Entrepreneurship: Problems and Challenges Faced

Abstract

India has seen a surge in its entrepreneurial spirit in the last decade. However, the end of the decade saw the economic slowdown spoiling the euphoria and putting breaks on this growth story. The growth in entrepreneurship holds the key to turning around the slowdown. Many factors such as limited access to finance, poor infrastructure, lack of required skills, etc. pose challenges to the growth of entrepreneurship. In this paper, we would like to limit our study to three important factors namely cultural bottlenecks, bureaucratic procedures in setting up and lack of distribution. It is argued that attitudes towards entrepreneurs and entrepreneurship are important determinants for future entrepreneurial activity. Despite the presence of certain business communities, the culture of India continues to remain risk averse. Stability and tag of a big company continue to be the middle class aspiration. This cultural attitude hinders the growth of entrepreneurial spirit among the young. The Indian economy provides a revealing contrast between how individuals react under a government-controlled environment and how they respond to a market-based environment. Evidence suggests that recent market reforms that encouraged individual enterprise have led to higher economic growth in that country. Distribution is a major challenge that Indian entrepreneurs face towards scaling up. The difficulties of setting up the firm’s own distribution network coupled with the lack of internet penetration place Indian entrepreneurs at a disadvantage when compared with counterparts in other countries.

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