How Startups are Building a New India
Published on : Tuesday 08-08-2023
Startups are expected to contribute a whopping 5% to the GDP of our country in the next five years, says Darshana Thakkar.
We are in the 76th year of Independence as a Democratic nation, and we are in the Amrit Kaal. The government envisions the Amrit Kaal – Blueprint for an Empowered and Inclusive Economy.
To provide the groundwork for the economy to guide itself over the next 25 years, from India at 75 to India at 100, #India@100, the vision for Amrit Kaal is an empowered and inclusive economy, with:
i. Opportunities for citizens with a focus on youth
ii. Growth in job creation, and
iii. Solid and stable macroeconomic environment.
The Saptarishi to guide the vision of Amrit Kaal
1) Inclusive development
2) Reaching the last mile
3) Infrastructure and investment
4) Unleashing the potential
5) Green growth
6) Youth power, and
7) Vibrant financial sector.
Being a young country, the role of youth in the country's inclusive growth is remarkable. The Indian startup ecosystem has proven the same in the last few years.
In the post-Covid era, accelerating startup growth and technology adoption by the traditional MSME sector have achieved remarkable never-before milestones.
On this occasion of the 77th Independence Day of India, while we are hosting the G20 Summit this year, I would like to showcase the contribution of startups in shaping the Indian economy in the last few years.
Indian startups are transforming citizens' lives while contributing to the nation's socio-economic growth.
Startup culture in India
India is a young country, with 65% of its population between the ages of 25 and 35. The number of startups in India has increased rapidly in the past few years.
India currently has the world's second-largest startup ecosystem. According to a survey conducted by Innoven Capital, the following are the primary reasons why India is among the countries with the best startup environments in the world:
a. Compared to other countries, the cost of doing business is relatively low.
b. Both customers and vendors live in close quarters.
c. The domestic market has grown significantly due to the 7 million graduates who choose to work in startups over MNCs each year.
d. Because India has the second-largest internet user population after China, businesses can communicate with their local markets more efficiently using social media and messenger apps.
Government support for the startups
On January 16, 2016, the government unveiled the Startup India Program to foster India's startup culture while fostering economic development, entrepreneurship, and significant job opportunities. A few of the schemes are:
1. The Startup India Action Plan
2. Fund of Funds for Startups (FFS) scheme
3. Startup India Seed Fund
4. Startups India: The way ahead
5. Startup India showcase
6. Startup India hub
7. Three years of income tax exemption, and
8. Self-certification under labour and environmental laws.
In the Amrit Kaal period, while India envisions an empowered and inclusive economy and becoming a world leader, the startup ecosystem is considerable in the country's overall growth.
Following are the few areas where startups contribute to the Indian economy:
1. Job creation
Indian youth are becoming job creators instead of job seekers. Youths prefer working in a startup instead of an MNC due to its work culture. Startups have created more than 7 lakh jobs in the past few years. Startups in IT, Life Sciences, Professional Services, and Food and Beverages provided employment opportunities in metropolitan cities and rural areas.
The working-age population in India is 900 million, while the corresponding figure for the US is 128.58 million! At the same time, countries like China, Japan, and America – where most of the population is aged and elderly – have fewer people who contribute to the economy.
India has immense potential, and startups are helping realise our potential.
Swiggy is the single best example of how startups create jobs: “Anybody with a driving license can sign up with Swiggy to become a delivery executive for a source of income – no other qualifications or skills are required!”
2. Wealth creation
Investment in startups has been going up for the past few years; very high investments done in the startups over the past few years.
Startups spend money on hiring talent, starting and sustaining operations, renting commercial property, and more. Every single rupee spent by a startup goes into the pockets of others. This money again circulates in the economy to other citizens in the form of vendors, suppliers, service providers, employees, etc. Every person in recipient of money spends it in one or a different structure. That creates faster circulation and increases the purchasing power of the citizens.
This way, startups generate wealth – a sustaining, self-fulfilling loop that keeps the economy going!
3. Healthy competition
A few decades ago, most industry sectors were dominated by a few big players enjoying monopolies in terms of prices and product variation. They are so big that nobody can compete with them.
Nowadays, anybody with a good enough idea and passion can take on any big company, which is the beauty of starting up.
Even industries like defense, space travel, and healthcare, previously seen as high-capital businesses that could only be taken on by big players, have been tackled by startups.
One quick example is Orange Healthcare. During Covid, quick and reliable diagnosis was a priority for citizens. Orange Healthcare started sample collection within 60 minutes and faster report submission. That has inspired other institutions to provide such facilities. Nowadays, many local laboratories also provide quick pick-up and online reporting services for routine diagnostics.
Competition is an essential dimension of a healthy economy. Competition helps bring the best quality goods and services at the lowest prices possible.
4. Innovation
Startups bring new, fresh, and innovative ideas to the market. These are called disruptions – ideas that completely change how people do things.
A few examples:
i. Ola & Uber: Revolutionised the world for local travelers.
ii. PayTM: Revolutionised the way for online payments – simple and reliable linked with the smartphone.
iii. OYO: Hotel booking is simplified and reliable, even for remote, unknown places.
iv. Magibricks: Now, people can buy, sell and rent property from the comfort of their homes.
v. Car Dekho: Indian startup made it easy to buy and re-sell second-hand cars.
vi. Lenskart: Who imagined buying spectacles online? With AI technology, one can try the spectacles look just with the mobile application – a premium product at relatively lower prices.
vii. 1 MG: started one-day medicine delivery during covid time, a remarkable achievement for the needy.
