ENT0024

New Age Indian Entrepreneurs
As per the 2008 Global Entrepreneurship Monitor Report (GEM), 11.5% of India’s working population was in an early entrepreneurial stage while the overall entrepreneurial activity stood at 27.6%1 as against 8.5% and 13.9%2 in 2007. These statistics indicate the increasing prevalence of entrepreneurship in India. After Indian independence, entrepreneurship was restricted to big industrial houses and family-run businesses. However, after liberalisation of the Indian economy in 1991, the environment became conducive for entrepreneurship to flourish and since then entrepreneurs have been increasing. Since 2004–2005, India has witnessed the emergence of a new breed of entrepreneurs. Most of them are young, well-educated and first-generation entrepreneurs, showing distinct difference from the entrepreneurs of the past. Will these new breed of entrepreneurs be able to re-create the magic of visionary leaders like J.R.D. Tata and Dhirubhai Ambani? Will their businesses sustain the test of time?

Entrepreneurial India
“Long years ago we made a tryst with destiny, and now the time comes when we shall redeem our pledge, not wholly or in full measure, but very substantially. At the stroke of the midnight hour, when the world sleeps, India will awake to life and freedom. A moment comes, which comes but rarely in history, when we step out from the old to the new, when an age ends, and when the soul of a nation, long suppressed, finds utterance. It is fitting that at this solemn moment we take the pledge of dedication to the service of India and her people and to the still larger cause of humanity...” With this famous speech on August 15th 1947, Pandit Jawaharlal Nehru, (1st Prime Minister of independent India), announced the birth of a nation, freed from the rule of the British.

1

Bosma Niels, et al., “Global Entrepreneurship Monitor: 2008 Executive Report”, http://www.gemconsortium.org/download/ 1254740851593/GEM_Global_08.pdf Scheper Scott, “Global Entrepreneurship: Entrepreneurship in India”, http://www.gaebler.com/Entrepreneurship-in-India.htm

2

This case study was written by Vandana Jayakumar and Deepti Srikanth under the direction of Dr. Nagendra V. Chowdary, IBSCDC. It is intended to be used as the basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation. The case was compiled from published sources. © 2009, IBSCDC. No part of this publication may be copied, stored, transmitted, reproduced or distributed in any form or medium whatsoever without the permission of the copyright owner.

During 1970–1991. the founding fathers adopted a mixed economy model of economic governance. Intrigued by the enormous work at hand and inspired to raise a robust nation. It was characterised by a system of centralised planning and the economic development of the nation was guided by the Five-year Plans (FYP) as borrowed from the then USSR. some sectors of the economy were under the control of the government and some were in the hands of the private organisations. In the name of self-reliance. “Growth and Persistence of Large Business Groups in India”. The act also allowed participation of private firms through licenses wherein they had to obtain a license to start any new enterprise.iupindia. the MRTP4 was enacted to ensure that no company became too big in any one industry. To this effect.).3 Between 1951–1969. They were also required to obtain permission to expand their business. established corporate houses were given adequate freedom to carry on their businesses. As the state took up the role of the entrepreneur. At the same time. there was not much scope for nurturing individual entrepreneurship. the business groups invariably held a diverse mix of businesses.org The MRTP was enacted to avoid the concentration of economic power. www. 4 2 . IUP on Entrepreneurship in India (ed. government companies and a very few independent private companies. the government’s broad policy was import substitution and export promotion stifled by Byzantine bureaucracy and lack of funding sources. At the same time. the IDR (which provided the conceptual and legal guidelines for industrial development in India. The sizeable economic activity was carried out majorly by public sector undertakings. This way. provisions of the Indian constitution focused on the larger cause of development of the country and not on amassing wealth. Also. The policies that were formulated between 1951 up to late 1990s were also in compliance with the ideology of controlling the growth of large business groups – two of the main legislative instruments being the Industries Development and Regulation Act (IDR) and Monopolies and Restrictive Trade Practices Act (MRTP) that controlled the growth of business groups for almost four decades. the growth of large business groups was kept under control. while the small-scale industries along with the large business houses were fostered for their potential to contribute to the development of the nation. the licensing policy being a part of this act) was enacted wherein industries of national importance were put in the public sector. In 1948.ENT0024 New Age Indian Entrepreneurs As India achieved independence from the British rule. Further. the architects of the young nation were concerned with rectifying the distortions in the country that had resulted from the colonial rule. 3 Anand Roshni. the first Industrial Policy of India was promulgated which emphasised on growth predominantly through government-led industrialisation. The public sector was seen as the catalyst of economic development of the country and was the major contributor towards industrialisation. Accordingly. The simultaneous impact of licensing and the MRTP curtailed the growth of large business groups during this period. the government controlled asset concentration through the MRTP. they had to accomplish the big task of laying the foundations for building a country. the focus was on high economic growth coupled with diffusing the concentration of wealth if any. As an outcome. in 1969. in 1951. imbibing the best of both worlds from the socialist USSR and the capitalist US.

