India is currently grappling with a job crisis. In November 2022, the unemployment rate surged to 8 percent, the highest in three months. Between May and August 2022, the unemployment rate among 20–24-year-olds hit a staggering 43.36 percent, the highest in 45 years. With traditional job markets becoming saturated, policymakers have shifted their focus from skill development to fostering entrepreneurship. This shift is evident from the introduction of various government initiatives like the Pradhan Mantri MUDRA Yojana (PMMY), the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), and the credit support scheme by the National Small Industries Corporation (NSIC) to provide capital and encourage entrepreneurship. Corporations are also contributing by offering seed funding, skills training, market linkages, and incubation support through their CSR activities.
Despite seemingly favorable conditions for entrepreneurship, India has a low number of entrepreneurs. According to the Global Entrepreneurship Monitor (GEM) Report 2020-21, 81 percent of Indian youth believe they possess the skills and knowledge needed to start a business. However, a significant number of them—56 percent—fear failure, which is a crucial barrier to entrepreneurship. Financial uncertainties and societal expectations of stable careers further deter youth from starting their own businesses. The pandemic exacerbated these anxieties, with only 20 percent of young people in 2020-21 expressing an intention to pursue entrepreneurship, a sharp decline from 33 percent in 2019-20.
This fear of failure and preference for stable jobs is likely why only 5 percent of the Indian population are entrepreneurs, a figure that is among the lowest globally. By contrast, 23 percent of the population in the US, 17 percent in Brazil, and 8 percent in China are entrepreneurs.
ComMutiny’s extensive experience with youth over the past 28 years reveals a significant shift in their outlook due to greater access to information. Today, more young people are knowledgeable, aware, and engaged, with four or five out of ten prioritizing social concerns compared to one out of ten in the early 2000s. However, the opportunities for real-life experiences that build essential life skills have declined due to safety concerns. This decline has resulted in reduced risk-taking ability among youth, as highlighted by the GEM report. Fear generated by news of violence and safety issues has led families to be more protective, limiting young people’s on-ground experiences. Consequently, their decision-making agency remains insufficient to take entrepreneurial risks.
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