Gujarat youths want jobs, not own private ventures

Gujarat has had a reputation of being a nursery for successful industrialists for so long that it is difficult to believe that the new generation of Gujaratis is losing interest in entrepreneurship. Young Gujaratis nowadays seem to prefer the security of salaried jobs to the risks of private enterprise, even if the enterprise happens to be a family business.

Data with the Centre for Entrepreneurship Development (CED), a Gujarat government organisation, reveals that nowadays fewer people trained by it are going for private ventures than they were 4-5 years back.

In the 30 years of its existence, the CED has trained around 45,000 people in entrepreneurship; of this, more than 14,000 people have been able to launch successful start-ups. Of late, however, the centre has noticed a decline in the number of its students who had launched new start-ups.

The CED data indicates that, in 2004-05, around 505 people trained by it had started their own businesses. But by 2008-09, the number of new start-ups by CED alumni had come down to 138.

Except for a small improvement in the figure for 2007-08, the number of CED alumni launching new business ventures has steadily declined in the last five years. Significantly, the number of people trained by the CED each year in these five years has remained almost stable at an average of 1,600. Further, in the last five years, the availability of finance from banks and other financial institutions has increased manifold but the number of entrepreneurs seeking funds from banks has declined steeply.

According to the CED data, in 2004-05, a total of 210 entrepreneurs had started ventures with loans from banks. This came down to a mere 38 in the year 2008-09.

Dr Chandan Chatterjee, who has been the CED director for the last many years, said that the preference for safe salaried jobs over private business seems to be growing in Gujarat.

“The decline in the number of youths trained by us who had actually become entrepreneurs is one indication of this,” he said.

“There are several reasons for this phenomenon. One reason is that the number of jobs that fetch good salaries has increased. These salaries are almost equal to the monthly income from small enterprises.”

Chatterjee said that big companies have entered businesses such as retail, textile, and pharmaceuticals, which are the domain of ‘micro, small and medium enterprises’ (MSMEs). “That has made it difficult for newcomers to launch ventures as it would pit them against big established players,’’ Chatterjee said adding that many highly-qualified youths, who had family business, had instead opted for salaried jobs .

“We have to start special programmes to train youths into tackling challenges faced by a family business,” he said. “Family businesses are facing new challenges in the changed economic environment.”