regulations and restrictions for the large industries. they could not have a great impact on some of the large business groups such as the Tata group and the Birla group. the state provided protection and incentives to the Small and Medium Scale Industries (SMIs) on the other.org 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 1 2 3 4 5 6 10 7 8 9 15 18 11 14 16 – 20 12 17 13 2 1 11 4 5 3 20 15 19 – 17 14 6 12 – – 7 9 10 – 2 1 67 4 6 3 – 18 14 66 – 17 12 10 – – 7 8 13 15 2 1 – 8 4 3 – – 15 – – 17 6 9 19 – 5 7 13 12 2 1 – 12 9 4 – – – – – – 8 6 – – – 5 19 10 2 1 – 12 5 7 – – – – – – 8 10 – – 20 4 – 9 2 1 – 9 6 15 30 55 – – 27 – 5 12 – – 19 4 36 11 2 1 – 10 9 12 – – – – – – – 8 – – – 6 19 13 2 1 – 10 12 8 – – – – – – – 7 – – – 13 18 11 Source: Anand Roshni.iupindia.ENT0024 New Age Indian Entrepreneurs While on the one hand. www. “Growth and Persistence of Large Business Groups in India”. the entrepreneurial spirit remained alive in the country due to the creativity and firm resolve of individuals. IUP on Entrepreneurship in India 3 . these two business groups continued to remain the top 2 business groups of India throughout the period of government’s regulatory intervention (Exhibit I). Exhibit I Trends in Business Group Rankings between 1951 and 1990 Name of Business Group 1990 1986 1981 1976 1972 1968 1966 1964 1958 1951 Birla Tata Reliance JK Singhania Thapar Mafathal Bajaj Modi Larsen and Toubro MA Chidambaram TVS Iyengar Hindustan Lever ACC Shri Ram ITC United Breweries ICI Bangur Kirlaskar Walchand (ed. Notably. It practiced the policy of protecting entrepreneurs in the small-scale industries from the impact of the sector’s disproportionate relationship with the larger sector. Although the government formulated policies to avoid the concentration of economic power and to a large extent the policies were able to achieve their objectives. were controls. Ironically.). However. this protectionist policy proved to be one of the biggest hurdles in the growth of entrepreneurship in India.

particularly the Gujaratis. Aditya Vikram Birla (AVB) and the group came to be known as the Aditya Birla Group (AB Group). they formed the natural entrepreneurial class. one of the biggest industrial houses of India.A.26 billion Company in 2009) were passed on to his son.htm “Dhirubhai Ambani Biography”. particularly in Africa. However. although late entrants were also able to establish themselves despite the regulatory regime of the government.).adityabirla. Ratan Naval Tata became the chairman of Tata group. Kumar Mangalam Birla”. Banias. went to foreign nations and established their businesses there. the Bajaj group of companies (entered in 1979) and Modi Enterprises (entered in 1976). the Marwari’s (in North and East India) and the Chettiars (in South India). Trading communities existed in India as the caste system was widely prevalent.ENT0024 New Age Indian Entrepreneurs The Birla Group. http://www. 5 6 7 Taher Nasreen. Reliance Industries Limited (RIL) went on to become India’s largest private sector company. “G. Walchand Hirachand.iupindia. Jains. Ambalal Sarabhai. Some other business groups. Similarly. Agarwals. Khandelwals and Porwals are Marwaris. Over a period of time. As the hereditary occupation of vaishyas was trading in goods and money lending. the Tatas also withstood the test of time. IUP on Entrepreneurship in India (ed. The Tata group.com/indian-heroes/dhirubhai-ambani. When JRD was at the fag end of his life. Many members of the trading communities. vaishyas (traders) and sudras (people doing menial jobs). Oswals. Interestingly. After Dhirubhai’s demise in 2002. Bajajs. Godrejs and Wadias are Parsis. RIL was split into two different business groups headed by his two sons Mukesh Ambani and Anil Ambani. Canada and the US. was founded by Jamsetji Tata.7 Dhirubhai was credited with crafting the equity culture of India and revolutionising its capital markets. While the Murugappa group hails from the Chettiar community. www. some of the prominent trading communities being the Gujaratis. founded by Ghanshyam Das Birla (GD) grew from humble beginnings to a business house worth INR 200 crore when GD died (1983). the Tata group flourished. He placed the Tata group on the international business map and in the process contributed to the development of the nation. most of the business groups that proliferated in India hailed from trading communities and continued their family businesses. Another business group to join the league of the Tatas and the Birlas was the Reliance group. Maheshwaris.com/the_group/km_birla_profile. Kumar Mangalam Birla.5 His legacy was later carried forward by his grandson. even the non-traditional trading communities started attempting the entrepreneurial act and that was the beginning of a wider entrepreneurship canvas in India. These included M. http://www. established by Dhirajlal HirachandAmbani. Tatas.D. Even amidst governmental controls. the business reins of the AB Group ($29. The legacy of his business was carried forward by his successor. The Indian society was divided into four main castes – brahmins (learned priests). Birla: A Legend”. which later came to be known as Air India.iloveindia. They made a mark in the Indian diaspora. popularly known as Dhirubhai Ambani (Dhirubhai). Muslim Khojas and Memons (in West India).html 4 . kshatriyas (warriors).org “Profile: Mr. Parsees. Birlas. during the late ’60s and early ’70s. Jehangir Ratanji Dadabhoy Tata (JRD) who was credited with the initiation of the national airlines. Kasturbai Lalbhai and Dhirubhai Ambani are Gujaratis. UK. Chidambaram (entered in 1985). After the sudden demise of AVB.

