India’s remarkable journey to become the third largest tech start-up location globally has left everyone surprised. The country is growing exponentially every day with over 4,200 new-age companies set up already and the numbers are expected to keep on rising.
India has been bitten hard by the entrepreneurial bug. Today, a millennial only at the age of 20 is keen to begin a start-up with an idea that’s out of the box. 72% of the start-up founders in India are less than the age of 35! That’s a great number as India is forecasted to have burgeoning youth by 2020.
Some of the key factors to make the atmosphere favorable for start-ups in India comprises of encouraging policies by the government.
Numerous benefits include Rs. 10,000 crore (US$1.5 billion) funding for start-ups and an exemption from paying income tax for the first three years. Along with this, start-ups also get to leverage on the registration front as the government plans to accelerate start-up registrations to 24 hours.
Other reasons like domestic investor’s active interest, foreign investor’s growing attentiveness and an escalation in the educated workforce has also helped India for the onslaught of start-up trend.
But do various other reasons such as cultural mindset or improving financial systems also impact the rising trend?
Let’s decode the reasons for India’s exponential growth at the grassroots level.
What are the biggest reasons to shift the mindset of Indians about Start-ups?
(1) Altering Social Outlook: Indians have understood and accepted that start-ups are the flavor of the season. Acceptance of this fact has opened up the minds of middle class along with an upsurge in the number of homegrown unicorns across the country.
The Indian middle class has always valued and promoted getting a good education. With the huge shift of reforms in the 1990s, globalization and the rise of Indian IT Industry, Indians saw a change in the social outlook. Jobs other than government jobs also started gaining acceptance. With private sector and MNC jobs gaining importance, a sense of financial security also came into play.
This saw the birth of ambitious and educated middle-class professionals who wanted to create a name in history. They wished to do more than a job and thus, entrepreneurship became a slow but widely accepted field among them.
The middle class is well aware of the global revolutions thanks to the widespread use of technology. Thus, along with technological advancements and an awareness of the regional problems that exist in India, they want to find solutions that cater to the needs of customers.
Parents have also accepted entrepreneur as their son or son-in-law as long as he is well educated.
(2) A Demographic Change: India is the second most populous country in the world. But what makes India a boon for the start-ups is the wide demographic divide in the population.
The young population will result in a huge workforce thus, increasing the GDP of the country. But we would like to concentrate on the fact that there will be a diverse range of age groups present within the country.
Thus, as a start-up, you get the opportunity to create and develop an idea for all age groups. From gaming to healthcare, exercise apps to educational ones – all start-ups will be accepted widely because of the demographic diversity and the huge population of India.
(3) A Shift in Job Preferences: Previously, the preferred career choice for a middle-class individual was to get employed in a government sector job. Whereas, higher middle class or students from a business background, opted to pursue their family business. This is not the case anymore.
Factors such as nascent infrastructure, increased risk-taking ability and talented individual’s inclination to work with start-ups have helped the scope of Indian startup space.
- At Graduation and Post-Graduation Level: 35% of entrepreneurs today are from the engineering background and 26% from M.B.A.
A drive to solve challenges, an attitude of “Being your own boss” and huge funding with compensation packages make startups an attractive value proposition among graduates.
- Mid and Senior Management Executives: Generation Y or Gen Next is looking for opportunities that challenge them and defy the standard rules. Mid-level officials are ready to quit their jobs to make bold moves.
Moreover, they are also offered stakes, equity or huge compensation packages making start-ups a lucrative option for them.
(4) Social Entrepreneurship: Social entrepreneurs are professionals with innovative skill sets who aspire to develop real-life solutions to the problems of society. They aim to bring sustainable social transformations that improve the state of the world.
Students from non-metros cities (areas with a population of less than 1 million) and villages are actively pursuing education from top institutes. These students are aware of the problems they face in their cities or at the grassroots level. Therefore, they strive hard to develop and deliver basic services and opportunities to those who lack access. Social entrepreneurs have a driving passion to develop practical solutions that focus on social or ecological value.
In earlier days, social entrepreneurship wasn’t considered as a profitable proposition. But with changing times it has been accepted widely and is a sought-after field today.
(5) No humiliation about failures: Lastly, and the most important reason for widespread acceptance of start-up ideology is that the fear of failure no longer exists
In earlier days, people (especially parents) didn’t choose entrepreneurship for it often led to the start-ups getting shut down because of various reasons. However, people have truly accepted the saying “failure is the first step to success.”
Investors, incubators, and institutions are willing to give second chances. This reformed perspective has helped individuals in opening up a start-up fearlessly and working hard to achieve their dreams.
Do you feel there is a rising shift in the mindset of people towards entrepreneurship and start-ups? What do you think are the major factors that have brought in this positive change?