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Seeding Start-ups

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Entrepreneurship helped India become one of the richest countries in the world centuries ago. By the 16th century, India’s economy was a quarter of the worlds by most estimates. It was driven mostly by smart, innovative entrepreneurs. These entrepreneurs produced cotton, silk and agri-products for domestic and global markets.

But lack of industrialisation, colonialism and command economy all but killed entrepreneurship. Some of the entrepreneurial spark was reignited two decades ago from the ashes when industrial licensing was removed in the first of many reforms.

India has a vibrant private sector but it ranks low on entrepreneurship and startups. Even though the information technology industry led the way for start-ups by creating global IT giants, India’s track record is poor.

Consider these figures from industry body Nasscom: India has more than 300,000 IT professionals; second highest number of engineers in the world. With such talent, India should be a hotbed of start-up activity.

This is where India disappoints. In 2012, US saw 15,000 start-ups in tech industry. Israel had 800. India? Just about 450 brave entrepreneurs managed to start-up.

Nasscom has launched a mission to enable 10,000 tech start-ups in the next ten years. That’s about 1000 start-ups every year for the next ten years. This is more than double of the start-ups that begin on their own.

This is an ambitious and much needed activity that will rightly work in mission mode to ensure that the targets are met.
Start-ups in India face many problems. While thousands have smart ideas, very few have the knowledge or the support to realise them. Those who know or learn how to, find it tough to fund their ideas.

Nasscom’s 10,000 Start-Up plan aims to bring together mentors and funders for critical support to fragile early stage start-ups. Aspirants will send the ideas to the Nasscom team. The selected ideas will be showered with incubation oriented support. They will get seed funds of as low as Rs 5-15 lakhs; business tools worth Rs 10 lakh; and much needed advice on next steps. For a start-up, even simple facilities like an office or help in registering a company can be a boon.

Venture funds don’t even look at start-ups. They support projects that have already assumed a corporate shape, howsoever small it may. But start-ups need very basic help. The support and guidance they need is similar to what teachers offer pre-schoolers. Nurseries prepare toddlers for the rough and tumble of school life.

The Nasscom mission is to offer such support. Once the start-ups are on their feet, the formal funding system will swoop down on them. 

To be really successful and inclusive, the Nasscom mission will have to go beyond the metros and look for talent and ideas in small town India.

Technology based business solutions will boom only when they serve local needs. Smart ideas that work in Delhi and Mumbai will not necessarily work in Jaipur and Visakhapatnam. While some start-ups will have national and global solutions, many will be focused on local and regional needs.

Innovative technology will have a great bearing on the surrounding entrepreneurial ecosystem. It will inspire thousands of young and talented to create their own businesses.

Service sector offers a relatively better environment for start-ups than the manufacturing sector where red-tape and government clearance are deal-breakers. Hopefully, the tech start-up mission will inspire more such efforts that make it easy for start-ups to blossom in other sectors.
 
(Pranjal Sharma is a senior business writer. He can be contacted at [email protected])


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