5. Improved work culture
Gone are the days of reaching work at sharp 9 am and logging out at sharp 6 pm. Startup employees enjoy the luxury of going to work whenever they want and leaving as soon as they like (as long as they get the work done, of course!).
The term ‘startup culture’ brings to mind flexible work timings, casual dress codes, and an approachable, easygoing work dynamic.
Compared to the stiff, suffocating culture of the pre-startup economy, calling your boss by name seems like a breath of fresh air!
Startups also introduced the idea of unlimited vacation days and employee perks like gym memberships, culture-building activities like off-site, and more. Startups allow their employees to embrace and exhibit creativity in the workplace. It also gives room for immense career growth and skill-building. It is an excellent opportunity for freshers or newly graduated college students.
6. Better quality life
Startups provide flexible working and other perks and facilities to improve people's work-life balance. For example, working parents in the startup can quickly attend the parent meeting and other activities of the child due to the flexible approach from the employer.
Further, due to innovative startups, people do not need to struggle with the daily requirements of life. Be it a grocery, medicine, food, veggies and fruits, hiring a cab, renting a house, and many more. With online delivery of almost everything, anybody can purchase or send a gift to anyone across the world from the comfort of their home or office.
7. Social contribution
When a business starts up in a small town or village, it brings money and growth to that place. With funds and growth come more enterprises, capital, and development – the cycle feeds itself.
By creating jobs, startups help to resolve the problem of citizen employment.
Startups in small towns and village areas help prevent the migration of people to metro cities, thereby creating a population balance upto some level across the geography.
8. Self-sustainability
Every startup with a new, innovative idea to make life easier for the people of India takes us one step closer to a self-sustaining economy.
Mama Earth, Naykaa, BoAt, Meesho, Lenskart, Myntra, Big Basket, 1 MG, and many more add value to become self-reliant.
By buying from Indian businesses, we support our economy and keep the money flowing.
9. Inspiration for the future generation
The growing startup culture inspires young secondary school and college students. Startups across non-traditional sectors like our ancient practices for healthy and long life, attract our youth to adopt the same. A few examples are herbal products, ayurveda products, wellness services, yoga, etc., transforming youth's lives towards healthy living.
Government inspiration for acceleration
In recent years the government has started a few novel initiatives to foster and accelerate the startup culture in the country. This also creates a healthy competition between the States to encourage the startup culture, especially moves like:
i. National Startup award
ii. State startup ranking
iii. Startup India Yatra
iv. Startup India seed fund scheme
v. Start India investor connect, and
vi. MAARC mentorship program.
Government initiatives and subsidies will significantly impact boosting startup culture in India and encourage entrepreneurship education and awareness among students about the benefits and scope of opportunities available. Knowledge about resources and government benefits available in India will create a more incredible boost in startup culture in India.
Conclusion
Startups are increasing at an unprecedented rate. Both male and female entrepreneurs are launching new ventures. Women are contributing more ideas and taking risks.
They are determined to establish and redirect their energy to plan, support, and execute their dreams while contributing to the economy's growth. This new startup initiative promises faster approvals for starting a business, more accessible exits, tax breaks, and faster patent registration. For any new idea to become a successful venture, it requires appropriate support, synchronisation, and mentoring from stakeholders, the government, and the community. These all are available in abundance in India.
The Indian economy is expected to be the fastest-growing one – and startups are expected to contribute a whopping 5% to the GDP of our country in the next five years.
The GDP of India last year was $3.469 trillion – 5% of that is 173,450,000,000, or $173.45 billion by startups; so inspiring and amazing numbers.
Darshana Thakkar is MSME Transformation Specialist and Founder, Transformation – The Strategy Hub. An Electrical Engineer followed by MBA – Operations with hardcore industry experience in managing business operations, Darshana is an expert in transformation of businesses that helps them achieve growth with speed and scale. She has invested 27 years in transforming Micro and Small Enterprises. Her rich experience in resolving pain areas and the MSME/SME industry's real-life problems are helping the organisation for quick results.
Darshana has helped many MSMEs to increase profitability & achieve sustainable growth. She is keen on the growth of Indian Startups, providing mentoring and hand-holding support to startups to make them succeed quickly.
She is very passionate about supporting women in pursuing their career and life goals. She is actively working for women's entrepreneurship and leadership development.
She is:
· Founder and CEO of Transformation
· Certified Women Director by IICA, Ministry of Corporate Affairs, Government of India
· Empanel and recognised Startup mentor and Trainer by CED, Government of Gujarat
· Registered and Verified Business Advisor – Tata Nexarc, Tata Business HUB, Mumbai, and
· Chairperson: MSME Support & PRO at Makarpura GIDC Association, Vadodara.
MSME Transformation and Strategic Advisor – MSME Business Forum India, Darshana has received various accolades:
· Winner of Gujarat Women's leader award 2022 by CMO Asia
· Winner of Influential Women leader in business by Insight Success 2022
· Recognised as India's most trusted consulting company by Insight Success 2022
· Felicitated by Mentor my board in the gracious presence of Honourable FM Mrs. Nirmala Sitaraman during Women Director's conclave – 2022
· Felicitated by the president of Makarpura GIDC Association during the Suvarna Jayanti Mahotsav on 17th December 2022 for her excellent contribution in supporting MSME and startup Businesses.
Apart from this, she is an author and publishes her blog, article, and case study related to the industry. Email: [email protected]
