Why Indian and German Startups Should Work Together?
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Why do I spend five months in India every year? Is it my curiosity to explore the country or that my profession which gives me a chance to meet the enthusiastic startup founders of this country? The last few years have made me realise that it is a combination of the two. I work closely with startups in India as well as Germany - fortunate enough to divide most of my time in the startup hubs of these countries - Berlin and Bangalore.
The first time I came to India was in 1998 when I was 17. The weeks I spent traveling in India then were so enriching that I came back multiple times in the last 20 years. Initially, as a tourist and later, as a charted accountant by profession. With my each visit to India, the fact that Germany and India have a lot to exchange in terms of ideas, talent, tie-ups in the startup ecosystem has reaffirmed.
Europe is not much talked about for its startup action when compared to the goliath Silicon Valley. However, the reality is that over the last five years, not only Germany but Europe has seen incredible activity in the startup space. Startups covered in the Europe Startup Monitor (ESM) report 2016 have already raised around € 2 billion in external capital. More than 90% of the ESM startups rate their present business situation as good or satisfying.
In Germany, it is not just Berlin, but even cities like Munich, Hamburg and Cologne attract a lot of interest from startups. Germany is central to the European Economy and this automatically gives access to most commercial avenues of the European Union to companies that operate in the country. Germany is not just home to big corporates like Mercedes Benz, Volkswagen, BMW, Bosch, Adidas or Siemens; it has also been the origin of new-age innovative startups like Bragi, Dubmash, GreenCitySolutions or peat.io.
One could claim that the Samwer brothers from Rocket Internet are the godfathers of startups in Germany. They are the ones who started vibrating the startup ecosystem with companies like Zalando (one of Berlin’s biggest employer in the startup community). After that, there has been no looking back for Germany when it comes to mushrooming of startups. From having similar sectors of growth to government initiatives, there are multiple reasons why startups in India and Germany could work together. Here is a look why.
The rate of growth : Germany and India
According to the Global Startup Ecosystem Ranking 2015, both Berlin ( Rank 9th) and Bangaluru ( Rank 15th) are the frontrunners in the startup ecosystem globally. With one startup being found every 20 hours in Berlin- it is already home to more than 2,000 startups. As per the McKinsey & Company report 2013, Berlin’s startups could create 100,000 new jobs by 2020 and have already raised 2 billion dollars of investments. Bangaluru, on the other hand accommodates around 1,800-3,000 startups across sectors primarily focusing on technology. Both the cities have a strong infrastructure, startup friendly environment, incubators, universities, tech talent and research facilities.
The similarity in booming sectors
The emerging and growth sectors of both the countries overlap - internet, ecommerce, mobile services and software are hot sectors for both and the startup industry thrives on these. The two countries could learn from each other and offer help wherever required in terms of skills, research, talent or funding in these areas. Indian companies could help German startups enter the market and vice versa. Finding the right partners to venture into a country is one of the most common problems for startups when they are looking at global expansion. Not to miss, a combination of the excellent hardware solutions in Germany with the amazing software solutions in India could be fantastic.
Government support and initiatives
Germany is a very strong partner of India in Europe. In particular, after the visit of the Indian Prime Minister to Germany in April 2015 and the visit of the Hon’ble Chancellor of Germany to India in October 2015, this has given new momentum to the bilateral relations and many projects and collaborative work has been initiated since then. This is also manifested by the intense effort that the Ambassador to India in Berlin (Mr. Gurjit Singh) is making since he arrived in Germany in January 2016. For instance, in October last year, he hosted a successful event at the Indian embassy connecting the Indo-German startup ecosystems together with the German Startup Association, CII and the Bertelsmann Foundation.
While the Indian government took initiatives such as Startup India to boost entrepreneurship and jobs in startups, Germany has initiatives like the HighTech Gründerfonds or EXIST, a support programme of the German Federal Ministry for Economic Affairs and Energy which aspires at improving the entrepreneurial environment at universities and research institutes.
It also aims at increasing the number and success of technology and knowledge based business start-ups. Last year, GIZ (a federal enterprise that supports the German government) along with its strategic partners conducted a bootcamp hosted in Berlin, Germany which invited innovative startups operating in the Energy space from India and Germany. There are also other initiatives organised by the GIZ or the Berlin Senate who initiated the StartHubs AsiaBerlin fostering startup ecosystems through economic cooperation, cultural exchange between Berlin and Bangalore. Both the governments could work together to see what policies can benefit both Indian and German startups simultaneously.
Focus on Digital
Prime minister Narendra Modi’s initiative Digital India Programme to transform India into a digitally empowered society and knowledge economy has given rise to new avenues to startups flourishing in the digital industry of India. According to a report on the digital industry of Berlin, more than 60,000 people work in the digital industry in Berlin. Since 2008, every 8th new job in Berlin was created at a company in the digital economy. Digital is the buzz word in both countries and with the support of Government, a potential exchange of ideas, events, cross-border relations could establish a symbiotic relationship between Germany and India.
Germany and India have been attracting and encouraging young startups to scale-up themselves with disruptive ideas. Joining hands with each other could fill the gaps in both economies. The time is just right.