Start-ups and young entrepreneurs have never had it so good. Entrepreneurship requires an ecosystem to flourish and all the elements to make that happen has come together, at least in the big cities, says Ravi Venkatesan, Chairman, Social Venture Partners and former Chairman, Microsoft India.
“Entrepreneurship requires an ecosystem and this is geographically local. The biggest such is Silicon Valley and many have tried to replicate it, but it’s not easy. Among the ingredients for a successful ecosystem is that, first, you need some successful entrepreneurs. You need role models and inspirational figures who have been spectacularly successful and have made their money and are now angel investors; they must be keen to invest and guide and mentor,” explains Venkatesan, who’s on the board of Infosys and is an IIT Bombay graduate with an MBA from Harvard Business School.
Secondly, the availability of venture and seed capital is important and right now in India there is a very strong inflow of venture capital. “Venture funds doubled in 2014 over the previous year and is again expected to double this year. There is a super abundance of venture capital. All these elements have fallen into place in the past year,” he says.
The most spectacular success of entrepreneurship has been in e-commerce, where companies are now seeing huge valuations. There is a lot of funding going into tech companies, both in companies leveraging technology through the cloud and now increasingly in product companies. “You are seeing investments in social businesses, and you see a lot of start-ups in health care, in education, in vocational services and also in the “sharing economy’, such as the equivalents of Uber, TFS and Ola,” says Venkatesan.
Venkatesan, a founding partner of SVP, a network of philanthropists attempting to address social issues through venture philanthropy, says that along with the changing fabric of entrepreneurship, the very idea of jobs as we know it is changing. “We think of jobs as something stable, a long-time contractual agreement with salary and benefits; this sort of arrangement is going to become rarer, I prefer to think in terms of self employment or livelihood. You can decide how many hours you want to work, but it’s not a job, it’s self employment. Increasingly, you will see companies won’t employ an accountant or a lawyer and they will post their requirement and there will be someone willing to do that job. So, the nature of work is changing at an extraordinary pace,” he explains.
Increasingly too individuals will be accountable for their own lives, not organisations. They have to fend for ourselves, develop a useful skill and make sure it remains useful and doesn’t get obsolete. “It’s liberating but also frightening. You look at India’s success in IT, but now low-end jobs are being automated. In the next five years you can expect that a large number of these jobs will disappear. So what will these people do? They won’t be employed in the conventional sense, but have to become self-sufficient,” he says.
Everyone, he says, has to be a micro entrepreneur and employ a few others. “I have gone from being an employee to being self-employed and an entrepreneur. The problem also is we are living longer as longevity is up, so you can be productive till around 70. One has to think in a 20-40 year horizon, that’s the challenge out there. I don’t think India really understands the magnitude of the job challenge,” says Venkatesan.