Active Stocks
Fri May 24 2024 15:59:27
  1. Tata Steel share price
  2. 174.80 -0.37%
  1. NTPC share price
  2. 374.85 0.68%
  1. State Bank Of India share price
  2. 828.60 -0.45%
  1. ITC share price
  2. 436.10 -1.16%
  1. Power Grid Corporation Of India share price
  2. 318.50 -0.39%
Business News/ Opinion / Views/  Creating job-creators requires us to celebrate failure

Creating job-creators requires us to celebrate failure

Failure seems anathema to the Indian psyche and unless we begin to accept and celebrate it in schools, homes and elsewhere, an entrepreneurial culture could remain a pipe dream.

According to law, if a firm has 19 employees and adds one more to its payroll, all 20 will have to be registered under EPFO. This gives a false picture—that 20 jobs were created instead of just one. Photo: HTPremium
According to law, if a firm has 19 employees and adds one more to its payroll, all 20 will have to be registered under EPFO. This gives a false picture—that 20 jobs were created instead of just one. Photo: HT

What will it take to turn young job-seekers in India into job-creators? Can we foster and nurture entrepreneurial talent within higher education institutes (HEIs)? An important topic, no doubt, given that India faces the spectre of joblessness, even as the economy tries to crawl its way out of a pandemic-led recession. It was also a topic I was invited to speak on recently, to a gathering of academics constituting leadership teams from Maharashtra’s autonomous undergraduate colleges.

Nurturing entrepreneurship has been taken up as an agenda item at the highest level. The National Education Policy 2020, through its appeal for more creative, innovative and pioneering youth, refers to competencies typically associated with entrepreneurs. It also seeks to remove rigidities of the erstwhile education system, speaking of multi-disciplinary and holistic education to ensure life-long learning—all hallmarks of an entrepreneurial culture. Graded autonomy to HEIs, as sought in the NEP, is designed to help them pursue innovation and excellence. However, despite the best intentions of both the government and concerned leadership teams, our best-laid plans may go astray.

Our big demand-side challenge to entrepreneurship lies within an Indian attitude towards achievement and a perceived linear relationship with education. Conventional education is seen as a passport to respect and success, with dropping out of college not an option for children from ‘good families’. Indian parents make every attempt to ensure that everything that can be taught gets learnt. Life, especially in cities, is a mad rush to keep kids up with the Joneses at swimming, horse-riding, gymnastics, piano, dance, origami and every new fad in town. The Indian drive for success and its abhorrence of failure is much recognized, even celebrated. Take the 12-year record that students of Indian descent have held in the Scripps National Spelling Bee Competition in the US, broken only in 2021 by an African-American. Indians also further the cause of science and technology across the world. But our education system has failed at making a mark in the field of entrepreneurship. Simply put, demand for entrepreneurship is low.

To understand this, look at the statistics available from the entrepreneurial world: 90% of all startups fail, with 10% failing within the very first year and about 70% within 2-5 years. With failure being anathema to the Indian psyche, the lesson is clear. Unless we begin to accept and celebrate failure in schools, homes and in communities, entrepreneurship will remain a pipe dream.

There is also the issue of entrepreneurial orientation (EO), which separates the haves of entrepreneurial talent from its have-nots. EO is identified as comprising five dimensions: autonomy, innovativeness, risk-taking ability, pro-activeness and competitive aggressiveness. While HEIs seek to nurture EO among students, how many such institutions could claim to have EO themselves?

Colleges and HEIs in India do have their e-cells and even incubators today. However, one swallow does not a spring make. Trying to create entrepreneurship is much like losing weight. It can happen only through a series of ‘small steps’ taken every day, rather than a burst of yo-yo fasting or high-intensity exercise now and then. Institutions and academics will need to work hard at not only imbuing their curricular and pedagogical structures with creativity and risk-taking, they will need to pro-actively seek to build a culture that encourages entrepreneurship, rather than the current tick-the-box approach.

For some perspective, consider the case of Israel, a country that is only 0.07 times as large as Maharashtra and yet a global hub for entrepreneurship and innovation. At the heart of its entrepreneurship culture is its compulsory military service that all young men and women have to go through. A stint in the military exposes youngsters to the latest technologies, while working in teams and accomplishing tasks helps them translate natural partnerships into startup teams. The military then provides a natural ‘national incubator’ for Israelis. The adversities faced by Israelis are a source of national competitive advantage, while the diversity of its population, comprising mainly immigrants, has made them natural risk-takers. Israel, with only about 8.7 million people, cannot provide markets for all its innovations, forcing its entrepreneurs to be compete aggressively for global customers. Its government has facilitated creative ways of funding, provided tax incentives to foreign venture capitalists and offered to match their investments with state funds through a plan called Yozma (‘initiative’ in Hebrew). Besides, Israel’s research and development expenditure is 4.4% of its gross domestic product, much higher than that of most developed countries. Starting and running a company is cheaper in Israel than in most other places, and families are proud to have entrepreneurs willing to embrace failure.

Thus, creating job creators would need India to become one large incubator, with the government, academia, industry and the financial sector working together, but more importantly, by cultivating a national culture that eases our acceptance of failure.

Tulsi Jayakumar is professor of economics at Bhavan’s SP Jain Institute of Management & Research. These are the author’s personal views.

You are on Mint! India's #1 news destination (Source: Press Gazette). To learn more about our business coverage and market insights Click Here!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 15 Jul 2021, 10:13 PM IST
Next Story footLogo
Recommended For You