By Sanjay Anandaram, Co-Founder (Network of Indian Cultural Enterprises)
On the midnight of 14th August 1947, India’s “Tryst with Destiny” officially began. This tryst began in the context of a 12% literacy rate, a life expectancy of 32 years, a poverty rate of 70% (the highest in the world at the time), a nominal per-capita of Rs 250, and a GDP of Rs 2.7L crore. India had been left impoverished at the time of Independence thanks to centuries of colonialism and imperialism. Moreover, given the experience with the East India Company, it was no surprise then that trade and business were severely distrusted and only just tolerated.
Private enterprise was discouraged, not least by a labyrinthine system of laws, controls, regulations and licenses that stifled business, entrepreneurship and innovation. Rajaji called this the “License Raj” that effectively all but put paid to the creation of a vibrant private sector. The government was the lawmaker, regulator, participant and in many industries like telephones and airlines, the monopolist. Crony big businessmen supported this as it kept them isolated from the competition. Corruption, red tapism and inefficiencies abounded. The economic growth rate from 1950 to 1980, was about 3.5% with per-capita growth in income at about 1.3%. Waiting times for say, a phone or a gas connection or a scooter ran into years! Tax rates in the 1970s were 97.5%. The first of our purusharthas namely artha, became unmentionable! The socialist mindset and practices were enshrined in the Preamble to the Constitution thanks to the 42nd Amendment in 1976. Draconian laws across sectors like foreign exchange, land, labour, and industries were passed, banks were nationalized, and the government became more of a “mai baap” sarkar dispensing largesse, in cash and kind, to preferred constituents. As Gurcharan Das writes in India Unbound “In a society steeped in feudal traditions and generations of economic stagnation, it is difficult to think of positive-sum results. Everyone is programmed to think that “my success can only come at the expense of your failure,” and “I can only get more land by taking it from you.” The government is “mother and father,” protecting me from my rapacious brother”.
Our first PM Jawaharlal Nehru, a socialist, who delivered the “Tryst with Destiny” speech didn’t think much of business and businessmen. He is quoted saying, in Gita Piramal’s “Business Legends”, QUOTE Nehru once told Tata that he hated the word profit. “Jawaharlal, I am talking about the need of the public sector making a profit,” Tata shot back. “Never talk to me about the word profit; it is a dirty word,” Nehru retorted UNQUOTE
Films of that period also reflected this zeitgeist. Villages were shown to be happy, peaceful, and idyllic, with hardworking and somewhat innocent villagers while cities were where the corrupt, devious, decadent, and rapacious capitalist businessmen influenced by undesirable Western lifestyles lived. In the villages, it was the exploitative greedy middleman, or trader or money lender or feudal landlord, and sympathetic to the city dwelling capitalist who reigned supreme. Any number of films showcased these societal beliefs. The asymmetry of power – money, influence, muscle, pricing, market and channel information and access to business networks – gave the middleman a dominant stature that was exploited, more often than not. This intermediary added no value whatsoever except to leverage the asymmetry of power for personal gain.
The educated middle class (the thin sliver that existed then) had very limited job opportunities outside of the government, family run business houses or to go abroad on a scholarship. A large number of highly talented and qualified Indians departed for foreign shores – this was referred to as the “brain drain”. As someone quipped: it is better to have brain drain than brains in the drain! The words “entrepreneur” and “startup” were unheard of while “Businessman” and “middleman” were commonly used, often pejoratively, for those running enterprises.
Such was the prevailing environment.
FROM MIDDLEMAN TO ENTREPRENEUR
Changes started occurring from the 1980s onwards till 1991 when economic liberalization was forced upon us by an acute balance of payments crisis. Since then there has been a progressive opening up of all sectors of the economy to the private sector and to foreign capital, easing of regulations relating to the ease of doing business, positive changes in tax laws, investments in infrastructure, adoption of digital technologies, the emergence and growth of a domestic market, reforms in capital markets and other areas. The internet, mobile phone, travel, media, and demographic shifts have contributed significantly to the emergence of the confident and assertive Indian, not just in economic terms but in social, cultural and political terms.
The word “entrepreneur” started slowly seeping into the country’s media, policy-making, popular imagination, academic and other circles about 20 years ago. India’s vaunted IT services and technology startups were started by educated, highly aware, very capable, passionate and driven middle class entrepreneurial Indians. Today, a vibrant robust ecosystem thrives and nurtures these entrepreneurs with a range of funders, entrepreneur-focused organizations, incubators and accelerators, academic institutions, corporations, service providers, government schemes, think tanks, practitioners and policymakers. A tiered structure of the industry has emerged with the top branded companies being globally known and employing several lakhs of national, regional, state and local players. The IT services industry today employs about 5M people and generates over $227B in revenues.
