India prides itself on being the world’s third-largest startup ecosystem after the US and the UK. But the country’s techies, it seems, aren’t really sold to the idea.
Fewer than 10% of Indian engineers want to work at startups, according to an employability report by the Mumbai-based pre-employment assessment firm Aspiring Minds. The report is based on a survey of over 170,000 engineers who graduated in 2018 from over 750 colleges in India.
Moreover, India’s startups are caught in a bubble, with nine in 10 failing within five years of founding. “…when the unviable astronomical valuations of startups come down and the dust settles on true business cases, especially in B2C, and when more B2B tech product companies gain traction, more engineers may want to work there,” said Yugal Joshi, vice-president of consultancy Everest Group.
Ultimately, it is becoming a prerequisite to be business-friendly and politically stable. Countries in Latin America and the Caribbean have advanced monumentally in both regards in recent years, so there are many options to choose from and it’s easy to discard the outliers from consideration. This has been reflected in the reticence companies have shown to enter Argentina and Venezuela during the last decade (not to mention the Philippines currently).
Talent, then, becomes the next differentiator. In some sense, size matters. Simply put, Brazil (with a population of almost 210 million) and Mexico (nearly 130 million) offer more people than everywhere else in the region. While Uruguay or Chile may have an advantage in terms of certain tech skills or overall education levels, when it comes to the ability to scale, there is no competing with the big two.
Salil Dani, a vice president in the global sourcing service line for the Dallas-based consulting and research company Everest Group, breaks it down into two elements: Potential for fast growth versus competition. Going to Mexico City or Buenos Aires means you can fill up seats fast. But you will also likely deal with high employee turnover rates since skilled workers are in high demand and have many options — not just from the services industry but in various other fields.