Can Startups Give Boost To Indian Economy?
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India needs 10 million jobs a year and global data shows that it is startups, not large enterprises that create net new jobs in any country. Startups are also the centers of innovation and are a great way to enhance employment creation in the economy.
However, more important aspect is the technological enhancement they bring to the country. Startups involve dealing with new technology which generally lies at the highest end of value addition chain.
With more and more startups India can aspire to be world leader in skilled work and not just an outsourcing destination for cheap IT services.
Bringing new competitive dynamics in the economic system – Startup companies are the most dynamic economic organizations on the market, since they provide additional dynamics and competitiveness to any economic system.
This means that the economy stays healthy, vital and diligent, while individual companies find it harder to fall asleep on their laurels. Startup entrepreneurship is crucial because it brings innovations, new jobs and competitive dynamics into the business environment.
A oft-mentioned aspects of startup companies is that they first test different possible business models in order to find the right fit for the market. This disruptive attitude is not possible with large corporations with many stakeholders to answer to. As corporations grow they come under the ambit of governance and shareholders want to have a say in the decisions the company makes.
As startup, you are free from that encumbrance and that’s what makes startups so disruptive and agile. Startups work in an environment of changing technology and try to maximize profits by innovation. This induces backward and forward linkages which stimulate the process of economic development in the country.
They act as catalytic agent for change, which results in chain reaction. Once an enterprise is established, the process of industrialization is set in motion. This will generate demand for various types of units and will in turn, lead to overall development of an area due to increase in demand and setting up of more and more units.
To see how startups are actually making a disruptive difference, let’s take the handicraft sector for example - In India, there are more than 2000 traditional skill-based clusters covering various skills from textile designing, handicrafts, and glass, leather and brass goods to wooden industries.
However, most of those working in the sector are suffering from serial exploitation, poor living conditions, extremely low wages and inaccessibility to direct market. Companies that work in this sector provide them the raw material and treat these craftsmen as daily wagers rather than as artists whose work should be valued.
Developed nations are now looking towards India to gain maximum from the huge untapped potential markets. In the recent years, different countries are taking different initiatives to link up their businesses with the Indian startups in almost all sectors including defense. Such joint venture can attract the huge foreign fund which can boost the country’s growth.
India is a home to almost 3100 startups starting per year standing just behind the US, UK, and Israel according to the NASSCOM report of 2015.
If the growth continues in the same pace then it is expected that Indian tech startups will generate almost 2.5 lakh jobs in the next five years.India is also said to enjoy demographic dividend and it is anticipated that by 2020 India will be a home to 112 million working population falling in the age bracket of 20-24 years as compared to that of 94 million workers of China. This demographic dividend will definitely boost the startup culture in the country.
The Prime Minister’s Startup India campaign is a great initiative to boost entrepreneurship in India. This initiative will play a very important role in further facilitating startups and providing a new dimension to entrepreneurship in the country.
India needs to address the critical needs of the country in areas like affordable healthcare, education, financial inclusion, etc. In spite of a ‘startup unfriendly environment’, Indian entrepreneurs have already made India one of the top 4 entrepreneurial hotbeds in the world. It bodes well for the country that the current government, for the first time in modern Indian history, has understood the criticality of startups for employment and economic growth and has launched 'The Start-up India, Stand up India mission'."
The government must help startups promote themselves, not just in India but across the globe, as well as create policies that are startup friendly so that Indian startups get a major boost and they can further create better employment opportunities for the youth of the nation.” The Government should enable easy availability of loans across the country. Startups can have a more tax-friendly norms to sustain the pressure which sometimes adds to their cost.
Indigenous startups will not only make the lives of the people easier through their affordable and convenient services but will also act as a major booster for the development and the progress of the Indian economy.
So the question - ‘Can startups give boost to Indian Economy?’
The answer to that is a resounding YES - infact it is already doing so.