They were professionally and technically qualified. The growth rate of money supply became lower than the growth rate of GDP. the industrial groups. It was more of a capitalists’ cartel. These entrepreneurs were politically savvy and during the license raj. the then Prime Minister P. India had to. the industrialists. They sought economic freedom for themselves within limits – a freedom that benefited the industrialists but did not allow the entry of foreign capital and kept the competitors at bay. though not associated with any political party. Bajajs and Goenkas could thrive and their entrepreneurial ventures were undeniably success stories. position of the large business houses was threatened with the growing influence of the technocrat breed of entrepreneurs. were able to influence the governmental policies with regard to industry through various industrial associations. Under such circumstances. The License Raj (investment. which were formed pre-independence strengthened their positions and gave birth to many flagship companies. There was a steep decline in the foreign exchange reserves. disproportionate governmental expenditures during the decade of the ’80s resulted in a fiscal debt of 10%8 of GDP in 1991. The industrialists. 5 . Dalmias. only large business groups such as the Birlas. May 5th 1997 Ibid. The controls 8 9 Khanna Tarun and Melito Danielle.V. for the first time in its independent history. “Modern India”. Warranted by the dire economic situation and undeterred by the huge task ahead. Tatas. During the 1980s. industrial and import licensing) was replaced with Liberalisation. Barring exceptions such as Reliance. Narasimha Rao ushered in a new and second generation of economic reforms masterminded ably by his finance minister Dr. the progress of first-generation entrepreneurs was hindered by the established groups of industrialists who leveraged their political connections. Shrirams. While some changes in the Indian economy were sighted in the early 1980s and were strengthened in 1985–1986. India was faced with a balance-of-payments crisis and the country was threatened with bankruptcy. pledge gold to save itself from the impending sovereign bankruptcy. Manmohan Singh (the current Prime Minister of India. they did not continue for a long time. and inflation stood at 17% 9 in August 1991 and was rising. Privatisation and Globalisation (LPG). due to the liberalisation initiatives taken up by the then Prime Minister Rajiv Gandhi’s government. 2009). They were futuristic and they wished to detour the dogmas. which were just sufficient for 2 weeks of oil imports. Position of well-established entrepreneurs was challenged by the first-generation entrepreneurs and by those who tried to scale-up from small to medium. politicians and the administrators worked in close cooperation to ensure the fulfillment of mutual interests. However. The New Wave of Reforms Structural changes were made wherein many controls and regulations were done away with and the tax system was made simple and fair. As a consequence.ENT0024 New Age Indian Entrepreneurs It is worth noting that the large business groups were able to thrive despite the strict governmental regulations because of a symbiotic relationship that existed between the industry and the bureaucracy. During the mid-1980s. Harvard Business School. the Indian economy was put on a new and brave economic pedestal. these entrepreneurs were able to challenge the well-established traditional industrialists in unexplored areas. Given the circumstances.

The Securities and Exchange Board of India (SEBI. whereas the other business groups showed a decline.4 billion in 1992. With LPG. the role of the government changed from a controller to that of a facilitator. To promote domestic competition. the Indian economy started moving towards an increasingly market-based economic system. the growth of the large business groups dropped further. the rise in the relative share of gross value added by the business groups was on account of the top-four business groups of India.10 Notably. op. private mutual funds. India witnessed a rise in a class of people who believed in retail saving and investing. the new class of technocrat entrepreneurs was technically sound. Simultaneously. 6 .3% points in one year. It helped the budding stock markets of India to gain more credibility and to be aligned with international standards of investor protection. As the capital markets grew. as the Indian economy integrated with the global economy. Notably.ENT0024 New Age Indian Entrepreneurs on international trade (both exports and imports) and domestic and foreign investments were also removed.12 However.cit. armed with foreign education and global exposure. 1991 onwards. the share of the public sector to GDP dropped by 0. With the government encouraging private investors to provide investment capital. started questioning the business practices of their seniors. With the relaxation of the MRTP. Accordingly. established in 1988) became a fully autonomous body by 1992. Foreign trade was to become a significant part of the economy of the country in the years to come. the established industrialists faced competition. For instance. Post-liberalisation. With the resolve of the government to reduce government expenditure and to move towards privatisation. The financial advantage that the industrial fraternity had been enjoying till then was blunted. the large industries benefited to a great extent as they were no longer dependent on government approval for expanding their businesses or entering new markets. the MRTP was also modified in 1991. By adopting the policies of LPG. With the 1991 policy reforms. As against the traditional businessmen. between 1991–1992 and 2000–2001. there was a growth in production as well as consumerism in India. Ibid. This enabled the small entrepreneurs and those who wanted to scale-up their businesses from small to medium to access money directly from the market. The economic developments in the country started weakening the position of the well-established industrialists and boosted the growth of individual entrepreneurs in India. many of the regulatory obstacles were done away with. there was a steep rise in the relative share of gross value 10 11 12 “Modern India”. At the same time. in the year FY 1991(running from April to March). the foreign direct investments increased from $230 million in 1991 to $1. Ibid. post-1991. The year 1991 was a turning point in the economic history of India as the nation entered into a new period of its economic evolution. institutional investors from foreign and country-funds participated in the capital markets of India. the private sector heaved a sigh of relief. With decreased governmental control. had the business acumen and was able to adapt to the changing industrial demands. the younger generation of the family businesses in India. the public sector contributed 37%11 to the GDP.

