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Excerpted
from Mr. Kumar Mangalam Birla's convocation
address at the Entrepreneurship Development
Institute of India Sixth Convocation held
on
18 September 2004 in Ahmedabad.
How
do we get more of our young people to want
to be entrepreneurs?
While there have been many success stories,
I believe that the entrepreneurial
attitude still meets too many roadblocks in
India. Our societal norms accord primacy to
attributes such as a steady and stable individual
career path, reduction in the levels of uncertainty
and ambiguity, an aversion to failure, and
the desire to 'fit' within a certain 'mould'.
Hence, only a very small proportion of the
educated elite in India opts for entrepreneurship
as a way of life. Even in the case of those
who do become entrepreneurs, most of the ventures
are clustered around businesses that are more
predictable and stable. Few entrepreneurs
go for the jugular — the breakthrough.
What do we need to do, so that social and
cultural attitudes are more entrepreneur-friendly?
First
— a good starting point is to reorient
our system of education. I believe that a
key factor that may be acting as a brake on
the entrepreneurial impulse could be the nurture
factor — and I am thinking of the system
of education, through school and the university.
The system tends to reward rote, mechanistic
learning. Critical questioning and back-and-forth
dialogue are largely absent, while the creative
instincts are stifled. The educational process
is biased towards finding 'correct' answers,
rather than examining a range of possibilities
and experimentation. Such a rigid learning
environment hardly makes for excitement. The
mind is therefore steered, at a very young
age, towards conformity. As a result, the
spark of entrepreneurship starts getting doused
quite early on in life.
Second, our key institutions must interact
more with each other. Today, the boundaries
between the university, business and government
laboratories are sharply demarcated. There
is hardly any flow of ideas or talent —
between
the university research lab and applied research
in business. Potentially good ideas therefore
stagnate for want of an airing. The result
is that some of the best entrepreneurial talent
finds that it has to leave India, in order
to be able to strike it big. This situation
may be changing, but not quickly enough. The
infrastructure for entrepreneurship —
a solid core of university-led research, the
venture capitalists, the willingness by business
to take and build on the research and take
it forward into the commercial arena —
all this is still substantially lagging in
our country.
Third, entrepreneurship needs to take
stronger roots where it is most needed —
at the village level, where the greatest income-generating
opportunities exist. According to a World
Bank study, off-farm employment can play a
vital role in catalysing income growth and
promoting stability of rural incomes. Rural
households value such non-farm incomes highly,
not only because they contribute significantly
to overall income levels but also because
they reduce their exposure to income fluctuations
associated with bad harvests. Sadly, in India
only about a third of rural households' income
comes from non-farm sources, much of it from
micro and small-size firms. The scope for
non-farm income to increase is enormous.
Fourth,
even the largest organisations in India
need to experience — and imbibe the
refreshing breeze of entrepreneurship. Without
that, they run the risk of becoming ossified.
It has happened to the largest of companies
the world over.
As
the Head of Microsoft Research put it, "Most
large organisations have a mission, and
invention often takes you in another direction."
So, large organisations need to create a
state of continuous tension and flux, and
stay alert. The job of the leader is to
keep the status quo, the established way
of doing things, under constant challenge.
And that's the reason the entrepreneurial
mindset is needed, even in the largest of
organisations. But, as you may be aware,
large organisations can be extremely hostile
ground for entrepreneurs to bloom in. Because,
while entrepreneurs make ample use of intuition
— the 'gut feel' — this is an
attribute formal organisations downplay.
In most large companies, risks are tightly
controlled, and out-of the-box ideas discounted.
The task cut out for large organisations
like ours is to make space for new ideas
and encourage a spirit of experimentation
— tone down the bias for analysis and
certainty, with the bias for experimentation,
and for trying things out. If it doesn't
work, by all means, scrap it. But do give
the champions of an idea the chance to try
it out.
For
example, some activities and projects and
some of the people who are inclined towards
entrepreneurship, may just need to be shifted
outside the more formal work groupings,
to looser work settings that provide greater
autonomy, or the corporate reward systems
may have to be modified so that occasional
failure is not penalised. Creating an entrepreneurial
culture may also require that normal recruitment
criteria be dispensed with — because,
people with innovative ideas and impulses
may not necessarily have the 'right' credentials.
The trick is doing all this without throwing
overboard what works. The discipline and
the checks and balances imposed by formal
structures are very necessary. But so is
the need to retain the spirit of entrepreneurship.
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