Start-ups are gradually becoming the foundation of our country. Given the increased interest for job seekers to become job creators, it is anticipated that our economy will hinge on the success of start-ups in the coming decades.
In the age of Shark Tank, start-ups are fuelling growth not only in urban areas but also in rural and remote regions throughout the country. After China and the United States, India is now the third-largest start-up ecosystem in the world, with 44 Indian businesses reaching unicorn status in 2021.
With the Jan Dhan, Aadhar and Mobile (JAM) trinity in place now, the Government of India understands and emphasises working with disruptive innovators across the value chain and the need to use their innovations to improve public service delivery.
Post-Pandemic Swadeshisation Of Start-Ups
The arrival of the pandemic in 2020 has further accelerated the process relating to consumer adoption of digital services, assisting start-ups and new-age ventures in building tech-focused businesses for customers. The last several years have therefore witnessed what I like to call 'Byjuization', 'Paytmization', and 'Groferization" in education, financial inclusion and grocery shopping, respectively.
The pandemic has altered the educational system more than anything else by necessitating a transition to an online style for teaching and learning. Businesses like the Byju's have been able to do this by offering a distinctive way to acquire and transmit knowledge while also helping to enhance the country's educational system.
The rise of fintech companies like Paytm suggests that the road to financial inclusion is also feasible. Start-ups in India have thus been able to disrupt the industries to which they belong by making things simpler for clients while becoming a part of their everyday lives.
The Challenges Up Ahead
However, in the past few years, the expansion of start-ups in India has faced some teething problems. Given the financial drying up caused by global macroeconomic conditions, the availability of necessary vital finance has been significantly impacted.
According to a PwC India report, the start-up funding decreased by around 40 per cent to roughly Rs 6-7 billion in the April-June 2022 quarter due to geopolitical tensions. Job losses across start-ups have been making news as they attempt to prolong their runway with their current financial resources.
The major foreign investors in India's start-up scene include SoftBank Corporation from Japan, Alibaba from China and Sequoia Capital from the US. India's venture capital sector is at a nascent stage. Owing to that, it is willing to take on risk, and the existing corporations in the nation have stayed mainly in conventional industries.
As India looks to develop crucial infrastructures such as science and technology parks and incubators, it needs to reorient its bureaucratic norms and ease government approvals for a burgeoning start-up ecosystem.
To address these concerns, India has proposed to set up a new engagement group called 'Startup-20' during its G20 presidency.
More consumer-centric business models must be developed to reach a bigger audience. The goal should be to reach metropolitan regions and rural India, therefore solving the digital gap.
Proper branding and strategy, using cutting-edge technology and the execution of a customer acquisition plan may attract venture capitalists and new investments, which are the foundation of every firm. Early-stage businesses should also take advantage of the policies of the Indian government, like Make in India, Digital India, etc., that demonstrate the desire to recruit talent.
Under the Start-up India Initiative, for instance, more than 69,000 firms have received nationwide recognition since the initiative began in January 2016.
According to information from the Ministry of Commerce and Industry, 1.74 lakh people were employed by start-ups that were part of the Start-up India programme in 2021.
Due to the rapid growth of the start-up ecosystem, considerable investment is required; consequently, venture capital and angel investors play a crucial role. Aside from decisions made at the legislative level that support entrepreneurship, it is also the responsibility of India's corporate sector to support entrepreneurship, forge alliances to develop effective technological solutions and achieve sustainable and resource-efficient growth.
The world is paying more attention to the attractive IT opportunities in India and the potential wealth that may be produced due to recent events that have increased capital mistrust in China. India thus needs bold policy changes in addition to the Digital India initiative to achieve this.
To ensure a Re-'Start' of our Swadeshi start-ups in the post-pandemic era, I, therefore, propose the I3 formula model. Herein innovation, investment and institutional support will be crucial in laying the groundwork for the current decade to become what the Prime Minister refers to as 'India's techade'.
- Aparajita Sarangi is a Member of Parliament, Bhubaneswar