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India’s Lack of Entrepreneurship is Due to its Culture

Saurabh Malkar

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I came across an article shared on a Facebook group, describing Apple co-founder, Steve Wozniak’s, take on Indians’ lack of creativity and the resultant dearth of innovative enterprise. The article was met with a lot of pushback and hate-posting, mostly arising out of national and cultural chauvinism.

But Woz’s words were like music to my ears. He is certainly not the first person to have lambasted Indians for their lack of creativity and innovation, but he is one of the few ones who touched on points that subtly implicated the culture, straying away from the oft-cited bogey man – the Indian educational system.

I will try to swing further Woz’s wrecking ball and try to break down (pun intended) the shortcomings of Indian culture that stymie creativity, innovation, entrepreneurship, and individual progress.

For this rant, I shall use everyday examples and observations, while eschewing citing scientific literature. This is, thus, an opinion grounded in empiricism.

Low Expectations

Entrepreneurship is the pursuit of a lofty goal, often, with scant resources. The challenges are not merely of an infrastructural or a monetary nature, they are first and foremost of a psychological kind. The individual has to place his personal life and tertiary goals on the proverbial altar that will serve as the foundation of his venture.

Unfortunately, such goals and aspirations have no place in a culture of low expectations. Indian culture encourages playing safe just so one gets to check off a centuries old check list of ‘success.’ The check list comprises of education (in select disciplines), employment (in select industries), matrimony, a mortgage, and a car loan.

With the bar set to keeping up with the Joneses, setting off on an almost monkish, backbreaking entrepreneurial journey is off limits.

Group Think

Starting a business or being innovative requires a person to make critical decisions that can either make it or break it. Such critical decision-making needs one to be self-aware and accustomed to make independent decisions from a young age.

A culture that puts a premium on defining one’s identity in the ethnolinguistic group in which one was born is not at all geared for the rigors of independent decision-making.

To add to the burden, individuals are perceived as part of a group and are expected to be in lockstep with group conventions, practices, and thought. For a maverick, this can be stifling and self-isolation is the only counter-measure.

A sub-malady of group think is that individuals get painted with a rather broad brush. Group outliers, viz. future mavericks, tend to be ridiculed, jeered, and in some cases, ostracized due to the misalignment of their compass with the group north star.

A combination of group think and steep penalties on renegade behavior means that the raw creative energy, the fuel of entrepreneurship, is lost or discharged in hackneyed pursuits.

Identity Politics

Group think and ethnolinguistic segmentation segues into identity politics. People tend to judge individuals by their default identities, issued at time of birth, by no virtue or fault of their own.

While this pathology seems to be at its peak in the US, fortunately, there are counter voices that rail against it.

In India, it’s part and parcel of the routine life. Preferential policies and biases towards hiring folks of similar ethno-linguistic groups as that of the employer is rampant in most parts of the country.

Identity politics can creep into fraternizing, segmenting the populace along ethnolinguistic fault lines. This can be extremely counterproductive to the process of information exchange and making beneficial acquaintances – essential pre-requisites to entrepreneurial beginnings.

Lack of Grassroots Innovation

Entrepreneurship has become such a money-minting buzzword that universities now run courses that teach folks how to bootstrap their ideas into successful businesses. Big to medium sized cities see at least one event dedicated to discussing and fostering entrepreneurs. Magazines beat the entrepreneurial drum at least once in their publication cycle and Youtube is chalk full of videos on entrepreneurial hacks.

 

But really, entrepreneurship and innovation is not a gala affair and certainly doesn’t result from a structured top-down plan. It’s more akin to the randomness and meandering trajectories of Brownian motion. Over time, a few of these random trajectories lead to success.

Rockefeller’s success with oil, Henry Ford’s successful application of the assembly line, modern day advances in fracking, the smartphone, and all the petty things that make our domestic life convenient have one thing in common. They are the cumulative result of the effort of average individuals, with great minds and even greater dreams, who wanted to innovate contemporary processes and systems to bring about a greater good.

