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ENTREPRENEURSHIP
REPORT 2015
Fostering A New Wave Of Entrepreneurship
Foreword
Founded in 1959, Amway is today the world’s largest Direct Selling FMCG Company in the world with
operations in more than 100 countries and regions. For the past six decades, Amway’s business has
been built around providing self-employment opportunities to individuals to retail our world-class
FMCG products, such as Nutrilite, Artistry, Persona, Attitude, Glister etc.
We have been privileged to support 10 million individuals across the world to become self-employed
or independent resellers of our products. Through this, we have gained a rich understanding of what
drives entreprenuership and self-employment globally.
We believe India can benefit from this vast repertoire of learnings. As the demographic dividend
unfolds and the business environment changes in India, more Indians have reasons to start their own
businesses. Amway is committed to helping this new wave of entrepreneurship and in line with our
annual Amway Global Entreprenuership Report (AGER), we launched the India Entreprenuership
Report last year to identify what motivates entrepreneurs here and understand the environments in
which they operate.
Our second edition, Amway India Entrepreneurship Report 2015: Fostering A New Wave Of Entrepre-
neurship, builds on our findings from last year. It reveals the regional variations, state differences, and
the main drivers, obstacles and motivations that influence entreprenuership in India.
Anshu Budhraja
CEO, Amway India
1
Contents
Foreword
Introduction 4
Executive Summary 8
Entrepreneurship Readiness 13
Recommendations 23
3
Introduction
Why we must talk entrepreneurship
Demographic opportunities and challenges are often talked about in the context of India’s economic
growth. According to the United Nations Population Database 2015, India is one of the youngest
nations in the world with more than 62 percent of its population in the working age group (15-59
years) and more than 54 percent of its total population below 25 years of age. Our population pyra-
mid is expected to bulge across the 15-59 age group over the next decade. In fact, during the next 20
years the labour force in the industrialised world is expected to decline by 4 percent while in India it
will increase by 32 percent. Eleven to 13 million Indians are estimated to come onto the job market
every year till 20251.
To both absorb the growing bulge in our working population, and to speed up overall economic
growth, India will have to create jobs in the primary, secondary and tertiary sectors at a brisk pace.
Sparking entrepreneurship across all sectors will be crucial for this to happen.
India has not efficiently harnessed its potential for entrepreneurship though; the MSME (micro, small
and medium enterprises) sector contributes to only 17 percent of our GDP as compared to 85 percent
in Taiwan, 60 percent in China and 50 percent in Singapore2. The cost to start a business as a
percentage of income per capita was 51 per cent in India, over five times the G20 average of 9.4
percent, the largest in the G20 by a significant margin (2010–12 average).
To foster this spirit of enterprise, supportive ecosystems have to be shaped and created at various
stages of entrepreneurship. Key parameters such as access to funding, social perceptions of entre-
preneurship, government regulations, entrepreneurship education and an ecosytem that facilitates
mentorship/advisory are important factors. The fears, motivations and drivers for the adoption and
success of entrepreneurship can be found within these parameters.
The Amway India Entrepreneurship Report 2015 (AIER), an extension of the annual Amway Global
Entrepreneurship Report (AGER)3, aims to train a spotlight on these issues. Our objective is to under-
stand the latent enthusiasm for entrepreneurship in our country as well as the factors that motivate
and obstruct the creation of new enterprises.
Amway India hopes the insights will be useful reading for policy planners, government bodies, finan-
cial institutions and entrepreneurship evangelists to help create a more enabling, conducive environ-
ment for existing and potential business owners in India. The conversations sparked off from these
findings, we hope, will give way to more progressive and timely policy interventions.
