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Amit Prakash
The last few yearshave seen a lot of ac-tivity in the infor-
mation technology ledstart-up space in India.The Government of India(GoI) has recently releasedan action plan for its flag-ship initiative, Startup In-dia, which intends to builda strong start-up ecosys-tem in the hope of drivingsustainable economicgrowth and generatinglarge-scale employmentopportunities. This fol-lows attempts by variousStates, such as Karnataka,Kerala and Telangana,which have come out withpolicies and are creatinginfrastructure to foster thegrowth of start-ups.
The Indian start-upecosystem is emerging asone of the most promisingones in the world. Accord-ing to the 2015 GlobalStart-up Ecosystem Rank-ing report brought out byCompass, Bengaluru hasmoved up four places andis now ranked 15th in theworld on an index com-prising performance,funding, talent, marketreach and start-up experi-ence. Though there is stilla wide gap between Indianstart-up hotspots such asBengaluru, Delhi and
Mumbai and Silicon Val-ley and other clusters inthe US and Europe, wholead Compass's rankinglist, the report is opti-mistic in terms of ourability to catch up. Ven-ture capital has been moreforthcoming and exit vol-umes have improved - bothget high visibility in themedia and contribute tothe build-up of the positiv-ity that engulfs the start-up space in India.
Start-ups are an impor-tant constituent of anyeconomy - with relativelysmaller sizes and informalorganisational processes,they are expected to benimble enough to spot andcater to untapped marketspaces which often go un-noticed by their larger andmore established counter-parts. New firms have al-ways been strong competi-tors to older firms due tothis reason. GoI's start-upaction plan defines start-ups as entities establishedin the last five years withan annual turnover of lessthan Rs 25 crores, 'workingtowards innovation, devel-opment, deployment orcommercialisation of newproducts, processes orservices, driven by tech-nology or intellectualproperty'. Many large ITfirms in India also started
small, with initial set ofcharacteristics not verydifferent from what the ac-tion plan notes.
The thrill and excite-ment of creating some-thing new with a relativeindependence from rigidorganisational routineshas been a key motivatorfor entrepreneurs to takerisks associated withstarting new ventures.With the maturity of the(traditional) Indian IT in-dustry in providing off-shoring services, a lot ofstandardisation has set in,which often introducesconstraints in meaningful-ly engaging with profes-sionals having new andout-of-the-box ideas. Thisset of IT professionals,whose creative urges wereearlier satisfied in a rapid-ly changing industry land-scape, is now on their wayout. They find support in atechnology environmentwhich imposes lower bar-riers to entry, especially interms of capital and hu-man resources needed todevelop and test an appli-cation before scaling up.
Unavailability of pro-ductive employment op-portunities in rural areas,largely due to a stagnantagriculture, is forcingmany people to migrate tourban areas. While a high
economic growth wit-nessed over the past cou-ple of decades has led torise in per-capita income,most of this growth hascome from higher-produc-tive segments in the serv-ices sector, which are rela-tively exclusive and em-ploy persons with highereducation degrees. Theseare contributing to urbanagglomerations which arenot only seeing an in-crease in households withhigher disposable incomesbut also an abundance oflesser-educated labourpool, often forced into mi-gration due to an increas-ing disillusionment withemployment opportunitiesin rural areas.
The current set of techstart-ups seems to be get-ting it right in under-standing this urban trans-formation underway inlarge Indian cities. Most oftheir products and servic-es are targeted at makinglife convenient for thegrowing urban middle-class - by making it easierto buy grocery, order food,taxi or home-based health-care services, book flighttickets or hotel rooms. Indoing so, the supply sys-tem incorporates withinits fold those displacedfrom their livelihoods inrural areas by providingthem employment as deliv-ery boys, taxi drivers, car-penters, plumbers, nurs-ing attendants etc.
Producing for a domes-tic market provides thesestart-ups with advantagesin terms of proximity tocustomers and suppliers,something which is notavailable to many large In-dian IT companies whocater to external demand.If a greater proportion ofthem are to sustain for alonger haul and transforminto industry-shaping or-ganisations of tomorrow,they will need strong capa-bilities to design technolo-gy solutions which incor-porate local contextual re-alities and sensibilities.
