“The number of people who choose entrepreneurship is small. I want at least 5% of students to take the entrepreneurial path. For India to become a $5 trillion economy, we need jobs. Big manufacturing companies don’t create jobs. We need smaller units and start-ups to create jobs in newer fields,” says Prof. Ashok Banerjee, Director at IIM-Udaipur.
Economic uncertainty is one reason. Another is large student loans. Most students want to start a business, but only after they have worked steady jobs for a few years and paid off their loans. “I think most B-School students think about starting their business at some point, even me,” says Udit Joshi, a 2022 graduate of the Indian Institute of Foreign Trade in New Delhi. Joshi says some of his colleagues turned down internships to help flesh out their business ideas. Many start-up founders also trace their academic roots back to B-Schools. Clovia’s founder and director, Neha Kant, for example, graduated from FORE School of Management in Delhi in 2004. The founder and CEO of jewelry start-up Melorra, Saroja Yeramilli, has conducted PGDBM in Marketing and Finance at Xavier Institute of Management (XIM), Bhubaneshwar.
However, there are several factors that prevent B students from pursuing entrepreneurship early in their careers.
Lending, course structure
MBA programs are expensive, and most students take out loans to pay tuition. Dhairya Arora, who completed his MBA in Marketing at the Institute of Management Technology (IMT) in Ghaziabad, says student loans in India range from 20 lakh to 40 lakh. And students, many from middle-class families, cannot afford to opt out of internships. Arora wants to start but has accepted a job at Whirlpool for now. “A job gives you stability,” says Anand. “You have to find a way to pay for EMIs. They also lure fantastic placements at IIMs on the easy way,” says Banerjee of IIM-Udaipur.
“Financially, there is no point in starting something unless you have strong financial backing or an idea that has already received support from investors,” says Uday Virmani, Associate Dean of BITS School of Management (BITSoM).
Credit isn’t the only problem. MBA programs are not designed to encourage students to experiment. For example, they do not allow you to drop out of a semester to pursue a business idea. “There is no time to think, to think. In addition, modern companies need a strong technological foundation. Brand new high school graduates don’t have what it takes to be founder-entrepreneurs of such tech-heavy companies. A founding team needs people with different skills and most of them will not be B-School graduates, many of them will be IITians for example,” says Nagaraj.
Engineering graduates have four years to develop ideas. Although the length of the MBA program at IIM is two years, students only spend 18 to 19 months on campus, says Banerjee. “In 18 to 19 months, they need to acquire a number of credits. The pressure is enormous,” he says. “In incubators at IIMs, the number of in-house students working on their ideas is very small,” he adds.
skills first
Most B-School students want to improve their skills by working for others before starting their own ventures. “I had to have corporate experience. My only focus in college was finding a suitable job to improve my skills,” says Joshi. “Most people want to get a job first to fill gaps in confidence and knowledge. The Indian education system doesn’t fully prepare you for the world,” says Arora of IMT-Ghaziabad.
Naren Kashyap works with Meesho because of the learning opportunities there. Entrepreneurship is something freshmen are reluctant to start unless they have a business background, says Vivek Chakrapani, AGM, Internships at FORE School of Management. Even graduates with some work experience prefer jobs in other sectors before starting their own business, he says.
Attractive placements
Most students are also attracted by high internship salaries. “In India people go to B school for a job. Success at a B-School is defined by career outcomes,” says BITSoM’s Uday Virmani. “Over the last three years, IIM-Shillong has seen a 22 percent increase in recruiter participation. The average CTC increased by 20.50% compared to the previous year. As companies offer better packages, students continue to prefer jobs,” says Prof. DP Goyal , Director, IIM-Shillong.
At ISB, the average salary for Class 2022 was ₹34 lakh, a jump of 20% over the previous year. The ISB course helped the students increase their salaries by 173.75%, says Chandan Chowdhury, Senior Associate Dean, Career Advancement Services at ISB. At the KJ Somaiya Institute of Management, the average of the top 200 offers was 13.55 lakh per year compared to 11 lakh last year. It’s grown 10% year over year, says director Monica Khanna.
“People who procrastinate on internships either have a family business or already have something up and running before they enter B-School,” says Kashyap. But there is an opportunity here. “The recruiter ecosystem has changed. It used to be traditional FMCG, banking and consulting companies. Students don’t mind working with smaller companies that may not be as well known but do a smart job. Not everyone wants to join a Cisco or a Microsoft. Many startups have IIM alumni who encourage students to collaborate with startups and gain expertise,” says Virmani. Also, many tech startups pay the same as traditional companies. “On average, consulting firms pay best, but tech firms (including New Age companies) can break the bank for someone they like,” says SPJIMR’s Nagaraj.
