Encouraging Innovation and Entrepreneurship

 Encouraging Innovation and Entrepreneurship

By Dinesh K Kapila CGM (Retd) NABARD 

(Published by Business Sandesh on 1st December 2025). 

The thoughts flow from attending a boot camp at the Maharaja Agrasen University, Baddi (HP) and having an opportunity to address the participants. Himachal Pradesh, a hilly state, with its unique challenges and natural resources, demands a new economic blueprint. That blueprint is Innovation and Entrepreneurship. Stakeholders have to transition the educated youth from being job seekers to job creators, anchoring the next wave of development to the mountains themselves. This applies to most states in our nation, many states stay low on the entrepreneurial cum manufacturing indices. 

I firmly believe that the growth of our nation rests on the creation of wealth through encouraging broad basedentrepreneurship. Entrepreneurship has served as a key factor in the development and growth of nations. Employment opportunities created by entrepreneurs have helped in dealing with concerns related to poverty, regional imbalance, migration etc. Our states need to incentivise and boost entrepreneurial ventures while calibrating development with equity  within the state too. There is no single definition of what an entrepreneur actually is, but the term usually refers to someone who, among other aspects, spearheads a venture, makes decisions on how to proceed, secures the capital needed to make the venture a reality, and shoulders most or all of the associated risk. In order to think like an entrepreneur, you need to develop the characteristics of an entrepreneur. 

Successful ventures and projects, across the level of scale, developmental spectrum as also in infrastructure and commercial ventures indicate learnings to be drawn on technology, product development, enhancing productivity, commercial nuances, marketing in the rural context, the challenges in execution and overcoming them, the typical problems of urban or rural infrastructure, legal and compliance issues, it’s a huge range. Equally important, it empowers the fellow citizens who turned entrepreneurs or social entrepreneurs, and achieve stability and sustainability in operations. These are the successes which need to be taken to the would be entrepreneurs still assessing the scenario. 

 

This is one sector which is open to entry, on merit, to a large extent. Concerns of equity and access to finance are certainly there, the projects of many entrepreneurs are mostly basic and do not attract glamour or attention. Yet they are the foundations of development and as they add up in mass and scale, they are vital cogs of the economy. Benign government policies over the years have created a huge core of entrepreneurs across all communities and the access to information through the digital mode is encouraging ambition and aspirations, even independent of governmental prescriptions.  It’s a deeply aspirational society we live in and this understanding has to amplify our initiatives.  

We have institutions of learning, research, knowledge located within sub regions. Yet they may not be collaborating or engaging with each other. Scholars of innovation and economic geography have documented the importance of cities as geographical units of innovative activity. Urban agglomeration seems to lead to a clustering of innovation and startup activities.We discuss the benefits of Silicon Valley, this part  of our nation has the PEC, PU, ISB, Two IITs, IIMs, PAU, Incubation Centresand Chambers of Commerce, Private Universities, the level of engagement needs a major scaling up. Governments need to mandate and fund collaborations between state universities and local industries for curriculum revision, joint research projects, and student internships as also integrate practical entrepreneurship and skill-based training into the curriculum from the school level up.

Its important to understand that the potential of fostering a vibrant ecosystem rests with the stakeholders, the North West needs to build it up. The alternative and answer is for an atmosphere of entrepreneurship and mentoring to be encouraged in the smaller cities by way of a fora to exchange views and seek guidance and insights. Each city has its chambers of commerce or business associations, they need to foster entrepreneurship as mentors or knowledge sharers. Senior retired bankers and government officers could also be associated alongside the usual line departments and organisations. The Universities have to develop a commercial orientation for such initiatives alongside technology. This requires to be addressed across the nation. It’s a long term process but its my conviction we are now settling in.  

 

Innovation is an imperative for sustainability and resilience.Entrepreneurship in districts beyond the main cities creates local, high-value jobs, directly addressing the critical challenge of out-migration of young, skilled talent. We need innovative, local solutions in agro processing, inputs, water conservation, eco-tourism, waste management etc. Innovation allows the monetization of unique geographical advantages, transforming traditional sectors like horticulture, medicinal herbs, and handlooms into global, technology-enabled enterprises.Reducing the over-reliance on traditional sectors and government jobs leads to fostering high-growth, modern enterprises. Each state has to assess its own specific endowments and challenges. 

Entrepreneurship takes time to develop as a culture. Each state needs to develop its sub regions and sectors with a nuanced understanding of the cultural ethos and economic orientation. Could “Patient Capital"—smaller, local funding amounts coupled with high-quality, long-term mentorship be encouraged.Even encouraging local industry to pitch in on the value and supply chain integration would be an add on. Skilled graduates often prefer opportunities outside many states, moving to clusters at Bangalore, Hyderabad, Indore, Noida, Gurgaon and the like. The local R&D, Tech ecosystem would require to be scaled up. For the setting up new industrial/tech/incubation infrastructure, the shifting of the government's role from a regulator to a facilitator and active market-maker for startupsis a pathway. As for Entrepreneurship, inputs on Financialsavviness, hustle of business, Quality Control, Compliance- are the need alongside building a relationship with a lawyer and exposure to small level case studies.  

 

Many entrepreneurs have a focus on the services sector, Manufacturing remains a gray area, our weakness, even in Agriculture, it is mainly advisory services as the focus. Being hands on has to be a mindset. Two observations about our evolving entrepreneurs in general terms. The first one is — they think too small. And the second thing is they're very conscious about the subsidies or  grants. This distorts planning and the viability. An important differentiating factor is the imperative to have respect for capital and being frugal in its utilization. Second, is the respect for  technology, third is the respect for domain knowledge. Fourth is respect for documentation, accounting, compliances. Fifth is the ability to pivot and to understand the financials. Sixth is an obsession with quality. 

 

Alberuni about 1000 AD did state that we indicated a marked preference for the theoretical over practical learning. Well we have to become tinkerers, combining knowledge with a manual hands on approach, this would facilitate innovation. Though historically entrepreneurs shied away from manual labour and technology , it could have led to missing the industrial revolution. but new entrepreneurial successes in India are a result of talent, hard work and professional skills.  We have to build on it with bankers and the investors being facilitative.

 

Wealth creation is at least as important or more important than wealth redistribution. This should be understood well. Intrinsically. A competitive economy produces high productivity, efficiency, innovation and higher investments in human resources.  The Japanese miracle is based on brutal domestic competition, product development and innovation. Economists observe cultural traits are not that important, pointing out the South East Asia success is by an efficient employment of resources, exports by labour intensive industries, vigorous literacy and the government role in building competitiveness and correcting distortions.   We cannot sustain or achieve 8 % growth in GDP with a stagnant industrial sector.   

 

The Education Department of HP had deputed over seventy officials to the Maharaja Agrasen University for understanding  innovation and entrepreneurship. Such initiatives embed awareness and belief among the educationists and demystify the jargon around entrepreneurship and innovation.   Inspiring students towards innovation and startups requires a multifaceted approach that integrates curriculum changes, extracurricular activities, industry collaborations, and support systems. By implementing this comprehensive strategy, educational institutions can play a pivotal role in shaping the future generation of students, particularly engineers, instilling in them the mindset and skills necessary for success in the ever-evolving technological landscape. Plain simple interventions in processes and business models are important and need encouragement.

Government Departments connected with industry and entrepreneurship require to re-engineered from within, a change in mindsets is the first step. Prioritize ventures that create sustainable livelihoods for local communities, focus along the level of scale. Actions must be strategic, collaborative, and focused on long-term systemic change. Publicly recognize and celebrate individuals who have shown courage in innovation, irrespective of commercial success, to foster a culture of calculated risk-taking.

Our nation has ten percent to fifteen percent of the population creating a demand for products and services, another twenty to twenty five percent is in  the supportive role. This needs to be widened for prosperity with equity . Entrepreneurship and innovation is the key. 

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