lanka are better off. Doing business in India is an extremely difficult proposition (Ashish Gupta, 2004). The absence of an appropriate entrepreneurial climate, the lack of required infrastructure facilities, and the lack of access to relevant technology hinder rapid industrial development. Most of the time, the Indian entrepreneurs have to tackle electricity, transportation, water, and licensing problems.

 

Challenges for EE in India

 

Cultural barriers Entrepreneurship can develop only in a society in which cultural norms permit variability in the choice of paths of life. Unfortunately, the Indian culture consists of a network of benefits that in many ways run counter to entrepreneurship (Leo Paul Dana, 2000). For example, Indians believe that being passive and content with the status quo is healthier for the inner soul than striving to improve one’s situation. They believe that peace of mind can be achieved from spiritual calm rather than from materialism. People in India are more sensitive to emotional affinity in the workplace than to work and productivity. Moreover, the caste system has impeded class mobility for centuries. The caste system and its series of obligations reinforce the practice of following a family occupation rather than launching a new venture. An entrepreneur needs to work around the clock and this has kept some people away from their own start-ups. After all, compared with other countries, family life in India is more important. People, even today, think that taking up a job is much better than taking a risk and starting a venture. If a job is taken up after college, the person will soon have a comfortable existence. The other scenario could be starting a venture after working for four to five years. This requires a lot of commitment and courage to leave the present job. As time passes by, the risk-taking capacity goes down.

 

Conclusions

 

Since not everyone has the potential to become an entrepreneur, the proper identification and selection of potential entrepreneurs is the first step in the EDP. Those with high entrepreneurial potentials are selected through particularly designed procedures. Tests, group discussions, and interviews may be used in the selection of entrepreneurs. Empirical findings indicate that the conviction to start up a new venture is to some extent a question of personality structure and attitude towards entrepreneurship. For selected candidates, development of achievement motives is essential in the EDP. A motivation development program may create self-awareness and self-confidence among the participants and enable them to think positively and realistically. Without achievement motivation training, entrepreneurship education becomes an ordinary executive development education. Carefully designed programs will be offered based on the situation of the trainees. After the proper training of the selected candidates, essential mechanisms such as financial assistance will be offered to help them succeed. Likewise, the EE teaching staff should also be selected carefully. In theory, a lecturer of entrepreneurship education, first of all, must be a successful or experienced entrepreneur. A qualified EE teacher should also have some entrepreneurial practices especially in risk taking and opportunity perceiving as well as entrepreneurial qualities such as good communications skills. Otherwise, teaching quality cannot be guaranteed. A program in specialized training and professional development in entrepreneurship will be needed. In fact, EE needs a group of teachers who have different backgrounds and expertise. A valuable experience for the EDP in India is its teachers/trainers who are qualified and who come from different universities, industries, government agencies, etc. Those teachers/trainers are well organized by the training institutes.

 

References

 

1.      Harlow: Longman. Brockhaus, R.H. and P.S. Horwitz. 1986. “The psychology of the entrepreneur” in D. Sexton and R. W. Smilor (eds). The art and science of entrepreneurship. Cambridge, Mass: Ballinger. Business Today, October 10, 2004, p. 32.

2.      Calabrese, T. and B. Silverman. “Don’t go it alone: Alliance network composition and start ups' performance in Canadian biotechnology.” Strategic Management Journal, 21, 2000.

3.      Chirantan Chatterjee/ETIG. “IIMs, IITs Set Up Centers to Bring Innovations to Market, Big Idea may Come Out of This Box.” The Economic Times New Delhi, 24 April 2004.

4.      Davidson, P. 2003. “The Domain of Entrepreneurship Research: Some suggestions” in Katz, J. and S. Shepherd (eds). Advances in Entrepreneurship, Firm Emergence and Growth, Vol. 6, Greenwich, CT: JAI Press.

5.      Dunkelberg, W.C. and A.C. Cooper. 1982. “Entrepreneurial Typologies” in K. H. Vesper. Frontiers of Entrepreneurship Research. Wellesley, Mass: Babson Center for Entrepreneurial Studies.

6.       “Focus of Innovation Moves on to Teams.” The Economic Times New Delhi, 24 April 2004.

7.       Gorman, G., D. Hanlon and W. King. “Some Research Perspectives on Entrepreneurship 11 Education, Enterprise Education, and Education for Small Business Management: A Ten Year Literature Review.” International Small Business Journal, April-June 1997.