India always had a very large proportion of self-employed in its working population, and even now, by some estimates, over 65 per cent of all adult Indians in the working age group are engaged in myriad self-employing vocations.
India, of course, has also seen some extraordinary entrepreneurs in the last 100 years and more and the myriad businesses that they gave birth to continue to provide a very visible growth momentum to the economy. What is more interesting, however, is the phenomenon of an emerging “middle class” even in the context of entrepreneurship.
Until a generation ago, there were largely two “classes” of entrepreneurs in India. There were the mega (by the then Indian economy standards) entrepreneurs, which included major business houses such as Tata and Birla and a host of others, and the small & medium ones that owed their existence partly to the anachronistic policy of reserving thousands of articles of normal consumption for small-scale entrepreneurs.
The big became bigger due to their ability to successfully compete for the licences as well as successfully seek public capital by way of equity and debt. The small started up under the umbrella of the Small Scale Industries (SSI) reservation policy but the same policy subsequently came in the way of their becoming medium-scale enterprises.
However, over the past 18 years, a host of factors has provided a very conducive environment for India’s Gen Next entrepreneurs to venture into uncharted waters. These have included elimination of licensing and quotas, easier and more universal access to capital including risk capital, steady economic growth, increasing globalisation, profound changes in consumption not only in absolute terms but also in the consumption basket itself and increased spending by the Indian government in physical and social infrastructure.
It is really exciting to know that many are succeeding, and this success will provide motivation to tens of thousands of others to start the next generation of entrepreneurial ventures in incredibly diverse sectors.
This new “middle class” of entrepreneurs is fundamentally different from their yesteryear counterparts. They are, in many ways, more “genuine” entrepreneurs, since most of them are starting out in a field that is much more level than ever, and hence the competitive landscape for them is also much more challenging.
Further, the aspirations of most of this new breed of entrepreneurs go way beyond just achieving a comfortable living. They dream big, and while they may have respect for today’s mega entrepreneurs—which include, beyond the Tata, Birla and Godrej families, the Ambanis, the Mittals, the Mahindras, the Ruias and the Munjals, among others— they are not overawed by them.
Indeed, many who were till recently “middle class” entrepreneurs, such as Adani, GMR and GVK, have already joined the ranks of mega entrepreneurs and hundreds more will do so over the next decade. These Gen Next entrepreneurs are also far more tuned with the emerging needs of the Indian (and global) economy and hence are aggressively entering potentially more exciting sectors of the future such as agri and biotechnology, healthcare, education, green energy, consumer-oriented services such as travel & hospitality, food services, etc., setting themselves up to join the ranks of the mega entrepreneurs of the next decade.
Arvind Singhal is Chairman, Technopak Advisors