India is now becoming a hub for start-ups over recent years due to high growth rates and other factors. Many entrepreneurs like to invest in information technology, finance, software, and other sectors to earn more money. The number is likely to increase in the future due to the availability of high manpower and government policies. A recent study says that India is growing at faster levels in the start-up ecosystem which contributes more to the country’s economic growth. Start-ups offer several job opportunities for jobs seekers who want to start their careers with the best salaries.
Reasons why the start-up ecosystem is booming in India
- Emerging markets
The market is emerging in India due to the IT revolution and technological development. It is one of the fastest-growing economies in the world because every niche product has the potential to sell in the markets. Not only that, the income and purchasing power of people is increasing steadily that made start-ups set up their facilities in India. Moreover, the youth population is becoming high and many of them are below 25 years old. As a result, they want to start a business or company with high ambitions. Some even work in leading multinational firms to gain work experience and learn other things which prompt them to become successful entrepreneurs.
- Increased political will and Government support
Various state governments in India encourage new entrepreneurs to launch a company or business easily. They aim at building a strong ecosystem in Indian markets that is suitable for start-ups. Furthermore, start-ups offer different types of jobs for engineering graduates and others that will reduce the unemployment problem. Both central and state governments make great efforts to support the growth of start-ups in India which will boost the economy.
- Technological innovations
Technologies are growing rapidly every day which reduced the cost of building digital products and other things. As the number of internet users is increasing in India, people are well aware of everything with ease. Moreover, R&D facilities in India allow new entrepreneurs to start their companies in special economic zones to get more concessions. They even show ways to launch operations with the latest innovations in a better environment.
- Changing perception towards entrepreneurship
Most start-up owners in India are youths who have to put their ideas into practice and grab the opportunities in the markets. They also have strong intrinsic motivations, problem-solving skills, patience, and the desire to achieve goals in society. The founders of start-ups will plan everything properly and take smart movements for the benefit of a company. Apart from that, they know how to overcome risks and other problems after opening a company in India. The successful stories of new companies such as Paytm, Zomato, Ola cabs, Oyo, Big Basket, and Vedantu entirely changed the perception of entrepreneurship. Start-ups are earning more income these days due to proper planning, allocation of funds, etc.
What are the challenges faced by Indian start-ups?
Although start-ups are increasing, they have to face some challenges initially when they want to plan their operations in India.
- Hiring qualified employees
Hiring qualified employees may become a challenging job for many start-ups because some job seekers don’t prefer them due to low salaries. Besides that, they can’t compete with the compensation offered by the big companies in the markets. A majority of employees who work in start-ups will switch overs to reputed firms to earn more income. A second reason is many job seekers don’t have sufficient skills when it comes to work and other things. The third reason is highly qualified employees will move abroad for jobs.
Funding is one of the most important problems faced by start-ups in India because it will take days and months to process an application. Banks need collateral documents when they want to offer loans for start-up owners. The chances of getting immediate funds are very low in India that will jeopardize the operations.
- Complex policies
The policies followed by state governments in India are very complex to understand due to changing political environment. A majority of start-ups face difficulties in adapting to the bureaucratic processes due to underlying standards. The policies will change quickly and they receive random notifications that result in various problems.
- Lack of marketing strategies
Lack of marketing strategies is one of the main issues faced by Indian start-ups due to cultural differences. They don’t know how to target them geographically while promoting a product or service. This, in turn, results in losses and other problems that will affect the growth of a business.
- Not able to compete with big companies
Big companies have already entered the Indian markets to sell their products and service to customers. As a result, start-ups are not able to compete with them which result in survival problems.