Indians, for a variety of reasons, lack the innovative mindset. Outliers apart, most Indians don’t think of upgrading existing ways of doing things to make their own lives better. To demonstrate this, I will use two extremely routine, but telling, elements of our lives – house cleaning and food packaging.

House cleaning involves sweeping, mopping, and wiping down surfaces.

The Indian broom hasn’t undergone any significant upgrade since its inception. It’s still made of long fibers of processed grass, held together by a plastic casing which doubles up as the handle. From head to tail, the broom measures around 3.5 feet. The result: poor cleaning and significant strain on the back from bending over. No thought has ever been put into upgrading this tool. It’s only through the entry of products from the West that urban Indians are being introduced to the ‘real’ broom – one with greater work efficiency and optimized for use in upright posture.

Mopping in the average Indian household is performed with a rag and a bucket of water. One has to squat and use their bare hands to mop the floor with the wet rag. Only recently has a mop and a purpose-built bucket been introduced into Indian homes. But to much dismay, this convenience is the result of globalization and trade, not local innovation.

It’s routine to wipe down surfaces with a damp rag. The process requires frequent rinsing and wringing of the rag. Not only is it time consuming, it also produces poorer results. To date, there is no alternative to this, as there is nothing like Clorox wipes on the market.

Food packaging is my pet peeve. I was particularly wowed by food packaging in North America. There is a great emphasis on three criteria – ease of opening, resealability, and ease of dispensing. Cue food packaging in India, and except a few multinational brands, most food packaging is dismal. None of it meets the above three criteria and situation hasn’t changed much over the past few decades.

It seems, at least empirically, that the driver of innovation and entrepreneurship – the individual – is missing in action. This very much explains, partly, the state of shambles India has found itself in.

Lack of Infrastructure

I won’t detail on infrastructural quagmires affecting at a macro level like GDP and public transportation. This is an individual-centric harangue, so I will touch on the micro effects.

Innovation or entrepreneurial pursuit needs contemplation, solitude, and some spare time to etch out the road map. The above elements become unattainable due to the way infrastructure is (mis -)set up in India, at least in urban India. (These problems don’t occur in rural India because there is no infrastructure to begin with.)

The Indian infrastructural setup is for the most part pre-industrial. This accompanied by a pre-industrial culture and way of life throttles any serious contemplation and self-reflection.

Following has been my observation.

Poor roads and dismal traffic management often result in urban Indians spending over 3 hours commuting one-way. While one could theoretically brainstorm and introspect while stuck in traffic, the co-existent cacophony from honking and outdated car motors makes this theoretical prospect unfeasible.

But what about using ear plugs and reading up on relevant issues on the Internet while stuck in traffic? This unfortunately is made impossible due to poor Internet speeds/bandwidth – a characteristic flourish of digital India.

The same lack of quiet is continues on into the urban residential setup, thanks to poor city planning, resulting in noisy vehicular traffic streaming right down the middle of the township. The problems get compounded, every now and then, by cultural and social events, where making the most noise and being inconsiderate to others seems to be the end goal.

With a lack of privacy, quiet, and uninterrupted me-time, it’s hard to think about anything, except the most trivial matters.

Inverse Logic

Part of the goods and services tax in India is also the culprit for not affording the average Indian sufficient downtime. Elements that free up time and make daily routine convenient – frozen and canned foods, processed foods, packaged foods, and household appliances like dishwashers, refrigerators, washers, and ovens – incur a steep tax.

The rationale: the above goods and products are luxury items, hence, should be steeply taxed.

The counter-rationale: how can these conveniences become mainstream if they cost a lot?

The result: most Indians continue to live pre-industrial lives, with household chores occupying a significant chunk of their daily schedule.

Introspection, contemplation, and brainstorming, then, are prerogatives of post-industrial cultures of the West, which is where most innovation and developments occur. This is not serendipity, it is cause-and-effect.

