Start-ups propel India, China growth
A recent study by IIM-A & Tianjin University says that growth in the two countries is led by entrepreneurs.
By Mansi Bhatt, TNN |
AHMEDABAD: If India and China are growing the fastest, thank the businessmen in these two countries. A recent study by IIM-A and Tianjin University of Finance and Economics say an increasing number of people in both the countries prefer their own businesses and that economic growth is being led by the small and medium enterprises (SMEs). What’s more, people’s attitude towards entrepreneurship has a significant bearing on that region’s economic development, unlike the developed world. Research teams interviewed 3,000 respondents across India and China. “The attitude towards entrepreneurship is found to be highly affected by the economic development of that region,” says Neharika Vohra, professor at IIM-A.
Indians were more positive than their Chinese counterparts when it comes to entrepreneurship. The research suggests 63% of the Indian respondents thought of entrepreneurship as a favourable activity. In China, only 59% respondents believed so. Interestingly, in both countries, the southern region tops the entrepreneurship index. “It is a coincidence that in both the countries, southern regions have seen more entrepreneurial activities. “In early years, many engineers from Bangalore left for foreign countries for better opportunities. Later, with the outsourcing boom, many of them launched start-ups. While SMEs got help from financial institutions, there was also less of government interference.” says TiE Bangalore’s executive director K Vasudevan.
The research also talks about how China has experienced a faster growth for longer duration than India. According to the study, in 2002, SMEs were responsible for about 60% of China’s industrial output and employed about 75% of the workforce in cities and towns. The research talks about how progressive governments tried to make it easy for entrepreneurs to set up a business. Government support and economic environment in the state plays a key role in encouraging entrepreneurship. The study also describes how cities like Bangalore and Hyderabad grew as IT hubs due to the sector-region specific sops for starting new ventures.
“Apart from government support in the south, other key factors which helped the region grow included reservation across industry sectors. This led to fewer job opportunities, resulting in more entrepreneurial activities,” says Entrepreneurship Development Institute director Dinesh Awasthi. Over 75% of the participants from South India were positive about entrepreneurship, followed by western India where over 72.80% felt the same. In eastern India, over 69.5% were of this opinion.
Indians were more positive than their Chinese counterparts when it comes to entrepreneurship. The research suggests 63% of the Indian respondents thought of entrepreneurship as a favourable activity. In China, only 59% respondents believed so. Interestingly, in both countries, the southern region tops the entrepreneurship index. “It is a coincidence that in both the countries, southern regions have seen more entrepreneurial activities. “In early years, many engineers from Bangalore left for foreign countries for better opportunities. Later, with the outsourcing boom, many of them launched start-ups. While SMEs got help from financial institutions, there was also less of government interference.” says TiE Bangalore’s executive director K Vasudevan.
The research also talks about how China has experienced a faster growth for longer duration than India. According to the study, in 2002, SMEs were responsible for about 60% of China’s industrial output and employed about 75% of the workforce in cities and towns. The research talks about how progressive governments tried to make it easy for entrepreneurs to set up a business. Government support and economic environment in the state plays a key role in encouraging entrepreneurship. The study also describes how cities like Bangalore and Hyderabad grew as IT hubs due to the sector-region specific sops for starting new ventures.
“Apart from government support in the south, other key factors which helped the region grow included reservation across industry sectors. This led to fewer job opportunities, resulting in more entrepreneurial activities,” says Entrepreneurship Development Institute director Dinesh Awasthi. Over 75% of the participants from South India were positive about entrepreneurship, followed by western India where over 72.80% felt the same. In eastern India, over 69.5% were of this opinion.
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