Longtime readers of TriplePundit know we’re big fans of entrepreneurial solutions to the world’s problems. But simply throwing loans around to impoverished people and hoping brilliance percolates is not enough. Developing a culture of entrepreneurism, and beyond that, a culture that understands sustainability, is something that requires generations of development and the close involvement of expert mentors and investors.
K Srikrishna, of the National Entrepreneurs Network (NEN), made the point very clear in our meeting last week – “There is no shortage of money in India, what’s missing is a mature ecosystem of angels, mentors, etc… that’s where the bottleneck is.” To illustrate, Srikrishna explained that in 2011 a mere $20Million in angel funding took place in India, 1000 times less than the $20Billion invested in the United States. Even Canada had close to $400Million. Complex regulations and bureaucracy are not helping either (India ranks 132nd on the annual “doing business” rankings).
NEN is working to overcome these obstacles in a variety of ways. Srikrishna explained that the spirit of entrepreneurship is very much alive and well respected. Emerging entrepreneurs are now celebrated across India in a way that simply didn’t happen in older generations. Business plan competitions abound and resources and media aimed at entrepreneurs have multiplied in recent years.
Nonetheless, the bottleneck persists. To attack it, NEN’s efforts are aimed primarily at capacity building across three areas:
1) Traditional academic institutions (training faculty in mentorship)
2) Creating incubators and “e-cells” inside academic institutions – 425 of which are currently active
3) Establishing a volunteer ecosystem of angels, VCs & experts – currently standing at 3,000 members
Working with the private sector, NEN has established internships & mentorships (notably with SAP) as well as forums, events, and other networking opportunities for potential entrepreneurs and their potential investors.
Another key organization helping move things along is the National Association of Software and Services Companies (NASSCOM), an IT trade association. We had a chance to talk with the organization’s Vice Chair, N Krishna Kumar.
According to Kumar, despite the bottlenecks above, the Indian IT industry has matured to the point where it is now far beyond outsourcing and back-office tasks. Call centers, for example, are still around but have almost stopped growing as more high value skills and opportunities have emerged. Now product design, R&D, and many other higher end services are thriving across the country. In fact, the IT sector now accounts for almost 7.5% of India’s GDP and growing.
SAP, in addition to being a strong parter with both NASSCOM and NEN, has also been tackling the earliest phase of what might be called mentorship – namely working to enable to basic computer training of young Indians. Additionally, SAP has offered inexpensive or free licensees for their new advanced computing platform, HANA, to start-ups – including many with specific social missions. We’ll learn more about both in articles to come.