How India’s Start-ups can Fuel Economic Growth and Drive Innovation

India’s thriving start-up ecosystem helps drive innovation, coming up with new offerings, pioneering new business models.

September 30, 2020

E-learning has been steadily gaining popularity over the years with COVID-19 accelerating adoption.

During the lockdown and after, ecommerce companies played a crucial role in providing essential supplies to people, especially in urban areas.

Given the lockdown, social distancing norms and the added stress on medical personnel, remote medicine gained considerable uptake.

Start-ups need adequate support from government, industry, and society.

India is home to a thriving start-up ecosystem, the third largest in the world. In 2018, there were about 50,000 start-ups in India, with a large chunk comprising technology start-ups. As many as 1300 new technology start-ups were born in 2019 alone, which translates to roughly 2-3 start-ups created each day. Apart from generating revenues, these start-ups have also played an important role in job creation too. As per the Department for Promotion of Industry and Internal Trade (DPIIT), the 16105 DPIIT-recognised start-ups have together created 187 thousand direct jobs in the country.

Start-ups are hotbeds of innovation, coming up with new offerings, pioneering new business models, and creating differentiated products that cater to various niche markets.

Not surprising then that India jumped up four ranks in the Global Innovation Index 2020 to make a place for itself on the top 50 countries for first time ever.

In the wake of the unprecedented disruption created by the  COVID-19 pandemic, there have been several start-ups that have risen to the occasion to provide important services to citizens in these trying times. This has especially been true for segments such as e-learning, e-commerce, and health.

E-learning

Even before the pandemic, e-learning has been steadily gaining popularity over the years. Statistics indicate that global investments in educational technologies reached US$18.66 billion in 2019, with a projected market for online education estimated at $350 billion by 2025. Indians too were adopting online learning methodologies enthusiastically. However, the COVID-19 pandemic has accelerated the rate the growth significantly.

Several Indian start-ups such as Byju’s, Unacademy, upGrad, and Simplilearn have risen to the occasion providing viable alternatives to aspiring learners forced to stay home during the pandemic, spurred by the growing Internet penetration in India.

Ecommerce

During the lockdown and after, ecommerce companies played a crucial role in providing essential supplies to people, especially in urban areas. The delivery personnel of these companies acted as true Corona-warriors, enabling citizens to stay indoors and adhere to social distancing measures. Online grocery companies such as Big Basket were able to fulfil the demand for home delivered groceries.

Health and Wellness

Given the lockdown, social distancing norms, and the added stress on medical personnel, remote medicine gained considerable uptake. Companies such as Practo, mFine and others helped empower doctors to serve patients remotely without exposing them to the risk of infection due to hospital visits. These online medical services also played an important part in helping treat patients affected by COVID-19, enabling them to get the required medical support and advice even as they were in home quarantine. 

These examples demonstrate the profound impact that start-ups and entrepreneurial ventures can create to spur economic growth and improve the quality of life for citizens.

Encouraging Entrepreneurship

Given the important role of start-ups in driving economic growth, they need adequate support from government,industry and society. The Aatmanirbhar Bharat initiative will prove to be an important shot in the arm for start-ups too. It encourages these companies to realise their potential and build themselves to a position of strength where they can serve India and the world.

Educational institutions too need to foster the spirit of entrepreneurship and provide vocational training and assessment tools to assess potential and aptitude.

The corporate connect is important as well. Already, there are several enterprises who have recognized the immense disruptive potential of start-ups and have come forward to partner with them, invest in them, and provide the required mentoring support.

For instance, Facebook partnered with Startup India and  disbursed cash grants worth $50,000 to five selected start-ups. Goldman Sachs, as part of its 10000 Women program, is working to support women entrepreneurs across the globe providing them business and management education, mentoring, networking support, and access to capital. Microsoft Ventures has chosen 16 start-ups in India for its Accelerator Program. 

The Government of India too understands the value of working with disruptive innovators across the value chain. It has been doing its bit to support the growth of start-ups across the value chain by helping them use their innovations to improve public service delivery.

The Department of Animal Husbandry and Dairying has conducted a grand challenge in association with Startup India to award top start-ups in 5 categories 10 lakhs INR. The Small Industries Development Bank of India has launched a scheme to aid existing Small and Medium Businesses in need of capital for growth. Already, around 26 states in the country have constituted start-up policies to better support entrepreneurs. 

India has a predominantly young population that is teeming with enthusiasm and bursting with new innovative ideas that could potentially create a positive impact on India and the world. With the right support and encouragement, we can certainly expect a new wave of entrepreneurship that could transform India. 

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