GoI's start-up policy isambitious - it wants start-ups to make a positive dif-ference in diverse sectorsincluding agriculture,manufacturing, health-care, education etc. Thiswill require efforts at notonly making it easier forthem to conduct businessas the policy says but alsoin encouraging an educa-tion ecosystem whichequips the budding profes-sionals with interdiscipli-nary training through in-novative course designsneeded to ensure theirproducts and revenuemodels remain relevant inemerging and fast-chang-ing market segments.
(The author is a faculty member at the Centre for
IT and Public Policy, IIIT Bangalore)
What does it take today todraw global corporate houses tolook at a city as a regional base?
An MNC considers many factorswhile deciding on setting up a basein a city. They include an educatedand employable population, physicalinfrastructure, social infrastructure,favourable weather, efficient connec-tivity in terms of airport, rail etc, acosmopolitan culture, and most im-portantly, the availability of Grade-Aoffice space at a very reasonable rentthat typically hovers around 50-90cents (Rs 35-90) per sqft per month.
A stable and progressive Stategovernment, favourable tax normsand transparency in doing businessare also contributing factors thatplay a role in an organisation's deci-sion-making.
What does India have to offerglobal investors in terms ofworkspace infrastructure?
Most of our Metro cities have,over the last two decades, developedgood Grade-A workspaces. The ab-sorption last year was 50 million sqftwith Bengaluru leading the pack at14 million sqft. The other cities offer-ing good Grade-A spaces are Mum-bai, Delhi NCR, Hyderabad, Puneand Chennai. There are many Tier IIcities trying hard to get into thisspace.
Today, India matches the Westerncountries in providing world-classworkspace infrastructure to discern-ing corporates while reducing theirreal estate costs substantially. TheSmart City initiative by the govern-ment will ensure ample investmentopportunities for global investorsand growth opportunities for corpo-rates.
How do the tech parks, socialinfrastructure and hospitalityhere compare with those in thecommercial centres in theWest in terms of quality andefficiency?
Over the years, with the growingdemand from MNCs, many buildershere have had to adapt to and adoptmany of the standards of theseMNCs, including constructing eco-friendly buildings, and adhering toenvironment, health and safety stan-dards. I would say, many of the newdevelopments across the country areon par with, and sometimes evenbeat, the spaces that are availableanywhere in the world, both interms of quality and efficiency. Withthe expanding job creation and de-mand for office space, a parallel de-mand for housing, schools, shoppingcenters, hospitals and hospitalityhas grown exponentially. Many a
time, the physical infrastructure ofthe cities is caught unawares of therapid growth and is always playingthe catch-up game.
The tech parks in India haveevolved over the years. Some of ourtech parks are on par with or evenbetter than many of the develop-ments in the West, in terms of ad-vanced facilities, state-of-the-art in-frastructure, and energy-efficient
sustainable features.
Real estate is a basic necessityfor any business venture – espe-cially manufacturing. Can the in-dustrial hubs in the country offerglobal players the sort of infra-structure they want, to push the‘Make in India’ initiative?
If the Government and private de-
velopers can work in sync on infra-structure projects - on a public-pri-vate participation (PPP) model - tocreate manufacturing hubs, the'Make in India' agenda can certainlybe fulfilled.
Presently, the infrastructure isnot fully geared up to push signifi-cantly higher growth in the manu-facturing industry. However, withinitiatives such as the smart citiesand others we expect global playersto set up their manufacturing unitshere and take advantage of our com-petitiveness.
Integrated developments andultra-luxury apartments are arelatively new phenomenon in In-dia. What is your outlook onthese new-age developments?
The walk-to-work concept, largetownships and integrated develop-ments that have sprung up in manylarge cities is a new phenomenon.The living spaces come with manyfrills such as huge clubhouses thathave facilities such as a party hall,library, gymnasium, badminton,squash, swimming pool, tenniscourts and the likes, and of course,large landscaped gardens and spacefor children to play.