Parental Baggage

This might become a contentious issue.

Exceptions aside, adults in the West are expected to bear fewer parental responsibilities than adults in India. While helping parents out occasionally and tending to their health in times of need can certainly be accommodated in the life of a young adult, there is a threshold to such accommodation, beyond which it adversely affects the adult’s life.

Indian children are not only expected to take care (read middle age to grave) of their parents, they are also expected to fulfill some of the latter’s dreams and expectations. In some unfortunate cases, adults are expected to live with their parents, in line with long-standing cultural norms, despite having the means to move out.

The externalities of such a setup: young adults live a sheltered life and become encumbered with expectations and demands that can put their personal pursuits in a chokehold.

Such young adults can hardly be expected to become trailblazers and mavericks.

Indians are Philistines

Granted India has its own philharmonic orchestra and hosts art exhibitions and cultural festivals. Upon analyzing closely, one finds that such events draw out only the uber-elites of Indian metros – the real bourgeoisie with Ivy-league education and refined tastes. Unfortunately, they are a niche minority.

Most of the the Indian population, including inhabitants of metros, despite their university degrees and corporate careers, couldn’t care less about the arts. Patronage to the arts is considered so superfluous that it doesn’t even brush past the mental orbit of an average Indian.

The arts play a vital role in that they encourage creativity, out-of-box thinking, and open intellectual dimensions that cannot be opened by rote lessons that are the forte of the Indian K-12 system.

Case in point: the user experience on Apple products wouldn’t have been so definitively distinct had Steve Jobs not dropped in on a calligraphy course at Reed College.

It would be almost blasphemous and heretical for an Indian to wish to study the arts or want to build a career in humanities. Not only will he/she incur the wrath of their parents and the ridicule of a vacant society, they will remain cash strapped for the rest of their lives. The culture and the resultant economic system isn’t built to nurture artistic pursuits.

Notable Takeaway

The common thread running through all the above listed reasons is culture. It’s not the lack of money, or the burgeoning population, or poor governance – oft-cited culprits – that result in a dearth of entrepreneurship, lack of innovation, and a miserable existence.

In Closing,

While I would like to end on a sanguine note, I prefer realism to optimism. Cultures are difficult to change. Cultural upheaval results from the efforts of individuals who have seen the light and hazard walking towards something better.

There is a genuine dearth of rugged individualism in the Indian culture. With the engine for change, innovation, and entrepreneurship non-existent, there cannot be a cultural shift or individual progress or creative enterprise in India.

An ex-dentist and a business graduate who is greatly influenced by American conservatism and western values. Having born and brought up in a non-western, third world country, he provides an ‘outside-in’ view on western values. As a budding writer and analyst, he is very much stoked about western culture and looks forward to expound and learn more. Mr. Malkar receives correspondence at saurabh.malkar[at]gmail.com. To read his 140-character commentary on Twitter, follow him at @saurabh_malkar

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Economy

E-commerce: Helping Djiboutian Women Entrepreneurs Reach the World

MD Staff

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Djiboutian women entrepreneurs attended the launch of We-Fi MENA e-commerce, November 13, 2018. Photo: World Bank

Look around any café, bus, doctor’s waiting room or university campus and you will see heads down, fingers tapping as people immerse themselves into their screens. Increasingly, people are using their devices for shopping, with retail sales via e-commerce set to triple between 2004-2021.

Although significant gender gaps exist with internet use, and although online sales are currently dominated by US-based tech giants, this growing e-commerce trend presents an interesting opportunity for small businesses, and more specifically women’s businesses in the Middle East and North Africa (MENA).

This is a region where women’s economic empowerment is a significant challenge. With a female labor force participation rate of 19 percent, women’s participation in firm ownership at only 23 percent, and a rate of only 5 percent women top managers of firms across MENA’s non-high-income countries, there is significant scope for improving women’s participation in business and employment.