In January 2016, the government of India launched “Startup India” that saw the word “startup” become part of the official lexicon for the first time. “Startup” acquired a definition, a governance, policy and funding framework and was housed within the Ministry of Commerce. In just 9 years since 2014, an estimated $180B of capital would have flown into this tech startup entrepreneur ecosystem. Entrepreneurship is by choice, as opposed to the entrepreneurship of necessity, for the educated tech-savvy middle-class today.
Today, almost every ministry – from defense to space to agriculture to textiles to tourism to many others – is launching programs in partnership with entrepreneurs, innovators and startups for accessing innovative solutions to fill market gaps, offer greater value to customers, and make their ministry deliver greater value to its constituents.
For example, the Ministry of Textiles announced, in September 2022, the Handloom Startup India Challenge invited “innovative, cost-effective solutions for developing technologically upgraded handlooms which can provide better quality handloom products with reduced stress/drudgery for weavers during handloom weaving” and offered attractive prize money to the winning solution providers.
FROM IT TO CULTURE
The successful example set by the IT and tech startups played a catalytic role in the words “entrepreneur” and “startup” becoming part of the national discourse. While the pejorative “businessman” and “middleman” have largely disappeared in many sectors, their mimetic effects carry on in the minds of influential gatekeepers and custodians of sectors that have remained largely static and focused on preserving and protecting the status quo. “Profit” remains a dirty word and the idea that cultural assets can and should be a profit-making enterprise is anathema to them. They remain puritanically obsessed with the preservation and protection of culture, dependent on either state or philanthropic patronage and are suspicious of markets, “middlemen” and “businessmen”.
However, in parallel, a new breed of qualified, knowledgeable, tech savvy, experienced, committed, passionate and driven Indian entrepreneurs is rapidly emerging. These entrepreneurs add significant value to traditional products with their expertise in accessing capital, understanding of markets and customers, awareness of trends, customer engagement, design, IP creation, branding, and comfort with digital technologies. They cater to the new fast growing aware, well-travelled, tech savvy demographic that wishes to indulge in conscious and responsible consumption, is desirous of authentic, culturally rooted, and sustainable products while wanting to engage with contemporary designs, materials, colours. This important interface between these consumers and the creators is provided by the entrepreneur.
Culture is flowing, adaptive, adoptive, absorbing, morphing and finds expression in rituals, practices, mythologies, languages, food, art, craft, dress, music, and many other forms of human expression. Culture is a lived expression and experience that shapes and is shaped by the people. As people evolve, culture too evolves. Food, music, clothes, for example, all undergo inevitable changes in designs, materials, colors, representations and modes and venues of purchase and consumption with technology playing an important role across the value chain. There are any number of entrepreneurs at different stages of enterprise creation building businesses that are culturally rooted while being ever contemporary. They are creating value through branded products, services, and experiences: This enables income generation, wealth creation, livelihoods, and makes pursuing the family profession attractive for the next generation of creators. Recognitions, rewards, and regard are important but without cultural professions being remunerative, the unique skills and capabilities of creators will be lost over time. Entrepreneurs who build such businesses are cultural entrepreneurs.
THE NEED TO CREATE AN ECOSYSTEM FOR CULTURAL ENTREPRENEURSHIP
Government and development sector-focused organizations need to be an important part of a cultural ecosystem. Government is an enabler and facilitator, creating appropriate policies and regulations and institutions and standards that enable cultural entrepreneurship to thrive. There are great examples from our own IT sector as well as from countries around the world. Battles are first won in the mind by overcoming inhibitions, especially of the mimetic kinds. Development sector professionals and experts need to welcome profits, embrace markets, design, technology, branding, laws and regulations, contracts, IP creation and so on: it is possible to do so without letting go of cultural rootedness. Most importantly, cultural entrepreneurs need to be respected and recognized for the critical role they play in generating value and ensuring the sustainability of culture.
Today India, with a literacy rate of 77%, a life expectancy of 70 years, poverty rate of 16%, nominal per-capita of about Rs 1.5L and a GDP that is over Rs 40 trillion is among the world’s fastest-growing economies, is expected to be the world’s most populous by 2047 and with the most number of young people. There are over 65M MSMEs with many tens of millions of artisans, craftspeople and others employed in our cultural domains. Livelihoods, incomes, wealth and ultimately Brand India have to be created by, through and for them and by the creation of many newer ventures. Tourism alone can generate over $500 B and 50M jobs according to InvestIndia. It would be a travesty if we remain wedded to the economic metaphors of the past and hence are unable to help the participants in our cultural economy achieve their tryst with destiny. We need to therefore harness the power of cultural entrepreneurship and entrepreneurial thinking.