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What determines Entrepreneurial intent in India?

August 3, 2015

Setting up a business is the result of a long series of intricate choices. It is a procedure rather than the result of a distinct choice and the Entrepreneurial elements are not necessarily same and equal across different engagement levels of this process.

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An article in the Journal of Entrepreneurship and Innovation in emerging economies discusses the factors influencing entrepreneurial intent and studies the relationship between an individual’s preliminary entrepreneurial intention of starting a business and the factors driving the same, in India. Distinctions between several stages and engagement levels of the process have been recognised.

The decision to start a new firm is assumed to be planned for some time and thus preceded by an intention to do so. The article argues that before institutional factors such as financial markets, laws and regulation and incentive schemes play a role in affecting an individual’s decision to start a business, the decision is influenced by some intrinsic characteristics of the individual, which appears in the form of gender, age, location, education, work experience and subjective perceptions. The article presents the empirical study of all these variables in detail.

A striking outcome in India is seen in the case of gender, which shows no significant impact on the probability of business start-up, suggesting that both males and females are equally likely to have entrepreneurial intentions. It clarifies the previously held notion among the common masses that women entrepreneurship rate is low because they do not intend to expand beyond household barriers. In fact, men and women begin from the same starting point in the race of entrepreneurship. This implies that greater attention should be paid towards female nascent entrepreneurs at the start-up stage and bring them close to the young business stage.

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