Only 8% entrepreneurial exits successfully

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By IE&M Research

A survey by Global Entrepreneurship Monitor (GEM) said that in India only 8% made successful exits, which is the lowest entrepreneurial exit rate among factor-driven economies and BRICS countries. GEM measures the discontinued business rate as the percentage of individuals aged 18-64 who owned a business, but discontinued it during the past 12 months. The report said that 47% entrepreneurs discontinued because of unprofitable ventures and 22% exits were due to personal reasons, while 13% cited financial constraints. The survey also said that almost 79% of early-stage entrepreneurs were motivated to start a venture by some business opportunity in India, which is the highest amongst BRICS economies. Correspondingly, only 19% of early-stage Indian entrepreneurs were forced into entrepreneurship due to a lack of other alternatives. According to World Economic Forum, countries that compete primarily on the use of unskilled labour and natural resources are categorised as factor-driven economies. In factor-driven economies, companies compete on the basis of price. Burkina, Faso, Cameron, Senegal, India, Iran, Kazakhstan and Russian Federation are among the factor-driven economies, while Brazil and China are part of the efficiency-driven economies.

About the author: IE&M Team

Indian Economy & Market is an Indian media and information platform producing data-backed news and analysis on all the vital elements at the intersection of the economy, stock markets, mutual fund, insurance, commodities, currency, technology, startups and business.

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