19 1.6 24.74 3.16 1.6 9.0 51.99 0.71 1.0 23.84 0.98 1.66 2.9 24.5 55.49 1.57 3.89 0.90 2. However.7 66.21 2.10% of the GDP at factor cost.8 61.50 2.3 53.60 0.6 32.88 3.3 27.2 11.7 44.41 Net Fixed Capital Stock* (at the end of March) 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 39.32 3.09 3.12 0.84 0.7 8..34 3. the Tatas and the Birlas still remained the largest business groups till the late ’90s. when the Reliance Group emerged in a big way on the Indian business scene.99 0.64 1.02 1.ENT0024 New Age Indian Entrepreneurs added in 1995–1996 when it was 4.0 19.06 1.4 36.64 0.15 3.1 35.76 0.10 3.2 43.6 Contd.2 6.10 3.13 1.0 49.8 14.5 13.59 3.3 7.74 1.46 1.7 12.63 2.4 23.6 59.83 2.01 0. the share declined thereafter (Exhibit II).70 4.48 1.7 13.46 2.1 7.88 2.8 11.4 63.69 0.0 12.63 0.8 34.51 2. 7 .2 17. Exhibit II Share of Business Groups in Macro-Economic Indicators (in %) (From 1991–1992 to 2000–2001) Years Top 4 Next 16 Top 20 Others All GDP at Factor Cost* 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 1..2 44.3 36.1 42. It is worth noting that economic liberalisation was able to diffuse economic concentration in a much better way than the IDR and MRTP.1 22.3 46.6 38.67 1.5 36.9 8.2 10.7 73.68 0.75 2.4 16.92 1.82 0.8 7.9 12.6 23.0 41.1 36.

Wipro and Ranbaxy were recreated by second generation entrepreneurs. While Infosys and Bharti were the brainchild of first-generation entrepreneurs.2 23.ENT0024 New Age Indian Entrepreneurs BSE Market Capitalization* (at the end of March) 1997 1998 1999 2000 2001 17. C Ratio of ‘market capitalization of the listed group of companies’ to market capitalization of all companies listed in the Bombay stock exchange.R.7 6. Bharti and Ranbaxy exemplify the type of entrepreneurship that emerged in India post-liberalisation. a proactive approach towards doing business and good organisational abilities.2 11.6 34.0 13. Companies such as Infosys Technologies Ltd.org Amidst these circumstances. IUP on Entrepreneurship in India (ed. Narayana Murthy (Murthy). etc.6 7.0 34.).4 9. They were characterised by a global outlook. The new breed of entrepreneurs was able to capture the business opportunities that emerged with easing of controls in several sectors such as computer hardware and telecommunications’ equipment.3 39.1 30.0 32.1 6.iupindia.0 9. N.5 23.9 8. “Growth and Persistence of Large Business Groups in India”.1 19. India saw a spurt in entrepreneurship post-liberalisation when the likes of Sunil Bharti Mittal (Mittal).9 8.8 22. Source: Anand Roshni.2 8.2 7.4 26. Significantly.8 13. (Infosys). the Small and Medium Scale Enterprises (SMEs) also played a significant role in the economic development of India in general and the evolution of entrepreneurship in particular. 8 . The performance of Indian SMEs from 1990–1991 to 2004–2005 is given in Exhibit III.9 22.8 A Ration of ‘gross value added of group’ to GDP at factor cost at current price (with 1993-94 as base year). Wipro.0 43. emerged on the scene with their stupendous success. www. B Ratio of ‘net fixed capital stock of a group’ to ‘net fixed capital stock of joint stock companies listed’ current price (with 1993-94 as base year).

0 228730.51 76. By no small means.99 174. crore) 93555 100351 109623 115795 123790 125750 130560 133242 135482 139982 146845 154349 162317 170219 178699 Production (Rs.84 182. These entrepreneurs of modern India had a better understanding of customer preferences.40 197.71 93.93 205.org Entrepreneurship also grew in India due to reverse brain drain when many expatriate Indians came back from the US.0 98796.0 87355.42 282.9 157525.2 184401.15 101.84 86.0 158.21 89.57 9664 13883 17784 25307 29068 36470 39248 44442 48979 54200 69797 71244 86013 NA NA 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 Source: Barani G. Similarly.21 271. Significantly enough.1 105.0 146262. 9 . The Information Technology (IT) became a ubiquitous platform for new found entrepreneurship in India.4 195613.ENT0024 New Age Indian Entrepreneurs Exhibit III Performance of the Indian SMEs Year Total SSI Units (lakhs) 67.87 70.64 191.63 73. the entrepreneurial activity in India many a times presented a case of disruptive innovation. hoards of entrepreneurial ventures were created in and around IT and ITES space.).73 249.iupindia.0 108774.0 134892. UK and other countries and began their entrepreneurial ventures in India.55 229.10 238..34 165. IUP on Entrepreneurship in India (ed. Kishore Biyani’s Big Bazaar brought the retail revolution in India.0 210636.86 213.36 97.49 113. For instance.49 79.33 260. and Kotravel V.59 Fixed investment (Rs.0 92246.1 170379. crore) prices prices persons) (1993-94) 78802 80615 84413 98796 122154 147712 167805 187217 210454 233760 261297 282270 311952 357733 418263 84728 . they also knew the way to tap the potential of those markets.60 82. Not only did they possess knowledge about global markets.95 118. “Economic Development in India: The Role of SME Entrepreneurs”. www. Ambani’s Reliance Communications made telephony with mobiles affordable for the common man. Captain Gopinath’s Air Deccan made air travel as affordable as train travel. Crore) Employment Exports Current Constant (lakh (Rs.0 121175.21 109.0 251511.16 220.

