Let a Million Ideas Bloom

Historically, India has been an in- novation-driven country, but in the last decade entrepreneurial activity has declined due to lack of infrastructure, scarcity of capital, an unwieldy bureaucracy, as also the stigma attached to business failure.

There is enough empirical evidence that large corporations and public-sector undertakings have not generated enough jobs and cannot be relied on to do so in the future. If we do not generate an estimated 10 to 15 million jobs per year for the next decade we are headed for a massive social breakdown.

Our economy depends on our entrepreneurs. Twenty years ago, it was not only reforms that steered India’s economy, but it was also our entrepreneurs who led the economic resurgence. Twenty years on, we call on our next generation entrepreneurs to lead us out of the current cul-de-sac.

I have had the privilege of participating in the growth of the IT/BPO sector, which was largely driven by middle-class and firstgeneration entrepreneurs. I strongly believe we can recreate the heady days of the IT and telecom revolution.

Entrepreneurship is crucial for India not just to create jobs, but also for inclusive growth and socio-economic development. Affordable health care, clean water, renewable energy, and agri-based processing are some areas that be accelerated by entrepreneurs and impact investors.

In 2011, impact investors invested `400 crore in businesses that focus on addressing social development and environmental challenges. Indian angels invested `100 crore across 50 deals. Annual investments by early stage funds hover at `1,200 crore compared to `29,000 crore in the US and `3,000 crore in China. But a disturbing fact is that over 90 per cent of early-stage venture money in India comes from offshore sources.

Given the government’s goal of igniting the entrepreneurial spirit, the Planning Commission last year set up a committee comprising stakeholders from the government and industry. I was part of the committee, which recently submitted its report.

The committee has recommended the formation of a ‘National Entrepreneurship Mission’ to create a vibrant entrepreneurial ecosystem. We have proposed a series of steps to ensure a catalytic government policy and regulatory framework through the creation of 1,000 incubators, single-window clearance, registration of angels under a regulatory body, uniform and relaxed exits, and tax incentives. We would also like:

Access to equity capital and debt by encouraging banks to invest in VCs and classifying such investments as ‘priority-sector’lending. The committee has proposed a $1 billion dollar fund-of-funds to seed other early-stage venture funds.

Businesses as entrepreneurial hubs by involving the private sector in creation and operation of incubators.

Culture and institutions which encourage entrepreneurship over careerism through programmes and courses on entrepreneurship in our institutions.

Adequate and effective collaborative platforms by creating innovation labs.

India has the potential to build 2,500 highly scalable businesses in the next 10 years across multiple industries. These businesses could contribute $200 billion in revenues and create employment at the same scale as the IT/BPO industries. Getting these businesses going will require `3 lakh crore($55 billion) in venture capital and debt.

May a million entrepreneurs bloom and may a billion ideas spark the Indian entrepreneurial revolution.