Startup, up and away, shake up the ecosystem

The political environment around startups is undergoing furious changes, as Indian unicorns have mushroomed during the digital tilt of the economy during the pandemic. New vistas will open when higher technology stacks are built on 5G cellular services, public digital platforms, semiconductor design and electronics manufacturing. India is building an entrepreneurship-friendly data protection framework and redefining the rules to increase the efficiency of e-commerce. Universities are being redesigned to create the talent needed for an explosion of startup activity: large campuses will make way for virtual classrooms. The digital delivery of public services creates opportunities, and the appetite of investors imposes its discipline for startups to become solid companies.

The winners of this year’s ET Startup Awards learned lessons from the ecosystem: Building a large-scale business with public funds is an ongoing effort; innovation is the only barrier to entry; adaptation to the external environment is vital; money will drive out innovation and effort; and technology can solve big problems and is a social enabler. Startups also have their questions about the environment in which they operate. The main issues are whether the marketplace for ideas is efficient in terms of funding and whether regulation imposes an inordinate burden on fledgling companies.

Some suggestions made during the awards ceremony deserve consideration. Industry and Trade Minister Piyush Goyal pointed to self-regulation of e-commerce and the fact that bigger startups are helping smaller ones with funding. Ashwini Vaishnaw, Minister of Railways, Communications, Electronics and Information Technology, believes that the Indian government’s technology initiatives offer India the opportunity to produce five times more unicorns than today. Rajeev Chandrasekhar, Minister of State for Skills Development and Entrepreneurship, and Electronics and Computing, sees the privacy policy space somewhere between no protection and an absolutist position. These could signal some policy options for the sector.

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