India ranks as one of the best places in the world to start a business

Published: 13 February 2024

India is one of the best countries in the world to start a business, placed second, according to the Global Entrepreneurship Monitor (GEM) 2023/2024 Report.

Professor Sreevas Sahasranamam with University tower in backgroundIndia is one of the best countries in the world to start a business, placed second, according to the Global Entrepreneurship Monitor (GEM) 2023/2024 Report.

India has improved its ranking from 4th to 2nd during the last year.

India scores highly on ‘social and cultural norms’ in support of entrepreneurship and ‘entrepreneurship education at the school and post-school level’.

Professor Sreevas Sahasranamam of University of Glasgow Adam Smith Business School, and co-author of the global GEM report, said: “This is an encouraging trend that reflects highly of initiatives such as Atal Tinkering Lab in schools, stress on innovation in the New Education Policy, and cultural mainstreaming of entrepreneurship through popular TV shows like Shark Tank. Last year, under India’s G20 presidency, a dedicated engagement group for startups called Startup20 was launched, which also gave major impetus to entrepreneurship by bringing together global stakeholders.”

The insights are based on a survey carried out with national experts in India where they were asked to assess the country on 13 Entrepreneurship Framework Conditions (EFCs). These assessments are the basis for an economy’s National Entrepreneurship Context Index (NECI) score and rank.

India is one of only three GEM countries in which all EFCs were assessed as more than sufficient (alongside the Netherlands and the United Arab Emirates).In addition, the results of the Global Entrepreneurship Monitor survey reveal:

• ‘Making A Difference in the World’ was the most popular motivation among Indian entrepreneurs, agreed by more than four out of five.
• Three out of four entrepreneurs said they had started a business to continue a family tradition.
• India is one of just five countries where experts assess both social support for women entrepreneurs and their resource access as satisfactory or better.
• India is one of just three countries where early-stage entrepreneurship rates and established business ownership rates are on par, an emerging trend that suggests businesses are also sustaining over a longer time.

According to Dr. Sunil Shukla, National Team Leader of the GEM India Team and Director General of the Entrepreneurship Development Institute of India (EDII), Ahmedabad, "India has seen a quantum jump in NECI from the 16th position in 2021 to 4th in 2022, to 2nd in 2023. With impressive and growing ecosystem enablers, youth aspirations and their confidence, India's entrepreneurial landscape looks upbeat."

The report also highlighted some areas that need attention:

• Growth expectations are muted among India’s entrepreneurs, with less than one in 10 expecting to employ at least six more people over the next five years.
• The largest majority - 70% of Indian entrepreneurship - is in consumer services such as retailing, hotels and restaurants, and personal services. It fares among the lowest globally in the proportion of entrepreneurs in business services (2.3%) such as information technology and professional services.

Professor Sahasranamam added: “More impetus and support is needed to build business service entrepreneurs in India. Business services tend to have higher margins, greater potential for scaling, and have greater barrier to enter compared to consumer services.”

The Global Entrepreneurship Monitor is the largest single study of entrepreneurial activity in the world which started in 1999. It is the only global research source that collects data on entrepreneurship directly from individual entrepreneurs. In 2023, it surveyed over 136,000 individuals as part of the Adult Population Survey, including more than 3000 in India and more than 2000 experts as part of the National Expert Survey in 49 countries.

First published: 13 February 2024

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