boasts of offices across 64 cities in India and 22 countries worldwide 17. increased levels of discretionary spending among Indian consumers and a growing economy have nurtured numerous entrepreneurs in India.iloveindia. http://www. while southern Indian Brahmins have a strong grip on the software industry.com/economy-of-india/top-50-companies/infosys.html. “Traditionally communities like the Marwaris. a business historian and an acclaimed author said. Murthy. http://www.thehindubusinessline. from the desert state of Rajasthan. with a borrowed capital of INR 20. the average number of companies formed per year from 1992 to 2006 was 33. and Gujaratis from western India dominated manufacturing. till 1996. September 12 th 2009 “Infosys Technologies”. 15 16 17 18 10 . Guided by this interest. The Marwaris. http://www. first-generation entrepreneurs. with 99% of these companies being incorporated by the middle-class. “Liberalisation Was Catalyst for Growth of Entrepreneurship”.15 In 1981. it is believed that amidst a recessionary climate. September 18 th 2001 Radhakrishnan Sankar.com/latest-news/India-tounlock-entrepreneurial-boom-TiE-Delhi/516324/. Mittal laid the foundations of an organisation that would transform itself into India’s ‘telecom conglomerate giant’ in just over a decade.expressindia. that prevailed during 2008–2009 entrepreneurial activity of the new age Indian entrepreneurs is driving the growth of Indian economy. In 1985. incorporated Infosys.com/industries/banking-capital-markets/cards-payments-practice. the power of the new generation entrepreneurship in the country was first exemplified by the IT industry.ENT0024 New Age Indian Entrepreneurs knowledge of their respective industries and the ability to think out of the box.htm. an M.”13 According to the Ministry of Corporate Affairs.pdf. making it imperative for 13 14 “India’s Businesses Keep it in the Family”. who controlled Indian business for a half century are falling away fast. All this is changing.infosys. – that succeeded in painting a promising picture for the aspiring Indian entrepreneurs.379 per year from 1980 to 1991. op. Moreover. growing from $60 million to $ 60 billion over a span of just two decades. Having started in a small house in Pune the company. along with six other software professionals. About a decade ago.cit.00016 from his wife. It is the wave of economic liberalisation along with a combination of factors – easy accessibility to resources. the concept of Venture Capital (VC) was practically non-existent in India. growth in Entrepreneurship Development Programmes (EDP). New Age Indian Entrepreneurs: Weaving Long-lasting Success Stories? Gita Piramal. (BTL).Tech from IIT-Kanpur. which he used to make cycle parts in Ludhiana. July 21 st 2007 “The Nilson Report”.14 Interestingly. With these attributes they were able to innovate and win.com/ 2009/04/13/stories/2009041350381300. Mittal began his entrepreneurial journey at the age of 18. http://www.. with a borrowed capital of INR 10. Mittal could not have dreamt of being counted even amidst the B-list of Indian businessmen. Despite being the son of a Parliamentarian. “India to Unlock the Entrepreneurial Boom: TiE Delhi”. January 2009 “Bettering the Best”.rediff. by end of 2009.htm. For instance. Mittal was keen to plunge into the business arena instead of pursuing a career in politics.00018.com/money/2001/sep/18biznes. with the inception of Bharti Telecom Ltd. etc. April 13 th 2009 Kumar Ashok. Young population. while entrepreneurs have sprung up in all communities. http://www.835 as compared to 14.

“Today. “Want to be an Entrepreneur? Read This!”. many VC firms emerged in the country. with the aim of accelerating entrepreneurship in emerging economies. Ninan. http://www. If you have a good idea. with India emerging as a lucrative market with an average growth rate of 8%20. and the smarts to start and build a sound business. editor of the Business Standard said. Wadhwani Foundation (a not-forprofit organisation) launched the National Entrepreneurship Network (a network of entrepreneurial development centres). five premier academic institutes were selected – Birla Institute of Technology & Science (Pilani). To achieve the same. “Rise of the Indian Entrepreneurs”. capital can be arranged.”21 19 Natrajan Ganesh and Ganesh Uma. these financial institutions have also extended their support towards organisations conducting EDPs like Entrepreneurship Development Institute of India (a not-for-profit organisation imparting entrepreneurial education) and National Science and Technology Entrepreneurial Development Board. and technology and de-regulation keep throwing up new opportunities.htm.com/money/2006/mar/11guest. According to the Global Entrepreneurship Monitor (GEM) Report (an annual assessment of the national level of entrepreneurial activity). 2008. Industrial Credit and Investment Corporation of India (ICICI) rendered concessional financial assistance to new entrepreneurs with the aim of fostering entrepreneurship in the country.htm. Institute of Bioinformatics and Applied Biotechnology (Bangalore) and S P Jain Institute of Management and Research – to be a part of its original centre. Moreover. you may even make it to the Forbes list. personal savings or to seek help from friends (equivalent of angels). Along with these financial institutions some prominent educational institutes have also taken measures to nurture and promote the entrepreneurial spirit in the country. op.ENT0024 New Age Indian Entrepreneurs aspiring entrepreneurs to rely on family support. for all the difficulties of doing business in the country. which offered equity support to small enterprises and gave special concessions to women and physically handicapped entrepreneurs. in 2003.com/money/2007/oct/ 05book. within leading Indian academic institutes. The markets are vibrant. Hyderabad. October 5 th 2007 “Entrepreneurship in India”. T. Indian Institute of Management (Ahmedabad). Indian Institute of Technology (Bombay). http://www. For instance. India has become a fertile ground for breeding new entrepreneurs.rediff. entrepreneurship is regarded as a desired career choice in India.19 However.cit. Further. all India financial institutions like the Industrial Development Bank of India (IDBI).N. the Wadhwani Center for Entrepreneurship Development at the Indian School of Business. 67% people were willing to tread the entrepreneurial path while 33% were expected to start their own ventures within a span of 3 years (Exhibit IV). Owing to these factors.rediff. March 11 th 2006 20 21 11 . IDBI has also set up the Small Industries Development Fund (SIDF). Ninan T N.

