In India, entrepreneurship got a tremendous boost with the introduction of the New Economic Policy in 1991. The concomitant aspects of the New Economic Policy such as liberalisation, privatisation, and globalisation transformed several industries. The policy enabled India to take giant strides and align itself with the global economy. The resultant reforms disrupted traditional structures and made way for new models and modules that facilitated smooth trade.
With nearly 90,000 startups in India as of January 12, 2023, 7.6 lakh jobs already created by startups, and the average age of a startup founder being 32 years, the business climate has changed forever in India.
The Pioneer’s Amartya Smaran looks at how the traditional preference for ‘sarkari naukri’ to ‘private job’ has been relegated with the emergence of a stimulating environment in which an increasing number of passionate youth are bubbling with enthusiasm to strike it out on their own. For them, even taking up a job is not an option!
Entrepreneurship, at its core, involves nurturing innovation. A business enterprise can click if it can find a need and fulfil it in the most cost-effective manner. Entrepreneurs are torchbearers of a country’s economic development. A solid invention in the market brings with it a radical change. Disruption is inevitable if the change is transformative. The economic reforms triggered by the New Economic Policy helped transform India into a tech base, with companies based out of the UK and US off-shoring their work to India or outsourcing Indians to work on their products. Experts say the reforms, coupled with advances in global technology, have made all the difference.
While introducing economic reforms in his July 1991 budget speech, the then Union Finance Minister Manmohan Singh apparently quoted Victor Hugo: “No power on earth can stop an idea whose time has come.”
Today, India is one of the fastest-growing economies in the world. Currently, we rank sixth with a real GDP of $2.66 trillion. Around 80% of Indian citizens are either self-employed or work in the informal sector. Micro, small, and medium enterprises (MSMEs) – 64 million enterprises contribute 30 percent to the country’s GDP. As per government data, MSMEs provide employment to over 113 million people, which makes it the second largest employer after agriculture. MSMEs also contribute about 45% of the manufacturing output. Most of the MSMEs still struggle to sustain themselves during tumultuous times.
For any country to achieve major economic progress, its manufacturing sector needs to be given utmost importance. To succeed globally, India needs to move up the value chain and develop products that demand high-end manufacturing. In India, the contribution of the manufacturing sector to the GDP hasn’t shown much improvement from 1991, having moved up to just 17% in 2021 from 15% in 1991.
Recently India surpassed China to become the most populous country in the world. The median age in India is 28.4 years, compared to China’s 38.4 years. That is, we have a huge pool of youngsters in the country. About 65% of Indians are aged below 35 years.
Some circles are talking about 80% of our citizens being self-employed. India’s per capita income is growing at a rapid pace and having a higher proportion of productive population is really going to help any nation to produce more goods, according to Prof. Murty S. Kopparthi, Adjunct Professor, School of International Business, Andhra University (AUSIB), Visakhapatnam.
The entrepreneurial activity rate rose from 5.3% in 2020 to 14.4% in 2022 as per the Global Entrepreneurship Monitor India report (FY 21-22). Today India is the third largest startup ecosystem in the world.
The Union Department for Promotion of Industry and Internal Trade (DPIIT) recognised 87,988 startups in India as of January 12, 2023. Startups have created around 7.6 lakh jobs as of June 30, 2022, and according to reports, the average age of a startup founder is 32 years. The point is, more than ever, today’s generation is keen on turning entrepreneurs. Taking up a traditional 9-5 job isn’t the norm anymore. Why is it so?
“Risk appetite has gone up for current youth,” says Sri Charan Lakkaraju, Founder & CEO, Student Tribe. “They don’t want to settle for traditional jobs as there are many options available. Even if they fail in their own venture, it opens up doors for many other opportunities.”
As someone who’s been in the entrepreneurial world for quite a long time, Sri Charan opines that the current startup trends are based on the profitability of the startups, decreasing unnecessary expenditures. “There is a saturation in aggressive hiring but not for the quality folks. These are testing times which will ensure good startups stay.”
One might have plenty of ideas, but not everyone can execute them. Even if they execute them, it is not guaranteed that they would succeed. Sri Charan says user validation and the timing of one’s idea matter a lot in today’s entrepreneurial work. To cite an example, can you imagine Facebook being introduced to the world today? It is what it is because it was founded at a time when the market didn’t have anything as disruptive and unique as Facebook.
The CEO of Student Tribe underscores some of the basic mistakes that people might commit in the process of starting their entrepreneurial journey. “Without proper market research and competitive intelligence, people venture into startups. One can learn from other’s mistakes as some might have tried an idea and stalled it. Their feedback matters a lot.”
Siddharth Swamy, CEO of a startup, feels youngsters are looking for creative ways to earn money. He says there’s a paradigm shift in people wanting to work on building their dream start-up/company rather than work a 9 to 5 job.
Freelancing is one such great opportunity, according to Siddharth Swamy. “You get to work without any restrictions while making good amounts of money. This allows individuals to be more creative.”
The young entrepreneur lays emphasis on problem-solving skills and continues: “Problem-solving is one the biggest driving forces. We youngsters are determined to carry on the legacy of the great minds that have put in tremendous amounts of effort to bring progress to our country and we take pride in it. Identifying problems and coming up with appropriate solutions give rise to a start-up idea. It creates a lot of employment opportunities which in turn helps the country grow. With a great startup, you can bring tremendous value to society, which in turn inspires a lot of people to start their own start-ups. Starting a startup, you need to know that it’s okay to fail. We need to learn from our mistakes and grow.”
Albert [name changed upon request] is a software engineer. Soon after completing his engineering in 2020, he joined as a fresher in a tech company that has a global presence. Albert describes himself as a passionate entrepreneur at heart. His goal is to start a Jazz themed cafe in the city’s suburbs.
