On June 23, an interview of Dinesh Awasthi, Director at EDI, got published in the Financial Express.
Established in 1983, the Entrepreneurship Development Institute of India (EDI)—in Gandhinagar, Gujarat—is an autonomous body and not-for-profit institution, and is sponsored by apex financial institutions, namely IDBI Bank, IFCI, ICICI and the State Bank of India. EDI is registered under the Societies Registration Act 1860 and the Public Trust Act 1950.
Dinesh Awasthi, Director, EDI, is an economist with extensive experience in entrepreneurship education, research and training. He has worked extensively on policy issues related to SMEs with several multilateral agencies such as ILO, UNIDO and UNDP as a consultant on several international assignments. Awasthi is a member of various apex committees and core groups of ministries of MSME, urban employment and poverty alleviation and Department of Science & Technology. In a free wheeling interview with FE’s Nirwa Mehta, he discusses the prospects for entrepreneurs in India. Excerpts:
How have the past few years been for entrepreneurs?
The past few years have been very encouraging. Until 1991, the economy was stifled because of restrictions, quotas, permits and red-tapism. Innovative and creative entrepreneurship was the casualty of crony capitalism. However, after the liberalisation, privatisation and globalisation which encouraged free flow of capital goods and services, India started becoming a global market. Until 2000, it was a period of adjustments and restructuring, but post 2000 there has been a growth period. The advent of IT substantially improved India’s image. This led to knowledge-driven technologies such as biotechnology and nanotechnology. As government started opening up to ideas, an ecosystem has been created to encourage individuals to come up with innovative products.
What are your views on rural entrepreneurship?
Today you cannot ignore the rural market. Rural growth has been higher than the urban growth and because of that, rural demands have gone up. For every company, rural penetration is a priority. For an entrepreneur, there are possibilities at every stage of supply chain. The government has also started focusing on food processing industries and there are very high possibilities for the same in the rural sector. Today there are better roads, better connectivity and more means of transport which leads to growth in the services sector in rural areas.
How do you see growth in social entrepreneurship?
Social entrepreneurship is an emerging sector. It has been only 5-7 years since it came up. There are a lot of NGOs which work solely on grant basis. Once the grant is over, the work also stops and hence it is not a sustainable model. But, over time, entrepreneurs have realised that there are unmet demands in the market. On a global level, there is unmet, under-met and under-served demand of about 4 billion people, or 12 trillion dollars. There is a huge scope if people are willing to look at it as a profitable market. Teach for India has been a great example of the same. It led to quality teachers and teaching quality improved at a relatively low cost. We are contemplating projects in Assam to electrify 100 villages which are out of reach of regular transmission lines. The idea is to create local power supply system which is managed by people to supply electricity to the villages. There is also a project from the Department of Science & Technology that addresses concerns of non-conventional sources of energy, food processing and bamboo projects in the North-East. We want to create 500 medium-scale industries in the North-East in the next five years.
What has been the success ratio of start-ups in India?
It is estimated that 40% of the start-ups fail in the first 1,000 days of starting. India success ratio more or less mimics the global standards. In India, about 60-70% of the start-ups manage to stay afloat and are doing well.
What are the challenges faced by the entrepreneurs?
Most start-ups are started by people with science or engineering backgrounds. People here are in love with their idea and think they have a miracle with them. They tend to ignore the market demand. Lack of proper assessment of market is the biggest challenge they have. The second challenge is finance. But for ideas which have potential, money is not a problem. More than procuring money, managing money is the problem. If the market is there and the idea is viable, finance follows. The challenge is to make optimum use of finance. The third challenge is to find the right resources. When you are starting out, you are not in a position to pay well, but you will need a better team to showcase yourself as a brand. This is where the next challenge comes in. Who will be on the board? Who will be your mentor? Who are the people to guide you? You need a team which is good enough to create a brand.
What are your expectations from the new government?
Prime Minister Narendra Modi has created a new ministry—the ministry of entrepreneurship—which I think is a commendable step. For the first time space has been created for entrepreneurship and we are looking forward to working closely with them. The primary thing on their agenda should be to create an entrepreneurship policy to create an ecosystem. Putting together a policy and a systematic movement is the first step in building a healthy, cohesive ecosystem. I hope the government is more open and encouraging. But I am hopeful as Modi is a business-friendly politician. Creating employment opportunities is also on his agenda and that can only be done by creating entrepreneurship opportunities. One good entrepreneur creates 10 decent jobs and hence it is in the interest of the government to promote entrepreneurship in a big way.