Indian Entrepreneurs - Finding System in Chaos

I was wondering why Indians are such entrepreneurial in nature. If you look at it, India is not a very entrepreneur friendly country -

1. Company laws are archaic - opening a company takes time, and closing one is almost impossible
2. Labor laws are not favorable - one can not fire an employee without permission from State Labor Board if number of employees in the organization are more than 100
3. Infrastructure leaves a lot to be desired, be it electricity, roads, health care etc.
4. Laws are confusing, and God forbid if you do get into a litigation it would take ages to get a judgement
5. Manufacturing industry is still mired with bureaucracy, and red tap

So from the surface it looks like an impossible task to start and run your own enterprise. But then why is India known for its entrepreneurial people around the world?

I think the answer is that we Indians are very street smart, and know how to work the system in our favor. The laws are tough but lack of enforcement works in our favor, and penalties are not very stiff to act as deterrent for people to be adventurous. Even if one gets caught, that person knows how to get out of the trouble by greasing the right palms (for minor oversights). As far as infrastructure is concerned, electricity I think is the most important requirement for most industries and entrepreneurs meet that by installing their own generator sets.

So in effect, the very things that would be considered a show-blocker actually work in an entrepreneurs favor.

But street smartness can only take you to a point. To grow beyond that one needs institutional support, easy funding opportunities, and most importantly a mind-set which can think beyond immediate profits and look for value-creation. It's the third point which I think is our Achilles heel (first two - though lot to be desired, are still slowly getting into place)- most of us are short-sighted and only look for immediate gains in bottom-line, and generally do not invest aggressively in something innovative that can generate value in future, and quickly catapult a company to next level. That I believe is one of the core reasons why there are so many successful SME's in India but very few examples of large enterprises built by first-generation entrepreneurs.

With booming stock market (which is relatively a recent phenomenon), Indian entrepreneurs too have started realizing the value their can organizations can offer to them if they stay focused, concentrate on long-term gains, and work towards building world-class organizations.

I am positive that in next 5-10 years we would see many more big companies emerging out of India as more and more entrepreneurs align themselves with global best practices, and work towards creating innovative solutions rather than just creating need-based solutions.