John L Khiangte
Senior Policy Analyst - Government Affairs,
Amway India
5
Facts & Figures
States covered
21 States and 50 cities
Sample
250 households were surveyed from each of the 21 states. One male
and one female member in the 21-65 age group were interviewed from
each household taking the total no of respondents to 10,768 individuals
(Male 5,402 and Female 5,366)
BY AGE GROUP
20%
37%
21-35 years
36-49 years
43%
50-65 years
BY INCOME
25% 37%
upto 3 lakh
3 to 10 lakh
38% above 10 lakh
BY EDUCATION
2.9% 0.7% 7.1%
14.7% M.Phil/PhD
3.3% Graduate/PG (Professional)
Graduate/PG (General)
31.9% SSC/HSC
39.5% School 5-9 years
School up to 4 years
Illiterate
CITIES AND STATES COVERED
1 Agra 26 Lucknow
2 Ahmedabad 27 Ludhiana
3 Amritsar 28 Madurai
4 Aurangabad 29 Meerut
5 Bengaluru 30 Mumbai
6 Bhopal 31 Mysore
7 Bhubaneswar 32 Nagpur
8 Chennai 33 Nashik
9 Coimbatore
10 Dehradun
11 Delhi
12 Faridabad
34 Navi Mumbai,
Thane, Kalyan,
Dombivali
35 Noida
36 Panipat
37 Patna
38 Pune Metropolitan
13 Gandhinagar Region
14 Ghaziabad 39 Raipur
15 Gurgaon 40 Rajkot
16 Guwahati 41 Ranchi
17 Gwalior 42 Rewari
18 Howrah 43 Shimla
19 Hyderabad 44 Solapur
20 Indore 45 Surat
21 Jabalpur 46 Thiruvananthapuram
22 Jaipur 47 Vadodara
23 Jodhpur 48 Varanasi
24 Kanpur 49 Vijaywada
25 Kolkata 50 Vishakhapatnam
7
Executive Summary
Our survey shows that there is a tangible enthusiasm for entrepreneurship as being a good prospect
to earn a livelihood in India, with nearly two-thirds of the respondents viewing it favourably. This is
good news for India as entrepreneurship is an important source of competitiveness, growth and job
creation in a country, especially in an emerging economy.
Yet, even as our findings show a perceptible attitude advantage when it comes to entrepreneurship,
the environment and the enabling ecosystem in India has not kept pace. Only 11 percent of the
respondents said the environment to start a business in their state had improved significantly over
the past five years. Only 14 percent of the respondents feel the government is doing the “best it can
under the given circumstances” to promote entrepreneurship. Nearly eight in ten people (79 percent)
felt that either their governments were not doing enough to promote entrepreneurship, or could do
more. The awareness of government schemes and programmes were poor as well.
Consequently, even as two-thirds view entrepreneurship positively, only three in 10 people said they
could imagine starting their own business; and overall, only 19 percent of respondents said they are
“very open to starting a new business and in fact are actively pursuing one”. A conducive, facilitating
environment can enable more people to move towards actually becoming entrepreneurs.
Interestingly, two primary reasons that might seem at opposite ends of the spectrum emerge as the
biggest motivations for entrepreneurship. Of all the reasons that appeal most as a driver to start one’s
own business, 44 percent respondents cited wealth creation as the “most important” factor. Some-
what in contrast to the aspirational aspect of wealth creation, 70 percent of the respondents also said
they believed people in their city/town started their own business because they were unable to find
employment elsewhere. The dichotomy suggests a disguised positivity to entrepreneurship; a diver-
gence in how people view themselves as entrepreneurs as opposed to how they view others who
became one.
Another obstacle for entrepreneurship in India is the fear of failure, with 63 percent of the overall
respondents saying so. This is aligned to our global findings as well. The AGER 2015 found that for 70
percent of worldwide respondents, the fear of failing is an obstacle to starting a business. Globally,
and in India as well, “financial burdens up to bankruptcy” is the main element breeding fear. It isn’t
surprising then that 77 percent said access to financing was either the “most important” or “very
important” factor to starting one’s own business, higher than other factors such as government
schemes for entrepreneurs and family support. The role of financial services institutions is crucial to
facilitating creation of new enterprises.
9
Entrepreneurship Confidence
Nearly half of all respondents (45 percent) said the environment to begin a business in their state
has improved over the past five years. But only 11 percent of the respondents felt the environment
had “improved significantly”, indicating that while the business environment has seen some prog-
ress, and much more needs to be done to foster entrepreneurship in India. Gujarat (31 percent),
Karnataka (26 percent) and Assam (22 percent) were the top-ranking states when it came to
“significant improvement” in the environment.
11% 8%
17%
Has worsened significantly
Infrastructure (road, electricity, ICT, water) was the area in which people perceived most improve-
ment. Sixty six per cent of all India respondents said infrastructure had either improved “moderate-
ly” or “significantly”. Respondents in Kerala, Karnataka and Telangana were most satisfied with the
pace of improvement in infrastructure.
