The Great Indian Startup Boom
Context:
The Great Indian Startup Boom in the past decade has witnessed an extraordinary surge in entrepreneurial fervor, spearheaded by young visionaries and fueled by the government’s trailblazing Startup India initiative. This robust ecosystem of entrepreneurship is no longer confined to metropolitan cities but has remarkably permeated the aspirations of entrepreneurs from suburban and rural regions as well. At present, the government has officially recognized over one lakh startups, and surprisingly, nearly half of them have originated from Tier 2 and Tier 3 cities. This monumental growth has emboldened India’s youth, endowing them with a profound sense of agency and the liberty to chart their own course towards destiny.
Relevance:
GS – 03 (Employment, Growth & Development, IT & Computers, Mobilization of Resources)
Prelims:
- Startup
- National Initiative for Developing and Harnessing Innovations
- NIDHI
- Startup India Action Plan
- Credit Guarantee Scheme for Startups (CGSS)
- National Startup Advisory Council, Startup India Seed Fund Scheme (SISFS)
Mains Question:
- Discuss the profound impact of the Great Indian Startup Boom on the country’s economy, focusing on the proliferation of deep tech startups in various sectors and their potential to drive industrialization and generate employment opportunities. 250 words.
Dimensions of the Article:
- Catalyzing Deep Tech Entrepreneurship
- The Nexus between Deep Tech Startups and S&T Discoveries
- The Promising Path of Deep Tech Startups
- Industrial Investment in R&D and the Deep-Tech Startup Preference
- Nurturing the Risk Appetite of the Startup Ecosystem
Catalyzing Deep Tech Entrepreneurship
- The Startup movement has transcended the realm of consumer Internet and e-commerce, making resolute strides into genuine deep technology domains. These revolutionary sectors encompass a diverse array of cutting-edge fields, such as space and remote sensing, artificial intelligence and robotics, biotech and pharma, electric vehicles, drones, defense, telecommunications, semiconductors, among many others.
- Unquestionably, the impact of these real sectors stretches far beyond the conventional digital marketplaces, embracing seller discovery and information exchange, to ingeniously revolutionize various facets of the economy, ultimately driving profound industrialization in untapped domains and paving the way for enhanced job opportunities.
The Nexus between Deep Tech Startups and S&T Discoveries
- Notably, deep tech entrepreneurship has also unfurled new avenues for scientific and technological (S&T) discoveries to transcend the confines of public sector laboratories and find their way into the market.
- A plethora of success stories emerges from noteworthy institutions like IIT Madras’s Research Park, which has nurtured over 200 deep tech companies, collectively valued at a staggering ₹50,000 crore, encompassing space and aviation sectors.
- Similarly, C-CAMP boasts a portfolio of seven pioneering biotech startups, securing a combined funding of over ₹550 crore. Additionally, the Venture Centre at the National Chemical Laboratory exemplifies its indispensable support in patent filing and commercialization of high-quality patents, exemplifying the seamless integration of science from public-funded institutions into the realm of startups, benefitting citizens and consumers alike.
The Promising Path of Deep Tech Startups
- Intriguingly, our discussions with technology leaders in academia and industry have uncovered a fascinating trend – faculty members are increasingly drawn to spinning out their discoveries through startups founded by themselves or their alumni, eschewing conventional licensing or patent re-assignments.
- This evolving landscape presents a unique opportunity to harness the extensive historical investments in S&T within public labs and institutions. Consequently, deep tech startups emerge as the main conduit through which India confidently takes on technology risks, an indispensable element in the pursuit of building formidable new capabilities.
- In stark contrast, traditional risk-taking sectors such as government departments and legacy corporates appear to be mired in inertia, perhaps ensnared by the intense scrutiny of their respective stakeholders, voters, and public market investors.
Industrial Investment in R&D and the Deep-Tech Startup Preference
- Regrettably, India’s industrial investment in research and development (R&D) continues to languish in most sectors, barring the noteworthy exception of the pharmaceutical industry.
- Notably, the industrial landscape predominantly favors investments in deep-tech startups and the acquisition of successful, scaled technologies. This trend is underscored by numerous instances of Indian legacy corporates acquiring deep tech startups, such as the Tatas’ acquisition of Saankhya and Tejas Networks, Reliance’s foray into Faradion, and Hero Motors’ equity stake in Ather Motors.
Nurturing the Risk Appetite of the Startup Ecosystem
- Central to the sustained dynamism of the startup ecosystem is the remarkable tenacity displayed in retaining risk appetite. The key to this endurance lies in a system-wide shared approach to assessing risk and progress during frequent rounds of funding negotiations.
- The ecosystem operates with a shared vocabulary of rounds, stages, and product-market-fit, while preserving the autonomy of multiple venture funds and investors. This formidable model has unlocked the true potential of innovation, long eluding the Indian landscape.
- It is incumbent upon the government and industry to amplify this groundbreaking model manifold, birthing enterprises that resonate with India’s vast scale and potential.
Way Forward:
- Amplifying Risk Capital for Deep-Tech Startups: The government must channel its focus towards bolstering risk capital for deep tech startups. Emphasizing the aforementioned sectors within the existing SIDBI Fund of Funds can yield fruitful results. Simultaneously, industry players must actively augment their research funds, directing them towards the financing of innovative deep tech startups.
- Enabling Mass Procurement of Indigenous Technologies: Facilitating mass procurement of indigenously developed technologies becomes imperative. Despite nascent attempts across Ministries such as defense, smart cities, and health, there remains a pressing need for a cohesive, concerted push across the entire government machinery. Industry and relevant bodies can significantly contribute to this endeavor by consolidating demand within their sectors and promoting locally-made technologies through co-creation at incubators, expediting testing and certification procedures, and offering support for large-scale procurement of innovative goods.
Conclusion:
The inception of the Startup India movement marked the dawning of an era characterized by innovation, resilience, and tenacity, uniquely defining the Indian entrepreneurial spirit. Embarking on the transformative journey towards Startup India 2.0, the country finds itself at the cusp of monumental growth, driven by the ever-expanding horizons of deep tech startups. Nurturing these startups, backed by substantial risk capital and the indomitable spirit of India’s entrepreneurs, holds the potential to propel the nation towards unparalleled industrial and public capabilities. Fostering Indian economic growth, generating employment opportunities, ensuring national security, and fortifying various national capabilities converge into the overarching vision of Startup India 2.0, a vision that resonates with the heartbeat of a nation on the cusp of greatness.
