In the current entrepreneurial landscape, India is witnessing a remarkable surge in the number of young entrepreneurs who are redefining the way businesses are started and scaled. With a supportive ecosystem in place, these new-age entrepreneurs are breaking conventional boundaries, bringing innovative ideas to the market, and crafting success stories that inspire future generations. However, the scenario was vastly different when established entrepreneurs embarked on their journeys decades ago. The dynamics of starting and growing a business have evolved significantly over the years, shaped by economic reforms, technological advancements, and a more favorable regulatory environment.
In this article, we explore five critical areas where new-age entrepreneurs differ from their established counterparts, reflecting the transformation of India’s business environment.
1. Ease of Doing Business: Then and Now
The concept of “Ease of Doing Business” (EoDB) plays a crucial role in determining how conducive a country’s regulatory environment is for business operations. The World Bank’s Ease of Doing Business index ranks 190 countries based on ten key areas of business regulation, including starting a business, dealing with construction permits, getting electricity, registering property, and more. This ranking serves as a vital indicator of how business-friendly a nation is.
In the “Doing Business 2020” report by the World Bank, India secured the 63rd position among 190 countries. This is a significant leap from its 142nd position in 2014, showcasing India’s enhanced status as a business-friendly nation. This improvement is a testament to the booming entrepreneurial environment in India, signaling that the country is now more conducive to nurturing new businesses than ever before.
India’s Pre-Reforms Business Scenario: 1947-1990
Before the economic reforms of 1991, India’s business environment was far from being entrepreneur-friendly. Post-independence, the country adopted a protectionist approach with state intervention in major industries, including transportation, electricity, insurance, and banking. The infamous “License Raj” system imposed stringent controls on private enterprises, making it difficult for businesses to grow and expand. High tariff rates and restricted imports further stifled economic growth, pushing the nation into a balance of payments crisis.
This period, though challenging, saw the rise of renowned business conglomerates like the TATA Group, Aditya Birla Group, and Bajaj Group. However, their growth was constrained by the government’s tight regulations, limiting their potential to innovate and expand.
Post-Reforms Business Scenario: The Rise of New Entrepreneurs
The economic reforms of 1991 marked a turning point for India’s entrepreneurial landscape. With the liberalization, privatization, and globalization (LPG) policies, the government reduced its intervention in business operations, dismantled the License Raj, and opened the doors to foreign investment. These reforms unleashed a new wave of entrepreneurship, particularly in the IT and IT-enabled services sectors.
First-generation entrepreneurs capitalized on these opportunities, establishing back-office and BPO service firms that laid the foundation for India’s IT boom. The rise of technology reduced the costs associated with starting a business, making entrepreneurship more accessible. Access to venture capital, angel investors, and a more transparent stock market further fueled this entrepreneurial surge.
Today, Indian startups attract significant foreign direct investment (FDI), with investors eager to fund innovative ventures. As of 2018, India had approximately 50,000 startups, of which 8,900-9,300 were technology-led. These startups have created over 160,000 jobs, positioning themselves as engines of economic growth and innovation.
2. Diverse Entrepreneurial Spirit: From Legacy to First-Generation Entrepreneurs
One of the most significant shifts in India’s entrepreneurial landscape is the diversification of the entrepreneurial spirit across different family backgrounds. Historically, business in India was predominantly the domain of a few communities and religious groups, with entrepreneurship often passed down through generations in family-owned businesses.
For decades, entrepreneurship was seen as a risky venture, with most people preferring the stability of employment. However, the economic liberalization of the 1990s changed this mindset. The favorable conditions created by the reforms encouraged individuals from non-business families to explore entrepreneurial opportunities.
These first-generation entrepreneurs brought fresh perspectives, embraced new technologies, and were willing to take risks. They challenged the notion that entrepreneurship was reserved for a select few, proving that anyone with a viable idea and the right resources could succeed in business.
Dr. Sunil Shukla, Director of the Entrepreneurship Development Institute of India (EDII), highlights this transformation, noting that the ecosystem today is much more supportive of startups. He emphasizes that government policies, societal acceptance of entrepreneurship, and the availability of funding have given entrepreneurs the confidence to pursue business ventures with a clear purpose, rather than merely as an alternative to traditional employment.
3. Government Initiatives: A Boost for New-Age Entrepreneurs
In recent years, the Indian government has introduced several initiatives aimed at fostering entrepreneurship and nurturing the startup ecosystem. These initiatives have played a crucial role in empowering new-age entrepreneurs by providing financial support, easing regulatory processes, and promoting innovation.
Make in India Campaign
Launched in 2014, the “Make in India” campaign aimed to transform India into a global manufacturing hub. The initiative focused on attracting investments, promoting innovation, enhancing skills, and protecting intellectual property. By streamlining processes and implementing transparent, user-friendly measures, the campaign sought to make India a more attractive destination for global investors.
The “Make in India” initiative identified 25 key sectors, including manufacturing, infrastructure, and services, where policy changes were made to encourage investment. This shift from being a regulator to a facilitator has significantly improved the business environment, benefiting both established and new entrepreneurs.
Startup India Initiative
The “Startup India” program, launched in 2016, is another key government initiative designed to build a robust startup ecosystem across the country. The 19-point Action Plan under this program includes measures such as tax exemptions, nationwide incubation centers, and a Rs. 10,000 crore corpus fund to support startups at various stages of their development.
