Will the Next Big Unicorn Come From Bharat?
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By 2020, India will be home to 10,500 start-ups, and will emerge as the third largest base for start-ups in the country behind the US and the UK. About 80% of India’s start-ups are in Bengaluru, Delhi, Mumbai, Hyderabad, Chennai and Pune. Delhi, Bengaluru and Mumbai get 93% of such investments, according to a Nasscom-Zinnov report.
Nassscom believes that “the start-up landscape in the country is becoming the epitome of innovation, with companies bringing out solutions that are aimed at solving locally relevant issues.”
Going forward, entrepreneurship is going to be crucial for India’s economic development as it aspires to become a future world leader. Start-ups alone will employ 210,000 people in the country. In order to become an economic superpower, the country can no longer afford to ignore the Tier-II, Tier-III and rural areas.
Today, more than ever, semi-urban and rural development is linked very closely to entrepreneurship. While the government has launched campaigns such as Smart City, Startup India and Standup India, it is essential that such campaigns stretch their wings to Tier-II and Tier-III cities. Lack of awareness and acceptability, dearth of talented professionals, lack of internet bandwidth and insufficient power supply plague Tier-II and Tier-III cities.
Here are the top three reasons why it is critical for Startup India to focus more on Bharat:
Direct impact on Tier II, Tier III Cities: Amrita Therapeutics, Wittyfeed, InfoSoft Global etc. are great examples of start-ups based out of Tier-II and Tier-III cities and which have come up with world-class products and services that people need, while also providing employment opportunities. In addition to being drivers of local growth and job creation, start-ups play an increasingly important role in addressing urgent development challenges particularly related to sustainability and service delivery.
When the startups grew, the cities that housed them also grew. Take, for example, the rise of Jaipur in the start-up industry. Initially, there was no ecosystem and the city was happy to just piggy-back its IIT-alumni. Today, there are so many mentoring and funding institutions for entrepreneurs like TiE, Jaipur Angels, RAIN and Startup Oasis.
Democratization of Entrepreneurship: It is time that people in rural areas are encouraged to pursue entrepreneurship as it would help them build sustainable livelihoods. If the idea is good and the product is of global quality, then it does not matter where the location is.
This will be crucial to develop a vibrant economy as it will help distribute and sustain growth across the country from Madurai to Mohali, from Jaipur to Bhubaneswar. There are about 500 new start-ups in Rajasthan. Odisha and Kerala are giving a big boost to entrepreneurship in their respective states by opening start-up villages. The growth, of course, is not at the level of what is seen in Tier-I cities as there is a very nascent level of mentoring and support for new ventures in smaller cities.
Lower Cost of Operating a Business: The investors’ reluctance to travel to smaller towns and limited clientele base, not so matured markets are issues that plague investments in Tier-II, Tier-III cities. However, since the cost of living is low, it will also bring down the overall cost of the business. The rate of attrition is also comparatively lower, ensuring an assured talent base.
According to the latest report released by Cushman & Wakefield (C&W), Ahmedabad, Bhubaneswar, Chandigarh, Coimbatore, Jaipur, Kochi, Indore, Nagpur, Vadodara and Vishakhapatnam were identified as the next most promising business destinations offering a long-term investment potential. The volume of investment by various companies in these 10 cities has increased by over seven times in the past two years.
It is the right time for startups and entrepreneurs to make the best use of these endeavours and strive to find the right solutions to pertinent problems with the right technology and make India great again.