Making a Global Impact
I recently had the privilege of being on a global webinar with a 19-year-old entrepreneur from Sitamarhi, Bihar. Instead of pursuing studies overseas or seeking a government or corporate job, this young entrepreneur established a start-up that provides a unique service. It helps other start-ups in neighbouring towns and villages raise funds and scale up their business. These start-ups represent every possible sector: agriculture, waste management, e-commerce, education, medicare and artificial intelligence, among others. These innovators are not just the navigators of India’s growth story but its very engines of growth. They are the creators of this growth and the energy that is propelling us into the future, to a ‘New India’.
New India is framed not only by enterprises but also the enterprise of countless entrepreneurs, both young and the not-so-young. The story of start-ups in India is not just the story of economics or finance or even the story of businesses. This story represents the immense social, economic and political transformations occurring within India at present. The elements of these changes have come together to create a singular trajectory towards growth and prosperity. They have enabled the most unprecedented transformation — both in scale and pace — ever seen in the free world. The start-up ecosystem in India is emblematic of these changes. It paints a picture of a future that is yet more prosperous for India and, indeed, the world.
For a long time, these start-ups were concentrated in economic hubs like Bengaluru, Mumbai or Gurugram. But not anymore. The roots of our start-up journey are now spread in every corner of the country. During the pandemic, for instance, some of the most exciting start-ups — whether they made the best quality ghee or the most aromatic incense from discarded temple flowers — came from villages and small towns and cities.
These start-ups are reimagining the very value of India’s rich and diverse geography, teaching us to relook at our forests, our rivers and streams, our mountains, and the ingenuity of our people. India’s start-up revolution is neither all elite nor entirely urban. Its fastest-growing and most unique hubs lie in countless small towns and rural areas where entrepreneurs have used newfound digital connectivity as the anchor for profitable commerce. The movement is vigorously growing in every home, every village and every district. Indeed, of the country’s 739 districts, more than 600 have at least one registered start-up.
This flourishing of start-ups can be credited to the widespread internet penetration in the country. There are nearly 800 million internet users in India already. Every second, three more go online for the first time, two of whom are from a village. Today, India has over a billion citizens, each with a unique identity linked to a bank account, a billion with mobile phones and, in the next 24 months, a billion on the internet. This is an unprecedented, potent stack of access and opportunity.
This is the India opportunity — unparalleled in size and scope. Our economy offers an unmatched market business opportunity, not just for start-ups, but for each business entity and individual in India; a potential one can easily capitalise on through just a text message or the push of a button. Digital India has created an inclusive growth momentum across the country, democratising India’s growth benefits.
Evolving mindsets
The backbone of this entrepreneurial revolution is a digitisation process that now touches every aspect of life in India. Our world-class digital payment infrastructure, our digitally enabled new logistics systems, and digital-first, smart marketing have changed the way business is done at the grassroots. The combination of entrepreneurial momentum and digital facilitation has bridged distances, transformed consumer mindsets, and brought about, among other things, a direct-to-customer boom in the country.
These start-ups are a tribute to the minds of India’s youth who, through economical innovation, are not only establishing multi-billion-dollar institutions but also creating effective solutions for our challenges. These start-ups are reaching all corners of the country and becoming instruments through which communities realise their potential. They are bridging gaps that thousands of Indians previously thought were impossible to overcome.
The success of India’s start-up ecosystem has consistently inspired our youth to push the envelope of innovation. Young entrepreneurs are not only creating solutions to serve the needs of their domestic environment but also ones that cater to two-thirds of the global population. They are local in development, but global in impact. As a result of their imagination and ability to deliver, these Indian start-ups have become engines for growth — not just in India, but for the entire world.
Equally remarkable is how these new and emerging start-ups are changing the way many traditional industries have operated for decades, some even centuries. From dramatically shortening the time to deliver tea from leaf to cup and medicines from pharmacy to home to reimagining diagnostic processes and how doctors function, and from bringing education on-screen effortlessly to live-streaming religious functions and enabling digital participation — there is almost no aspect of everyday life that is untouched by the power of a start-up’s enterprise fuelled by rapid digitisation. India is becoming a society — not just an economy — driven by entrepreneurial zeal.
This start-up movement has also highlighted the evolution of the Indian thought process. People today don’t see failure as the fallout of ambition but as an opportunity to learn. The start-up zeal of a democratic India has recast its social, economic and political ambitions. It has created a new mantra that defines the ‘New India’: failure fuels the drive to excellence.