Respondents rating on
Infrastructure (road,electricity,ICT,water) 3.7 a scale of 1 to 5; where
Education (schools & colleges) 3.6 1 = worsened signifi-
cantly; 2= worsened
Society’s attitude to entrepreneurship 3.5 marginally; 3= has
remained the same, 4 =
Government policies and schemes 3.4
has improved, but
Mushrooming of private industry & jobs 3.4 moderately and 5= has
improved significantly
0 1 2 3 4 5
The environment for entrepreneurs to start businesses in the states
percentage of respondents in each state
All India 8 17 30 34 11
Andhra Pradesh 4 17 32 34 13
Assam 15 22 21 19 22
Bihar 2 9 25 51 13
Chhattisgarh 2 11 35 47 5
Delhi 11 14 26 38 11
Gujarat 4 6 18 41 31
Haryana 5 8 62 21 3
Himachal Pradesh 27 22 22 24 5
Jharkhand 9 49 28 13 1
Karnataka 12 7 64 26
Kerala 9 44 31 13 4
Madhya Pradesh 8 13 14 47 18
Maharashtra 6 13 24 44 12
Odisha 6 14 23 39 18
Punjab 24 7 45 23 2
Rajasthan 1 8 33 54 4
Tamil Nadu 6 23 38 32 1
Telangana 6 24 24 28 18
Uttar Pradesh 5 13 33 41 9
Uttarakhand 13 19 29 28 11
West Bengal 3 20 54 19 4
Respondents rated the changes over the last five years in their states on a on a scale of 1 to 5;
where 1 = worsened significantly; 2= worsened marginally; 3= has remained the same, 4 = has
improved, but moderately and 5= has improved significantly 11
The Attitude Advantage
Entrepreneurship is valued in India. Nearly two-thirds (66 percent) of respondents consider it to be a good
prospect. While encouraging, this is lower than the global average of 75 percent, according to AGER 20154 .
80
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13
Entrepreneurship Readiness
Nearly one in two respondents (47 percent) overall said they had either thought about starting their
own business or are actively pursuing one. Overall, 19 percent of respondents said they are “very open
to starting a new business and in fact are actively pursuing one”. Income doesn’t lead to significant
differences in the active pursuit of opening a new business.
Jharkhand has the highest percentage of respondents (60 percent) who say they are actively pursu-
ing a new business, followed by Uttarakhand (40 percent) and Uttar Pradesh (29 percent).
The gender gap is striking here too. One in four men (25 percent) are actively pursuing a new busi-
ness but only 13 percent of women are. The thought-to-action journey seems to be the toughest for
women as well.
Male Female
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The Way to Wealth or
an Alternative to Unemployment
Wealth creation tops the list of factors that would motivate people towards entrepreneurship in India.
Of all the reasons that appeal most as a reason to start one’s own business, 44 percent of all respon-
dents cited wealth creation as the “most important” factor, different from our global findings5 where
“independence from an employer, being my own boss” and “self-fulfilment, possibility to realise own
ideas” were the most appealing reasons. The other factors cited as choices came a distant second
and all received almost equal weightage on being “most important” reason for starting one’s own
business.
If you were to start your own business, which of the following factors
would appeal to you the most?
Not important Somewhat important Important Very important Most important
Wealth creation 3 5 15 33 44
As an alternative to unemployment 3 8 25 41 22
Somewhat in contrast to the aspirational aspect of wealth creation, 70 percent of the respondents
also said they believed people in their city/town started their own business because they were
unable to find employment elsewhere, indicating a dichotomous, “disguised positive” perception.
The respondents’ personal motivation to start a business is clearly in contrast to why they think
others become entrepreneurs.
Yes, to a
great extent
7%
Yes, to some
37%
24% extent
I don’t think
33% so
I can’t say
Across gender, income and age, the fear of failure emerges as a clear obstacle to starting a business
with 63 percent of the overall respondents saying so. This is aligned to our global findings as well.
The AGER 2015 found that for 70 percent of worldwide respondents, the fear of failing is an obstacle
to starting a business.