12 Has the required knowledge and skils to start a business A Expects to start a business in the next three yearsA Country attitudes perceived by individuals EntrepreneurMedia ship considered Attention for as desirable EntrepreC career choice neurshipC 45 49 26 41 35 25 46 22 40 43 34 36 31 54 51 41 30 44 45 58 53 49 54 56 70 56 45 40 53 33 66 34 54 60 37 35 33 36 15 26 29 10 30 39 62 25 71 38 44 67 27 38 49 81 82 92 79 73 67 57 69 68 80 70 92 46 60 60 78 57 57 81 53 80 78 44 61 64 Contd... Exhibit IV Entrepreneurial Attitudes and Perception in 43 GEM Countries. 2008 Sees good Fear of failure Personaly opportunities would prevent knows for starting a starting a someone who B business in the business started a next 6 monthsA business in the past 2 yearsA Factor-Driven Economies % Agreeing with Statement Angola Bolivia 74 52 Bosnia and Herzegovina 50 Colombia 65 Ecuador 50 Egypt 40 India 58 Iran 35 Efficiency-Driven Economies Argentina Brazil 48 44 Chile 30 Croatia 53 ENT0024 New Age Indian Entrepreneurs Dominican republic 58 .

50 66 34 82 50 55 26 66 46 52 39 80 66 52 71 56 50 67 69 63 67 33 23 7 75 71 46 65 17 81 71 26 43 6 48 19 30 43 32 53 49 55 36 37 43 48 35 30 33 60 35 29 30 46 45 42 35 35 33 25 46 30 28 43 34 30 65 5 13 4 13 12 6 14 7 47 57 46 63 56 76 61 55 58 68 38 32 71 48 50 55 81 65 57 40 Contd. Hungary 26 Jamaica 52 Latvia 37 Macedonia 47 Mexico 59 Peru 60 romania 45 russia 39 serbia 56 south Africa 60 Turkey 47 Uruguay 57 Innovation-Driven Economies Belgium Denmark 23 69 Finland 54 France 34 germany 35 greece 35 Iceland 38 Ireland 35 Israel 39 New Age Indian Entrepreneurs ENT0024 Italy 35 .13 47 26 37 35 31 38 52 66 28 38 39 33 40 58 17 27 44 21 41 31 13 52 60 31 72 65 72 71 33 14 3 60 36 21 9 ...

14 44 32 33 28 33 52 38 28 33 48 7 63 23 45 5 52 36 43 5 68 50 44 7 58 34 33 7 61 71 67 43 54 73 32 30 4 85 61 32 23 17 69 67 21 9 4 26 59 Japan 13 republic of Korea 20 Netherlands 54 Norway 46 slovenia 55 spain 32 United Kingdom 41 United states 44 A Denominator: non-entrepreneurially active adult population 18-64 years B Denominator: non-entrepreneurially active adult population 18-64 years that sees good opportunities to start a business C Denominator: adult Population 18-64 years Source: GEM Adult Population Survey (APS) Source: Bosma Neils.pdf ENT0024 New Age Indian Entrepreneurs . et al.gemconsortium.. http://www.org/download/1254198580699/GEM_Global_08. “Global Entrepreneurship Monitor 2008 Executive Report”.

