The Entrepreneur Culture in India
From all aspects, considering the diversity and heterogeneity of the Indian population, the growth of entrepreneurship in India is rather restricted.
This seems to be a surprising anomaly for a country that is supposed to have a demographic advantage. It is estimated that out of India’s population of 1.30 crores, around 62% are in the workable age group between 17 to 60 years.
Almost 65% of the population is below the age group of 35 years, and again about 54% of the population is below the age group of 25 years.
This means that India is a young country as compared to many developed nations which are facing a crisis of an aging and non-working population.
Till about a decade back, the overwhelming tendency was to opt for a salaried job and avoid the risks of running one’s own business.
Having a self-run business was considered as the prerogative of a select few. Most of them were traditional family-run units like traders, merchants, or jewelers.
These were to be preserved and handed over from generation to generation. The age of risk-exposed ventures was considered a hands-off virtual affair. Parents would encourage their children to score the best of the marks so that they could get secure jobs either in government or the private sector.
Having a fixed salary was even considered the essential factor in securing a good marriage pact. Families could not think beyond the stereotyped doctor, lawyer, engineer for their children.
Till about the late early 1980s, the government was considered as the safest bet for a job. This was obviously because the government sector was the biggest generator of jobs and most of the investments in capital-intensive segments like infrastructure and engineering were happening from the government side.
Even the banking segment was a governmental domain. The other career options like doctors and lawyers were considered more of self-made professionals and hardly any form of entrepreneurship.
It was from the early ’90s onwards when the liberalization reforms saw explosive growth in the corporate work culture that a slow and steady thought process evolution started to happen. This would take almost two decades more for a paradigm shift in thinking towards becoming entrepreneurs
Entrepreneurship in India – The Role of Business Schools
As mentioned above, with the coming-of-age of the private sector, post the 1991 liberalization reforms, there happened to be a slow shift in the career track.
This shift was not towards the entrepreneur side but corporate sector jobs. This was because liberalization spawned the growth of private corporations as well as the Multi-National companies in India.
In virtually every sector, like shipping, steel, infrastructure, power, telecommunications, automobiles, Banking & Insurance, the private sector started expanding neck to neck.
This expansion of the private sector necessitated the need for young, dynamic corporate managers who were skilled business professionals.
The growth of these companies was possible over the succeeding years due to the business, strategy, and vision of the frontline managers.
The spread of these frontline managers and corporate leaders would necessitate the coming up of more and more Business administration colleges. Graduates from all streams especially engineers started opting for two year MBA courses.
The high paying lure of corporate salaries and the fast track growth options was the main reason for the pull towards MBA career.
The private corporate segment started encouraging the growth of initiative thinking. These managers had the responsibility of turning companies into profitable units and consequently had to go for out-of-the-box ideas.
The CEOs and COO’s of the companies would go into high investment projects with a fast turnover period. This period also saw the equity investment expanding in the private sector.
However, all this still did not translate into definitive entrepreneur culture. The MBA colleges like IIM’s and other top B-school did indeed churn out the best of talent into the corporates. They would enhance and brand-build the existing names but were not very keen to set up their ventures.
The main reason, of course, was the salaries. Having a high-paying job was one thing but setting up one’s venture and earning money out of its profits was a different thing altogether.
In short, the business schools of India did produce the best business managers, but they were yet to gravitate into good people in the business. This turnaround would eventually come about.
Role of Business Schools in Encouraging Entrepreneurship
- Be your leader
When the MBA schools came up in the early days of the private sector growth, business students were taught to be good corporate managers. Now the motto is to be a good self-managers.
This will naturally lead to the birth of the entrepreneur. Every MBA pass out is a potential entrepreneur by himself or herself. This is the message that each MBA school needs to convey.
- Not dependant on the company fortunes
Even at the height of corporate ladder success, the employee is dependent on the fortunes of the company. A sudden change in company policy can affect the career. To take an example, the sudden loss of the share value in the Stock exchange can bring a nosedive to the company fortune.
- New Ideas and innovations
The core of every teaching in every business school is to inculcate the growth of innovative thinking. It is through great ideas that every organization is born. Hence each MBA future pass-outs needs to develop the feeling that he or she is the bearer of a great idea that can bring a sea change. The onus of this is on the MBA school.
- Optimal use of technology
Information and digital technology are changing every day. New dimensions are being added every day. The management schools carry the responsibility of giving access to this technology to more and more people. This is fulfilled through their students who are the future torchbearers of the Industry. This is possible in a much better way if these students are the future owners of their own companies.
- The entrepreneur provides others employment
If every MBA student of today turns into the entrepreneur of tomorrow, they will be employing several people. This number may vary from one to ten thousand, but employment is being created. The corporate manager, on the contrary, does not create any new employment opportunities. This is something that every MBA school and college needs to drill into their students.
- The entrepreneur finds solutions to problems
Most of the new start-ups have benefitted the users in some way or another. This is through ease of transportation through app-based low-cost cabs or buying medicines online or portals are helping in comparing the different insurance policies. The entrepreneur thereby makes life easy for a lot of people.
- Making good use of Venture capitalist fund
Unlike the earlier days, there is a slew of VC and Private Equity (PE) firms ready to fund good ideas and patient enough to keep on supporting with new investments till break-even is attained. The MBA colleges should encourage right from day one of the curriculum to encourage their students to make the right use of these investment funds. This is possible if entrepreneur aspirations are evoked.
- The will to succeed is paramount in business
If a job is not giving the desired growth, the person will simply leave it. Even if they are riding high, another tempting offer will make them shift over. However, the entrepreneur will always strive to tide over bad times.
- Setting up of incubator cells
Most of the MBA schools have started incubator and start-up cells to help their students in availing seed funding help so that they can set up their ventures.
- Placement cells
The MBA schools and colleges’ alumina and placement cells encourage their former students to start their ventures.
The last seven to eight years have seen a major shift in the thinking process of the current breed of MBA managers. The statistics also would point to this. It is estimated through a survey of 2017, that about 83% of the workforce population would prefer to have their own business. This is much higher than the 53% global average.
The internet age and online buying or influencing trends have brought in a slew of start-up companies in every sector. The daily app usage for virtually every product or service is giving mass reach across the country.
Social media, of course, is there to offer information, opinion, and even guidance. Add to this the fact that the top B-Schools are taking every step to churn out bright entrepreneurs with the idea and the zeal to make it successful.
The net result of all this is the slow but sure dawn of the entrepreneur.