World Bank president Ajay Banga recently said that between 2025 and 2035, 1.2 bn young people will enter the global workforce. Current economic projections suggest the creation of only about 400 mn jobs in that period.
World Bank has identified sectors with the capacity to generate large-scale employment: infrastructure and construction, healthcare, food and agriculture, tourism, and manufacturing. If India is to sustain its projected 7.5% growth over the coming decades and translate it into jobs, these sectors must expand rapidly.
To develop these sectors, both established and new companies must be nurtured to build strong domestic champions in a competitive home market. But India's conversations around entrepreneurship remain disproportionately centred on VC-funded tech startups. AI has become the latest obsession. This is a narrow lens.
Globally, only about 21% of new firms are in tech, and an even smaller fraction receive VC funding. While world-class tech companies are vital, the larger and more immediate need is to support entrepreneurship across core sectors that will underpin broad-based economic development.
There's a growing perception among entrepreneurs that success in India is confined to export-oriented tech companies, businesses that benefit from gov spending, and those based on labour arbitrage. If this belief becomes entrenched, it signals a deeper issue around absence of a robust ecosystem to build domestic, demand-driven, profitable businesses across all sectors.
India must broaden its entrepreneurial imagination. It needs to foster world-class companies that primarily serve domestic markets. The opportunity is evident. An American entrepreneur building California Burrito into a successful fast-casual chain in India is proof that the domestic market is fertile for well-executed ideas.
While China's economic success is often framed through the lens of exports, today, exports account for only about 20% of its GDP, lower than India's roughly 22%. Many of China's most successful firms - Tencent and CATL to BYD and Kweichow Moutai - first established dominance in the domestic market before scaling globally. India, with its comparable scale and demographics, has a similar opportunity. The path forward lies in strengthening core sectors that cater to domestic demand while building globally competitive capabilities over time.
The playbook for success in traditional sectors, however, is different from VC-backed startups. These are not blitz-scaling stories driven by rapid capital deployment. Instead, they are built patiently over time. Companies like Haldiram's, Marico, Serum Institute, Sun Pharma, Safexpress, Zerodha and Tally have achieved industry leadership by executing consistently over decades. Beneath the surface, thousands of SMEs, often overlooked, form the backbone of India's economic engine, following similar trajectories of steady growth.
Such businesses are typically bootstrapped or conservatively financed. Their success stems from disciplined execution, operational excellence and continuous innovation, rather than disruptive technology or large capital infusions. By design, their growth and returns may materialise slowly than those of a VC-funded startup. But they tend to be more stable and sustainable.
Their proximity to local markets requires them to remain responsive to demand while maintaining financial discipline. In fact, given India's diversity, many of these businesses build regional powerhouses first before venturing out across the nation. Policy must catch up with this reality.
Financing In China, SMEs benefit from gov-subsidised loans that reduce borrowing costs. In the US, small business administration (SBA) runs loan guarantee programmes of up to $5 mn, improving access to credit for new businesses. Similarly, gov-affiliated Japan Finance Corporation (JFC) provides zero-collateral loans tailored for new entrepreneurs.
While as many as 50% of new businesses in those countries access formal credit, only about 14% do so in India. Even when credit is available, high borrowing costs often deter entrepreneurs from taking risks or investing in growth.
Capability-building Entrepreneurs need access to mentorship, modern technologies and managerial expertise. Creating platforms that connect emerging businesses with experienced operators, industry knowledge and digital tools can improve their chances of success. Rather than emulate Silicon Valley, India must develop its own approach, one that reflects its unique economic structure, demographic realities and development priorities.
At a time when global integration and trade are slowing down, India's most reliable growth lever is its domestic market. Real entrepreneurial opportunity lies in building the next VC-funded unicorn. But in building the next gen of companies harnessing domestic talent to meet growing internal demand.
To achieve its developmental vision, India must shift its focus from a narrow celebration of VC and tech startups to a broader commitment to entrepreneurship across the economy.