Nookala said. Everyday we were making desperate calls…”22 Nevertheless.indiatimes. the company has succeeded in bagging 32 corporate clients. Interestingly. former techies and childhood friends. Dean. 22 23 Ignatius Navan. recent graduates from ISB. overcoming these obstacles. Mom’s Kitchen is currently delivering nearly 1.cms?curpg=2. gave the company a great deal of visibility.ENT0024 New Age Indian Entrepreneurs Driven by the vision of becoming the Amazon. a corporate library service. Further. Highlighting the same. “Those were the worst days. this new breed of entrepreneurs is aware that an innovative idea alone cannot ensure the success of an organisation. in June 2008. chose to jump on to the entrepreneurship bandwagon instead of striding the safer path of campus placements. They would prefer to have a simple and common thinking instead of nurturing elaborate and elite plans.. four IIM-Ahmedabad alumni – Sunder Nookala (Nookala). “Campus Interview? No Thanks!”.24 When drunken driving emerged as a serious issue in Mumbai. the duo are a reflection of the growing number of engineers and management graduates who are willing to venture out on their own while giving the more lucrative corporate jobs a go-by. Prashant John and Mithesh Damania – launched Kwench. We had left our jobs and were stuck at home. talent to meet the need. an IIM-Calcutta alumnus with nearly two decades of advertising experience.Ajit Rangnekar. Following this principle. to quit his job and pursue his entrepreneurial dream. Mitra is testing his business model on the ‘NTPC’ parameters (need for the idea in the society.com for the Indian book-lovers. “Business opportunities: All in a Day’s Work”. Sunil Kaura (Kaura) and Ankur Arora (Arora). the trio started their company Party Hard Drivers (PHD) by the end of 2007. college mates. Registering with Just Dial (the online directory) and the social networking website. He plans to set-up an organisation for helping companies to manage and improve their interpersonal relationships. This year we have got more than 100. August 22nd 2009 Madhavan N. Launching their driver service for the party lovers.com/News/News-By-Company/ Corporate-Trends/Business-opportunities-All-in-a-days-work/articleshow/4469859. http://economictimes.”23 However. It is imperative for these ideas to translate into marketable propositions while being backed by a feasible business model. students and out-of-towners of Pune. PHD also tied up with nightclubs and alcohol brands. offering the best hygienic and environmental standards.php?a=jfmr05fgicd&title=Campus_ interview_No_Thanks&tag=Interview. “The Librarians”. the focus of most of these first-generation entrepreneurs is on offering solutions to the problems faced by people in their day-to-day lives. including Tata AIG and Wipro. “Our Wadhwani Centre for Entrepreneurship Development usually receives 5-10 applications from students every year. Vinamra Pandiya and Ashwani Rathore. Ankur Vaid. In sync with this trend. offering nutritious and affordable Indian food for the hungry working professionals. started Mom’s Kitchen. Having grown to a 30 employee company.com/finance/fullstory. May 1 st 2009 24 15 . ISB said. Krishnan Madhabushi. May 12 th 2009 Menon Nikhil. It was this realisation that encouraged Chandradeep Mitra (Mitra). Facebook. Convincing big corporate houses was a tough ordeal and the global recession further added to the woes of the start-up. http://sify. passion and contribution that the idea can make) before taking the plunge. Business Outlook.000 meals a day. Mishal Raheja and Saurabh Shah decided to turn it into a business opportunity. Working towards establishing a state-of-the-art child care centre.

With Sanjeev pursuing his entrepreneurial dreams. Pawar Deepak G. Sanjeev Bikhchandani (Sanjeev). March 22nd 2009 Subramanian Anusha.000 packets and has grown from a team of 2–34 employees. “It was a challenge because it was very difficult to attract and retain people also. gave Prashant Lingam and Aruna Kappagantula the impetus for 25 26 “Business opportunities: All in a Day’s Work”. Nobody wanted to work at a dotcom. August 8th 2009 27 28 29 30 31 16 . Nirmal observes. eco-friendly furniture. Business Today. Also a core team of people. (ISBN 978-81-904530-1-1). with the dotcom bubble bursting in 2000.. Keen to make a social impact. 2008. “Hosting Design Talent”.25 Long-term Sustainability of the New Age Entrepreneurs Nevertheless. Launched in November 2008 with a modest investment of $300. I had told her that we will be living off your salary for quite a while. Nirmal said.29 On the other hand. decided to take a wild gamble by pinning up all his hopes on the internet wave.ENT0024 New Age Indian Entrepreneurs adding to their brand recall. However.cit. op.”27 During such testing situations it is the constant support and backing from family members that acts as a source of inspiration. Bansal Rashmi.31 The struggle to find indigenous.cit. even before we got married that I would soon quit and become an entrepreneur. Dhruv Lakra (Lakra) found his true calling in social entrepreneurship. 8-10 key people…You have to retain them…You know you can’t do it all alone.30 Nevertheless. Dotcom became a stigma. While Inbiopro (a bio-science company) broke even within a year of its inception. “Indian Amazon”. founder and CEO of India Infoline. many entrepreneurs have treaded the path of social entrepreneurship. given the high levels of risk and uncertainty. discovering and buying custom made t-shirts) earned revenues worth nearly INR 2 crore in a year of it’s origin. Stay Hungry Stay Foolish. touting the entrepreneurial route is not an easy decision. “I had told Surabhi. Surabhi.com (an online bookstore) has been witnessing a growth of 35% per month within a span of 2 years of its formation.”28 It is an encouraging sight that many of these ventures have started tasting the fruit of their labour. the company found itself in crisis.”26 Despite these odds. Flipkart. March 22nd 2009 Kaurunakaran Naren. Nirmal’s faith in his core team and persistent efforts saved the company from being wiped out. She was cool with it. Mirakle Couriers is wholly run and managed by the hearing-impaired. monetary gains are not the sole motivators for Indian entrepreneurs. “Mumbai Miracle”. op. In 1999 Nirmal Jain (Nirmal). Business Today.com) this support came in the form of his wife. Ltd. Sanjeev said. the company has delivered more than 10. It took merely 4 months for the company to break-even. “The Book of Job”. Inkfruit. founder and CEO of Info Edge (better known for its job portal naukri..com (a website for designing. In less than a year. which now handles nearly 26 requests per day. page 160 “The Book of Job”. “You have to have hope. you have to have faith and you have to persevere. Outlook Business. and that’s what we did. Print Vision Pvt. Ibid. After a brief stint as an investment banker. his wife shouldered the responsibility of being the breadwinner for the household.

