The economic reforms unleashed in 1991 in India marked a watershed in Indian entrepreneurship. A number of new entrepreneurial firms came into existence and took advantage of the new climate, the best known, perhaps, being Infosys. These were not extensions of the old family business houses, but were founded by a new breed of middle class entrepreneurs, who had no family connections, were not wealthy, and did not have a “business sense” in their blood. Most of them were, in fact, first generation entrepreneurs.
It may be noted that even during the Licence Raj, India had the presence of a large number of entrepreneurs. Small and Medium Enterprises (SMEs) accounted for more than half of the country’s industrial production, but many of these depended on protectionist measures by the government such as reservation of items for the SME sector. As a result, they stayed small, and were uncompetitive. But post ’80s, a new breed of entrepreneurs sought to hold their own and be competitive in their own niche, without depending on any special support. Not only did they succeed in creating a niche for themselves, but actually succeeded in driving out the vintage families from their businesses!
Most of these entrepreneurs were definitely not wealthy, which could act as a cushion should their venture fail. In our discussions with them, it was clear that they were not after money as such, nor even after the fame that would result if one day they should strike it big. Many of them had had good education, many were from prestigious B-schools, and all of them could have got well paying and secure jobs for the asking. Yet, they spurned these jobs and went after their dream.
The common factor binding this set of entrepreneurs was their spirit—a hunger for owning and running “their own business”. This was based more on a passion than the outcome of a logical reasoning, almost a fanatical belief in their own idea.
Second, these businesses were often the result of a new idea, in which they believed completely. These ideas sought to redefine the way business was run in that sector.
Third, they all had a high appetite for risk, with a high tolerance for uncertainty and ambiguity. They were fully aware of the risks involved in taking up an entrepreneurial course of life. Even in instances where the banks were reluctant to lend and venture capitalism had still not taken root, these entrepreneurs went ahead and took that critical step into the world of ruthless and predatory competition.
Fourth, they were unreasonable in their desire for change. In some cases, this also led to their being blind to the underlying problems of their businesses and an unwillingness to conform to stereotypes.
Lastly, many were consumed with a passion to do something for the country and society. They were the social entrepreneurs, and many turned to serving the disadvantaged and underserved sections by establishing non-government organisations. They forayed into new segments such as education, health, vocational and literacy training, low-cost medicines and so on. In this, they had to contend with the even greater uncertainties posed by vested groups that were interested in thwarting such attempts, mainly politicians. Clearly, it is this mindset that now rules and represents the face of our economy today.
S. Manikutty is Professor, Indian Institute Of Management, Ahmedabad