This program has been instrumental in speeding up regulatory compliances, allowing entrepreneurs to focus on core business operations. The introduction of the Startup India portal and mobile app has further streamlined interactions between startups and regulatory authorities, making it easier for entrepreneurs to navigate the business landscape.
Other notable government programs supporting entrepreneurship include:
- Stand Up India
- Atal Incubation Centre (AIC)
- New Generation Innovation and Entrepreneurship Development Centre (NewGen IEDC)
- Micro Units Development and Refinance Agency (MUDRA)
- The Women Entrepreneurship Platform (WEP)
- Support to Training and Employment Programme (STEP)
- National Skill Development Mission (NSDM)
- Biotechnology Industry Research Assistance Council (BIRAC)
4. Digital Space and the Rise of Digital Startups
The digital revolution has had a profound impact on entrepreneurship, giving rise to a new breed of digital entrepreneurs who leverage technology to create innovative business models. Digital space refers to the virtual environment that exists on digital devices like smartphones, tablets, and computers, where businesses can develop internet-based products or services.
Digital Entrepreneurship
Digital entrepreneurship involves using information and communication technologies (ICT) to create, market, and deliver products or services online. This can include anything from digital startups to traditional businesses that have transformed their operations to incorporate digital elements.
According to scholars Reuber and Fischer, a digital enterprise is defined as a business that utilizes ICT to communicate with customers and partners, primarily aiming to sell digitalized products or services. This encompasses a wide range of activities, including online accounting, social media marketing, and e-commerce.
In India, the Digital India initiative, launched in 2015, has been a significant driver of digital entrepreneurship. The program aims to make India a digitally empowered nation, providing a coordinated ecosystem for startups and enabling entrepreneurs to reach a global audience from their home base.
The accessibility to the internet and the proliferation of digital services have revolutionized the way businesses operate, connect, and grow. Digital entrepreneurs in India are exploring opportunities in various sectors, including health and wellness, digital learning, fashion e-commerce, and mobile wallets.
Successful Tech Startups in India
Several tech startups have emerged as leaders in India’s digital space, transforming industries and creating new business models.
- InMobi: Founded in 2007, Bengaluru-based InMobi is a mobile advertising platform with a global presence. It was the first Indian startup to achieve unicorn status and competes with giants like Apple, Facebook, and Google in the mobile advertising arena.
- Practo: Launched in 2008, Practo is a health-tech platform that bridges the gap between patients and healthcare providers. The platform offers services such as doctor appointments, diagnostic tests, online consultations, and medicine delivery.
- Paytm: Noida-based Paytm, founded in 2010, is a digital payment and financial services company offering a wide range of services, including bill payments, online shopping, and money transfers. It is one of India’s leading digital payment platforms with millions of monthly active users.
- Byju’s: Byju’s, an education technology startup based in Bengaluru, launched its learning app in 2015. The app offers personalized learning programs for students and has become a household name in India’s edtech sector, with millions of registered users.
- Ola: Founded in 2010, Ola is a ride-hailing service that connects customers with drivers through its mobile app. It offers a variety of transportation options, including cabs, auto-rickshaws, and bikes, and is the largest ride-hailing company in India.
5. The Rise of Consumerism: A New Era for Entrepreneurs
Consumerism, defined as the increased consumption of goods and services, has become a defining feature of the Indian market in recent years. This shift towards a consumer-driven economy has created new opportunities for entrepreneurs, especially those in the retail and e-commerce sectors.
In the past, India’s spiritual and minimalist mindset kept consumerism in check. However, post-liberalization, the growing middle class with higher disposable incomes began to demand more products and services, leading to a surge in consumerism.
Factors Driving Consumerism
Several factors have contributed to the rise of consumerism in India:
- Increased Disposable Income: The liberalized economy has led to the growth of the middle class, with more disposable income to spend on goods and services.
- Globalization: As India opened its markets to foreign companies, global brands began to establish a presence, introducing Indian consumers to a wider range of products and services.
- Digital Adoption: The internet revolution has made it easier for consumers to shop online, leading to the growth of e-commerce platforms like Amazon and Flipkart.
The retail landscape in India has also evolved, with the emergence of malls and the “shop-entertainment” experience, which has further fueled consumerism. Indian consumers, especially the younger, tech-savvy generation, are increasingly demanding global brands and luxury products.
According to the World Economic Forum’s report “Future of Consumption in Fast-Growth Consumer Market – India,” the country is poised to become the third-largest consumer market in the world, after the US and China. The report also predicts that by 2030, consumer spending in India will grow from $1.5 trillion to $6 trillion, driven by the rising middle class and the shift towards a consumer-driven economy.
Conclusion
The entrepreneurial landscape in India has undergone a remarkable transformation over the past few decades. From a restrictive, state-controlled economy to a vibrant, dynamic environment that fosters innovation and entrepreneurship, India has come a long way. The differences between new-age and established entrepreneurs highlight the impact of economic reforms, technological advancements, and changing consumer behavior on the business landscape.
Today’s entrepreneurs are more diverse, tech-savvy, and driven by a desire to innovate and make a difference. They are supported by a favorable ecosystem that includes government initiatives, access to funding, and a growing consumer market. As India continues to evolve, these new-age entrepreneurs will play a crucial role in shaping the future of the country’s economy.
Author Profile
- Nitin Jain - C.E.O - India PR Distribution
- Nitin Jain is the founder and C.E.O of India PR Distribution - India's top Press Release Distribution and PR Agency. Nitin has more than 20 years of experience in PR, Corporate Communications, Digital Marketing, Branding Strategy and Lead generation.
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