World Bank has identified sectors with the capacity to generate large-scale employment: infrastructure and construction, healthcare, food and agriculture, tourism, and manufacturing. If India is to sustain its projected 7.5% growth over the coming decades and translate it into jobs, these sectors must expand rapidly.
To develop these sectors, both established and new companies must be nurtured to build strong domestic champions in a competitive home market. But India's conversations around entrepreneurship remain disproportionately centred on VC-funded tech startups. AI has become the latest obsession. This is a narrow lens.
Globally, only about 21% of new firms are in tech, and an even smaller fraction receive VC funding. While world-class tech companies are vital, the larger and more immediate need is to support entrepreneurship across core sectors that will underpin broad-based economic development.
There's a growing perception among entrepreneurs that success in India is confined to export-oriented tech companies, businesses that benefit from gov spending, and those based on labour arbitrage. If this belief becomes entrenched, it signals a deeper issue around absence of a robust ecosystem to build domestic, demand-driven, profitable businesses across all sectors.
India must broaden its entrepreneurial imagination. It needs to foster world-class companies that primarily serve domestic markets. The opportunity is evident. An American entrepreneur building California Burrito into a successful fast-casual chain in India is proof that the domestic market is fertile for well-executed ideas.
While China's economic success is often framed through the lens of exports, today, exports account for only about 20% of its GDP, lower than India's roughly 22%. Many of China's most successful firms - Tencent and CATL to BYD and Kweichow Moutai - first established dominance in the domestic market before scaling globally. India, with its comparable scale and demographics, has a similar opportunity. The path forward lies in strengthening core sectors that cater to domestic demand while building globally competitive capabilities over time.
The playbook for success in traditional sectors, however, is different from VC-backed startups. These are not blitz-scaling stories driven by rapid capital deployment. Instead, they are built patiently over time. Companies like Haldiram's, Marico, Serum Institute, Sun Pharma, Safexpress, Zerodha and Tally have achieved industry leadership by executing consistently over decades. Beneath the surface, thousands of SMEs, often overlooked, form the backbone of India's economic engine, following similar trajectories of steady growth.
Such businesses are typically bootstrapped or conservatively financed. Their success stems from disciplined execution, operational excellence and continuous innovation, rather than disruptive technology or large capital infusions. By design, their growth and returns may materialise slowly than those of a VC-funded startup. But they tend to be more stable and sustainable.
Their proximity to local markets requires them to remain responsive to demand while maintaining financial discipline. In fact, given India's diversity, many of these businesses build regional powerhouses first before venturing out across the nation. Policy must catch up with this reality.
Financing In China, SMEs benefit from gov-subsidised loans that reduce borrowing costs. In the US, small business administration (SBA) runs loan guarantee programmes of up to $5 mn, improving access to credit for new businesses. Similarly, gov-affiliated Japan Finance Corporation (JFC) provides zero-collateral loans tailored for new entrepreneurs.
While as many as 50% of new businesses in those countries access formal credit, only about 14% do so in India. Even when credit is available, high borrowing costs often deter entrepreneurs from taking risks or investing in growth.
Capability-building Entrepreneurs need access to mentorship, modern technologies and managerial expertise. Creating platforms that connect emerging businesses with experienced operators, industry knowledge and digital tools can improve their chances of success. Rather than emulate Silicon Valley, India must develop its own approach, one that reflects its unique economic structure, demographic realities and development priorities.
At a time when global integration and trade are slowing down, India's most reliable growth lever is its domestic market. Real entrepreneurial opportunity lies in building the next VC-funded unicorn. But in building the next gen of companies harnessing domestic talent to meet growing internal demand.
To achieve its developmental vision, India must shift its focus from a narrow celebration of VC and tech startups to a broader commitment to entrepreneurship across the economy.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
R Narasimhan
R Narasimhan is author of Building India’s Upstarts: A Bootstrapped Entrepreneur’s Playbook for Success