Why Indian Millennials are Lagging Behind in Start-up Culture
India’s millennials need to start capitalising on demographic dividends or risk a demographic disaster.
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The popular perception of millennials around the world is usually of over-caffeinated tree-hugging liberals who have eschewed traditional jobs and offices for co-working spaces to toil on their current start-up idea. People like to believe that millennials have little regard for tradition or norms, and would rather take a risk and fail than choose stability and stay mediocre.
This cannot necessarily be said about all Indian millennials.
Millennials Haven’t Reaped Benefits of Liberalisation
Born between 1982 and 2002, Indian millennials grew up in an India very different from the country their parents inhabited. They comprise an entire third of India’s population.
After the 1991 economic liberalisation and the growth of the private sector, Indians had a wider variety of jobs to choose from and greater freedom to make their own choices. However, it does not appear that India’s young are beneficiaries of the country’s liberalised economy.
A 2017 survey of approximately 6,000 millennials conducted by the Center for Study of Developing Societies (CSDS), in partnership with the Konrad Adenauer Stitfung (KAS), revealed that the largest employer of India’s youth is still the agricultural sector. While this is not surprising given that farming continues to employ an overwhelming majority of Indians, what is surprising is that the number of young Indians engaged in agriculture has actually gone up by four percentage points since 2007.
Indian Millennials Stuck in Time
The survey also revealed that most young people in India would rather seek a job than create them. A tremendous majority (65 percent) of those surveyed responded that they wanted a government job, and less than a fifth wanted to start their own business. Perhaps most surprising was that less than 10 percent of those surveyed aspired for a job in the private sector.
Clearly, Indian millennials would rather bide their time in the country’s permanent bureaucracy than take the risk of starting their own business or look for a job in the private sector.
In other countries, millennials are powering and pioneering new start-ups in financial technology, healthcare, education, skill development, and cryptocurrency. The traditional internet is passé; millennials in the West are busy building the ‘Internet of Things.’ In China, millennials are foregoing higher wages to find more interesting work, using apps such as DouMi to find part-time jobs, or ‘gigs,’ which offer them greater flexibility and the ability to pursue other passions.
One would assume that the 21st century economy, with its different avatars — the digital economy, gig economy, and startup economy — would offer young Indians more employment options than agricultural or administrative work.
Why ‘Start-up India’ Is a Failure
However, the problem is not with the aspirations of Indian millennials, but the state of the country’s economy. Consecutive quarters of anemic economic growth, worsened by unleashing the ‘surprise’ of demonetisation and the disruption caused by the implementation of the goods and services tax (GST), slapped a triple whammy on Indians, making it harder for entrepreneurs to launch new businesses and for existing businesses to succeed. While ease-of-doing business numbers may have changed, the realities on the ground have not.
Of course, starting a business is not an easy task even in the most vibrant of economies. In today’s environment, having a unique idea is not enough. It needs to be scalable, and young entrepreneurs require mentorship and access to capital.
This is difficult even in Silicon Valley, but despite a lot of promotion and marketing, the government’s ‘Start-up India’ initiative and its Rs 10,000 crore ‘fund of funds’ for budding entrepreneurs have not been particularly successful. Only one in three companies which applied to the fund had their applications accepted, and most start-ups doing well today have founders above the age of 40.
Need to Create Jobs Outside Traditional Economy
Ultimately, young Indians’ job choices and economic aspirations are a function of their surroundings. India’s education system, which prioritises rote learning over creative thinking and problem-solving, is failing to not just foster innovation and entrepreneurship among young Indians, but even fails to provide a basic education. The economy is rigged for the top one percent to such an extent that last year it controlled 73 percent of the total wealth created.
Indian millennials starting out are not encouraged by the world around them. In such a system, the comfort of a government job and the stability it offers is the only thing worth working and fighting for.
For India to achieve double-digit economic growth and provide employment for the roughly one million Indians entering the workforce every month, agricultural and government jobs are not enough.
A new generation of Indians will need to step up and create jobs outside the borders of the traditional economy. As India’s middle-class continues to expand, so do business opportunities. Indian millennials need to wake up and begin capitalising on the country’s demographic dividend or risk becoming part of a demographic disaster.
(The author is the founder of Vantage Analytics and the author of a forthcoming book on Indian millennials. He can be reached at @VivanMarwaha. This is a personal blog and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same)
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Topics: Indian Economy Millennials Demonestisation
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