Earlier this year, the government announced the launch of Azadi Ka Amrit Mahotsav – a series of events to commemorate the 75th Anniversary of India’s Independence. The event embodies all that is progressive about India’s socio-cultural, political and economic identity.
In his Independence Day speech earlier this week, Prime Minister Narendra Modi said, “The goal of ‘Amrit Kaal’ is to ascend to new heights of prosperity for India and the citizens of India. The goal of ‘Amrit Kaal’ is to create an India where the level of facilities is not dividing the village and the city. The goal of ‘Amrit Kaal’ is to build an India where the government does not interfere unnecessarily in the lives of citizens. The goal of ‘Amrit Kaal’ is to build an India where there is world’s every modern infrastructure.”
Towards this objective, our Honourable Prime Minister envisioned a 100% Atmanirbhar India. He said it is essential to fully utilize the country’s capabilities to take it to new heights in the 21st century.
Entrepreneurship will play a critical role in the fulfilment of this goal. To bring context, 95% of all industrial units in India are entrepreneur-led micros, small and medium enterprises (MSMEs). The sector contributes to 30% of the national GDP and 48% of exports. It employs the second-largest number of workers, following the agriculture sector.
India’s entrepreneur ecosystem: the hotbed of innovation potential and progress.
Today, India is creating world-class start-ups that are poised for success on a global scale. Over the last few years, the country has consolidated its position as the world’s second-largest start-up ecosystem with a surge in enterprising young professionals wanting to take the entrepreneurship plunge. World Bank data shows that the number of new firms in the formal sector has grown by a significant 12.2% between 2014 and 2018. The country’s GDP registered an impressive growth of USD 3 trillion during this period. We should not overlook the correlation between the two factors.
While it is heartening to note that the start-up ecosystem in India is evolving to become globally relevant and technologically competitive, it is also true that start-ups continue to face critical challenges.
> they have limited access to connect with large enterprises to co-create solutions or integrate product offerings.
> these organizations are often unable to design a robust go-to-market strategy best suited for their industry and customer segments.
> the start-up ecosystems in non-metro cities are challenged in terms of resource availability and access.
The role of investors in mentoring entrepreneurs
To compete efficiently in global and domestic markets, the country’s start-ups require a robust support ecosystem to help entrepreneurs scale up and sustainably. The way I see it, we should focus on Atmanirbharta in private equity and venture funding for the sustained all-round development of our community of entrepreneurs.
One way of making this happen would be by channelizing private wealth created by established domestic businesses towards young Indian ventures. This way, seasoned leaders can mentor young start-ups and support them in their journey. In addition, the approach can have a positive impact on nurturing a culture of entrepreneurship. The investor-investee relationship can entail various aspects such as:
> Capital: investments with the agility to move at the speed of the start-up’s growth phases to ensure that they do not sell themselves short. Investors should put in the capital at a brisk pace to enable aggressive growth and provide patient investments to facilitate their overall development.
> Connections: Beyond financial support, investors should also support their investee organizations with access to a good talent pool, a customer base, or access to new markets.
> Confidence: Through timely advise and support, investors should provide entrepreneurs with confidence and courage. This factor is vital to ensure that the latter navigate uncertain times with better foresight and prudence.
> Calm: Private equity, especially a part of global funds, has a limited time horizon. Funding is based on the following valuation round, often derailing the founder’s vision. A business leader will ably back a start-up with patience and calm for seeing the enterprise-scale to a sustainable entity.
Conclusion
Over the next 25 years, I envisage the cohort of India’s start-up entrepreneurs to contribute to the country’s self-sufficiency. They will build through disruptive business models across all sectors – from food to energy production, manufacturing to services, education, financial services to healthcare, agriculture to infrastructure. Moreover, they will play an essential role in erasing/bridging/narrowing the urban-rural divide and gender divide and catapulting the economy to the USD 5 trillion club.
However, a robust local/domestic investor ecosystem is essential to make this happen.
I conclude with the Prime Minister’s words, “We must lay the groundwork for new resolutions and move forward with new resolutions. Starting from here, the entire journey of the next 25 years, when we celebrate the centenary of Indian independence, marks the Amrit period of creating a new India. The fulfilment of our resolutions in this Amrit period will take us to the hundredth anniversary of Indian independence with pride.”
Jai Hind!
