Persons of Indian Origin (PIOs) have been spearheading entrepreneurship across the world and are also at the helm of some of the world’s biggest technology companies including Google, Microsoft, Twitter, IBM, Adobe etc.. In the United States, average business income of Indian entrepreneurs is substantially higher than the national average and any other immigrant group. Further, despite accounting for about 1% of the US population, Indian origin people comprise 6% of Silicon Valley’s workforce. In stark contrast, India itself has one of the lowest rates of formal entrepreneurship on a per-capita basis compared to other countries. According to the Economic Survey 2020, between 2006 to 2016, the mean number of new firms registered per year per 1,000 workers was 0.10, compared to 12.22 and 12.12 for the UK and the US respectively.

The low entrepreneurship rates in India can be attributed to the following factors

• Lack of interest among the younger generation: According to Global Entrepreneurship Monitor (GEM), only 39.3 percent in India think of entrepreneurship as a good career choice.
• Red tapism: According to a Gallup study, around 46 percent of Indians think the government is the biggest stumbling block to starting a business. The perception about corruption was particularly high among those planning to start a business in the next 12 months (80 percent).
• Access to funding: Majority of existing venture capital funds for start-ups are focused on export-oriented IT or mobile solutions. There is less access to funds for start-ups in other sectors like healthcare or energy.
• Differences in vision: Foreign investors ignore India’s unique market demands, talent supply and business culture.
• Lack of training: A Gallup study found that only 22 percent of aspirational entrepreneurs who plan to start their business in the next 12 months have access to formal or informal training to start a business, which is much lower than the Asia average of 44 percent.

Initiatives taken by the government to promote entrepreneurship in India include

• The government has set up the Ministry of Skill Development and Entrepreneurship (MSDE),
  • Pradhan Mantri Kaushal Vikas Yojana (Skill India Mission) to facilitate job creation and entrepreneurship, as well as to attract private investment. is MSDE’s flagship scheme to enable young Indians to take up industry-relevant skills training and improve their employability.
• Schemes such as Make in India, Start-up India, Stand-up India, Digital India, MUDRA Yojana etc. have been launched to spur the creation of more productive and higher skilled micro, small and medium enterprises.
• Policies and programmes like Science Technology and Innovation Policy and Atal Innovation Mission endeavour to encourage entrepreneurship by providing a platform for the generation and sharing of innovative ideas, alongside an incubator to mentor and support innovators.
• Several skilling programmes have been initiated such as National Apprenticeship Training Scheme, Deen Dayal Upadhyaya Grameen Kaushal Yojana etc.

The Economic Survey 2020 emphasizes on the need to enhance ease of doing business and implement flexible labour laws in job creating sectors, such as manufacturing. Literacy, education and physical infrastructure are the other policy levers that district and state administrations must focus on to foster entrepreneurship and consequently job and wealth creation.