India has seen a significant growth in entrepreneurship lately, and start-ups are beginning to dramatically impact the economy.
With an average age of 28, India’s entrepreneurs rank among the youngest in the world. Formalization of India’s start-up economy is also increasing, with funding for start-up companies more than doubling between 2014 and 2015. The top MBA Colleges from Andhra Pradesh, Haryana, Karnataka, West Bengal, etc have been consistently producing entrepreneurs to progress in this field.
Survey results reveal that start-ups can exploit a range of advantages and attributes unique to India. A little more than three-fourths of Indian executives (76 percent) pointed to India’s openness in an economy as a major business advantage, while 60 percent identified India’s skilled workforce. And as much as 57 percent said that India’s large domestic market provides significant advantages. The Indian economy has benefitted from the country’s accelerating start-ups activity.
Indian governments also have a strong interest in supporting emergent start-up ecosystems both nationally and regionally.
In addition to contributing to improved economic vitality, a robust start-up community can support expanded economic openness, skills improvement and transformation of the economy overall into one based on technological and business innovation. The Indian start-up community, in particular, believes government needs to play an activist role in building an Indian start-up ecosystem. Not just the government, but also Universities such as The Northcap University, IIMs from all over India, etc. have been consistently playing a major role in the growth of this sector.
The Start-up India campaign is a good example of how the government can help foster growth of India’s start-up community. Established by the Indian government, Start-up India includes a series of initiatives designed to encourage accelerated start-up formation and development. As part of the program, the government is offering financial incentives for start-ups, including 100 percent tax exemption for three years, and has allocated Rs 500 crore to support funding for specifically targeted groups, such as women entrepreneurs. Additionally, the Indian government has announced a capital gains tax exemption for start-ups, as well as an 80 percent rebate for start-ups filing patents.
As of 2015, an estimated 80,000 jobs had been created by India’s technology start-ups businesses. Ninety-seven percent of India’s start-ups said they planned to continue hiring in 2016.
And start-ups are beginning to spread benefits beyond traditional locations into regional economies. Start-ups are upending established business models and creating new markets. Across industries, start-ups companies – such as Zoctr and HealthKart in healthcare, Paytm and FreeCharge in financial services, Ecolibrium Energy and Glowship in energy and utilities, and Jugnoo and Ola in travel – threaten to disrupt established businesses.
Jumpstarting India’s Start-ups is redefining the Indian economy.
With its favourable demography, open economic environment and culture of entrepreneurialism, India is highly conducive to entrepreneurial activity. However, India’s start-ups economy has not reached full maturity, and many start-ups die in their infancy. More proactive engagement between start-ups and established organizations can help start-ups harden their business models, accelerate growth and leapfrog into the big leagues while enabling established companies to share in the entrepreneurial spirit of innovation and agility. Their mutual success will drive India toward an ever-more dynamic future and traditional channels. In so doing, they can act as catalysts for innovation and collaboration throughout India’s business ecosystems.