Startup India Innovation Week
- 17 Jan 2023
- 6 min read
For Prelims: National Startup Day, National Start up Awards 2022, SISFS, NIDHI, Ranking of States on Support to Startup Ecosystems (RSSSE).
For Mains: Growth Drivers of Startup Ecosystem in India, Problems Associated with Startup Ecosystem, Recent Government Initiatives to Promote Startup Culture.
Why in News?
Recently, on the occasion of National Startup Day (16th January), Startup India Innovation week culminated along with National Start up Awards 2022.
- National Startup Awards 2022 given by Ministry of Commerce and Industry acknowledges startups and enablers who have been instrumental in revolutionizing the development story of India.
- Startup India organized industry-focused webinars on the topic "Championing the billion-dollar dream".
What is the Status of Startups in India?
- The Start-up ecosystem in India ranks third after that of the United States (US) and China.
- According to the India Venture Capital Report 2021 published by Bain and Company, the number of cumulative start-ups has grown at a Compound Annual Growth Rate (CAGR) of 17% since 2012.
- Growth Drivers:
- Large Domestic Market: India has a large domestic market for technology-based products and services, providing a ready market for startups to sell their products and services.
- Government Support: The government of India has been actively promoting entrepreneurship through initiatives such as "Atma Nirbhar Bharat" and "Digital India," providing support to young companies.
- Access to Technology: Advancements in technology and internet penetration have enabled startups to scale up quickly, leading to the rise of several unicorns in the ecosystem.
- Rising Start-up Hubs: The major startup hubs in India are Bengaluru, Mumbai, and Delhi-NCR, providing a conducive environment for startups to grow and thrive.
- Bengaluru, in particular, has been dubbed the "Silicon Valley of India" due to the large number of technology companies based in the city.
- Problems Associated with Startup Ecosystem:
- Stringent Regulatory Environment: The market laws and regulations are not always tailored to the needs of startups, which can make it difficult for them to comply. This can be a significant burden for early-stage companies.
- Limited Infrastructure and Logistics: The lack of proper infrastructure and logistics can be a major challenge for startups, especially those operating in the e-commerce space.
- The inadequate transportation, warehousing and logistics infrastructure can make it difficult for startups to reach customers and deliver their products on time.
- Lack of Mentorship and Guidance: Startups often lack access to experienced mentors and guidance, which can make it difficult for them to navigate the business landscape and make informed decisions.
- Recent Government Initiatives to Support Startup Ecosystem:
- Start-up India Seed Fund Scheme (SISFS): This scheme provides financial assistance to start-ups to help them prove their concept, develop prototypes, test products, and enter the market.
- National Initiative for Developing and Harnessing Innovations (NIDHI): It is an end-to-end plan for start-ups to double the number of incubators and start-ups in the duration of five years.
- Ranking of States on Support to Startup Ecosystems (RSSSE): The Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry has been conducting the States’ Start-up Ranking Exercise since 2018.
- Encouraging Innovation: The government and private sector should encourage innovation by providing funding and support for research and development.
- This can include setting up R&D centres, providing tax incentives for companies that invest in R&D, and connecting startups with universities and research institutions.
- School-Entrepreneurship Corridor: The National Education Policy, 2020 promotes student entrepreneurs by providing vocational education in partnership with industry and thriving innovation at school level.
- This can have a favourable impact on the start-up ecosystem in India, if entrepreneurial skills are integrated with the education curriculum.
- Towards Social Acceptability of Start-ups: By collaborating with various unicorns of India, the government needs to work towards social acceptance of entrepreneurial careers and channelize the youth in the right direction to choose a career with ease.
- Vocal for Local, Local to Global: Indian start-ups have the potential to not only look at Indian traditional problems, but also offer customised solutions for markets abroad.
- Exclusive Startup Zones can be initiated at state levels linked with Atma Nirbhar Bharat Initiative making India an entrepreneurship and export hub.
UPSC Civil Services Examination, Previous Year Question (PYQ)
Q1. What does venture capital mean? (2014)
(a) A short-term capital provided to industries
(b) A long-term start-up capital provided to new entrepreneurs
(c) Funds provided to industries at times of incurring losses
(d) Funds provided for replacement and renovation of industries