Businessworld. In January 2009.cit. “There are good people available who are more willing to join start-ups. producing 150 pieces of furniture per day.36 Further. the duo encouraged tribal artisans earn livelihoods by exploiting their skills and offered INR 20. Partho Dasgupta (Partho).htm. Technopak Advisors Pvt. chairman.000 per month to seven main artisans. AdventNet (a software company) and several others illustrate the same.paggu. “During boom time. The success stories of Sabeer Bhatia (Sabeer). Partho said. which is associated with developing countries. Conversely.htm. Ltd. Varuna D. “The Silver Lining”. Hotmail. and young people. Similarly.org/news/news_21615. Travelling to the insurgency prone area of Katlamara (a region in north-eastern India). Hailing from a humble background and the son of an Army officer. having learned that jobs in large companies are not necessarily “safe”.” 35 India ranks the highest among a group of countries in necessity-based entrepreneurship. January 6 th 2009 Ibid. some entrepreneurs are banking heavily on it. used this opportunity to launch her first exclusive store in January 2009 notwithstanding a lull in the luxury segment. Highlighting the same. hospitality and food services. This [the slowdown] is the time when you can redefine business relationships and get the best deals…”38 It is believed that these new age entrepreneurs have a better understanding of the emerging needs of the country and are raring to enter potentially exciting areas like travel. Outlook Business. Brahma Mahul.34 Highlighting the same. “…this gap can be bridged through self-employment and entrepreneurship-driven employment. Aurora Comms. Amy asserts. in a nation of almost 300 million young people. “The Smartest Unknown Indian Entrepreneur”. “Promoting Entrepreneurship in India”. Arvind Singal. (a 32 33 Gupta Ashish. vice president (corporate affairs) at Cisco Systems Inc. and Sridhar Vembu (Vembu). February 25th 2008 Naidu Viren. making entrepreneurship a necessity rather than a need. former CEO of Future Media quit his job to give rise to his own media company.32 The entrepreneurial streak of Indians has today transcended national boundaries. http://www. Amy Christen (Amy). Shukla Amitabh. Vembu transformed his company from a modest software firm to an innovative online applications provider. with only 100 million jobs.com/entrepreneurship/ nurturing-entrepreneurship-in-india-entrepreneurship-and-india/.karmayog. “Bamboo Shoots”.ENT0024 New Age Indian Entrepreneurs setting up Bamboo House India. The company has a scalable business. With a team of nearly 600 employees in Chennai in contrast to only 8 employees in the US. the current wave of global recession has encouraged many people to not only tread the entrepreneurial route but to also join and work for start-ups. Sabeer teamed up with Jack Smith to give rise to the immensely successful web based e-mail system. it ranks fifth from the bottom in opportunity-based entrepreneurship.” 37 However. March 30th 2009 34 35 36 37 38 17 . everyone is on a high horse. http://www. co-founder of Hotmail. said. September 5th 2009 Mitra Sramana. with the dual aim of marketing bamboo products while offering a means of sustainable livelihood for the tribal artisans. co-founder and CEO. the employment gap in India is wide. May 28 th 2009 “Promoting Entrepreneurship in India”. while most of the people are dreading the global slowdown. “Nurturing Entrepreneurship in Entrepreneurship and India”. may be more inclined to start off on their own.rediff. Jani. http://www. op. salaries are more reasonable and therefore within the reach of smaller companies.com/money/2008/feb/25forbes..33 Ironically.000–INR 30.

com/india/news/arvind-singhalnewclassentrepreneurs/371027/. They are in many ways. Tirodkar said. more “genuine” entrepreneurs…They dream big while they may have respect for the mega-entrepreneurs of today…they are not overawed by them.business-standard. many continue to be apprehensive regarding their long-term sustainability.”39 While some are confident of the success of this new age of entrepreneurs. July 28 th 2007 40 18 . So I understand the sell off business well.ENT0024 New Age Indian Entrepreneurs management consultancy firm) said. Falling to the temptations of making quick money. http://www. September 24 th 2009 Prabhudesai Arun. “I have done it before when I sold my e-commerce venture in 1999 and reaped in more than INR 550 crore.”40 The desire of these new entrepreneurs to monetise on their efforts combined with their craving to try something new every 5–10 years raises serious concerns on their long-term sustainability. “A New Class of Entrepreneurs”. Ameet Parikh sold-off his 3 year old start-up (Axis Risk Consulting) to Genpact. “This new middle class of entrepreneurs is fundamentally different to entrepreneurs of yesteryears. will these entrepreneurs be only known for their financial success stories or will they leave behind a strong leadership legacy? Will any of these new breed of entrepreneurs be remembered as Level 5 leaders’ or rather Level 5 entrepreneurs? 39 Singhal Arvind. Manoj Tirodkar (Tirodkar) sold his IT business to France Telekom and is now looking forward to a buyer for his BPO/KPO business as well. The modern day entrepreneurs don’t think much before calling it quits or selling their ventures. “New Age Indian Entrepreneurs: Think Exit Strategy First!”. Following suit.in/tags/business/2007/07/28/ indian-entrepreneurs-think-exit-strategy-first-mergers-and-aquisitions/. Will these new class of entrepreneurs be able to replicate the strong foundations of successes built by the Tatas and Ambanis? Moreover. http://trak.

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