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India’s economic narrative is undergoing a radical rewrite led not by metro magnates, but a new breed of risk-takers rising from Tier-2 and Tier-3 towns. As tech giants slash jobs worldwide and entry-level roles vanish under the shadow of AI, cities like Jaipur, Lucknow, and Indore have quietly doubled their company registrations in just two years. More than half of India’s new startups now rise from outside the metros — a silent revolution redefining how and where India works. The Tier-2/3 Surge: What’s Driving It? The growth of startups in the Indian hinterland is being propelled by a hunger for opportunity, a digitally skilled workforce, resilient talent pools, and entrepreneurial grit. India’s smaller cities delivered a 53 per cent surge in IT hiring this year, nearly double the national average. Graduates in these towns account for 60 per cent of India’s annual output, and unlike in years past, many are now choosing to remain local. Operational and talent costs in Tier-2/3 cities are 20-40 per cent lower than metro markets, but what truly sets them apart is talent retention — attrition rates here hover around 15-20 per cent, compared to 35-40 per cent in big cities. That translates to founders building more resilient teams who are committed for the long haul. Democratisation of Risk-Taking in India If one needs further proof of India’s shifting mindset, look no further than the country’s TV screens and WhatsApp groups. “Shark Tank India” and its viral pitch clips have made ‘entrepreneurship’ a national buzzword, not only for IIT graduates but for college youth in cities like Bhubaneswar, Jaipur, and Rajkot. The rise of local investor networks and digital access to capital means an ambitious founder is no longer held hostage by location anymore. Yet, even amid hope, a serious adversary looms: AI-driven disruption. India’s youth unemployment rate stands at a bruising 14.6 per cent, which is triple the national average. As is the case across the world, traditional entry-level roles are vanishing or evolving radically. Employers increasingly demand ‘AI + Everything’ skillsets, leaving entire swathes of graduates scrambling to upskill. The challenge is not that AI is destroying entry-level jobs, but that it is perhaps beginning to make these roles obsolete, especially those reliant on repetitive skills or manual oversight. This transition has created an urgent need for Indians at large to not treat risk-taking as taboo. It’s no longer enough for founders to merely create companies; they must become large-scale job creators, actively building pathways for others to learn and work. Government momentum has played a pivotal role so far. Over 1.57 lakh startups have received DPIIT recognition, with 17.28 lakh jobs created since 2014 alone. Flagship schemes like Startup India, Fund of Funds for Startups, SISFS, Credit Guarantee for Startups have all helped young founders with proof-of-concept support, targeted incubation, and access to both equity and debt capital. Programs like Atal Innovation Mission and MeitY Startup Hub have knit together the innovation fabric beyond big cities, with Atal Tinkering Labs and Community Innovation Centres catalysing innovation in remote districts. But capital and contests alone aren’t enough. Founders must act as role models, champion startup mindsets in classrooms and local communities, and create supportive peer networks. The private sector, for its part, must invest in upskilling and mentorship. Artificial Intelligence remains a relatively new phenomenon, and there is an urgent need for the private sector to acknowledge that young professionals entering the workforce are not yet as proficient with the technology as employers might expect. This gap largely stems from an education system that, for decades, has prioritised rote learning over critical thinking, creativity, and practical technological engagement. Turning Founders into Mass Job Creators So, how does India convert its entrepreneurial wave into one which creates jobs for the masses? First, by nurturing risk-taking at scale. Instead of treating startups like lottery tickets, society — parents, educators, local leaders — must normalise calculated risk, failure, and resilience. Media and pop culture should celebrate not just unicorn founders, but the thousands scaling up in smaller towns. Failure must not be frowned upon, but celebrated as being a critical component of the business development process. Second, by integrating practical AI education and startup exposure into schools, undergraduate programs, and vocational courses. India’s graduates need more than coding; they need experience in project management, product thinking, design, raising capital and go-to-market strategy. Third, by connecting founders to local markets and global supply chains simultaneously. Building startups for local needs, but with world-class standards and ambitions, ensures scalable impact. India’s sophisticated digital infrastructure has already helped remove old barriers, enabling even Indian living in non-metros to serve clients worldwide. Fourth, by scaling up incubation and mentorship networks, so that first-time founders in tier-2, 3 cities finding guidance, feedback, and growth capital just as readily as their counterparts in Mumbai or Delhi. The Road Ahead: Create, Don’t Wait India’s job market will not be magically revived by government schemes or episodic bets from venture capitalists. Change will come from local action — a Jaipur founder hiring her second team, an IIT alumnus in Guwahati launching a manufacturing SaaS, a Ghaziabad entrepreneur pivoting from coaching to edtech. If India wants a resilient future, it must double down on this momentum. That means a relentless campaign for boldness, innovation, and agency at every level, from government, private sector, education, and society. Mass entrepreneurship isn’t a catchphrase. It’s the best hedge against automation’s threat and the youth unemployment crisis. India’s economic future hinges not just on how many startups are registered — but on how many founders become mass employers, how many youth find meaningful work building out those visions, and how deeply the entrepreneurial spirit spreads beyond privilege and geography.