“This job and the corporate politics are draining me out!” he laments. “I wake up in the morning around 10:30 a.m. and log in by 11. Thankfully, I work from home. It’s not that the company is sympathetic towards us. They just want to cut down on travel time, lunch breaks, and coffee breaks. I work continuously until 11:00 p.m. It’s like being in a cage all day.”
He says he has no other option, but to slog in for the next couple of years until he can save up enough money to start a cafe. “It’s my dream to have something of my own!” shares Albert. “I still can’t understand how I ended up in this rat race. I need enough funds to kickstart my business and a few of my friends are also interested. If you honestly ask me, I really despise what I’m doing at the moment, but can you suggest any other way to make a good deal of money? People say you have to take the big step, come out of your shell, and go for it, but they don’t understand what’s at stake. A lot! A lot is at stake. I have a plan and I hope I will set up my business at the earliest.”
Although people tend to focus on the drawbacks of social media applications, they play a crucial role in helping people accelerate their businesses. The number of YouTube users in India was forecast to continuously increase between 2023 and 2028 by in total 252.2 million users (+43.92 percent) by Statista key market indicators. Not just YouTube, but platforms like Instagram and Snapchat have also worked in favor of thousands of entrepreneurs to promote their products online. By 2028, YouTube would have around 826.44 million users.
During the Covid-19 lockdown, Varthika Salike developed an interest in baking. Whenever she’d bake cakes at home, her parents and sister would compliment her. After a point of time, she decided to turn her passion into a business. She started her home baking business at the age of 16.
“I would rather prefer my own home baking business than a traditional 9-5 job as it offers flexibility,” says Varthika. “We can choose our own working hours, including how much we want to work. It also gives us a sense of being financially independent rather than being dependent on others and choosing the role as per our interests.”
The young baker is 18 years old now and she’s more than happy to do what she loves the most. She says, “Nothing is better than getting paid for something that you enjoy doing.”
Giving us a lowdown on how social media has helped her achieve her goals, she explains: “I’ve created a baking page of mine on Instagram and the name of my page is ‘thefoodstory’. Social media has helped me a lot in accelerating my business. It helps me to display my cakes and other desserts which I bake. It helps me to effectively engage with my customers and marketing becomes so easy on Instagram. It is easy to reach out to the people out there and connect with them and understand their wants. Instagram ads allow us to target a specific audience for our business. So I would say that social media is one of the best platforms for helping small home businesses grow.”
Challenges certainly didn’t bog her down. Being a business owner at such a young age is not so easy. There’s always the pressure of being a dutiful student.
“I’ve faced many challenges while doing my own business from home,” explains Varthika. “As I’m a student, it has been difficult for me to manage my time between studies and baking. I’ve slowly learned to manage my time between studies and baking by giving equal importance to both things. One more challenge was to maintain the taste and quality of my cakes and other desserts because customer satisfaction is one of the most important features for a business owner. So I’ve always used the best quality ingredients and always maintained the taste of my cakes so that my customers are fully satisfied and happy.”
Dimple Fouzdar, perfumer and founder of Maison de Fouzdar shares, “As a woman who started her own business in India, I can tell you that more and more young women are becoming entrepreneurs because society is changing, and women are gaining more access to education and information.”
The perfumer stresses that women want financial independence and they would like to be in control of their own careers. Women entrepreneurs, she says, still face challenges that are unique to their gender.
“People might not take us seriously, or we might struggle to get funding or resources,” says Dimple Fouzdar, underscoring the challenges faced by women in the business world.
“Women entrepreneurs all over the country are forming networks and support groups to overcome these obstacles, seeking mentorship and training opportunities, and using technology to reach more customers. It’s important for the government and businesses to keep supporting women entrepreneurs and breaking down these barriers.”
The Pioneer interviewed world-famous Australian chef Gary Mehigan. He has had a fantastic career as a television host and a restaurateur. Even after 35 years in the industry, he still carries himself with the spirit of a young boy. When asked about the younger generations wanting to make their mark in the world of business, he raised some really interesting arguments.
“Once upon a time, one had to have a business plan, engage your PR and marketing company, put up a website that would cost a fortune. There were so many hurdles,” opines Gary. “Also people telling you couldn’t do it and it wasn’t possible. Whereas young people deservedly don’t need to listen to any of that. They’ve got a platform where they can launch something and if it grabs, it goes. When I was training 30 years ago, I had to work for 10 years before I could even think about what kind of business I wanted to start.”
Sriram Goud, who worked as an Assistant Professor at a reputed business school in the city, thinks it is the fear of being stuck to 9 to 5 jobs that is pushing many young people into starting their businesses.
“Early entrepreneurship is not the right idea according to me,” avers Sriram Goud. “One has to experience the life of an employee, understand everything from scratch, bring out the best out of themselves and then launch a business. This is not followed everywhere which is why many businesses are failing but about 1 in 100 work out. Learn from the roots. Go to the depth of business, and then launch.”
Although he’s out of teaching at the moment, he says, in the last 5 years he noticed that not many students took the leap of faith to start their small businesses or startups.
“What I’ve seen in the last 5 years is that not many were into business. Also, because the college that I worked for and the students who had come there are from lower to middle-class families, whose main goal is to survive first thrive later. So job security is their major goal,” observes Sriram Goud.
There could be various reasons why one would want to start a business or take a plunge in the startup world. Everybody’s reality is a unique case. To each his/her own. In the current times, sure! It is a lot more convenient to receive funds, thanks to the many government policies that are in place. We have such a young population that they can drive the economy forward with their boundless enthusiasm and energy. Entrepreneurship is about solving problems. The winners in this exciting domain are surely those who find a need and meet it in the most cost-effective and innovative manner, using technology and available funding options — government, angel investors, or whatever — to the hilt.
