Start-ups! Tech revolution! Financial freedom! – These are some of the thoughts that have gripped our generation, not just in South Asia but throughout the entire world. While the USA, Europe, Canada and more recently the ‘start-up nation’, Israel have succeeded in fostering a vibrant start-up ecosystem, South Asia, despite initiatives from the governments of its countries, have come short of establishing an environment that is ripe for up-and-coming entrepreneurs. Make no mistake – there are several start-ups all over South Asia, and a majority of them end up failing, as in the rest of the world. The fundamental problem, however, is that very few of the surviving ones truly have the potential to make that big IPO, that dream exit or become a regional or global leader, like Google or Microsoft.
Now, is this the fault of South Asian governments? From my perspective this isn’t the case. Instead, the fundamental problem lies in our attitude, mindset, and approach to taking risks. The process of creating a start-up comes with a great deal of uncertainty: a significant initial investment, time commitment, and above all the possibility of the business failing, which could lead to bankruptcy. Western nations have embraced this culture of risk, in which – ‘everything or nothing’ – ‘go big or go home’ – are all too common phrases. However, within South Asian societies such sentiments embody a rather distant attitude to our conception of life and business. We often shy away from risk culture. From birth, we are encouraged to study hard, earn excellent grades, get a degree, and settle down within a stable job of nine-to-five, create a fixed income, in which there is no possibility of losses or bankruptcy to worry about. A very convenient life indeed! We are discouraged from taking the financial risk of founding our own business. To jeopardize a stable job, a good income, or our education can often be viewed as blasphemous. Many of us are therefore hesitant to get started – even with a little side hustle! We remain afraid to commit to spending time and money on any venture that could disappoint our family, friends, and bosses. We have been fed a false narrative, in which we are told that we can only obtain success and happiness through a stable job.
Governments have taken measures to create a healthy start-up environment, in which they have provided subsidies, mentorship, and access to investors. However, these government initiatives have failed to address this fundamental problem: the fear of risk culture. Although finances have been allocated, there are only a handful of people that are willing to take the first steps to establish their business. Therefore, it comes as no surprise that South Asian countries rank poorly in the World Bank’s Ease of Doing Business Index with Afghanistan being top ranked at 52 and only Pakistan, Sri Lanka and Maldives making the top 100. Moreover, the fact that Bangladesh and India are ranked 131 and 135 respectively despite being amongst the fastest growing economies in the world illustrates clearly that economic growth does not automatically improve the ease of doing business. Ultimately, if people are afraid to even take the risk of starting their own business, what use are these government programs which focus upon the later stages of entrepreneurship?
So, what could the governments of South Asia do to combat this culture of trepidation? I believe that there are three key factors that could be employed by these governments to quell our fear of risk.
1. Educational Reforms: Within our schools we must be taught about leadership, public speaking, coding, financial literacy, and entrepreneurship. These should be core components of our curriculum right from the start. These skills are vital to becoming a well-rounded individual who is confident and less likely to be reluctant to take risks. Furthermore, we should seek to lessen our focus on ‘four-walled’ education. Instead, we should concentrate on vocational education – the teaching of real-life, practical skills, which have real-world applications. This will be beneficial twofold – providing a foundation for student’s practical skills that will be invaluable if they wish to create a start-up culture, while simultaneously improving their knowledge and mental wellbeing, regardless of the career path they pursue. Very recently for instance, India announced a new education policy that will make coding, among many other subjects, a mandatory course for all students and there is no reason why other South Asian countries should not replicate that.
2. Safety Spaces for Entrepreneurs: In Sweden, people who have become unemployed can receive up to 6 months of remuneration in unemployment benefits. While it may not be possible for many South Asian countries to provide this broad safety net, it could potentially be offered exclusively to entrepreneurs in case their business was to fail. This could increase the likelihood of people setting out to create a start-up as they would be guaranteed to avoid complete financial ruin. However, this ‘solution’ comes with its own set of problems. Effective monitoring would inevitably have to take place to prevent people from founding start-ups simply to receive this benefit. Furthermore, this is also an expensive policy measure and governments will need to allocate additional resources from elsewhere. Although, in the long-term this could act as an interesting stimulus for start-up businesses.
3. Economic Integration: Economic integration in South Asia (see: Time for a South Asian EU?) could catalyse its economic development on many fronts, including start-ups. While an EU-like model is not a prerequisite for this, it could work more effectively by using this setup. This can be done by making collective policy reforms regarding start-ups and entrepreneurship at SAARC – for instance, there could be a collective start-up subsidy grant for entrepreneurs from SAARC member countries; governments could encourage and allow cross-border partnership and investment, in which a person from one country could have access to another country’s resources.
Therefore, the most important step must be to address this fear of risk-taking. Many Israeli entrepreneurs for instance, have claimed that it has been their mandatory military service that makes them less fearful and more willing to take risks. I am not suggesting that military service should be mandatory (it definitely has its own set of disadvantages) but that the state should seek to teach its young population the desirable qualities that one might gain from military work such as leadership, fearlessness, quick-wittedness, mental strength, alertness, boldness etc.
However, the most important step we can take is to alter our parenting styles. Parents must teach their children to boldly take risks. There is a saying that education starts in our homes. Parents should acknowledge that while their children’s happiness may come from entering the workplace, that this is not always the case. Of course, parents have every reason to feel concerned about the future wellbeing of their children, however, that does not mean they should not let children explore a plethora of different opportunities. Ultimately, a start-up culture in South Asia, will only begin to truly prosper if parents teach their children to not shy away from risks but encounter them head on with courage.