Experts’ Speak: Importance of startups in Indian economy

Several young people today opt to start a business of their own rather than take up a job. Indeed, there has been a rapid increase in the number of startups in recent years. Some of these startups solve long-standing problems faced by consumers while others are innovative offerings that promise to add value to new and existing products and services. It is an accepted fact that innovation drives economies. Startups do just that, usually harnessing the power of technology to offer improvements in products and services. A startup is a way through which young people may realise their dreams of doing something new since startups by definition offer new and innovative services or improvements in products.

Startups are usually started by young people and young professionals who want to solve some long-standing problems and remove bottlenecks. Students have invested their time and money in their ideas even while they are studying in their colleges and universities. Some of these new companies can well be classified as unicorns, that is, start-ups having achieved a valuation of $1 billion. Others have developed into profit-making companies, and still, others have contributed to solving social problems. We are all familiar with Uber and Ola, who have transformed the cab-hailing across the world. The best example of a start-up is that of Flipkart, which has been acquired by Walmart for $16 billion. In India, we have seen the rise of companies such as Big Basket, Urban Ladder and others which have become big businesses now.

Rise of Indian unicorns

According to a report by NASSCOM, the number of potential unicorns in India has increased considerably from 15 in 2018 to 52 in 2019. Some of the start-ups and unicorns have received huge investments of over $50 million. These include the logistics start-up Delhivery, gaming strat-up Dream11, data protection services such as Druva, and many others. Many start-ups have become famous and big – the names of Oyo and Zomato come immediately to mind. Others attempt to solve long-standing problems faced by farmers and provide farming and market information through new start-ups. Most startups are focused on providing solutions to businesses and more than half are concentrated in areas of gaming, cloud services, supply chain and logistics.

Students are best placed to invest in their ideas. One student I know started a small business of making home-made and custom-built chocolates and cakes, which has grown into big business now. Another student started supplying personalised soaps and personal accessories, advertising through Facebook and Instagram. Designers and artists are setting up their own startups. People who have skills can start their own company and market through online channels, which may well convert into unicorns.

Contribution startups are making in new India

Due to their nature in solving problems, start-ups are now contributing to the economy in a big way. CarDekho, for instance, is an online marketplace that helps purchase and sales of used cars. Grofers and Big Basket, who supply groceries, are a boon to working people who are hard-pressed for time and find home deliveries of groceries a big help. Kabariwallah in Bhopal helps people sell their waste materials in a simple and transparent manner. Jaggic, started by another past student, helps farmers convert sugarcane into jaggery based products and candies, hence adding value to their produce.

Such startups help remove bottlenecks in the economy. They make it easier for businesses and customers to connect and operate. By doing this, they help in creating value across supply chains. This is important for the economy for its smooth functioning and laying the seeds for future growth. Start-ups that grow into unicorns contribute a great deal in terms of the country’s GDP growth. But even those who remain small help remove obstacles to business and contribute to streamlining operations. A start-up to collect a city’s waste, for instance, may not be a unicorn but will help organising poor people and give them respectable working opportunities. In that sense, the impact of a start-up cannot be measured in economic terms alone. Their social impact will huge and immeasurable if their ability to transform lives is considered.

Start-ups thus have the power to transform economies, societies and countries. They have the power to make use of emerging technologies. They even develop new technologies to streamline existing operations. Many new start-ups, for instance, are building platforms that use artificial intelligence (AI) or applications to leverage on the internet of things (IOT). A number of start-ups invest in mobility, robotics, food services, health and fitness, and enhance them by modern technologies.

Apart from that, start-ups provide jobs to others, contributing to national development. By innovating new products and services, they become the driving forces of economic growth and societal transformation. By removing bottlenecks, they lubricate the wheels of the country’s industry. 

Above all, start-ups provide a way to realise one’s dreams. Young people can follow their passions through start-ups. A recent issue of Business Today shows that people interested in fitness, education, food, and environment protection have been started by those who were deeply interested in them.

The future belongs to those who can pave their own way rather than depend on others. By investing time and energy in a start-up, young people can build their own future as well as contribute to national development and growth.

About the Author

Dr Dinesh Kumar Gupta is an Associate Professor at Jagran Lakecity University - JLUran Lakecity University. He is a PhD holder in Marketing management.