India is fourth of 51 countries for the quality of its entrepreneurship ecosystem according to the new Global Entrepreneurship Monitor (GEM) National Entrepreneurship Context Index (NECI).
The score, reported in the ‘GEM 2022/2023 Global Report - Adapting to a New Normal’, is a drastic turnaround following its 2021 score of 16th.
India’s latest score of 6.1 reflects a steady increase in the country’s overall entrepreneurial environment over the years. India's NECI score rose from 5.8 in 2019 (ranked 6th among GEM economies) to 6.0 in 2020 (ranked 4th). However, there was a dip in 2021, with a score of 5.0 (barely sufficient) and a rank of 16th.
GEM defines the entrepreneurial context of a particular economy in terms of 13 different characteristics, labeled the Entrepreneurship Framework Conditions (EFCs). The NECI results are based on the scores of the Framework Conditions for each of the participating 51 economies. At least 36 experts are selected to assess statements that make up the scores that can be compared across economies.
Dr. Sunil Shukla, head of the GEM India Team and Director General of the Entrepreneurship Development Institute of India (EDII), said that one explanation for the reversing of the trend from 2021 may be that the pandemic was a “severe, but temporary, shock to the Indian entrepreneurial environment with all 13 Entrepreneurial Framework Conditions scoring lower in 2021 than in 2020.”
He added: “So, in a sense, normal service resumed in 2022. But there are lessons to learn from the sudden dip in 2021, not least that India’s high-quality entrepreneurial environment cannot be taken for granted. The trends in the current report portray a more resilient and emerging climate for innovative and tech ventures in the country.”
Dr. Sreevas Sahasranamam, a co-author of the GEM 2022/2023 Global Report and Associate Professor in Entrepreneurship & Innovation at Strathclyde Business School, Glasgow, UK said: “The improved quality of the entrepreneurship ecosystem is a reflection of both initiatives of the Indian government in supporting new businesses such as Make in India and Atal Innovation Mission, and a change in popular culture evident through the interest and celebration of entrepreneurship through television shows like Shark Tank India.”
The GEM 2022/2023 Global Report also discusses results from the Adult Population Survey (APS) carried out in India with more than 2,000 respondents which found:
• The motivation “to continue a family tradition” continues to be an important driver of entrepreneurship in India, with 69% of respondents agreeing to it. Another strong driver has been “To make a difference in the world” (81%).
• Nearly 80% of the respondents agreed that they had the skills and experience to start their own business, saw good opportunities to start a business, and found it was easy to start a business in India, but only 20% were expecting to start a new business in the next three years
• Part of the reason for the above trend might be that over 50% of the respondents, who saw new opportunities for business, fear that they might fail
• India entrepreneurs were at the top globally (nearly 70%) when it comes to pursuing new opportunities due to the pandemic
Access the full report at https://www.gemconsortium.org/reports/latest-global-report.