“Assignment- 2”
Q. Justify the need for and the significance of entrepreneurs in an economy like India?
A. Entrepreneurship and innovation are critical for the growth of any economy, in an increasingly competitive world. The Industrial Revolution, the rise of the US to its preeminent state ,the recovery of Germany post-World War, and, more recently, Israel’s status of a developed economy have all been driven by entrepreneurship and innovation.
Historically, India was considered an innovation driven country, at the forefront of trade, mathematics, astronomy and philosophy. Not surprisingly we accounted for almost 25 % of world GDP barely 300 years ago, arguably the largest in the world. Colonisation and missing the Industrial Revolution brought India down to 2% of global GDP by 1947. By the beginning of 1990’s, with virtual bankruptcy facing the country, India’s share of world GDP was down to 0.2.
However, economic liberalisation initiated in 1991 appears to have revived the old DNA. Business and industry rebounded. The stagnant and sluggish early single digit rate of growth zoomed to almost double digits. The last two decades have given us a glimpse of what entrepreneurship can do for the country. In barely 20 years, the Indian IT services industry, driven by first generation, middle class entrepreneurs, has grown from its early stages to around Rs 4.5 lakh crore ($88 billion), creating 117 lakh (11.7 million) jobs- 28 lakh (2.8 million) directly and additional 89 lakh (8.9 million) indirectly, and accounting 25% of our exports, and 7.5% of our GDP.
The telecom industry is another shining example where a first generation entrepreneur is now India’s largest and amongst the world’s leading telecom service provider (by subscriber base) with over 200 million subscribers.
The need of entrepreneurs in an economy like India can be explained in the following points: