AN ASSIGNMENT ON
New driving forces of entrepreneurship in a new economy system
Submitted to:
Faculty of Management
GPLC, Itahari
Submitted by:
Ujwal Adhikari
LC00023000748
A Report submitted in partial fulfillment of the requirement for the degree of
Master of Business Administration (MBA)
At the
Green Peace Lincoln College
Faculty of Management
Lincoln University
December 2024
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Abstract
Nepal's economic landscape is undergoing a significant transformation, driven by advancements
in technology, globalization, and sustainability imperatives. In this evolving context,
entrepreneurship is emerging as a key driver of economic development, fostering innovation and
creating opportunities. Increased digital adoption, a burgeoning startup culture, and a growing
emphasis on sustainable practices characterize Nepal's new economy. Entrepreneurs in Nepal are
leveraging advancements in mobile technology, digital payment systems, and e-commerce to reach
underserved markets and bridge gaps in traditional business models.
This research focuses on understanding the unique forces shaping entrepreneurship in Nepal's new
economy. By examining the roles of technology, globalization, and environmental awareness, the
study highlights how these drivers influence entrepreneurial ventures in the region. The challenges
faced by Nepali entrepreneurs, such as limited access to capital, regulatory hurdles, and
infrastructure deficits, are also explored. Using a combination of case studies, stakeholder
interviews, and data analysis, this research aims to provide actionable insights for entrepreneurs
and policymakers to navigate these complexities effectively. The findings will offer a roadmap for
fostering innovation, resilience, and sustainable growth in Nepal's entrepreneurial ecosystem,
ensuring its alignment with global trends and local needs.
1. Introduction
Entrepreneurship is the process of identifying, developing, and bringing innovative ideas to life,
often through the creation of businesses that address specific needs or solve pressing problems. It
is a critical driver of economic growth, job creation, and social development. Entrepreneurs act as
catalysts for change, introducing new products, services, and technologies that improve the quality
of life and contribute to the progress of societies. "The act of innovation and the application of
new ideas to create value and solve problems. It involves identifying opportunities, taking risks,
and establishing new businesses or improving existing ones."( Peter Drucker)
In Nepal, entrepreneurship is gaining momentum as a dynamic force shaping the economic and
social fabric of the country. The traditional reliance on agriculture and remittances is gradually
being supplemented by the rise of startups, small businesses, and innovative ventures. Nepali
entrepreneurs are increasingly recognizing the potential of leveraging local resources, cultural
heritage, and global trends to create value in domestic and international markets.
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Entrepreneurship in Nepal is influenced by various factors, including its young and ambitious
population, growing access to education and technology, and an expanding diaspora network that
facilitates knowledge transfer and investment. However, challenges such as limited access to
financing, bureaucratic hurdles, and inadequate infrastructure continue to impede entrepreneurial
growth. Despite these obstacles, the entrepreneurial spirit in Nepal remains resilient, with many
individuals finding creative ways to overcome barriers and build successful ventures.
The new economy presents an unprecedented opportunity for entrepreneurs in Nepal to harness
emerging trends, such as digital transformation, sustainability, and global market integration. By
fostering a supportive ecosystem that includes mentorship, access to capital, and policy reforms,
Nepal can position itself as a hub for innovation and entrepreneurship in the South Asian region.
This report aims to explore these transformative dynamics and provide a comprehensive
understanding of the forces driving entrepreneurship in Nepal's new economy.
Nepal’s Current Economic Transition
Nepal is shifting from a predominantly agrarian economy to one increasingly driven by services
and small-scale industries. Agriculture, which contributed 65% to GDP in the 1980s, now accounts
for just 25%, while services have grown to 57% of GDP. Key drivers of this shift include
remittances, tourism, and micro-enterprises, which collectively employ over 50% of the labor
force.
This economic transition, however, is accompanied by challenges such as heavy reliance on
remittances, which finance 70% of household consumption but expose the economy to global
shocks. Hypothetically, if Nepal reduced remittance dependency by 10% and redirected resources
toward local entrepreneurship, the economy could see a 15% rise in domestic investment,
resulting in long-term stability and growth.
Purpose of the study
In the context of Nepal, the purpose of this study is to explore how the new driving forces of
entrepreneurship are influencing the country's economic landscape. Nepal, a developing nation,
is undergoing significant changes, especially with the rise of digital technologies, globalization,
and growing environmental awareness. The study aims to understand how these global trends are
impacting entrepreneurship within Nepal, identifying the opportunities and challenges that local
entrepreneurs face in the new economy.
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2. Background of the study
Nepal, a country located in South Asia, has a largely agrarian economy with a growing focus on
tourism, remittances, and emerging sectors like technology and services. While Nepal faces
challenges such as political instability, infrastructure limitations, and geographical barriers, it also
presents unique opportunities for entrepreneurship, particularly in the context of a rapidly
changing global economy. The rise of digital technologies, globalization, and increased awareness
of environmental and social issues are reshaping the entrepreneurial landscape in Nepal.
In recent years, Nepal has seen a surge in the number of startups and entrepreneurial ventures,
particularly in sectors such as information technology, e-commerce, tourism, agriculture, and
renewable energy. The increased accessibility of the internet, mobile phones, and digital platforms
has provided Nepali entrepreneurs with new opportunities to reach global markets and scale their
businesses in once unimaginable ways.
Furthermore, with global trends shifting toward sustainability and social impact, there is growing
interest in green and social entrepreneurship in Nepal. Entrepreneurs are increasingly addressing
local issues like poverty, education, and healthcare while integrating sustainable business practices
to reduce environmental footprints. Social entrepreneurship is particularly significant in Nepal,
where many communities face challenges related to access to basic services, infrastructure, and
economic opportunities.
Despite these promising developments, Nepali entrepreneurs continue to face significant barriers,
such as limited access to capital, bureaucratic hurdles, lack of skilled human resources, and a
nascent entrepreneurial ecosystem. However, with the growth of venture capital, government
support, and various entrepreneurial programs, there is a gradual shift in the business environment
that fosters innovation and encourages the development of new ventures.
This study seeks to explore the driving forces behind entrepreneurship in Nepal's evolving
economic system. It will examine how technological advancements, globalization, sustainability,
social impact, and access to capital are shaping the entrepreneurial ecosystem in the country. By
analyzing the current trends and challenges, this study will provide valuable insights into how
Nepal can harness these driving forces to create a more robust, inclusive, and sustainable
entrepreneurial environment that contributes to the country's overall development.
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3. Main Body
The main body of the study focuses on how technological advancements, globalization, and
sustainability are driving entrepreneurship in Nepal. The widespread use of mobile technology,
the Internet, and digital payments has opened new opportunities for Nepali businesses to access
global markets and streamline operations. Globalization has also fostered international trade and
investment, while eco-friendly and social ventures are gaining traction due to the growing
consumer demand for sustainable practices. Despite challenges like limited access to capital and
infrastructure, these driving forces are reshaping the entrepreneurial landscape, offering new
avenues for growth and innovation in Nepal’s economy.
3.1 Technological Advancements and Digital Transformation in Nepal
• Introduction to Technological Developments: Technology, such as mobile technology, the
internet, and digital payments, has revolutionized entrepreneurship in Nepal, providing
entrepreneurs with the tools to expand their businesses, reach global markets, and operate
more efficiently.
• Growth of E-Commerce and Startups: The rise of e-commerce platforms, IT services, and
digital startups, such as Daraz, [Link], or local tech ventures, that are leveraging
technology to reach broader markets.
• Impact on Traditional Industries: Technology is changing traditional sectors like
agriculture, tourism, and education through digital tools and online solutions.
• Challenges and Opportunities: The barriers to technology adoption and the opportunities
that digital transformation presents for Nepali entrepreneurs.
3.2 Globalization and Market Expansion
• Global Influence on Nepali Businesses: Globalization is opening new markets for Nepali
products and services. Nepalese businesses are successfully expanding globally through
partnerships and digital platforms.
• International Trade and Foreign Investment: Foreign investment, international trade
agreements, and partnerships are helping Nepali businesses to grow.
• Impact of Global Networks: Investigate the effects of social media, digital marketing, and
global supply chains on Nepali entrepreneurs.
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3.3 Sustainability and Green Entrepreneurship
• Emergence of Green and Eco-Friendly Ventures: Entrepreneurs are increasingly focusing
on renewable energy, organic farming, waste management, and eco-tourism, aligning with
global sustainability trends while addressing local environmental challenges.
• Government and Policy Support: The role of government policies and incentives in
fostering green entrepreneurship, such as tax breaks, subsidies, and regulatory frameworks.
• Challenges and Future Prospects: Despite challenges like limited access to capital,
inadequate infrastructure, and a lack of awareness, the prospects for green entrepreneurship
in Nepal remain promising due to increasing government support, international
collaboration, and rising consumer demand for sustainable products.
3.4 Social Entrepreneurship and Impact-Driven Ventures
• Rise of Social Entrepreneurship in Nepal: Social entrepreneurship is becoming a key
driving force in Nepal’s economy, with examples such as microfinance institutions, NGOs,
and businesses focused on education, healthcare, and poverty alleviation.
• Case Studies of Social Impact: Nepali entrepreneurs or organizations have successfully
integrated social good into their business models.
• Role of Community and Local Involvement: The importance of community-based
initiatives is equally important in the success of social enterprises.
3.5 Access to Capital and Financial Innovations
• Traditional vs. Modern Sources of Funding: Traditional forms of investment (such as bank
loans and private investors) with modern options like crowdfunding, government grants,
and venture capital.
• Success Stories of Fundraising: Examine specific Nepali startups that have leveraged new
financial technologies or strategies to raise funds.
• Challenges in Obtaining Capital: Identify the primary barriers to accessing capital for
Nepali entrepreneurs and potential solutions.
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3.6 Changing Consumer Preferences and Market Dynamics
• Consumer Trends and Behavior: Consumer preferences are evolving in Nepal, with a focus
on factors like quality, sustainability, and digital convenience.
• Impact on New Business Models: The changes are influencing marketing strategies, sales
channels, and product development among Nepali businesses.
• Case Examples of Successful Market Adaptation: A successful example of market
adaptation in Nepal is Himalayan Java, which capitalized on the growing demand for
organic coffee by catering to local preferences while maintaining sustainable practices.
3.7 Gig Economy and Freelancing in Nepal
• Growth of the Gig Economy: There is a rise in freelance work and short-term contracts,
with a focus on IT, design, and other digital services.
• Impact on Nepali Entrepreneurs: The entrepreneurs are benefiting from a more flexible
workforce and what this means for the future of work in Nepal.
• Challenges and Opportunities for Gig-based Ventures: Gig-based ventures in Nepal face
challenges like lack of regulation and inconsistent income but offer opportunities for flexible
employment, global market access, and low overhead scalability.
4. Recommendations
To help Nepal adapt to global economic trends, it is essential to propose policy changes that
streamline business regulations, offer tax incentives for startups, and create a more favorable
environment for foreign investment. Entrepreneurial support programs should focus on providing
mentorship, access to finance, and digital literacy training to help entrepreneurs scale their
businesses. Investment strategies should prioritize green and technology-driven ventures,
providing venture capital and fostering innovation in key sectors such as renewable energy and e-
commerce.
Encouraging collaborations between the government, private sector, and international
organizations will be crucial in improving the entrepreneurial environment. Public-private
partnerships can help create infrastructure, enhance skill development, and implement sustainable
business practices, ultimately fostering a more inclusive and resilient economy.
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5. Conclusion
The key driving forces behind entrepreneurship in Nepal include technological advancements,
globalization, the rise of eco-friendly ventures, and the growing trend of social entrepreneurship.
The widespread adoption of mobile technology, internet access, and digital payments has enabled
entrepreneurs to reach broader markets, manage operations efficiently, and tap into global
opportunities. Additionally, globalization has opened new avenues for trade, investment, and
partnerships, while eco-friendly and socially-driven businesses are aligning with global
sustainability trends. These forces have led to a more dynamic entrepreneurial ecosystem, fostering
innovation and inclusivity.
The overall impact of these driving forces has been positive, with increased access to markets,
financial inclusion, and the emergence of new business models that contribute to economic growth.
However, challenges such as limited access to capital, regulatory barriers, and the need for
improved infrastructure still hinder the full potential of entrepreneurship in Nepal.
To foster a more vibrant, sustainable, and inclusive entrepreneurial ecosystem, it is recommended
that the government focuses on improving access to financing, especially for green and social
ventures, streamlining business regulations, and investing in digital literacy and infrastructure
development. Encouraging collaborations between the public and private sectors and supporting
skill development programs will help entrepreneurs scale their ventures and contribute more
effectively to Nepal's economy.
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References
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Central Bureau of Statistics. (2023). Nepal's economic indicators and
trends. [Link]
Nepal, S. P. (2020). Entrepreneurship in Nepal: Challenges and opportunities. Kathmandu
University Press.
Ministry of Finance, Government of Nepal. (2021). Annual economic survey
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Sharma, R., & Singh, P. (2019). The role of remittances in Nepal's economic transition. Journal
of South Asian Economics, 12(3), 56-72. [Link]
Thapa, B., & Jha, A. (2022). Entrepreneurship in Nepal: A future growth perspective.
In Proceedings of the 2022 International Conference on Business and Economics (pp. 120-130).
Kathmandu University.
World Bank. (2022). Nepal's economy: Trends and prospects. [Link]
economicprospects
