Pundits will be busy parsing the messages of this election for some time, but it is already clear that economic hardship and lack of jobs are major issues: young Indians want jobs over temples.
India has had an employment crisis for at least 15 years. It is a troubling problem that shows up in all the statistics, especially the low labor force participation rate (49% overall). The data also shows that the lack of quality jobs hits especially young people (80% of the unemployed are under 30), women, and college graduates. The case of college graduates is particularly shocking. For most of us, a good education was our passport out of poverty and into the middle or wealthy class. Today, a young person with a university degree is nine times more likely to be unemployed than an illiterate young person, according to an ILO report. This indicates both the quality of the degree and the quality of the jobs available. What has changed recently is that this is no longer a lower-middle-class issue. This year, 35% of IIT graduates and about 20% of IIM graduates are still looking for work. The problem is now affecting the elites too, which may be good news. It can no longer be ignored or brushed off. (Incidentally, this seems to be a global issue that also affects computer science and Harvard Business School graduates in the US)
One of the reasons we have such a big problem with quality jobs is that our economic mindset remains very elitist. In wealthy India, the media and policymakers are obsessed with catching up with the US and China in GDP without caring about broader indicators of well-being. We are fascinated by big companies that can compete globally, like the Tata Group, Reliance and Infosys. In entrepreneurship, we celebrate unicorns, not the millions of mundane small businesses that generate 60% of all employment. To encourage manufacturing, we come up with PLI schemes (production linked incentives) that bring in iPhone assembly and semiconductor packaging, rather than looking for dirty labor-intensive companies that make apparel, toys, shoes and all kinds of household goods and hardware.
Nobel Prize-winning economist Edmund Phelps, studying the economic development of the UK, the US, and China (in Prosperity for the Masses: How Grassroots Innovation Created Jobs, Challenge, and Change), notes that in these countries, prosperity was defined by “prosperity” in a broad sense. This prosperity included meaningful work, self-expression, and personal growth for the majority of the population. Phelps attributes this prosperity to a shift in societal values that stimulated widespread innovation and entrepreneurship at the grassroots level. That is, many people came up with new ideas and businesses, not just a few big names. Such widespread improvement and entrepreneurship led to an era of economic and personal prosperity that he calls “prosperity for the masses.”
What we can learn from chess
Sports are thriving in India. First cricket and more recently chess have been successful because these sports have become dramatically more inclusive, thereby attracting a lot of talent. Chess has grown at a grassroots level in the country and is now part of the school curriculum in Tamil Nadu and Gujarat. Chess clubs and tournaments are widespread, creating a movement in the same way as cricket. This democratization has rapidly expanded the talent pool, with at least a million people participating in local tournaments across the country. Among them are Uber and car drivers and construction workers who sign up for tournaments with no entry fee. Prize money and sponsorship, while still small, have grown rapidly with the success of the sport. As a result, India now has seven grandmasters, up from 20 in 2007 to 73, with some players ranked in the top 100 in the world. India’s success in chess is very similar to mass entrepreneurship. For India to thrive and reach its potential, it will take more than a handful of large companies and a few thousand tech startups. We need a grassroots movement of millions of young people who, rather than seeking a good job, want to start and build their own businesses. These are not gig workers or entrepreneurs of necessity who are forced to start small businesses like coffee shops or grocery stores, but growth-oriented entrepreneurs drawn by opportunity.
Learn Entrepreneurship
For this, not only do we need to make entrepreneurship a mandatory part of every curriculum, but we also need thousands of venture clubs, incubators and accelerators in schools, colleges, ITIs and districts. Competitions like Shark Tank can be extremely effective in inspiring young entrepreneurs. The key is to build a pyramid of competitions that builds a huge funnel of entrepreneurial talent who can see an opportunity in every problem and build a business by solving it.
India’s innovation and economic potential will not be unlocked by an elite few. Instead, imagine a future where every small town and city is like Bengaluru – vibrant with innovation, brimming with opportunity and thriving with the entrepreneurial spirit of its youth.
Disclaimer
The views expressed above are the author’s own.
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