The growth and transformation of entrepreneurship in India began in the early times when the ‘barter system’ was a common means of exchange. However, before proceeding, let us understand what entrepreneurship is and who entrepreneurs are.
Entrepreneurs are those individuals or groups who create new businesses and job opportunities. Entrepreneurship is the ability of an entrepreneur to run and operate a business with goal-oriented objectives. In this article, we will focus on the following:
To discuss the growth or development of entrepreneurship in India, you must understand that India has one of the oldest and most civilized business histories. During the Harappan civilizations around 2700 BC, there was an internal and external trade culture. Also, due to this, most foreign countries recognize Indian entrepreneurial skills.
Moreover, the increase in trade occurred during the era of Mughal rule. The popularity of Indian products, arts, crafts, Vedic tools, foods, and much more attracted attention from different parts of the world. The Arab mainland, western colonial counties and African countries were the major parties involved in the trade.
At the same time, different countries like UK, France and Portugal expanded their colonies in different parts of the world. However, a significant entrepreneurial change occurred when the East India Company started its business from the Bay of Bengal and later occupied parts of Bengal. It indirectly linked the entire Indian state into one business ecosystem.
There were some major downsides to the colonial mindset of England. However, it also played some good aspects in developing entrepreneurship in India.
This was the era of industrialization in India, where some of India’s best entrepreneurs rise. The major events changed the face of entrepreneurship in India.
Entrepreneurship in India, along with the national economy, was ground-breaking after independence. There was not much left in the Indian economy at that time. However, the government took major steps to support India’s development which is as follows.
As all these influential policies were in operation, few major industries were established as opposed to the traditional textile and natural resource industries. Since independence, there was a huge growth in entrepreneurship in India.
However, it may seem that most of the top entrepreneurs were already in business. But the reality was different. Economic policies were not giving much support to the entrepreneurs, due to which there was rough growth. However, the transformation of entrepreneurship began in 1990.
The major transformation of entrepreneurship in India began with the ‘Economic Policy Reform’ in 1991. The policy was further expanded in 2022. So, you can easily categorize the major transformation of entrepreneurs in India by these two policies and events.
The New Economic Policy of 1991 was a huge turning point. This policy has included three major aspects, which are as follows.
|Liberalization||Providing some provisions in different parts of the industry |
It boosts the private sector, including banks and the stock market
|Privatization||Disinvestment of Public Firms to reduce the burden |
Promote the national entrepreneurs for good business
|Globalization||Welcoming FDIs, and FPI Creating SEZ and Economic |
Corridor for foreign companies
These were the most important of all the major aspects involved in the new economic policy. However, all of them played an important role in developing entrepreneurship in India. Some of the benefits that this policy replaced are as follows.
The major objective was economic reform, which has also served in the transformation of entrepreneurship in India. Before the policy, India’s entrepreneurship was based on the model of traditional industries and agro-industries.
However, after the implementation of the policy, major changes were seen in the technology. The rise of Infosys, TCS, Wipro, HCL, and more. Also, in automobiles, Maruti, Tata, Mahindra, Bajaj, and more were emerging. But there is a limitation to this policy as it favours a lot of big companies and does not give a chance to a small and new startup to take off.
In 2016, startups started to grow. There are some key aspects of this startup initiative whose main objective is to provide and lend support for entrepreneurship development in India. By the year 2015, startups were rampant in India. Moreover, India is also known as the ‘poster child of an emerging market’. Some of the key aspects of the 2016 Startup Initiative are as follows.
New innovators and potential entrepreneurs are helping their businesses in the Indian market daily. If you consider the growth of entrepreneurship since 1990, you will see a sharp growth every year.
The current Indian entrepreneurship world is becoming a highly favorable market for any company to invest in. Also, most Indian companies have marked their potential in international trade and shown the growth of entrepreneurship in India. However, among all other top start-ups and companies, the IT sector of India is on the boom. It alone handles a large part of the development of the entrepreneur representing India.
