Mumbai:
The NS Raghavan Centre for Entrepreneurial Learning
(NSRCEL), part of the Indian Institute of Management-Bangalore
(IIM-B), has released the Global Entrepreneurship Monitor
(GEM) 2002 in Mumbai. GEM 2002 is the prestigious international
research project primarily designed to assess the level
of entrepreneurial activity in national economies including
India.
The
GEM project is a multi-country research project aimed
at assessing the level of entrepreneurial activity in
the participating countries and linking it to the entrepreneurial
framework conditions (EFCs) prevailing in the countries
on the one hand and their projected economic growth on
the other. The project was started in 1999 at the joint
initiative of Babson College, USA, and London Business
School, UK, with an initial membership of 10 countries,
which has grown to 37 in 2002.
India
being ranked as the second highest among the 37 countries
goes to prove that there is a significant positive change
in terms of market perceptions, entrepreneurial capacity
and financial support. Clearly the findings of the survey
point to the task ahead for all those connected with nurturing
entrepreneurship in India. These relate to entrepreneurship
support systems, research and development and transferring
the knowledge to entrepreneurs, fine-tuning government
programmes to nurture entrepreneurship and changes that
need to be introduced in the education system, says
Dr Prakash G Apte, director, IIM-B.
The
findings of the GEM 2002 Global Project are summarised
below:
- This
is based on the data analysis done at the global level
involving inputs from the 37 countries.
- Twelve
per cent of the worlds population in the 18-64
years range is entrepreneurial. Since these countries
represent about 62 per cent of the worlds population,
the total number of entrepreneurial individuals in the
world will be about 460 million.
- The
level of entrepreneurship varies from country to country.
In 2002 it was less than 3 per cent for countries like
Japan, Russia and Belgium and more than 18 per cent
for countries like Thailand and India. If the country
groups were to be graded from low to high on entrepreneurial
activity, the order will be as follows: (i) developed
Asian countries; (ii) East European countries; (iii)
European Union; (iv) former British colonies outside
Asia; (v) Latin American countries; and (vi) developing
Asian countries.
- The
level of entrepreneurial activity changes over time.
There was a decline of 25 per cent in the GEM global
average between 2001 and 2002. However, it increased
by more than 50 per cent in India during the same period
(from 11.6 per cent in 2001 to 17.9 per cent in 2002).
- The
demographic profile of entrepreneurs suggests that about
two-thirds of them are men and one-third women. The
largest represented age group is 25-44.
- In
assessing the entrepreneurial framework conditions,
the overall assessment of the national experts was focused
on three conditions: (a) government policies; (b) cultural
and social norms; and (c) education and training. Another
condition was assessed to be of intermediate importance,
which was financial support.
In
order to assess the supportiveness of entrepreneurial
framework conditions in a country, it was necessary to
define the various components of EFC. This was done by
an international consortium of researchers who selected
the following 14 components for EFC:
- Financial
support to new firms
- Government
policy on new firms
- Government
programmes for new firms
- Education
and training support
- Research
and development transfer
- Commercial,
legal and professional infrastructure
- Market-openness
and ease of entry
- Adequacy
of physical infrastructure
- Appropriateness
of social norms
- Appropriateness
of cultural norms
- Opportunities
for new venture creation
- Entrepreneurial
capacity
- Intellectual
property rights (IPR) law and enforcement
- Facilitation
for women entrepreneurs
The
level of entrepreneurial activity in India was assessed
through an adult population survey. The sample size was
increased from 2,011 in the year 2001 to 3,047 in 2002.
Based on the procedures and weightage systems outlined
above, the Total Entrepreneurial Activity (TEA) index
was computed for the country, which was 17.9 per cent
for the year 2002, the second highest among 37 countries
(Thailand being the highest with 18.9 per cent). The figure
is 6.3 per cent higher than the 11.6 per cent of 2001,
implying that the level of entrepreneurial activity in
India has gone up by more than 50 per cent in one year,
says Dr Mathew J Manimala, author of the GEM India 2002
report, and professor of Organisation Behaviour and chair
professor of entrepreneurship, IIM-B.
The
vibrancy of the Indian economy and the substantial improvement
in the opportunity-based entrepreneurship may be due to
the irreversible process of economic liberalisation which
has created several opportunities for private operators.
This is also substantiated by the fact that in the assessment
of the entrepreneurial framework conditions (EFCs) of
the country, the experts have given a more favourable
rating to those aspects where more and more of private
operators are allowed into. Obviously, a major precondition
for entrepreneurship to flourish is the empowerment of
the private sector, says Dr S Raghunath, chairperson,
NSRCEL, and professor of corporate strategy.
The
NSRCEL was set up at IIM-B to encourage young management
and technology graduates to act upon their ideas, energy
and talents for producing leading global companies of
the future. The NSRCEL seeks to help budding entrepreneurs
define their perceived objectives with a view to accessing
resources, says N S Raghavan, chairman, advisory
council, NSRCEL.
The
NSRCEL has been set up at IIM-B to encourage young management
and technology graduates to act upon their ideas, energy
and talents for producing leading global companies of
the future. It seeks to help budding entrepreneurs define
their perceived objectives with a view to accessing resources.
IIM-B
was established in 1973. The IIM-B campus is located in
100 acres of sylvan surroundings on the southern edge
of Bangalore. Today, IIM-B is recognised as Indias
best business school. Its world-class infrastructure provides
the foundation for its programmes of teaching, research,
consulting and other professional services.
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