Developing an entrepreneurial ecosystem to create a global start-up

India’s start-up economy is accelerating and has witnessed significant activities on multiple fronts, including the founding of new start-ups. The amount of funding, the number of investment rounds, the influx of global investors, the development of regulatory infrastructure, and internationalization in the last decade have witnessed geometric progress. 

India is currently the world’s sixth largest economy at $2.6 trillion and is halfway towards the Indian government’s target of becoming a $5 trillion economy by 2025. The robust entrepreneurial ecosystem of start-ups has a massive role in ensuring that India reaches this ambitious mark of $5 trillion-dollar. Since 2014, start-ups have collectively raised $50 billion.

The ecosystem has already yielded 500+ acquisitions and created 750,000 jobs. Bengaluru, Mumbai, and Delhi-NCR house 50 percent of all active start-ups and have emerged as global players.  India is today home to the third largest start-up ecosystem, behind only the US and China. 

The demanding perspective

To achieve the desired growth rate for becoming a $5 trillion economy by 2025, India requires several policy changes to develop a robust entrepreneurial ecosystem for boosting start-ups and high-growth firms. The entrepreneurship ecosystem approach recognizes that start-ups and high-growth firms flourish in distinctive types of a supportive environment. The distinguishing feature of the entrepreneurial ecosystem includes the: 

1. A core of large established businesses, including some that have been entrepreneur-led (entrepreneurial blockbusters)
2. Entrepreneurial recycling – whereby successful cashed-out entrepreneurs reinvest their time, money, and expertise in supporting new entrepreneurial activity.
3. An information-rich environment in which this information is both accessible and shared. 

Other essential aspects of an entrepreneurial ecosystem include its culture, the availability of start-up and growth capital, and the presence of large firms, universities, and service providers. Creating entrepreneurial ecosystems poses various challenges for policymakers. Policy intervention needs to take a holistic approach, focusing on the following: 

1. Entrepreneurial actors within the ecosystem
2. Resource providers within the ecosystem
3. entrepreneurial connectors within the ecosystem and the entrepreneurial environment of the ecosystem. 

It is also essential that policymakers develop metrics to determine the strengths and weaknesses of individual ecosystems and monitor the effectiveness of the policy interventions. The challenge to these new-age entrepreneurs and CEOs is to look for ways to develop the right kind of entrepreneurial ecosystem to create global start-ups and high-growth firms (HGFs) in different industries. 

What is the query?

For this, the CEOs and new-age entrepreneurs must relay a better understanding of the nuances and critical factors, either enablers or impediments to the creation of global start-ups. One must also unravel how entrepreneurial ecosystems can contribute to the development of high-growth firms. They also need to look at the policy intervention aspects of entrepreneurial ecosystems and develop industry-specific entrepreneurial ecosystems. For this, the industry leaders, the new-age entrepreneurs, and the ones engaged in the ecosystem must answer these questions. 

1. What are the challenges in developing industry-specific entrepreneurial ecosystems? 
2. How can policy interventions of the government support development of entrepreneurial ecosystems? 
3. What role is played by entrepreneurial ecosystems in the creation of global start-ups? 
4. What is the impact of the Covid-19 pandemic on the entrepreneurial ecosystem? 

The debate

The essentials of an entrepreneurial ecosystem are a robust policy framework, a culture for creativity and innovation, a support system that provides finance, and certainly the market and human capital understanding. In India, the government (Niti Ayog) has taken certain initiatives to support and develop the entrepreneurial ecosystem by bringing industry interventions and a need for levitating on an entrepreneurial mindset.

Several chartered accountants indicate that there are a lot of tight spots followed by many relaxations; what matters is implementation. One will have to translate these turning challenges into reality. For this, change the mindset to get beyond! With the onset oof digital platforms, there are ample opportunities for scouting and scaling the horizons of business. Entrepreneurs must not just master the process but also the mechanism for growth. They must develop and harness a global vision. 

Some believe that in context to India, where the essentials for entrepreneurship exist around land, labour capital and culture, there could be good area around rural and agri based entrepreneurship. Some experts on being interviewed feel that there is a technology driven corridor demanding high level of innovation driven entrepreneurship. The young entrepreneurs should focus on innovative thinking and develop a sense of social and environmental commitment for success. They can start small but think big. On entrepreneurship, there is no age, gender or background for charting the journey of an entrepreneur. Women entrepreneurship is also on the rise with an emphasis on inclusiveness and diversity in entrepreneurial ecosystem.

The big question for these entrepreneurs is how their start-up leveraging on technology for reaching out to potential customers? For this, what kind of competencies, skills and values are most important to have in as a start-up Founder is critical to begin the journey. Creativity, critical thinking, determination, empathy, business knowledge, interpersonal skills, networking skills and the most important to maintain integrity, mutual respect trust and self-discipline become the binding force around the entrepreneurial ecosystem.

Written by Prof. (Dr.) Manoj Joshi.
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