Liberalisation in 1991 unleashed the entrepreneurial spirit in the country. It became easier to raise capital through the stock market and there was also an influx of venture capitalists. The services boom and the internet meant that people could start businesses with lower capital and reach customers more easily.
Institutions of higher education, particularly B-schools, became a breeding ground for entrepreneurs. There was a buzz around business creation, yet very few became entrepreneurs. Those who turned entrepreneurs did so as they could not find a job that matched their education, skill and experience. Very few campuses made serious efforts to promote entrepreneurship as an alternative to well-paying jobs.
Today, the government’s Startup India programme has rekindled interest in entrepreneurship. Alongside, there are Skill India and Pradhanmantri Mudra Yojana giving tax incentives. According to a survey by Randstad Workmonitor, 72% respondents in the 25-34 age group want to be entrepreneurs. Yet, 72% of fresh graduates or post-graduates joining the workforce do not launch business ventures. The Global Entrepreneurship Monitor Report ranks India 56th among 61 countries on “Entrepreneurship a good career choice”.
Why don’t potential entrepreneurs take the plunge? Is it the fear of failure or perceived incapability? Do our B-schools prepare students for the rigmarole of life as an entrepreneur?
Initiatives such as the Society for Entrepreneurship Educators formed by the ISB in the early 2000s to bridge the gap between educators (across B-schools) and business owners-managers did not see much traction. Entrepreneurship was not recognised as an independent discipline, yet. The faculty in most B-schools were either not prepared or not incentivised to drive entrepreneurship on campus.
Similarly, there was little success for schools that started hubs with an objective to bring together different stakeholders in an entrepreneurship ecosystem, such as technology incubators, service providers, venture capitalists, mentors and academicians. They were unable to integrate the various spokes with the hub.
The lack of practical support from the ecosystem leads to frustration among students who are interested in starting their own ventures. They either abandon their pursuit or end with failures. A study by the IBM Institute for Business Value and Oxford Economics states that 90% Indian start-ups fail within the first five years.
An integrated environment will help reduce information asymmetry, besides allowing schools to learn from experiences and experiments of others. For example, other B-schools, too, can adopt the Maha Mandi event at NITIE Mumbai that has been a highly successful model in “Sell-Think-Learn-Repeat”. Similarly, Judge Business School at Cambridge University has a series of free evening lectures and networking sessions.
At the B-school level, curricular and non-curricular activities that build a wave of interest and excitement in entrepreneurship would create an ecosystem that stimulates innovation, funds commercially viable projects and facilitates mentorship through interactions and internships with industry leaders and other entrepreneurs. At the city or zonal level, several B-schools should come under one umbrella where organisations such as The Indus Entrepreneurs (TiE) join the journey. There can be events such as the TiE-ISB Connect at the regional level to encourage entrepreneurship among the youth. At the apex level, there should be integrated programmes that involve multiple agencies such as the Department of Science and Technology and the Ministry of Human Resources Development.
Integration at various levels and a complementary synergy will ensure students pursue entrepreneurship as a serious career option.
(The authors are with the Thomas Schmidheiny Cente for Family Enterprise at the ISB.)