Factors Inducing Entrepreneurship Growth in Tier 2 and 3 Cities of India

The country is witnessing an exemplary situation of people quitting an urbane life to build deep tech ventures in artificial intelligence, internet of things etc. across various verticals at the grass-root level

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By Himani Mishra


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Today India's economy is witnessing a paradigm shift in all its performing frugality. Talking about the entrepreneurial ecosystem, India has proved its ground-breaking dexterity on the global platform and it would not be incorrect to state that it is fast initializing as an entrepreneur model for the world.

However the fact that a country's development is a charge that has to be missioned beyond the metros have been merely looked at for far too long in India. But today, where the top tier cities of the country still hold the Crème de la crème layer of startups, the second & third tier Indian cities have also been firmly revolutionizing the entrepreneurship trend in the country. Nevertheless, this very factor of development is what has stirred entrepreneurship growth in these cities.

An industrial report peg that 18 new cities with hefty foreign investments have arisen as attractive business hubs. Prominently, ten Indian states, account for more than 75per cent of India's aggregate GDP including Rajasthan, Madhya Pradesh, and Uttar Pradesh, and tier II cities such as Surat, Jaipur, Indore, and Patna have shown an economic growth rate of more than 40per cent.

Solving local problems at scale, ranging across healthcare, education, agriculture, financial services etc. is the key driving force of the increasing number of startup hubs from the Tier-2 and Tier-3 cities of India. The country is witnessing an exemplary situation of people quitting an urbane life to come back and work at the grass-root level, building deep tech ventures in artificial intelligence, internet of things etc. across various verticals.

With this backdrop, the major factors inducing entrepreneurship growth in these cities are –

Increasing Number of Startups

The paradigm shift in the Tier-2 and Tier-3 cities is quite evident in the economic scenario where an extensive number of startups are emerging with the motive of solving more localized problems, compared to startups in large metros, which are solving larger problems. These SEZs are catering to urbane demography, consumer tech solutions, product discover, online delivered, ride sharing and more thereby driving the growth of startups in these cities leading to the exponential growth of entrepreneurship.

Co-Working Space

In the contemporary industrial scenario, budding enterprising graduates from Tier-2 & Tier-3 towns are no more interested in brain-loss at large fancy cities and prefer to invest their knowledge initiating and building companies from their hometowns.

Where the cost factor plays a dominant role in the entrepreneurial ecosystem, the mushrooming of co-working spaces in these cities is a healthy sign of a growing ecosystem. The co-working space is like a haven for the ambitious in supporting the talent and ideas to network with like-minded people and share expertise


The datum that tier-2 & tier-3 cities of India are virgin cities is exactly the cause leading to the heavy traction for the urge of development in people's mind. E-commerce is one such field helping the dynamic entrepreneurs to put their ideas and labour to work and earn a massive turnover. The e-commerce ecosystem is booming in the towns where they are being effectively placed and monitored.

Government initiatives

The entrepreneurial ecosystem in these cities has also marked its noticeable place on the government's plan of attention because the productive rendezvous of government initiatives is quite apparent in the startup ecosystem.

The Prime Minister's Startup India vision, to beef up entrepreneurship in India. The DST (The Department of Science & Technology) department investing INR 500 Cr. to nourishing ideas and innovations in the startup ecosystem are some of the noteworthy initiatives by the government which intends to foster and revolutionise the entrepreneurship growth in Tier-2 & Tier-3 cities of India.

At last, the statement remains that India is a land of immense resource and workforce. It can achieve great accolades in the entrepreneurial ecosystem if tapped at the right places with the right kind of infrastructure, and growth of the contention.

However, Tier-2 and Tier-3 cities have flourished some well-recognized business houses showcasing a plethora of modernization and expertise. These cities are ripe with possibilities and future of success.

Himani Mishra

Brand Radiator, Co-founder and CEO

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