Unlike in India though where age doesn’t seem to amplify or alleviate the fear, our global study found
that respondents under 50 years see the fear to fail as a bigger obstacle than those over 50 years
(under 35 years: 72 percent; from 35 to 49 years: 72 percent; over 50 years: 66 percent6).
5%
Yes
32% No
63% Can’t Say
The fear of failure is composed of different factors. Overall, 31 percent of respondents found “financial
burdens up to bankruptcy” as the “most important” cause for the fear. Non-conducive market condi-
tions (24 percent) and fear of unemployment (23 percent) were the other key causes of the fear.
Globally, as well, “financial burdens up to bankruptcy” and “threat of the economic crisis” - a major
personal fear and a huge external influencer - were found to be the main causes for fear.
Fear of unemployment 5 10 23 39 23
17
Entrepreneurship Can Be Taught
On average, 73 percent believe that anyone can be trained/educated to be an entrepreneur. The level
of education seems to have a reverse correlation with this notion of aspirational entrepreneurship.
Only 50 percent of M.Phils and PhDs seem to think anyone can be educated/trained to be an entre-
preneur.
I can’t say 3%
Most don’t feel limited by their current level of education with 62 percent of all respondents saying the
education they had right now was sufficient to start their own business. The gender gap raises its
head here though with eight percent less women than men believing that they are sufficiently educat-
ed to become entrepreneurs. Level of education doesn’t seem to influence this sentiment though.
Considering only 27 percent of the nationwide sample said they had been introduced to entrepre-
neurship as part of their formal education syllabus, the positivity towards entrepreneurship being
something they believe can be pursued is noteworthy.
4%
34%
62%
All India 27
Andhra Pradesh 11
Assam 25
Bihar 40
Chhattisgarh 2
Delhi 59
Gujarat 55
Haryana 5
Himachal Pradesh 40
Jharkhand 3
Karnataka 44
Kerala 27
Madhya Pradesh 28
Maharashtra 22
Odisha 60
Punjab 43
Rajasthan 21
Tamil Nadu 52
Telangana 19
Uttar Pradesh 3
Uttarakhand 5
West Bengal 2
What would you like to be trained /educated on to start your own business?
percentage of respondents who chose the following options
Financial Management
49 % 57% Marketing
People Management
55 %
58 %
Sales
44 %
Product development
19
Access to Finance is Key
When asked who they would approach when starting a business, 83 percent of the respondents said
banks would be their main port of call.
Banks 83%
Access to financing was either the “most important” or “very important” factor to starting one’s own
business for 77 percent of overall respondents, higher than any other factor.
The above insights clearly point to the role of financial institutions in fostering and facilitating entre-
preneurship. The reality though suggests that a lot of work needs to be done to respond to this.
According to the World Bank, the ratio of domestic credit to GDP in India was 48.2 percent compared
to an average of 99 percent across the G20 countries in the period of 2008 to 2010. In 2011, only 0.09
companies were registered in India for every 1,000 people of working age, among the lowest in G20
countries.
As per data from the Reserve Bank of India, the share of small scale industries in gross bank credit
from scheduled commercial banks has been continuously decreasing. Its share has fallen from 15.42
percent of the gross bank credit in 1991 to 6.34 per cent in 2006-07. Reinvigorating the flow of credit
will give existing and potential entrepreneurs a huge fillip.
Factors important to start one’s own business
percentage of respondents who chose the following options
Political influence 10 14 27 30 18
Family support 2 6 19 37 35
21
Governments Can Do More
Nearly one in three (32 percent) respondents believe their state government was not doing enough
to promote entrepreneurship in their states. Only 14 percent of the respondents feel the government
is doing the “best it can under the given circumstances”. 47 percent of the respondents feel the
government is working to promote entrepreneurship but believe it can do more.
Not at all Yes, but it needs to do much more Yes, it is doing the best it can I can’t say
All India
West Bengal
Uttarakhand
Uttar Pradesh
Telangana
Tamil Nadu
Rajasthan
Punjab
Odisha
Maharashtra
Madhya Pradesh
Kerala
Karnataka
Jharkhand
Himachal Pradesh
Haryana
Gujarat
Delhi
Chhattisgarh
Bihar
Assam
Andhra Pradesh
0% 20% 40% 60% 80% 100%
There are wide state-level variations on this issue with respondents in Telangana, Gujarat and
Madhya Pradesh being most appreciative of their government’s support to entrepreneurship. On the
other hand, respondents in Jharkhand, Himachal Pradesh and Assam are substantially dissatisfied
with their government’s performance on this score.
