After Independence, the focus of Indian growth was government jobs, with only a few business houses such as Tata and Birla in the play to support the economy. Then came the watershed year of the Indian IT revolution—1998. In Y2K, India transformed from a technocoolie to a software centre that offered solutions to a range of computer problems, while fighting the millennium bug.
Indian stakeholders companies such as Infosys and Satyam emerged as world players. The Hyderabad Information Technology Engineering Consultancy (Hi-Tec City) in Hyderabad powered the growth of this computer mecca, nicknamed Cyberabad. Global giants such as Oracle, Texas Instruments, IBM, Microsoft, GE Capital, and Motorola started making software in India. At the nucleus of the computer revolution were major metropolitan cities such as Mumbai (Bombay), Chennai (Madras), and the silicon triangle of Bengaluru, Pune and Hyderabad.
Why North Region Missed The IT Bus
The revolution was limited to a few companies and areas because of a lack of start-up ecosystems in major parts of India. The entire North, Punjab especially, had no startup ecosystem at all, more so in the IT sector. Most of the region’s population was below 35, all job seekers only. Then came start-ups such as Flipkart and Uber to excite young minds to turn entrepreneurs. The technology and Internet booms were becoming dormant and easily accessible to young, budding entrepreneurs, which sowed the seeds of a start-up ecosystem.
Now, India is recognised and acclaimed globally as an economy with a respectable business environment. A shift in jobs from the government to the private sector has resulted in a tremendous growth of new companies over the last few years, where the metro cities are seeing a vibrant start-up culture. The Indian government’s policies have put the focus on making the country a preferred startup destination. Prime Minister Narendra Modi’s call for ‘Start-up India, Stand-up India’ has become a facilitator of entrepreneurship that could provide employment to a large young population. These building blocks will encourage many young entrepreneurs to come forward with innovative ideas and contribute to the growth of India.
All That Glitters Is Not Facility
But one is tormented every time to see a government press release seeking investment in the areas with no start-up ecosystem and dumping crores of rupees into building shiny facilities to “boost local start-up innovation”. More often than not, these initiatives end up providing local freelancers with a great photoopportunity to discuss and debate while sitting on beanbags, but with little else.
Similarly, a lot of government venture funds invest in the best companies in their locales, whether these companies have found a productmarket fit or not. Not only do these efforts give improper validation to businesses before they are ready, but also they are an egregious waste of taxpayer’s money.This is the right time and opportunity for the people of this region to innovate and invest their energies in building a strong start-up ecosystem. There is now a race between the states to prove a point and be on top,
since the IT hubs of Bengaluru, Hyderabad, and Pune are now saturated. The north region is the best place now in India to establish a strong ecosystem, not only because the governments are proactive, but also because the geographical and climatic conditions are congenial for living. This is one more opportunity for the people of this region to explore and organise the stakeholders of the start-up ecosystem to work and explore synergies. Some of the best lessons that can be practiced are:-
Gather The Network
In order to develop an interpersonal relationship with the top start-up entrepreneurs of your city, no matter what type of start-up market you are in, you need to host start-up events where local entrepreneurs share their challenges and lessons learnt to provide feedback on startup ideas.
Work With Your Govt
Governments cannot create a start-up ecosystem out of thin air. Their crucial role is in supporting the start-ups once the new companies are formed organically and the roots of an authentic start-up ecosystem have been seeded. Policy and incentives can be used to create a strong nucleus of activity which can generate its own momentum and become self-sustaining.
Connect and involve bodies such as Startup Accelerator Chamber of Commerce, Chandigarh Angel Network, Punjab Chamber of Commerce and Industries, TiE, Assocham, PHD Chamber, CII, and Entrepreneur Organisation (EO) to see what they have to offer. Getting local government officials and organisations involved in the events organised by the start-ups would work even better.
The government should institute special, risk-free loans to promising start-ups. If the companies fail, then they do not need to pay back the loan, but if they succeed, they pay back under the laid terms. The open data policy, city-funded co-working spaces, free public Wi-Fi, and strong relationships with global partners are also enabling factors for a vibrant ecosystem
It is one of the foremost examples of a rich collaboration between companies, university researchers, and entrepreneurs.
The technology transfer from universities will help create new enterprises. Building strong educational infrastructure in the Tricity and boosting research and development activities should be given top priority. Encourage researchers to liaise with professionals from the industry to deal with real-life challenges and opportunities.
Access To Capital
The best ideas and talent are useless without the capital to fund the venture. Deep-pocket investors like to invest closer home.
If that capital is located in another city, they are reluctant to invest usually. It is critical that the capital be available to support each stage of development of the start-up. Through its vibrant ecosystem and human capital, Israel generates more startups than even large, industrial countries such as Japan, China, Korea, Canada, Germany, and the UK. It has nearly 6,000 active start-ups, with 1,300 being founded every year.
Experience suggests that strong companies with great metrics and digits will get funded, no matter where based, but if the local startup ecosystem creates a strong company, the funding will follow, whether from international investors or
from the increasing viability of online networks. Israel is called the Start-up Nation. It’s all because of a strong start-up ecosystem.
Focus should be on first creating a strong start-up ecosystem with a bottom-up mentality. Then, when great companies are formed, the capital and a sustainable start-up ecosystem will follow. Innovative businesses are the bedrock of any city’s success, as they embrace new ideas and new enterprises. Start-ups are a crucial feature of this ecosystem.
The writer is founder and CEO of Netsmartz LLC and an angel investor of Chandigarh Angels Network