Bangalore: In a tightening job market, India’s business schools are going the extra mile to encourage entrepreneurship among students by offering mentoring services, space to work from and even seed capital.
To be sure, most maintain that their efforts have nothing to do with the economic slowdown but students seem more receptive this year as the current scenario has translated into fewer high-paying jobs.
The Hyderabad-based Indian School of Business (ISB), for instance, has in recent weeks started a number of initiatives to nurture entrepreneurship. Earlier, ISB restricted itself to research on entrepreneurship.
Creating opportunities: XLRI Jamshedpur. Eight students set to graduate next month at this institution are planning to start ventures. This is the first time that fresh graduates here are turning to entrepreneurship. Indranil Bhoumik / Mint
ISB students Deepesh Agarwal, 30, and Amit Gupta, 27, opted out of placement and instead incubated on campus a company they have founded. Their start-up, GoCars India, is a mobile and online platform that helps pooling of cars, taxis and cargo trucks.
Agarwal says he always wanted to strike out on his own and the “downturn is helping since both individuals and companies can save costs through shared transport.”
Gupta and Agarwal are not exceptions. At least 100 students out of a class of 440 at ISB are interested in becoming entrepreneurs. This compares with 70 firms that ISB graduates have started in the past seven years of its existence.
“We will provide work space, free accommodation on campus, mentoring, access to experts, as well as assistance in reaching out to investors,” says Krishna Tanuku, executive director at the Wadhwani Centre for Entrepreneurship Development at ISB.
There is an increasing interest in entrepreneurship due to the economic slowdown, according to Kumar K., professor and chairperson of the Nadathur S. Raghavan Centre for Entrepreneurial Learning at Indian Institute of Management, Bangalore.
Though IIM-B successfully found jobs last week for all students in the class of 2009, seven students opted out of the placement process to start ventures, compared with just two last year.
One of the seven, P. Kamalakanth, was set on joining the World Bank’s young professional programme until it was frozen because its largest funder, the US, is in recession. Since November, therefore, he has been focusing his energies on starting a clean energy and sustainable development consultancy service. “Had the (World Bank) programme been there I would not have entertained (the idea of) entrepreneurship,” says Kamalakanth, 31.
At XLRI Jamshedpur, eight students set to graduate next month are creating history at the 60-year-old institution by planning to start ventures. Though XLRI alumni have started businesses in the past, this is the first time that fresh graduates are turning to entrepreneurship.
The present economic situation has acted as a catalyst, says professor Prabal K. Sen, chairperson of XLRI’s entrepreneurship development cell.
The school has also for the first time invested seed capital of Rs2.5 lakh in Parichay, a venture started by second-year students Vikas Sharma, 26 and Siddharth Shah, 24. “When we started Parichay there was no economic crunch... But the economic downturn does help because there is lower opportunity cost,” says Sharma.
Parichay is a for-profit partnership which designs, manufactures and sells tribal and local crafts from Bihar, Orissa, West Bengal and Jharkhand. It used the XLRI funding to build a design and learning centre to train 15 of its artisans and is scouting for another round of capital from angel investors.
A few months ago, the SP Jain Institute of Management and Research, Mumbai, allotted Rs20 lakh to provide seed capital to fund its students’ ventures. “We were giving incubation facilities (earlier but) this year we have announced seed capital,” says Abbasali Gabula, professor and chairperson external relations at the school.
The institution says it is confident of finding jobs for all its students, but ISB and XLRI said they would not comment on placements as the process was yet to be completed.
All three schools said their initiatives to spur entrepreneurship are part of a long-term and ongoing strategy to promote entrepreneurship, conceived much ahead of the onset of the current slowdown.
Rashmi Bansal, author of Stay Hungry, Stay Foolish, a book profiling 25 graduates of IIM Ahmedabad, who started their own ventures, says the move towards entrepreneurship has been building up for some years. But this year is different.
“Schools are allocating money towards it and students are more receptive,” she says. “When you don’t have an opportunity cost, it is easier to take the jump. It’s not like you are giving up something very lucrative (to start your own company).”
Institute of Management Technology (IMT), Nagpur, too, is setting up an incubation centre and plans to provide seed capital as well. Says IMT director Anwar Ali, “Some students would feel that starting a venture on their own is a better option than waiting for a job to come.”
Ali says a dozen students were bitten by the entrepreneurship bug last year, out of which two set up a company, but this year the number of interested students has jumped to 60 out of a batch of 283. He declined to reveal how many of this batch were yet to get jobs or how much IMT was setting aside for its incubation cell.
Rakesh Kuneru, 24, a second-year MBA student from IMT, Nagpur, is readying a business plan for a portal for busy professionals to fix their appointments with doctors online. The paucity of jobs, Kuneru says, “is the main reason” for starting out on his own right now.
Agrees Varun Jindal, 24, also a second-year student at IMT. “We were expecting Rs5-6 lakh jobs but...we are not getting,” he says. Jindal is busy doing legwork for his soon-to-be-established venture, Sparx, an electrician services and products company in Delhi.
At the time of joining management school, Kuneru and Jindal wanted regular jobs and intended to become entrepreneurs a few years down the line. The economic slowdown has hastened their crossover.