Start-up central
India is, at present, the fifth-largest economy in the world, climbing from 10th position in 60 short months. Our economy today is worth $3 trillion and will more than triple to $10 trillion by 2030. India is the largest (a population of 1.4 billion by 2025), youngest (27 years median age) and fastest-growing (working-age population of nearly 1 billion by 2025) demographic.
It is also leading the world’s largest digitisation movement, largest health insurance drive and largest vaccination programme to counter the Covid-19 pandemic. We are becoming more competitive on the global stage and carving our space in the global business map. And while we have made rapid progress, the movement has only begun; the magic has only just started to unfold.
Start-up India is a remarkable player in this story. By itself, it, too, is a very young start-up, launched just five years ago in January 2016. Its success is an outstanding representation of the magic we can create with the trifecta of mission-driven policy-making, impactful implementation and partnership with the people. Start-up India functions as and embodies the ethos of an impact-driven, high-growth start-up and has made start-ups central to both the people and the government. This can be witnessed in its unprecedented success in the last 60 months that made India the third-biggest start-up ecosystem in the world today.
We have grown from just 4,000 registered start-ups in 2016 to 50,000 today (80,000 as per market estimates). Four new start-ups join their ranks every hour, a statistic that is unparalleled globally. We rank third globally in the number of unicorns, which are also among the largest and fastest-growing in the world. Despite the pandemic and lockdowns, one unicorn was created every month in India last year. In the first seven months of this year, we got 20 more. By 2025, India will have 150 unicorns, sailing past its previous target of 100.
What is remarkable is the pace at which this is unfolding. It took more than 26 months (about 800 days, or 19,000 hours) for us to reach the first 10,000 start-ups. The last 10,000 start-ups came up in a mere six months (about 180 days, or 4,300 hours). In the first half of 2021, Indian start-ups raised more than $10 billion, surpassing the 2020 total. These start-ups highlight not only the ease of doing business in India but also the zeal of its demographic, particularly the youth who are pursuing their passion, chasing excellence and are indispensable in the creation of a New India.
A job well begun
Indian innovators are also deftly navigating the cutting-edge and increasingly crowded start-up ecosystem in the country. They have successfully identified disruptive sectors and created products that add genuine value to a consumer’s experience. From a hotel aggregator to an e-marketplace for fashion products, from a ride-hailing company to a digital payments one, each new start-up has been a game-changer in the lives of millions of Indians and how they interact with the internet each day. This is a most remarkable achievement given that the internet is still very young in the country and people’s relationship with it is still in the very nascent stage.
Furthermore, tech-based start-ups in India are increasingly exploring the fields of artificial intelligence particularly in healthcare, education and home systems. Their success will further India’s contribution to global technological advancement.
Another remarkable aspect of the story of start-ups in India is that many of them—45 per cent of all start-ups, in fact—are run by female leaders. They are leveraging technology to capture previously untouched sectors such as fashion, beauty, animation and inventory management. Female leaders are also helming some of the largest start-ups in finance, e-commerce and travel. These start-ups are championing gender equality and greater workforce diversity. This is a significant positive impact on the Indian start-up ecosystem that is sure to have a lasting impact on Indian society and the economy.
In a way, then, start-ups have become the lens through which India views its future as a leading global economy. They represent a society that is increasingly self-confident and self-empowered. Indians are no longer looking for safe, comfortable jobs but to follow their passions, to become the best in whatever they desire. They have captured their inherent ability to adopt and adapt to new technologies to create world-class solutions that are practical, economical and easily scalable. We are among the fastest-growing economies in the world and the International Monetary Fund projects that despite Covid-19, India will regain its position as the fastest-growing major economy.
Indeed, the pandemic became an opportunity for Indians to capitalise on their frugality and adaptability. Our reputation for frugal innovation, to create magic with morsels, was not lost during this time as start-ups, MSMEs and large companies joined hands to meet the needs of the hour. They deftly pivoted business models to help India brave the worst pandemic of the modern era by supplying domestically made ventilators, masks, sanitisers, protective equipment, test kits and oxygen concentrators. In fact, thanks to such efforts, India went from producing a minimal number of personal protective equipment (PPE) kits to becoming the world’s second-largest manufacturer in two months.
These achievements highlight our strengths and serve to make India more competitive globally, especially as we emerge as a manufacturing hub. Our focus now is on ensuring excellence in quality. To truly capture the global imagination, India will not only offer the widest range of goods that are at the very cutting edge in their space, but also those of the highest quality, accompanied by the greatest quality of service.
This is the New India. And its story has just begun.
(The author is CEO and MD at Invest India)