The indirect effects of entrepreneurship are not so visible, yet they are equally important for economic development. The following are indirect effects:
The flow of money in an economy is as important. The more it flows, the healthier the economy. Enterprises help in the flow of money in the market by creating employment and increasing production and consumption.
Start-ups thrive in the ecosystem. When an ecosystem is formed in a particular city, there is an increase in the infrastructure of the city or particular area. For example, startups growing in Bangalore, Hyderabad and Delhi. These cities were developed strategically to create a better environment to support start-ups to meet the need for entrepreneurship.
Direct employment is the employment created by entrepreneurship within the business. But it is not the only employment. Entrepreneurship also creates a lot of indirect jobs. For example, in an area like Powai in Mumbai, infrastructural development creates a need for hotels, restaurants, transportation, etc.
When entrepreneurs grow and expand their operations, it requires many services. These services may be outside their core expertise. For example, an ed-tech start-up would require several services like human resources, marketing, consulting, legal services, etc. Therefore, when the number of entrepreneurs increases, so does the demand for related services.
Entrepreneurship is important because it improves the standard of living and generate capital. Let us look at some of the reasons for the importance of entrepreneurship.
It shows the importance of entrepreneurship in the best possible way. New products and services produced by entrepreneurs can fuel the economic development of the companies concerned. This is also true for areas that need to support new business.
For example, the boom of IT industries during the 1990s. The industry grew rapidly and it helped many other businesses. Businesses have grown in related sectors, such as call centre operations, network repair firms and hardware suppliers.
Entrepreneurial projects help create fresh wealth. Established companies may remain confined to existing markets and reach a threshold in terms of profits. Better goods, services or technology from businesses enable the development of new markets and the creation of new wealth.
Entrepreneurial projects help create new capital. Better goods, services or technology from businesses enable the development of new markets and the creation of new wealth. Also, higher income in the form of increased jobs and higher tax revenue and expenditure leads to better national income.
So, this importance of entrepreneurship helps in making the national income of a country. The government will use these proceeds to invest in the country.
This importance of entrepreneurship breaks with tradition and reduces reliance on outdated systems by providing unique products and services. This will improve the quality of life. Such as the smartphone industry continues to grow, tech entrepreneurship will have a huge, long-term impact on the planet.
Also Read: 6 Types of Entrepreneurs
Entrepreneurship is an instrument of social change and economic development. Entrepreneurs firmly believe that it is entrepreneurship that will beat and transform the market with new-age technologies.
The following factors define why entrepreneurship is needed in economic development.
Innovation is the primary element of entrepreneurship. New-age entrepreneurs are passionate about innovations in technology and business models. Some of the primary examples of this are Airbnb, Innova8, Ola, Zinerr etc. These companies not only bring innovation in technology but also created unique business models that never existed before. It helps in making your life much easier.
Policymakers of an economy consider innovation while creating a road map for the country’s economic development. Innovation creates market ease and new opportunities and encourages consumption. Therefore, entrepreneurship in India is important as it inspires innovation.
Employment is an important factor in the development of any economy. A low employment rate indicates the poor health of an economy. An economy needs to generate more jobs and wage opportunities to accelerate growth. It plays an important role in job creation.
The bigger the enterprise, the more job and salary opportunities are created. Therefore, the need for entrepreneurship in India becomes important for economic development.
The standard of living is, in a way, directly proportional to employment. Because employment pays people, they spend their money on the purchase of goods and services. Therefore, the consumption rate increases in an economy, and so does the production rate. This eventually raises the basic wage, and people become able to consume higher quality goods and services.
If entrepreneurship in an economy is sector agnostic, it will go a long way in raising the standard of living of the people. Therefore, the need for entrepreneurship in India becomes important for overall economic development.
Social entrepreneurship is a modern term that encourages entrepreneurs to bring about change in society. For example, crowdfunding companies are usually involved in social work such as raising funds for NGOs. Their businesses bring positive changes to society. They not only help the needy but also spread social awareness.
A prosperous society facilitates the path of community development. Therefore, the need for entrepreneurship in India is important as it brings together social reform and economic development.