Access to finance also remains a problem, where 53 percent of women-led small and medium enterprises (SMEs) do not have access to credit and 70 percent of surveyed MENA female entrepreneurs agree that lending conditions in their economy are too restrictive and do not allow them to secure the financing needed for growth.

Several obstacles stand in the way of women’s entrepreneurship and access to markets, such as social norms, family care duties, and transportation issues. Not being able to physically access markets to sell their goods or to participate in international trade fairs to market their products is also a challenge.

This is where e-commerce can play a role, allowing women to circumvent these obstacles and sell their products online. For this, they need to rely on e-commerce platforms connecting them to clients around the world, on performant and affordable logistics, and on reliable payment systems. Building the e-commerce ecosystem will be key to allowing women entrepreneurs to access markets and grow their business, thereby employing more women, as data shows that firms run by women tend to employ more women.

The situation for women in Djibouti is no different. Gender inequality in the labor market remains substantial, with less than a third of women between the ages of 15 to 64 active in the labor market. Unemployment among both genders is high, with a rate of 34 percent for men but it is considerably higher for women at close to 50 percent.

Djiboutian women are also at a disadvantage in terms of education and skills to access economic opportunities. Women in Djibouti typically run small and informal firms in lower value-added sectors, which are less attractive to creditors, thus impeding their access to finance. Women entrepreneurs face difficulties accessing finance and launching formal enterprises.

There are, however, opportunities to increase women’s economic empowerment. Over 57 percent of inactive women in Djibouti say that they do not work because of family and household responsibilities. However, they also indicated they are generally not discouraged or prevented from accessing training or work opportunities by male family members, and there are no legal barriers against women’s entrepreneurship.

Years of research have shown, that when women do well, everyone benefits. Research has found women tend to spend more of the income they earn on child welfare, school fees, health care, and food for their families. Empowering women is an important path to ending poverty.

It’s vital to enable women to participate constructively in economic activities in Djibouti. More entrepreneurship will allow Djibouti to benefit from the talents, energy, and ideas that women bring to the labor market.

To help address this issue, on November 13, 2018, the World Bank launched a $3.82 million regional project called “E-commerce for Women-led SMEs.”  The project targets small and medium enterprises run or managed by women that produce goods marketable via e-commerce.

This project is at the crossroads of women’s entrepreneurship and the digital economy, which are two levers for the economic transformation of the region, and that it was very opportune to be able to launch it at the digital economy days of Djibouti.

The launch event took place with the participation of the Minister of Women and Family, the Minister of Economy, the Minister of Communication, the Head of the Women Business Association, and several Djiboutian women entrepreneurs.

The project will contribute to development of women’s entrepreneurship, digital commerce, and the economy in Djibouti and across the region. It will facilitate access for women-led SMEs to domestic and export markets through better access to e-commerce platforms. This will be done by training e-commerce consultants who, in turn, will train and help women-led SME’s access e-commerce platforms.

The project will also aim to ease access to finance for these SMEs by connecting them to financial institutions lending to women, particularly the IFC’s Banking on Women network. It will also work to create an ecosystem conducive to e-commerce by diagnosing regulatory, logistical, and e-payment constraints and supporting governments to lift them.

This launch comes following a successful pilot program in Tunisia, Morocco, and Jordan where women entrepreneurs were enabled to export handicrafts, organic cosmetics, and garments to several overseas destinations including Australia, Europe, and the United States.

The development of women’s entrepreneurship and the digital economy—including better access to domestic markets and exports—are essential levers for the development and economic diversification of the MENA region that the Women Entrepreneurs and Finance Initiative (We-Fi) e-commerce project strives to support. The Women Entrepreneurs Finance Initiative (We-Fi) is a collaborative partnership launched in October 2017 that seeks to unlock billions of dollars in financing to tackle the full range of barriers facing women entrepreneurs.

