The Ernst&Young-CNBC TV18 survey on entrepreneurship focuses on the importance of soft skills, even as claustrophobic controls and lack of capital remain the biggest hurdles on the road to business.
Quick, name the best role models in the world of business. If you answered Dhirubhai Ambani, Azim Premji and N R Narayana Murthy -- and not necessarily in that order -- you're in good company.
The majority of the respondents of the Ernst&Young-CNBC TV 18 survey on entrepreneurship named these self-made businessmen as entrepreneurs worthy of emulation.
The survey, exclusive to Business Standard, was organised by Delhi-based market research company Synovate. So, what did it reveal? The overwhelming feeling from the survey is that entrepreneurship has more to do with a state of mind than the external environment.
Methodology
Over 120 interviews were conducted in Delhi, Mumbai and Bangalore among four, clearly-defined target groups: small and medium entrerepreneurs, managers, management students and sick units.
For interviews with management students, Synovate covered Lucknow, Ahmedabad and Kolkata as well. The respondents were quizzed on the importance of luck in entrepreneurial ventures, the desirable qualities in an entrepreneur and the role played by the family.
Separate semi-structured questionnaires were used for each target group and "purposive" sampling was adopted to tap into the target groups: managers from multinational companies and the domestic private sector, chief executives and heads of small and medium companies and sick units and mainly final-year students from the premier B-schools.
Soft skills such as a positive, risk-taking attitude and a thorough knowledge of the business are critical. Among the outside factors, lack of finance options stands out as the single-largest hurdle in the path of entrepreneurs in the country.
And across the board, local success stories are more popular as a source of inspiration compared to even the most famous international businessmen.
Seeking inspiration within
The majority of the small and medium entrepreneurs interviewed for the survey were seasoned businessmen. Of the 40 respondents in this target group, 80 per cent had been in business for more than five years.
More than 42 per cent had started their business more than 10 years earlier, while just 3 per cent were less than a year old in business.
The survey also brought out the importance of family support. Sixty five per cent of the SMEs polled said their families were involved in the venture and were aware of the nuances of the business.
A corresponding 63 per cent agreed that they had realised their growth targets -- a direct consequence of family backing? Less than 27 per cent said the growth of their business had fallen short of their expectations.
Of course, that could also be due to the problems faced by SMEs in India. Lack of finance, high customs duties and high taxes were cited by most respondents as some of the obstacles in the business growth path.
The other issues SMEs have to grapple with include labour problems, competition, high cost of materials, excessive government regulation and delayed payments from customers.
Still, contrary to popular perception, most SMEs believe that liberalisation and the consequent opening up of the Indian economy has been a shot in the arm for their businesses. Of those polled, 63 per cent agreed that a freerer economy has been a blessing.
Which is not to gainsay the importance of luck. An overwhelming 70 per cent of the small and medium businessmen interviewed by Synovate declared that luck was a critical success enabler.
Interestingly, more than a quarter of those polled did not seek inspiration from anyone. Asked to name their role model businessman/corporate head/entrepreneur, while 18 per cent named Reliance Industries founder Dhirubhai Ambani, and 13 per cent said they were motivated by their father or brother, 28 per cent said they charted out their own path. The only non-Indian who made it to the list of role models is the king of the stock market Warren Buffett.
Erring on the side of caution?
That's not the case with B-school students. Asked to name their role models among businessmen, corporate heads and entrepreneurs, three non-Indians -- Bill Gates, Jack Welch and Richard Branson -- made their way to the list.
Of course, it helps that management students are -- indeed, they are expected to be -- more informed of happenings in the world of business, across the world.
No surprises among the Indian inspirations, either: Infosys founder N R Narayana Murthy (20 per cent), Ambani (12 per cent) and Airtel founder Sunil Bharti Mittal (3 per cent)
They may seek their role models among the best-known entrepreneurs, but you won't find too many students rushing out to set up in business on their own once they graduate.
Less than 20 per cent said they were likely to start their own business after graduation, while 81 per cent indicated their wish to work in the private sector, either with a multinational (50 per cent) or with an Indian company (31 per cent). And only 2 per cent were interested in pursuing a higher education.
That's slightly surprising, given that almost as many students believe their institute is training them to be employers as believe it is churning out employees.
While 35 per cent believe they are in training to become employers, 43 per cent feel their B-school is an employee-making machine.
But it does explain why students aren't willing to venture out on their own. Asked to explain their reluctance to turn entrepreneurs, the reason cited by the majority (62 per cent) is a lack of experience, followed by lack of capital (26 per cent).
Of course, it doesn't help that there is no one in the family to show the way: only 38 per cent of the respondents in the student target group have entrepreneurs in their family.
Still, 39 per cent are willing to concede that entrepreneurs are made, while 34 per cent believe entrepreneurship is an inherited trait; 5 per cent hold the slightly complicated view that while entrepreneurs are born, they need training before they can be "made".
Does this mean they will start something on their own in the future? The answer is a resounding 'yes': 72 per cent of the students interviewed are willing to take the plunge -- albeit, not immediately.
They trot out the usual suspects when asked about possible hurdles: finance (44 per cent), lack of experience (16 per cent), knowledge and market conditions (10 per cent each). Clearly, some things don't change.
Wear your attitude
At least, not until students become executives. Quizzed about what is necessary to become a successful entrepreneur, top of mind for managers in multinational and private Indian companies was not finance.
Instead, it was all about attitude. The ability to take risks came first (21 per cent), followed by a good personality, good head for business, a thorough knowledge of the subject and, of course, a high income (all 19 per cent).
Tellingly, hard work was listed after all these attributes, with only 16 per cent of the respondents considering it important.
And even if students are still hesitating at the brink, nearly half the salarymen polled are willing to throw caution to the winds and venture out on their own.
Only a third believe the present economic climate still calls for working for someone. Of course, that's also because a staggering majority (72 per cent) believe the present education system is geared towards churning out employees, and not oriented towards promoting entrepreneurship.
Once again, Narayana Murthy and Ambani find their way to the lists of role models, joined this time by J R D Tata (at the top, with 19 per cent of the managers naming him as their role model) and Wipro's Azim Premji.
Down, but not out
What about the heads of companies that have turned "sick"? Surely their experience should have made them bitter and turned them away from entrepreneurship? Surprisingly, no.
Of the four respondents in this target group, only one believes that it is wiser to be in a job rather than starting your own venture and will not recommend turning entrepreneur to others.
The rest are still willing to walk the tightrope of entrepreneurship, even as they cite labour trouble, bad competition, finance and inexperience as the reasons for their troubles. Greater profitability, more challenges and the freedom to be your own man are the advantages that keep them in business.
And no, luck doesn't have anything to do with it -- at least, that's what three out of the four polled believe. It must be reassuring that the role models they have chosen -- Narayana Murthy, Ambani and Premji -- are entrepreneurs who had to overcome tremendous odds before they could take their businesses to their current heights.