Research and development are the progress of innovation. When an entrepreneur comes up with innovative ideas and builds a business from them, they need to continuously develop their innovation to keep up with the market and improve the user experience. As the enterprise grows, they spend more resources on research and development, which leads to technological progress.
Technological advancement not only supports a particular company but the entire nation. It contributes to the growth of science and technology. The economy further utilizes these developments to implement in various sectors to make progress. Therefore, the need for entrepreneurship in India is necessary for the progress of science and technology.
Need help solving tough topics on Entrepreneurship? Master your toughest subject with Chegg. Here subject matter experts will simplify complex topics for you and make learning easier through illustrations, video explanations and definitions.
Entrepreneurship in India was on a rough path. Moreover, after independence, it had a terrible impact. However, with policies and hard work our country was able to overcome it at one point in time. Now with an innovative mind, India is gaining dominance in the market. And entrepreneurship opportunities will increase in India.
For policymakers and business owners, it is essential to consider the relationship between entrepreneurship and economic development. Knowing the pros and cons of entrepreneurship makes it possible to adopt a balanced approach. An approach to developing the importance of entrepreneurship, which can have positive economic and social impact.
Conclusively, we can look at various practical, direct and indirect factors that come into effect due to entrepreneurship. And why entrepreneurship is essential to an economy. We should not underestimate the impact of entrepreneurship on the economy. Entrepreneurship in India leaves a positive impact on the economy.
Suggested Read: 10 Successful Entrepreneurs in India and their Net worth
Entrepreneurship in India is growing today and has reached the global level. With new economic policies and the rise of startups in India, more jobs are created in the market. It is helping India’s economy to grow and attract massive investments. Given the current policies for entrepreneurs and the growing market, the growth of entrepreneurship will be bright in the coming years.
Entrepreneurship has certain important qualities. Those qualities include the ability to communicate accurately and effectively, leadership skills, the ability to sell products and ideas, having a vision for the future, being flexible, persistent, and collaborating. The most important thing in all this is vision. No entrepreneurship can survive and grow without a proper vision.
Entrepreneurship helps in boosting the economy of the country. It plays a vital role in building and establishing the economy without which the country has to suffer huge losses. Entrepreneurship has three importance for the economy:
1. Contribution to National Profit
2. Social change
3. Economic Development
It also helps in raising the standard of living, generates employment, and brings innovation.
There are several benefits of entrepreneurship for youths. You can learn many important skills that can be useful for your work and life. Along with this, you get to know about teamwork, how to manage a team, networking, creativity, problem-solving, communication, critical thinking etc. Along with this you will also earn money for yourself and can help your community by giving back.
There is a great need for entrepreneurship in India. Entrepreneurship brings the following changes to society.
3. Living standard
4. Social change
Apart from this, entrepreneurship helps in boosting the economy and takes the country forward. It creates new products and brings new services which encourage employment and ultimately economic growth.
Entrepreneurship is on the rise in India. Every year more and more businesses are booming in addition to the already existing business. In the last few years, India saw 50,000 startups out of which 8000 – 9000 are technology-based startups while there are more than 1300 new tech startups. According to the government, which will increase further.
Yes, you can become an entrepreneur. Before starting any business, I do not have a high expectation that I will be successful. Entrepreneurship requires a lot of motivation and dedication. To be a successful entrepreneur you must have the zeal to learn new things and have a critical mind and creativity that can solve any problem that comes in the business.
There are many entrepreneurs in India who have been in business for a very long time and still growing. Some of them are:
1. Jamsetji Tata – Tata Group
2. Kumar Mangalam Birla – Aditya Birla Group
3. Gautam Adani – Adani Group
4. JRD Tata – Air India
5. Dhirubhai Ambani – Reliance
6. Narayana Murthy – Infosys
7. Azim Premji – Wipro
8. Shiv Nadar – HCL
9. Ardeshir Godrej – Godrej Group
10. Jarnanalal Bajaj – Bajaj Group
Got a question on this topic?