India is currently the 12th largest economy in the world, according to the World Bank. According to an unprecedented new survey of nearly 2,400 Indian entrepreneurs conducted London-based Legatum Institute, senior managers and aspiring entrepreneurs, India is now on course to outstrip the USA, Japan, Germany and the fast-emerging economic giant of China over the next two decades.
The survey revealed startling levels of confidence among the country’s wealth-creators with nearly nine in ten saying that they expected India to be in a stronger economic position in five years. Only one in five said that the world economic crisis had badly affected business in India. More than half the respondents (53 per cent) were extremely bullish about the future, saying they expected India to be the world’s most important economic power by 2030.
The survey also found that the entrepreneurial spirit is deeply embedded in the Indian business community. Eight in ten of the respondents said that they believed that people could get ahead through hard work.
About two-thirds of respondents said that Indians were a more entrepreneurial than people from other countries and 84 per cent said that their country was going in the right direction.
Business start-ups in India in 2007 numbered 20,000 and the evidence for India’s economic optimism is vast:
- India’s automobile industry is one of the fastest growing in the world, boasting exports greater in number than China.
- India is one of the world’s leading outsourcing destinations for many of the world’s top businesses, with annual revenues of nearly USD 60 billion.
- It is home to a USD 52 billion textile manufacturing sector.
- Mumbai is a recognized global financial centre.
- India is also a world leader in innovation from ultra-inexpensive cars to pioneering computer software.
Strong family connections are a key to India’s business dynamism. Just over a third (36 per cent) of respondents said that the country’s entrepreneurial spirit was rooted in the family, with 30 per cent citing the example set by other business people and 11 per cent citing social networks or friends. Only 2 per cent selected government encouragement and incentives. In addition, nearly half the respondents (48 per cent) relied on family money to found their firms.
Beyond making money, Indian entrepreneurs are also highly motivated by the broader social impact of their work. Over half (54 percent) of respondents say the social effects of their business, such as improving the quality of life in their communities or developing people, are a main motivation for what they do.
Also, more respondents said that both internal motivation and the ability to take risks amidst uncertainty are more important than access to finance for helping entrepreneurs to succeed.
The survey also contains substantial grounds for caution about India’s economic future. Over half of the respondents say that corruption is a serious problem that hurts business in India, and 40 percent say they have been pressured to pay a bribe.
In addition, together with access to finance, government bureaucracy is regarded as the biggest barrier to successfully starting companies in India. Government bureaucracy is also regarded as one of the main three reasons that businesses fail in India. Likely because of corruption and bureaucracy, more than half of respondents running smaller companies said it was very important to improvise and work around the system to make their companies grow. [via]