Innovation and Entrepreneurship in India: Some Concerns, Some Directions

Abstract

The paper makes a serious attempt to find and analyze the present scenario of innovation based entrepreneurship in India. The policy rationales and foundations of innovation and entrepreneurship are well discussed and debated. Various problems of innovation as well as entrepreneurship are delved into, to search for reforms required in India. It also mentions how the shift from government controlled environment to market-based environment, in post reform era, has generated additional economic growth by fostering entrepreneurial activity within its border. The problem with tax system, bureaucracy and land/real estate laws are dealt with, to augment the culture of innovation based entrepreneurship in our country. Priority areas like financing hi-tech startups, education and training in entrepreneurship, networking of entrepreneurs, boosting R & D spending and fostering more inclusive innovation were identified and discussed. A work jointly conducted by Columbia University and Indian Institute of Management, Bangalore is incorporated in this paper. The work defines the optimal role for individual entrepreneurs, whether Indian entrepreneurs playing their optimal roles, if not, what are the obstacles stands in their way. One of the unique features of this paper is to highlight the problem of startup fund required by brilliant, young, middle and lower middle-class entrepreneurs from I.I.T, I.I.M, N.I.T and other reputed institutes. The problem is they do not have money, land or any security required for mortgaging a commercial loan. Many experts proposes venture capital, but this has it's demerits like equity ownership and interference in management of the hi-tech startups. The solution provided is high value 100% hypothecation route of financing the hi-tech startups, with minor reforms in hypothecation loan laws and policies.