World Bank

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Getting around sanctions with crypto-rial

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In April 2018, the Central Bank of Iran banned domestic banks and people from dealing in foreign cryptocurrency because of money laundering and financing risks.

However, the CBI decided to take a more moderate stance toward the digital money and blockchain technology following the imposition of a new round of U.S. sanctions, hoping that the digital technology would facilitate Iran’s international money transfers and let the country evade the sanctions.

Meanwhile, as an oil producer with an oil-reliant economy dominated by petrodollars, Iran settled on the plan to utilize cryptocurrencies and blockchain technology to make up for any drop in oil revenues due to the economic sanctions designed to cut its oil sales.

Moving on the same track as China, Russia and Venezuela, Iran also hopes that blockchainization of state-backed fiats would lead to the demise of the dollar and put an end to the tyrant U.S. policies.

Under the toughest U.S. sanctions ever and blacklisting of Iran from the Belgium-based international financial messaging system (SWIFT), the country’s plan to create an indigenous cryptocurrency is improving incrementally and thanks to highly dynamic nature of the cryptocurrency, it can act as a good means for Iran to skirt certain sanctions through untraceable banking operations.

The CBI has been working with domestic knowledge-based companies to develop a digital currency, called crypto-rial, supported by HyperLedger Fabric technology.

As reported, the Informatics Services Corporation, affiliated to the CBI but run by the private sector, has accomplished development of rial-based national cryptocurrency and when the CBI approves the uses of national cryptocurrency, it will be issued to financial institutions such as banks to test payments and internal and interbank settlements.

Transactions at the state-backed virtual currency are carried out on an online ledger called a blockchain, just the same as Bitcoin, but since the infrastructure is privately-owned it will not be possible for people to mine it.

In fact, Iran is mainly aimed at testing the potentials of blockchain and crypto technology in running its financial system, making banks able to use the tokens as a payment instrument in transactions and banking settlement at the first phase of the blockchain banking infrastructure. The country seems inclined to enjoy the new virtual currency businesses which includes little notice or footprint and has also prepared the required infrastructure for trading cryptocurrency in its stock exchange.

However, in spite of the CBI’s prohibition from trading cryptocurrencies, Iranians had commenced using cryptocurrency and Bitcoin mining for transactions with the rest of the world before its use was banned by the CBI in the country.

Individuals and businesses in Iran have had access to virtual currency platforms through “Iran-located, internet-based virtual currency exchanges; U.S. or other third country-based virtual currency exchanges; and peer-to-peer (P2P) exchangers,” according to reports.

But the U.S. embargo on a number of cryptocurrency exchange platforms, including Binance and Bittrex, restricted Iran from receiving services, however, no assets belonging to Iranians were blocked. U.S. sanctions have also ensnared Iranian bitcoin traders.

Furthermore, in December, the U.S. Financial Crimes Enforcement Network, known as Fincen, issued a warning in an advisory to assist U.S. banks and other financial actors such as cryptocurrency exchanges in identifying “potentially illicit transactions related to the Islamic Republic of Iran,” Bitcoin.com reported.

Fincen claimed that since 2013 Iran’s use of virtual currency includes at least $3.8 million worth of bitcoin-denominated transactions per year. The organization noted that “while the use of virtual currency in Iran is comparatively small, virtual currency is an emerging payment system that may provide potential avenues for individuals and entities to evade sanctions.”

Fincen believes that P2P cryptocurrency exchangers are a significant means through which Iran can dodge economic sanctions.
Following the Fincen’s announcement, the United States lawmakers introduced a bill (HR 7321) to impose more sanctions on Iranian financial institutions and the development and use of the national digital currency, Cointelegeraph reported.

The act prohibits transactions, financing or other dealings related to an Iranian digital currency, and introduces sanctions on foreign individuals engaged in the sale, supply, holding or transfer of the digital currency.

