India has been ranked fourth out of 51 countries in having a quality entrepreneurship ecosystem, a new global report said on Thursday, reflecting the steady rise in the nation's business environment over the years.
India's ranking in the Global Entrepreneurship Monitor (GEM) National Entrepreneurship Context Index (NECI) report is a drastic turnaround following a much lower score in 2021, which was 16th overall.
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, the report said.
GEM defines the entrepreneurial context of a particular economy in terms of 13 different characteristics, labelled 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 Sreevas Sahasranamam, who is a co-author of the current GEM global report and Associate Professor in Entrepreneurship & Innovation at Strathclyde Business School, Glasgow, UK said that the improved quality of the entrepreneurship ecosystem is a reflection of the Indian government's initiatives.
"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," Sahasranamam said.
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".
"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," he said.
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 Indians excelling in several arenas of start-ups.
"The motivation 'to continue a family tradition' continues to be an important driver of entrepreneurship in India, with 69 percent of respondents agreeing to it. Another strong driver has been 'to make a difference in the world' at 81 percent," it said.
According to it, nearly 80 percent 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.
However, only 20 percent 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 percent of the respondents, who saw new opportunities for business, fear that they might fail," the report highlighted.
"India entrepreneurs were at the top globally (nearly 70 percent) when it comes to pursuing new opportunities due to the pandemic," the report further said.
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