Hello friends,” India is a developing economy” we have been hearing this for the past many years. I will try out to figure out the reasons today. In the previous blog I mentioned that people in India don’t like to take risks. Neither with their career nor with their investments. I explained in the previous blog about the various types of returns which can be expected when money is invested in different asset classes. I believe india is still a developing economy because people in India don’t want to take risks with their career also.
The economy will grow if people will add to the economy by purchased India made products and services. For this they will have to do business. For doing business they will have to take risksand the first reason I find why people don’t want to take risks is mindset.
In business ,one has to take risk. In job ,the risk is taking someone else, the employee is only responsible for some specific department of which he is incharge, like marketing or operations. Most people don’t want to do additional work and take risks also at the same time. They want assurance that they will get money in terms of salary just in one month. But the only difference I find between job and business is of mindset.
You can see this video also for reference.https://www.youtube.com/watch?v=VltgwL3ToGM&t=469s
If a person is not willing to take risks ,he continues to do a job for a business owner who is willing to take risks and provide him what he needs, i.e .salary every month. But the employee does not understand that the salary which he is getting is coming from the same work which he is doing for his employer. And the difference is not small to be ignored. It ranges from 500 % to 1000 % every month. Because of this mindset ,the business owner continue becoming rich and employee remains in the middle class economic juggling between employer and family responsibilities.
The difference is only of mindset. If the employee becomes mentally ready to take the risk himself instead of depending on someone else, it will not be possible for him to continue in the job. This, I feel is the second reason.
Economy will increase only if the people do business and become self sufficient. The question is that how people in India became like this in the first place . The reason is low quality of education and no mentorship from family or educational institutions. In this day and age where everyone talks of digital India and booming economy, we should not forget that till today after 75 years of independence, India is still a developing economy because people don’t want to take risks.
There are some communities in India in which their families promote enterpreurship since childhood because they know the importance of business and taking risks and the have become the richest people in India . They are Marwaris, Gujratis, Punjabis, Parsis and a Jain community .
The richest people in India like Tatas is Parsi and Ambanis are from Gujrat. They have provided so much employment in India which even the government has been unable to do . This is just for proving my point that if provided right guidance from family and friends with a mix of quality education , India will become a developed economy much sooner than anticipated.
The third reason is the education system. One more point is that the quality of educational institutes in India. There are more than 1000 universities and more than 50000 colleges in India with more than 2 crore students studying in them, but no college of India features even in the top 200 colleges of the world apart from some IITs . With such a quality of education ,students are forced to look for jobs even after spending so much time and money in education.
Fourth reason is students have no idea of share market and how it works. The difference between business and job is that in job only a part of the work needs to be done . In business all the aspects need to be looked after by the same person. And share market is a place where the business is listed and then the balance sheet is made available in public. In colleges , students are only trained in one specific area and told that you will get a job . To sum up,they are only generating employees and not business owners .
Even if a student becomes a good engineer , he has no knowledge of the business aspect of the product . So he starts looking for job. Similarly if a biology student becomes a doctor , he starts looking for job in hospitals because he has no idea how the hospital is run. Or he is not at all ready to take risk and open a hospital or even a clinic. In Max hospital, which is a chain of hospitals, the management is run by someone else and doctors are paid a salary and they have little idea of how much the patients are being charged for their treatment.
Compare the situation with USA where most of the good colleges are located , there are a lot many students who after graduation start a business, scale it up and list the company in share market and become millionare within few years . Some examples are facebook https://www.facebook.com/, Twitterhttps://twitter.com/home, Amazonhttps://www.amazon.in/, and much more. Same situation is missing in India and the students are unaware of this . Many companies started small and has become so big that some companies in valuation are similar to some countries.
The last and most important part is digital marketing. Digital marketing started in the 1990s and social media like Facebook started in 2003. Before digital marketing, marketing was done through offline channels like print, media, television, radio among others. Digital marketing helps reach a large audience at a very low cost compared to tradational medium. There are some companies which are only online with very less offline presence but have millions of customers. Many of the are foreign based like Amazon and flipkart .
The point which I want to make is that the resources which are available today is a lot more than 20 years ago and doing business has become much cheaper that before . Many companies are taking benefit from this changing market dynamics. But in absence of knowledge and guidance, our country’s youth has no idea where to start and how to start . If this problem of mentoring is removed India can grow a lot faster.
Today with the evolution of digital marketing, many opportunities have emerged which were not available earlier. So in a way doing bussiness has become easier than before . You can read about digital marketing in my previous blog. https://sidworld.in/wp-admin/post.php?post=184&action=edit
And finally one more point ,if people start taking enterpreneurship seriously and start business instead of choosing job, they will also understand the importance of investing and then start investing themselves .