A nation’s finest colleges, the IITs and the IIMs are associated with hard work, massive innovation, and respectful employment. These institutions are thought to be a hub for modernization and future leaders. However, the vision is not as simple when it comes to the aspect of entrepreneurship. Recently, Aviral Bhatnagar, an investor in start-up companies went to Twitter to reveal a shocking yet interesting fact that sets the course for conversation regarding the institutes in IIMs and IITs nationwide.
~10 out of 1,000+ IIT B's graduating class last year started a company
— Aviral Bhatnagar (@aviralbhat) December 29, 2024
This is probably true across all IITs/IIMs where entrepreneurship is the least chosen option
India's biggest challenge is its skilled students take very little risk
Entrepreneurship will take us forward
This tweet was important because it brought to light a significant issue: Only a handful of students from these prestigious institutions are venturing into the world of entrepreneurship. This necessitates a critical line of inquiry: If the best brains do not come forward to build businesses, what is going to happen to the future of entrepreneurship and innovation in India?
As highlighted by the Ministry of Commerce and Industry, the country has over 500 startups a day with concentration, which begs the question of whether these numbers highlight the potential of future entrepreneurs among the elite students of India who remain dormant.
In another tweet, Kartik Varma discusses the gap between academic success and entrepreneurial skills:
“Skilled students” from IIT/IIMs might not be trained in or have the skills required to start a business.
— Kartik Varma (@CorpusKV) December 29, 2024
Acing an entrance test is very different from starting a company. Not saying they can’t do it, enough examples of success stories. Just saying the skills aren’t always the…
A Glimpse into the Reality: Why Entrepreneurship is Too Tough to Attempt
To begin an entrepreneurial journey is usually seen as a risk, and this too seems to be the case for students of IITs and IIMs in India, which isn’t surprising considering they are some of the most sought-after institutions in India. Another Twitter user Nikhil Agarwal seems to have added to this discussion quite maturely and intelligently:
People are driven for jobs rather than taking risks.
— Nikhil Agarwal (@iamnikagarwal) December 30, 2024
Plus the student loans are a added pressure.
This insight, however, highlights a very important issue. The given insulation is that the risks involved in seeking an entrepreneurial opportunity are on a very large scale. For students toiled many years of their lives to secure a position this high, they have a lot to lose. More so, taking a calculated risk—starting a business—is often considered a risk because of the societal expectation that they are to seek respectable and high-gaining jobs.
An article by CIOL cites that only 16.4% of entrepreneurs in India are IIT or IIM alumni, and thus it follows that the larger share of Indian entrepreneurs are not graduates of elite institutions. This figure emphasizes the need to expand the scope of the entrepreneurial ecosystem beyond the country’s best schools.
Such data points out the fact that the India and World Startup Ecosystem should not limit their efforts only to the IITs and IIMs for building entrepreneurs but should also actively work towards developing talent from a variety of colleges and Universities across the country. Hence, India will be able to leverage a much larger source of ideas and enterprise which will eventually foster a more competitive and productive startup culture in the country.
However, in the US, making the transition from a student to an entrepreneur is made easier as colleges and universities have a stimulation of start ups with backup in the form of venture capital, counselling, and incubators. India is at the opposite end of the spectrum as Indian Colleges and universities are more keen on focusing on academics and unfortunately not giving that much importance to entrepreneurship.
One user @pientropy suggests that cultural differences play a significant role:
it is probably a cultural issue, take any non iit student and put him in a good US school, say Stanford, and very likely they’ll go the startup route.
— π𝔼 (@pientropy) December 29, 2024
The Talent Drain: Why India’s Top Talent Chooses Corporate Jobs
Another reason is the fact that the climate is very competitive when it comes to acquiring a skilled workforce. MNC usually offer better pay and job titles and this makes the volatility of entrepreneurship appear inconsequential. A survey suggests that 72% of graduates from IIT are content in working with big tech companies such as Google, Microsoft, or Amazon and many even plan on moving abroad to have a stable job.
Many students dream of working in such global giants and it boasts of a sense of security and value that entrepreneurship cannot promise. While India’s startup ecosystem has thrived in the last few years, especially with unicorns like Zomato, Swiggy, and BYJU, the failure rate of startups is quite high. As per a report by Inc42, nearly 90% of start-ups do not make it past their first five years. For the students themselves who are faced with the dire need to be settled and make some important decisions in life this fear of failing might seem all too real and valid considering the alternatives which are corporations that promise job security.
Anshuman Vora considers different aspects including mindset which could influence a self-employed and educated young person from starting a business even though it can be extremely lucrative and requires valuable skills:
Risk-taking is required and rewarding, yes, of course, but we need to figure out why very few highly educated youngsters start on their own:
— Anshuman (@AnshumanVora) December 30, 2024
clutter?
low entry barriers?
anxiety to pay back education loans?
visible uncertainty?
funds?
parents' concerns?
JUST THE MINDSET?
The Click: Bringing in a Shift in Mindset
Anshuman has a point as some students at IIMS and IITs see a goldmine in salaries and job positions, but the country is devoid of entrepreneurs which is worrisome for India’s economic outlook. As India over the next few years is likely to grow into a 5 trillion dollar economy, the importance of being an entrepreneur is paramount.
As per NASSCOM projections, India is set to become the 3rd largest startup ecosystem in the world by 2025 with 50000 startups coming every year. But for this growth to be sustainable it is imperative that a large chunk of students take off their social and self-imposed risk.
We need to alter the approaches by which risk and accomplishment are viewed in the realm of entrepreneurship. The role of government, educational institutions, and businesses has to be shifted towards fostering a risk-friendly culture and atmosphere.
For example, providing students with startup funds, business development centers, and mentorship opportunities where failure is allowed will lower the risks in entrepreneurship. Moreover, an emphasis on practical learning through case studies and start-up labs is expected to instill the confidence and drive needed to venture into entrepreneurship.
Embracing Risk-Taking: The Solution
To disrupt the status quo, the country’s focus on educational institutes and entrepreneurship has to change. This can be done in the following ways:
Setting Up Incubation Centers And Startups Advisory: There is a need for more IITs and IIMs to come forward and collaborate with angel investors and venture capitalists for start-up funding and business mentorship. For instance, the FIRST Foundation of IIT Delhi has already begun to succeed in its efforts to promote student start-ups. Through widespread dissemination of such initiatives, the country can increase the number of potential entrepreneurs.
Reforming the Risk Culture: Working on reshaping the risk culture as that risk should be perceived as a step towards progress in life not at all stagnation. As per the National Entrepreneurship Network report of 2022, 53% of all respondents who were entrepreneurs said that they were discouraged because of failure stigma. The stigma of failure leads to students’ reluctance to pursue entrepreneurship. Fostering a culture where risk and failure are regarded as essential elements of learning can assist students in overcoming such fears.
Updating Financial Aid Mechanisms: Providing low-interest loans, seed investments, and grants to student-owned start-ups can ease the financial constraints. The Indian Startup measures launched by the government are a good start, however, the level of risk appetite can be improved with more targeted support at the institutional level.
To sum up, the elite institutions of IIMs and IITs have the brightest minds in the country, unfortunately, the atmosphere cultivated lacks a sense of requirement for innovation in economics within the country. We can inspire the students at these exceptional institutions and encourage them to become innovative leaders by removing financial obstacles, changing the perception of risks, and providing more institutional support.
Last Updated on by Saket Kumar