NCPA - National Center for Policy Analysis


April 16, 2010

Indian entrepreneurs, regardless of their age or size of their company, are gritty, optimistic, suspicious of government, heavily reliant on their ability to innovate around bureaucratic barriers, very family-centric, and highly motivated by the social -- not merely the financial -- effects of their enterprises.  In many ways, the typical Indian entrepreneur looks a lot like the idealized American entrepreneur -- one who is self-determined, risk-prone, and determined not only to make money but to make a difference, says Ryan Streeter, a senior fellow at the Legatum Institute. 

Based on a panel survey of 2,000 entrepreneurs in India and looking specifically at respondents who run new, ascendant enterprises, Streeter found that they make a special contribution to the Indian economy: 

  • Indian enterprises less than three years old are more likely grow at rates above 50 percent than older companies.
  • Only 17 percent of young firms are run by a single, self-employed owner; half of them have less than 10 employees besides the owner, and another 25 percent have between 10 and 50 employees; in other words, new firms in India create a significant share of jobs.
  • Additionally, nearly one in five firms less than three years old generates annual revenue between $100,000 and $550,000, which is real money in India. 

The owners of new, fast-growing enterprises are especially interesting when one looks at the characteristics that distinguish them from those running more established businesses, says Streeter: 

  • Two-thirds of them say the social impact of their business is a main motivator, compared to less than half of those running companies between four and 10 years old.
  • They are more skeptical of government than their peers, the only class of entrepreneur to say they started their own business to try something new, and far more reliant on personal savings to start their businesses than on family resources or loans.
  • More than other groups of business owners, they value their internal determination and ability to weather risk in uncertain circumstances much more than accessing finance as a key to their success. 

In other words, those who seem most self-reliant, creative, and risk-prone are also among the most socially minded and libertarian, says Streeter. 

Source: Ryan Streeter, "Indian and American Entrepreneurs Are Similar," The American, April 9, 2010. 

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