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Janki Murali

BANGALORE, April 12

THE country scores the highest in necessity entrepreneurship that has led to economic growth. However, it ranks third in fear of failure, which inhibits entrepreneurship, with 27.8 per cent respondents, after Korea with the highest of 64 per cent and Spain the lowest with three per cent.

This and other factors such as lukewarm attitude towards entrepreneurship, lack of proper physical infrastructure and outdated policies and programmes, inhibited entrepreneurship in the country, according to the Global Entrepreneurship Monitor (GEM), released here on Friday.

An Indian Institute of Management, Bangalore's research project, the GEM study assesses the level of entrepreneurial activity in national economies, including India. Started in 1999, with the joint initiative of Babson College, US, and the London Business School, UK, with an initial membership of 10 countries, the membership has grown to 29 in 2001.

At a press conference here on Friday, Dr M. Rammohan Rao, Director, IIMB, said the findings of the survey pointed to the tasks ahead for all those connected with nurturing entrepreneurship in India. These relate to entrepreneurship support systems, research and development and its transfer to entrepreneurs, attuning government programmes to entrepreneurship and changes that need to be introduced in the education system.

The GEM India 2001 survey estimates that 10 per cent of the population to be engaged in autonomous entrepreneurial activity, four per cent in business sponsored entrepreneurial activity and 12.5 per cent of the respondents were owner managers of small business.

The survey sought to distinguish between entrepreneurial activity motivated by necessity and that by opportunity. Altogether over a quarter of the country is involved in entrepreneurial activity.

The GEM findings were based on research conducted in 2001 across a wide spectrum of 36 experts, which helped the researchers to assess the national framework conditions. These experts furnished data on nine framework conditions through in-depth interviews and filling up a detailed questionnaire.

The level of entrepreneurial activity in the country was assessed through an adult population survey, wherein 2011 adults were randomly selected from the country and interviewed.

Among some of the findings of the expert group on national framework conditions, in the area of positive attitude towards entrepreneurship, India scored 2.60 as against the lowest score of Japan with 2.21 and the US with 4.23.

In the area of opportunity perception, India scored 3.24 as against Argentina with 2.45 and the US with 4.19. In the area of availability of equity and debt funds, the country scored 3.18 as against the lowest score of 1.99 by Argentina and 4.30 by the US.

In appropriateness of government policies, regulation, taxation, India scored 2.30, with the lowest score from Argentina with 1.30 and Ireland with 3.57. In the area of adequacy of education system, India scored 2.13, with Portugal being the lowest with 1.65 and Singapore with 2.84 being the highest.

The report has been brought out by IIMB's N.S. Raghavan centre for entrepreneurial learning.

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