There was a time when India was known to the outside world for its ability to provide enormous labour at relatively low prices, prompting global companies to outsource their work to India. Indian companies very quickly transformed the value proposition from cost to quality with more IT companies in India having global quality certification than any country in the world. This made India the outsourcing capital of the world.
The country is now witnessing the beginning of another era where it is now aspiring to achieve in the sphere of product development what it did in services. This charge is being driven by the growing number of start-up companies in the country.
India possesses some distinctive traits that could propel its ability to present the world with pioneering technology in form and function. A largely meritocratic education system and an optimally timed demographic dividend, in combination with people's knack for creative improvisation, form some of these embryonic drivers of innovation.
There are other factors that work in favour of the country's blooming culture of start-ups. Indian government and state organizations have been steadfast about mushrooming millions of professional universities and educational institutes across the country, creating a huge pool of competent talent. With a flourishing democracy and a tech savvy talent pool, India is becoming the latest global hot-spot for start-ups.
There are dynamic entrepreneurs who are trying to run their start-ups at a fast-growing pace. Given the market condition which is full of potential, a lot of venture capitalists are investing in start-ups as they see a huge potential for them to grow. India has over 5 million developers, a large domestic market, large venture capital available and a fast growing angel investment community. All these factors are driving a vibrant startup ecosystem that is focused on both the Indian and global markets, and demonstrating an increasing maturity in building product companies.
The Start-up culture is not restricted to traditional tech hubs like Bangalore and Pune in India, but has spread country wide. It has gone beyond major towns and cities to places like Jalandhar and Coimbatore. Hundreds of aspirational entrepreneurs are busy trying to conquer the US and the world markets, without so much as moving out of their cubicles in India. Companies like Zomato, Mettl, Capillary Technologies, to name a few, are already making waves everywhere. The culture is spreading beyond IT to sectors such as education, energy, healthcare, hospitality, manufacturing etc.
Despite the boom being witnessed, there are a few challenges that are holding back the growth wave. The Indian entrepreneurial ecosystem being at a nascent stage, access to finance remains a key challenge. Angel activity has made a small beginning but still has to achieve scale. While investment climate is improving and there is enough money for growth stage and private equity, there remains a shortage.
To help start-ups, NASSCOM has started the 'Emerge Forum' as also the "Emerge Blog' which provides for electronic communication between start-ups and allows for person to person communication. It already has 3500 members to its credit. NASSCOM also brings product start-ups and the CIO Association of India to meet periodically and discuss the trends in the industry.
The Indian Angel Network, kick started organized angel investing in India and now has the who's who of successful entrepreneurs and CEOs as its members. With over 200 members and operations across 5 cities, it is not only the first but also the largest angel group in India and now amongst the largest in the world. Its success has formed other angel groups in the country.
Entrepreneurship holds the key to India's future. Entrepreneurs will be the creators of wealth and employment that is needed to change the destiny of the country. India needs to create over a 100 million jobs over the next 10 years. The only way we will succeed is to create a vibrant entrepreneurial ecosystem where we reap our demographic dividend by encouraging job seekers to become job creators.
The good news is that the government is now focused on entrepreneurship and innovation. It has set up committees to look at what needs to be done to create a more enabling environment that would make India a vibrant entrepreneurial society. The success of the Indian IT Industry which crossed $100 billion this year is a testament to what entrepreneurship can achieve and has created several role models. We are now seeing critical elements come together -- Entrepreneurs, Angel investors, VC Funds and government policy. If we stay the course, our future will be bright.
Saurabh Srivastava is one of India's leading IT entrepreneurs and venture capitalists. He is a co-founder and past Chairman of Nasscom, a member of the Advisory Board of the Imperial College Business School, London, and an adjunct professor of entrepreneurship at IIT, Mumbai. Presently, he is Chairman India, CA Technologies.