Spread the Word
Much of the perception that the government has either not done enough, or not done anything at all,
could also be a function of the poor awareness of government schemes. Nearly half the respondents
(49 percent) polled that they did not know of any government schemes or programmes to promote
entrepreneurship. Even the ones (43 percent) who said they knew of some government schemes to
promote entrepreneurship could not remember the details of such programmes. Governments would
be well advised to invest in mass media communication campaigns and other outreach initiatives to
ensure that lack of awareness isn’t a stumbling block to the access and adoption of existing and
future government schemes.
Don’t know any Have heard, but can’t remember Have heard, and could recall at least one
All India
West Bengal
Uttarakhand
Uttar Pradesh
Telangana
Tamil Nadu
Rajasthan
Punjab
Odisha
Maharashtra
Madhya Pradesh
Kerala
Karnataka
Jharkhand
Himachal Pradesh
Haryana
Gujarat
Delhi
Chhattisgarh
Bihar
Assam
Andhra Pradesh
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
23
Recommendations
1. Enhancing Infrastructural Development: The survey reveals a strong correlation between positivity
towards business environment and development of infrastructure. In boosting entrepreneurship,
creating new infrastructure such as roads, highways, ports as well as digital infrastructure that
augments access to technology and the internet plays an important role. State governments will be
well advised to focus on this aspect. Infrastructure is an expensive capital expense for govern-
ments but its impact on entrepreneurship makes the return on investment even more compelling.
2. Facilitating Financial Access: World over, fear of failure is the biggest stumbling block to entrepre-
neurship. The India survey found that to be true for India as well. Fears of bankruptcy and personal
financial insolvency contribute most to this fear. Financial services institutions such as banks,
micro-lending agencies or non-banking financial companies need to play an important role to help
people negotiate this fear and design financing solutions that can facilitate new enterprises. Their
role in de-risking start-ups and business owners will be crucial to the growth of entrepreneurship.
Policy makers must work in close coordination with these financial institutions to ensure that
capital is accessible and timely for aspiring entrepreneurs.
3. Providing Entrepreneurship Education: The survey revealed that most respondents consider their
current education to be sufficient for becoming entrepreneurs, despite the fact that not a large
percentage had received entrepreneurship-focussed training or skills enhancement. While aspira-
tional confidence is positive, people might not be able to articulate its benefits in the absence of
entrepreneurship education. To aid creation of enterprises, and to lead to productive entrepreneur-
ship, policy makers would be wise to invest in establishing programmes, centres and modules that
deliver relevant education.
4. Communicating Government Schemes: In the context of having articulated the National Skills
Mission, where entrepreneurship is relied on to create jobs for India’s rapidly-growing workforce,
the government must be able to communicate and spread awareness of the various government
schemes and programmes. The survey found that there was fairly low awareness of existing
government initiatives to boost entrepreneurship.
5. Creating a Pull for Women: The survey found that women are almost as likely as men to be posi-
tively inclined to view entrepreneurship as a desirable livelihood choice. Yet, there exists a wide gap
in their ability to become entrepreneurs. Entrepreneurship offers women many advantages - self-
reliance, more independence, greater control on their time - and policy makers must make women
a core target group. With special financing packages and better government schemes aimed at
them, women can be encouraged to become entrepreneurs.
For more information on the Amway India Entrepreneurship Report 2015, write to:
For more information on the Amway India Entrepreneurship Report 2015, write to:
John L Khiangte
John L Khiangte
Senior Policy Analyst - Government Affairs,
Senior Policy Analyst - Government Affairs,
Amway India
Amway
Email: India
john.khiangte@amway.com
Email: john.khiangte@amway.com
About our research partner: Micro-market and Economics (MME) team, Nielsen India Pvt. Ltd.
About our research partner: Micro-market and Economics (MME) team, Nielsen India Pvt. Ltd.
Previously known as Indicus Analytics, MME examines various aspects of the Indian economy both
Previously
at known
the national as Indicus
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conducts MME examines
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25