Once the land of agriculture, manufacturing, and textile industries, India has become a thriving hub for tech startup clusters in the last couple of years.
The future is promising. We have seen young entrepreneurs’ increased focus on deep tech and the spike in solutions and innovations in various fields. FinTech, e-Health, EdTech, e-Commerce, you name it. This shift has led to a significant transformation in the country’s economy and has created a new wave of innovation and growth. Flipkart, Zomato, Ola, all of these companies are leading the change, disrupting traditional industries worldwide.
But think about this! Based on the Indian Startup Ecosystem, India has the largest startup ecosystem globally, with YoY (year-over-year) growth of 12-15% predicted annually. In fact, India had over 50.000 startups in 2018, around 18% of them being technology-based. However, the next year, 2-3 new tech startups were established every day. This led to the establishment of 1300 new startups in 2019 alone.
This trend has led to growth across various sectors, making it easier for service providers and consumers alike, one of them being e-commerce. But this sector has started booming only after the COVID-19 Pandemic hit. The massive growth in the number of customers, but also profits, has only been possible due to the tech adoption and digital innovation during that period.
Because of this, the focus on new technology startups in various industries was well-received even by the Indian government. They focused on policies that further support the development of the market and successful startups, one successful program being the “Startup India initiative” in 2015. After all, fostering the growth of startups massively contributes to the country’s economy.
There’s no question that the rise of tech startups in India is facilitated by the increased adoption of digital technologies in the country.
As an emerging economy, the market in India has the potential to continue pulling out successful new technology startups. We saw them excelling with a young and skilled workforce, funding opportunities available, and a positive regulatory environment.
Startups are known for their ability to generate novel innovations. This can create lots of job opportunities for the large population that it has, which leads to a stronger economy and has a direct impact on the growth of cities where these startups are located. Look at how Infosys transformed Bangalore. For this reason, we can expect the impact of Indian startups to continue to influence the global economy even more in the following years, consolidating its position as one of the world’s superpowers.
We can also foresee that in the future, the Indian government will create more programs and regulations to promote the incubation of new startups further. As this happens, we have a chance to study how Indian tech startups are affecting (and being affected by) the global economy. And that’s not all! We will be able to observe how they perform and gain some insight into how the global markets are changing and why.
With the trend of new technology startups continuing to develop in India, it will benefit both its society and the economy. They will harvest the entrepreneurial spirit and create more jobs. The niche is also well chosen, as we know tech startups are very scalable. That means it is easy to reach global audiences and markets faster than in other startup sectors.
A few new tech startups appear in India every day, and some problems will inevitably arise.
One problem that we see a lot of entrepreneurs facing in today’s society is the lack of funding for everyone. Unless you have a strongly prepared business strategy, unfortunately, you might not be able to get the funding needed to get on your feet.
With so much enthusiasm in the market, a lot of young entrepreneurs forget to plan and don’t think about the long term. One aspect that we saw a lot of people misjudge is the power of a good marketing approach. And that’s not all! Startup founders are trying to move so quickly that they fail in hiring the right people for the right job. We saw cases where businesses ended up with a lack of talent where needed.
India was the third-largest startup market in the world in 2022. Even so, we should not omit that some people consider almost 90% of these startups to fail in the first years of their lives. There are, of course, reasons that back up such affirmations. Sociocultural norms, for example, can be quite problematic. We hear stories of entrepreneurs sometimes not valuing investors’ money as they should. Other examples have shown that family members were occupying management positions because they were - well…- family.
Holding the presidency of the G20 group is an important factor for India in 2023.
They started focusing on the importance of startups for the global economy. India introduced the program Startup20 which tackles a lot of international issues, from equal rights to funding a business regardless of gender, race, and social class to the issue of stability in regard to funding options. Holding on to India’s position, we can all agree that startups are an engine for growth that everybody benefits from.
The promotion of healthy and fair entrepreneurship opportunities was an expectable measure that India would bring to the table, though. It is, after all, a very important aspect of their economic growth. It remains to be seen how the new technology startups will continue to evolve for them in the next year and post-presidency. We can be sure of one thing, though, the focus on deep tech will not die soon for the emerging economy of India.
As the tech boom in India continues, it’s clear that there is still much potential for innovation and growth. But this only shows that even if India is still considered a developing country, with a lower-middle income country, this is the definition of approaching technology right.
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