In the wake of the U.S. restrictions, thus, cryptocurrency trades are limited into Iran’s domestic market and not possible at the international level and Bitcoin is sold at a significant premium relative to the global average price in Iran.

Unfortunately, the basic and premier regulations of using cryptocurrencies have not been ratified in Iran and Iranians are obliged to refer to stock exchange shops abroad to do their crypto-transactions, most of which are American obedient to U.S. regulations and of course, sanctions.

To make using cryptocurrency and blockchain technology legal and official in the country, the Iranian government is drafting a policy framework by the help of the CBI and the Stock Exchange Organization which clarifies all its regulations and policies over cryptocurrency and mining.

Being legislated, it is believed that SWIFT can be replaced by the digital money, i.e. the rial-pegged national currency, and transactions would be done faster and at lower prices.

Due to a lack of required regulations, cargos of equipment for mining cryptocurrency are seized by the customs administration. They are said to be released as soon as the government legalizes cryptocurrency use in the country.

First published in our partner Tehran Times

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How to build your entrepreneurial mindset today

MD Staff

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An entrepreneurial mindset is a way of life. Even if you aren’t starting your own business, an entrepreneurial mindset teaches you that no problem is insurmountable: you can overcome challenges through perseverance and resilience.

Here are five things you can remember to build an entrepreneurial mindset today. If you’re aged between 18-30, why not start by applying to be a Young Champion of the Earth in 2019? Stay tuned—the competition is opening soon!

Transform problems into opportunities

There are so many clues in everyday life. Is there anything that you experience daily that frustrates you? Perhaps it is the prominence of unsustainable materials in your local shop and restaurants, such as plastic straws or unnecessary food packaging? Often, alternatives to problems do exist, but no one has thought of connecting them in specific circumstances. A good example is supplying restaurants and bars with paper straws. Entrepreneurial mindsets apply a lens which identifies problems not as negative issues but as opportunities to be solved, towards creating value in our economy.

Dare to dream and believe in yourself

If you can dream it and believe it, you are halfway there. How big you can dream is a component of your potential for success. Everyone has ideas—but daring to dream big, and then believing in yourself to apply an entrepreneurial mindset and bring them to reality, takes effort. This year, why not push yourself to think creatively? You could come up with a problem once a week, and each week, come up with one matching solution, for example. The key is to think outside the box, to think of a problem as a potential solution.

Know yourself and discover what you are passionate about

Solving problems, especially those associated with the environment, can be daunting. You will constantly be faced with challenges in your journey to change the world. Some environmental challenges feel so large—like those brought about by climate change. But helping to break down large issues into smaller ones which everyone can take steps to solve, is part of the entrepreneurial journey. Remember that you are capable. Find problems that you are passionate about solving and connect with others passionate about solving them too. This will help you through the tough times to stay motivated.

Go for it and don’t take no for an answer

We all have the foundations of an entrepreneurial mindset. We can all identify problems and think up ideas about how to solve them. Being an entrepreneur pushes you to go out there and take actions to achieve them. Often, this process forces you to think through a specific problem in more detail. It helps you to truly understand pathways towards a solution which others might not have thought about. An idea does not have application in the real world if it is not hammered out in real situations. Part of being an entrepreneur requires following this process, identifying real experiences which can be made better or more efficient, and talking with other people who experience similar challenges to find solutions. Using the resources you have at your disposal will force you to be creative. Keep improving your solution. As you go on, you will eventually gain traction and interest. From there, the possibilities are endless.

Learn, embrace uncertainty and accept failure

Eric Ries from the lean startup says that entrepreneurship is “management under conditions of extreme uncertainty”. Forging your own path to solve a problem that no one has solved before is scary—things change constantly. There will be many obstacles and there will be failure. But an entrepreneurial mindset teaches you that failures are opportunities to learn in disguise. An entrepreneurial mindset embraces uncertainty and learning, to leverage the opportunities that emerge from the space between them.

UN Environment

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