Can entrepreneurship drive employment generation?
Without extensive planning to provide basic amenities and employment opportunities, India will unable to take advantage of its famed demographic dividend which can instead easily plunge into chaos
About a fifth of the world’s population increase by 2050 will be caused by India alone according to a United Nations Report of 2017. Governments often dress this unhealthy fact in terms of a ‘demographic dividend’. But the truth is that there is nothing automatic about this dividend. A huge population is unsustainable for the resources of any state. Without extensive planning to provide basic amenities and employment to this group, this dividend can easily result in chaos.
LARGE UNEMPLOYED POPULATION IN INDIA
The latest report by the Center for Monitoring the Indian Economy claimed that the unemployment rate at the end of February, 2018 was 6.1% or about 3.1 crore in absolute terms. Skill development programs have managed to bring to par a significant number of unemployed youth in terms of training and skill. However, those numbers still remain a minuscule proportion of the actual number of unemployed persons. Agrarian distress is driving greater number of domestic migrants to urban centers in search of work. This continuously adds to stress on unemployment numbers. Manufacturing, which is often touted as a sector with the greatest potential to absorb new entrants to the workforce, is witnessing jobless growth despite buoyant ‘Make in India’ initiatives.It is estimated that the Indian economy would have to generate at least 10 lakh jobs every year if it is to successfully reap the much talked about demographic divition dend.
NEW ENTERPRISES WILL BE THE KEY DRIVERS
It is said that new enterprises are the backbone of any economy with their ability to generate employment in a self-propagating manner. A market economy thrives when there is competition, growth and innovation. New enterprises are the engines of innovation and consequent growth. New businesses tend to shake established methods of product conceptualization,
design, delivery and competition. The end result is that consumers benefit from either improved competition or an improved product. The industry benefits from capital inflow and society benefits through transformational progress. These are processes necessary for sustaining healthy market dynamics.
NASSCOM reported that India added 1000 new tech startups in 2017. Fields of business for these startups vary from healthtech and fintech to e-commerce and aggregator services. While urban metropolises retained their pre-eminent status as the focus of India’s startup ecosystem, tier 2 and tier 3 cities accounted for about one fifth of all new enterprises. Modern business incubators, accelerators, investors and angel groups have been a big part of this success story. Those catering to other businesses made up 40% of all startups reported. Healthcare technology witnessed a significant number of new entrepreneurs at 320 while accumulating a total funding of $ 160 million in the first half of 2017.
A WORD OF CAUTION
A report titled ‘Entrepreneurial India’ by the IBM Institute for Business Value and Oxford Economics cautioned that 90% of Indian startups fail within the first five years of their existence. This was attributed to lack of new technologies in Indian new enterprise and failure to create new business models. Poor workforce funding, the absence of a good mentor and poor business ethics were some of the other reasons given. India has yet to deliver a Google or a Microsoft. But, some experts believe that creating a positive ecosystem was a pre-requisite for market-defining innovation.
GOVERNMENT INITIATIVES
The government is a major contributor to the ecosystem by its efforts to increase ‘ease of doing business’. With the ‘Startup India’ initiative, the government hopes to mentor, nurture and facilitate startups throughout their life cycle. The Atal Innova- Mission is a grand scheme to set up world class innovation hubs within academia and institutions of learning. The Support to Training and Employment Program for women (STEP) has the noble goal of empowering women with no access to formal training facilities with skills essential for self-employment and entrepreneurship. Along with these a host of other policies to make institutional finance available to the needy have been put in place. However, it is the performance on the ground that has failed to impress. Unemployment and lack of job creation opportunities continue to deter new entrepreneurs.
Entrepreneurship consists of envisioning a major problem to solve. The entrepreneur must be focused and dedicated. It takes a lot of hard work and patience before a measure of success can be met with on this arduous journey. Apart from technical innovation, you must have the ability to communicate and market your idea to your people. Creating good relationships and networks at the start of your journey is crucial to ensure your success. There must be a formal level of familiarity with accounting and legal pre-requisites. Not everyone may appreciate your idea, however, and setbacks have to be accepted as part of learning. Female entrepreneurs may face special prejudices associated with expectations from society. Dealing with these myriad challenges successfully and assertively without breaking down is the key to success.