Startups: Growth, Sustainability And Circular Economy A circular economy is where products are designed and created so that a minimum of resources go into their making and stay in usage for a much longer duration

By Rohit Gajbhiye

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In recent times, startups have emerged as the drivers of economic growth. With more than 13,000 startups, the country is 3rd most preferred destination for new firm registrations in the world. Not only do they employ thousands of people and contribute significantly to the gross domestic product, but they also contribute to research and development, and innovation. Many startups have made Tier II, Tier III cities, and rural areas their playground and helped bring facilities such as education, healthcare and hygiene to the remotest parts of the nation. They serve the underserved and help bring more and more people into the mainstream economy. Besides all this, another significant contribution of the startups is towards the goal of sustainability and circular economy.

A circular economy is where products are designed and created so that a minimum of resources go into their making and stay in usage for a much longer duration. Even when the primary purpose of the products is over, they are either easily recyclable, serve some secondary purpose or act as raw material for some other product. A circular economy goes much beyond mere recycling. Reusing, repairing, and sharing are important pillars of a circular economy.

Many startups have developed innovative business models where they use waste material to create useful products. This way they prevent or delay the entry of a plethora of products into the waste stream. A startup based in Kanpur designs and creates useful and decorative products from scrap. The startup sources its base materials from scrap dealers in the city and employs local artists to create innovative products from what would have otherwise gone to waste. Another company from Mumbai is using floral waste from religious institutions to make incense products. The efforts of the company help prevent thousands of kilograms of organic waste enter the rivers and oceans, thus reducing the environmental impact of human activities. Similar startups exist in other parts of the country too. As per the world bank report in 2018, India generates around 277.1 million tonne of solid waste every year. Most of this waste is either dumped in landfills or finds its way to water bodies. Imagining even 10 per cent of this waste being recycled or reused by startups is overwhelming.

A growing number of startups is coming up with organic products directly sourced from the producers. These products range from food products to nutritional supplements to fabrics to apparel and beauty products. The raw materials for these products are grown organically which significantly reduced their environmental footprint. The organic nature of the products also makes them biodegradable at the end of their lifecycle. A lot of such products are made by hand, e:g: handloom products, which means practically no or minimal use of electricity during production. Several startups have come up with products such as bamboo toothbrushes that minimize the use of plastics.

Many startups are directly involved in environmental protection and alternate energy business. These companies are helping fight ground, water and air pollution and providing innovative easy-to-use methods to harness the power of nature, for example rooftop solar installations. Waste segregation and recycling is another way, several startups have been contributing towards creating an economy with a minimum environmental footprint. As per the world air quality report, released in March 2022, 63 out of 100 most polluted places worldwide are in India. The government, NGOs and large corporates have been doing their bit to counter environmental degradation; however, their efforts have met with limited success. Startups, by their connectivity with the people at the grassroots level, can play a significant role in controlling this menace.

Education is the key to creating a better world. Whether it's economic sustainability or environmental, the role of educated and skilled people is paramount. There are more than 250 million students in India in K-12 and another 34.3 million in higher education. Startups have also greatly contributed to expanding the reach of education in society by making it affordable and accessible. Edtech startups have come up with many innovations that have made learning much easier, more interesting and experiential. Most importantly, by making education finance easier, affordable and less complicated; many startups have helped in reducing the school drop-out rates and fulfilled the dreams of higher education and skill development of many. The evolution of fee-financing helped thousands of students continue their education during the pandemic when their parents suffered the loss of income.

The aforementioned are some of the many ways in which startups have been contributing towards creating a circular economy; however, their contribution runs much deeper than this. One of the biggest and often overlooked contributions are taking numerous essential services to the doorsteps of millions of people in smaller towns and rural areas. By bringing quality healthcare and education to the people, startups are doing their bit in checking migration to larger urban areas in search of these services. The employment provided by startups has also contributed in this regard to a small extent. Migration causes overcrowded cities and overburdened infrastructure, which results in severe environmental impact in form of air, water and land pollution.

Another important way, startups have been playing an important role in creating a circular economy is through research, development and innovation. Most startups are conceived and headed by millennials who understand the value of sustainability, social inclusiveness and constant innovations. Therefore, most startups are coming up with products and services with pure business sense and social and environmental concerns in focus. Startups also play an important role in spreading awareness regarding environmental issues, waste reduction and segregation, reusing and recycling, and resource utilization and conservation. The success and popularity of these startups are exerting pressure on many large and established companies to come up with business models and products that care for the environment and society.

The circular economy is a broad concept and requires everyone's effort to achieve the ambitious goal of sustainability. Startups are doing their bit in pushing the current system towards a circular economy. The larger corporates also need to shoulder their part of the responsibility and the government needs to recognize, incentivize and reward the efforts of startups in this direction. With around 46 per cent of the country's total workforce as millennials, India stands in an advantageous position in achieving the goal of sustainability and carbon neutrality.

Rohit Gajbhiye

Chief Executive Officer, Financepeer

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