India’s current start-up run is neither by chance nor an outcome of a cultural ethnicity. We Indians have always been great risk-takers and now time is also on our side. While our maturity to handle the situation is secondary, the opportunity at hand is immense. Our startup and business expert Mr. Kamal Gupta shares his thoughts on Business in Indian ready for disruption exclusively on HashingLife.com
It has been said, and observed, that India’s old and large business houses are rentier, and are risk averse. We have always preferred to buy established technical know-how from foreign companies, or at best to reverse engineer and copy it, rather than striking out on uncharted paths, and doing our own research.
By contrast, European and American entrepreneurs were found to be willing, even welcoming, risk taking. And they got the rewards for it. From scientific & tech research to business innovations. The Time & Motion studies that improved labor productivity by 12 to 25 times. The hire-purchase system that opened up huge markets for farm tractors by making it affordable. Home loans, credit cards, multi-level marketing. AirBnB to Uber. The list is huge.
Why? Because Europe of the 18th and 19th centuries, America of the 19th and 20th, had very little to lose. They embraced the steam engine and spinning frame because they had no textile industry where jobs would be lost. India had artisans in hundreds of thousands if not millions, working on metals, wood, masonry, textiles and the like whose jobs would have been at stake (as we became a British colony, the jobs got lost in any case).
The Europe of today is very different. Despite having a huge techie population, and capital, and strategic location, it is not in the forefront of disruption. It has vested interests that would lose. We can see this in examples like the stiff opposition to services like Uber and AirBnB.
India has far lesser well-paying jobs that could be at risk. Therefore, we see today’s risk-accepting generation of entrepreneurs ready to cause, and be ready for the effects, of disruption. Our strength is in software, and this is being increasingly supplemented by R&D (though that is still tiny, we can see the green shoots). Not only do we have the Ola and Oyo Rooms, we have the Baxis. We have innovative models of providing lighting, HVAC and solar power. We have young entrepreneurs thinking out of the box. Business in India, ready for disruption.
I am happy to find many of the old world companies jump into this. Mahindra has kicked off a “Garage”, a separate organization to nurture innovative thoughts, products, and processes. ITC, the cigarettes monopolist, has also created such a team, whose deliverable is measured by how many new ideas they put into practice in one-quarter. Tata and JK are getting into the act.
The risk appetite of an organization (country, sub-country, company, whatever) depends upon what it is risking. When there is nothing or nothing much to lose, the appetite goes up. Business in India is at that stage now, and the appetite is fueled by the availability of risk capital from across the world.