India’s startup momentum despite all challenges
Tamanna Inamdar: Statistics show that unemployment is on the rise, but on the other hand startups are taking the talent acquisition game to another level. What’s your take?
The entire technology and digital universe has taken off on a trajectory that has been accelerated by the pandemic. A lot of startups were already well prepared, and now a lot of young people who have spent years skilling themselves in this particular area are going to benefit from it.
In recent years, tech startups have impacted not only in the field of technology but the whole of life. There are a number of startups that have actually enabled formalization of the workforce.
In the fintech industry, with the advent of new tech startups, there has been a rise and resurgence of many organizations. I think it’s a good sign because we need this pipeline of startups. We know that there will be a certain percentage of failure, but it is really leading to innovation.
It is also changing the nature of jobs, benefitting the youth. India has always struggled with the problem of wages rather than just the problem of jobs. With the emergence of the startup ecosystem, I have noticed that it is no longer just about the amount of jobs. They have also been successful in affecting the quality of jobs to a large extent.
Youth who otherwise struggled without the dignity of work or some basic right to wages, are now getting the flexibility as well as the opportunity to earn much more than before.
So I think it’s fantastic, not just the evaluation part. It is actually bringing a lot of youth out of the despair of jobless existence.
Some of these startups will also impact small towns. Some of the ideas look promising and will probably impact the youth even in remote areas.
While the pandemic has had a negative impact, if this trend continues, we will see more and more opportunities being created for the youth. And it won’t just be limited to the tech world. Some business models offer opportunities not only to high-end technology experts, but also to many others whose lives can be changed.
I think this is a good sign for us. High time India had this resurgence.
As far as the startup story as a vehicle of macroeconomic revival is concerned, what do we need to look out for now for their sustainability and wider participation?
I often use this voting machine versus weighing machine analogy. This means that the excitement around the startup ecosystem initially resembles the effect of standing at a voting machine. However, in the long run, we all know that weighing machines are essentially where rubber meets grass.
We know that given the mortality rate of organizations, only a certain percentage of them will survive and grow in the long run. But this cannot be the case against mortality resurgence.
In fact, despite the possibility that some startups may not survive for long, I think India deserves to go through this phenomenon. While global big companies like Facebook and Google have been run by Indian engineers, India is still not able to create organizations of that stature.
But at this point I think we have a shot at being able to make them. So despite being a challenge in terms of stability, I think this momentum should not stop.
As far as the impact of all this on employment is concerned, today’s youth have reached the taxi-cab relationship with the job. This means that the average tenure in a job, especially among youth – when they are entering the job market or between zero and three years – is about 12 months. Despite this, from the employment point of view, they are gaining valuable job experience. They are also able to enjoy a fixed salary premium, which they could not have enjoyed if they were stuck in an informal sector job.
It also improves the purchasing power capacity of a wider range of our youth today. And all of that comes back into the economy.
When there was a resurgence of e-commerce, there were many organizations in that area. We had delivery agents and boys posted. Now an integration has started, but I have yet to find a delivery boy who is unemployed. If anything, they have really only moved on to work for larger organizations, perhaps more stable organizations. But startups are where they started earning.