INTERNATIONAL CONGRESS ON RECENT ADVANCES IN SCIENCES AND TECHNOLOGY - Kuala Lumpur - Malaysia (2019-02-20)

Exploring Ecosystem of StartUps in India
India ranked 77th in the World Bank’s Ease of Doing Business (EDB) 2019 survey and 57th in Global Innovation Index (GII). Since, genesis of a Startups revolves round both - innovation and business environs therefore these ranks and the underlying indicators are of critical importance. India at this moment is striving for creating a pro-Startup ecosystem with impetus on addressing multitude of operational, regulatory and policy issues. In the same line, Government of India (GoI) has committed to spend INR 100 billion through more than fifty enterprise development schemes with an objective to build ecosystem for Startups and to facilitate its growth. To abide by the commitment, government brought changes in investment norms for Startups. This transformation resulted increase in recognition of Startups from 797 in 2016-17 to 7968 Startups in 2017-18. Of all the recognized Startups 6954 Startups have claimed employment generation of 81264 in 2017 (Press Information Bureau’s report on Startup, April 2018). On the contrary, another trend inferred from World Bank data on unemployment rate (UR) of India was at its peak at 4.12% in 2008 which declined to 3.41% in 2014. However, in 2017 the unemployment rate (UR) further increased to 3.52%. These inclinations in unemployment rate has constrained the growth and necessitates to contemplate further. Thereby GoI was compelled to think beyond traditional job opportunities and focus on building ecosystem for creating earning opportunities for educated youths through new innovative enterprises. The entire scenario depicting high doses of investments for Startups inception vis-à-vis new job creation seems to be enigmatic, with a huge scope of plausible in-depth reasoning and exploration of Startup ecosystem interactions and its impact on economic outcomes. Hence, authors in present study attempts to data mine various set of data on Startup’s of India available from secondary sources like NITI Aayog, NSSO , DIPP (under MoCI ) of GoI and other relevant private sources such as NASSCOM , World Bank, with an objective to explore government and private investments from angel investors and venture capitalists on establishing and nurturing of Startups. The scope of the referred study here is to explore the trend among Indian Startups from the perspective of investment and employment generation. In the process the authors in the paper have hypothesized a relation between government and private investment and ratio of number of consumer is to Startup’s market value. At the same time the study proposes a model on the basis of available investment data on Startups, number of emerged Startups and its impact. The pattern analysis of number of Startups incorporated; Venture Capital (VC) investments and unemployment rate in India over a period of decade from 2008 to 2017 clearly depicts that Startups and VC investments have grown gradually with two points of inflection with a polynomial trend. at the similar time periods. This shows that both have been working in tandem. However, the UR seems to be rising in last four years but not complementing the increased number of Startups with deployment of huge investments. This might be due to the fact that the type of business models have inherent issues which is resulting in failure of majority of Startups in first five years of operations. An extensive data mining and analysis will facilitate the researchers and other readers in inferring critical reasons for paradoxical scenario of India. Consequently, the practical implications of this paper will help policy advocates of government and private organizations in evaluating their investment manifestations, decision making and revisiting economic interventions on stratups in future. Keywords: Ecosystem, Employment, Innovation, Investment, Startups
Mr. ANIMESH GHOSH, Dr. Prabha Bhola