Interviews

Sonu Bhasin on the History and Promise of Entrepreneurial Spirit in India

In an exclusive opinion piece for HarperBroadcast, author of the series Entrepreneurs Who Built India, Sonu Bhasin writes about the challenges that India’s entrepreneurs had to overcome to be successful. Read more below:

India has always been a land of entrepreneurs and businessmen. In fact, of the four varnas in our ancient caste system, the Businessman/Trader/Merchant is one of them. The earliest records available show that the businessmen have played an important part in the country’s economy at every stage.

While businessmen have managed to flourish in every era, the time between 1947 and 1991 was perhaps the most challenging one for them.  India became independent in 1947 and the newfound freedom brought forth aspirations and dreams for not just individual people but also for the  collective dreams of social, political and economic freedom.  However, the first Prime Minister envisaged a developmental model that had the state playing a dominant role as an entrepreneur as well as the funder of private businesses. The dreams of economic freedom that businessmen had of the new India quickly withered away as the British Raj was quickly replaced by the Licence Raj.

Due to the restrictions placed by the License Raj, which many say was a complex and opaque system, being an Entrepreneur in India meant a big headache. Further, the entrepreneurial spirit was kept on a tight leash by the complex system. Businesses were successful not so much because of what they did, but because of who they knew. Such was the dependence on the benign hand of the government that businessmen, due to their association with the politician and bureaucrat, also were enveloped in the cloud of corruption in the minds of the general public.

However, people forget that there were many businesses, and indeed businessmen, during those very challenging times that worked tirelessly to make the new India. It certainly was not easy, but these businessmen persevered. Gujarmal Modi and Lala Shri Ram are just two examples of such businessmen.  True, they did learn how to ‘manage’ the system, but it needs to be noted that it did require entrepreneurial skills to set up, manage and grow the business within the tight framework of the system. Manufacturing is never an easy business and the License Raj made it even more difficult with the restrictions on the numbers to be produced. It is to the credit of these entrepreneurs that they not only went about their work but also created products that became household names at that time.

Unfortunately, a large number of the businesses that were successful during the 1947–1991 era are not visible today. The Gujarmal Modi Group, the Shriram Group, the Dalmia Group, the Mafatlal Group, the Kamani Group are just a few names that were riding the success wave during the Licence Raj day, but are present in a highly diluted manner or are almost forgotten today.

However, what cannot and should not be forgotten is their contribution to laying the foundation of Indian economy and industry. If it were not for those stalwarts who worked against the odds and set up a business, provided employment to many people and kept the Indian economy growing, India of today would not be where she is currently.

Entrepreneurs of today, especially the millennials, cannot even imagine the odds that existed before 1991.  It was said that, in the License Raj, one needed a license just to breathe! The suffering that each businessman went through to run his business is a shining example of the grit and the determination that each one of them exhibited. They did not give in or give up.

The well-educated and extensively travelled entrepreneurs today are almost all of them global citizens. However, the earlier businessmen did not even have an MBA degree to their name. Nor did they have a ready pool of educated and trained youngsters with an MBA or an engineering degree, waiting to work with them. They relied on the inherent ‘Indian Business Sense’ that most of them had and looked for people who could learn on the job.

But many of the earlier entrepreneurs were completely unprepared to the new, liberalised environment after 1991. There is enough empirical data to show that businesses, and businessmen, who failed to adapt to the new environment post the liberalisation faded away quickly. A change in the external environment, over which they had no control, and the failure to adapt led to businesses going under.

This becomes relevant in the current times and for current entrepreneurs. The coronavirus unleashed an unprecedented set of challenges for all businesses around the world at the same time. Further, the development in AI and Machine Learning is bringing about change in the businesses and business environment that is difficult to keep pace with. To add to the uncertainty, the war in Ukraine is having a global impact – a situation that the millennials have not experienced before. Entrepreneurs of today need to remember that those who fail to adapt will find themselves withering away in this ‘new world’.

Entrepreneurs of today would also do well to focus on the spirit of entrepreneurship – which goes beyond just setting up a business or taking on a financial risk. The spirit of entrepreneurship encompasses the ability to look at failures squarely in the face; refusal to stay down after stumbling; internal strength to get up, dust oneself and move forth; the confidence to do things differently; the confidence to get one’s competitors to do things differently.

My learning from spending time with entrepreneurs is the following:  While entrepreneurship may or may not lead to success, there is no success possible without the spirit of entrepreneurship.

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