Today, most of these facilities in aresidential development are takenfor granted by homebuyers, and de-velopers who don't provide these fa-cilities stand at a disadvantage. Theexpectations of a homebuyer havechanged dramatically. Today's buyeris very well-informed, and alwayslooks for a lifestyle property at a rea-sonable and affordable cost. The en-tire benchmarking for property de-velopment keeps rising and onlythose developers that strive for excel-lence can succeed in this highly com-petitive market.
Starting up fora longer haul Start-ups hold promise and are turning into
potential avenues for creative minds to explorenew paradigms and markets
‘We offer spaces on parwith the best in the world...’
State-of-the-art workspace infrastructure and living spaces on par with global standards in terms of amenities and lifestyle qualityoffered are basic necessities to draw MNCs and investors. Irfan Razack,
Chairman, Confederation of Real Estate Developers’ Associations of India(CREDAI), shares some thoughts on what India has to offer
Where does ‘Brand In-dia’ stand in the globalarena today?
India is the flavour of theyear for sure. Brand India,led by its most charismaticbrand ambassador, PrimeMinister Narendra Modi, isthe favourite country-flavourin the global arena today. Asmost of the BRIC countrieshave crumbled, with Brazileven forecasting a one per-cent de-growth in GDP terms,India leads both in terms ofimagery and investment-pas-sion.
A host of market-facingreforms-in-promise makeBrand India stand out fromthe rest. India incidentallyboasts of the second-largestnumbers of bellies that needsatiation. That makes us abig market, and a market thatpromises a growth of 7.50percent in GDP terms as op-posed to China's projection of6.80 percent.
Since we opened up ourmarkets, has the image ofIndia as an economic pow-er strengthened?
Absolutely. The catharsisof Brand India started with PV Narasimha Rao and theearly tinkle of reforms. Suc-cessive regimes followed itup with vigour and we seethe current BJP regime goinghammer and tongs at it.
How relevant is brandimage for India to drawmore global majors to in-vest here?
The world wants to see In-dia on the front foot. An In-dia that performs is good forthe world at large. The brandimage of India is importanton this count. India needs tonot only perform, but needsto tell the whole world that itis performing. India has beena promise for a while. It'stime to fulfil and redeem thispromise.
The brand image of a na-tion is vital to stoke and keepthe investment tempo in thecountry alive. A vibrant, sol-id and active brand image ofIndia is an imperative today.India needs a brand cam-paign that weaves for theworld the imagery of India asan inclusive and performinggiant. Brand campaigns havethe ability to showcase busi-ness culture, sentiment andvigour of a country. India isexhibiting a brute force inthe space of the start-upecosystem. It's time to accom-pany this movement on theground with an air cover ofbrand imagery that tells theworld of investors abroadwhat India is really about.
Global majors who haveinvested in India today are inmany ways still toe-hold in-vestors testing the waters ofIndia. A firm policy regimethat shows consistency of
economic thought, a bureau-cracy that showcases itself asa facilitator and an enabler ofgood business practice, is theneed of the day. As all thisfalls into place, we need abrand campaign that tells theentire story seamlessly.
Do you find a change inthe way corproates and in-vestors in the West viewIndia as a potential mar-ket, over the last couple ofdecades?
Absolutely. I see investorsentiment turning. In the olddays, the standard thoughtwas a negative one. Not any-more. Today, we are a 'Hap-pening India', and that is abig turn in the India imagery.
In the beginning, they sawus with tinted glasses, andthen they saw us for what wewere. Today, they are lookingat us as what we will be inthe near future. It is thatpromise that investors areputting their money behindtoday.
India is still a promise tothe overseas investor, but to-day, we are a more maturepromise than ever before.
We talk of our GenNext as the prospectiveharbingers of changewith innovative ideas andentrepreneurial skills.What sort of image hasyoungistan built?
Young India is talk of thetown for sure. Our youngpopulation and the very ap-parent fire in its belly is be-ing watched with awe bysome and with shock by oth-ers. The entire movement ofstart-up India is showcasingthe potential and ability ofthe 63 percent of India's pop-ulation that is below the ageof 35.
While getting excitedabout this movement, it isequally important not tobuild up unrealistic expecta-tions from it all. Unrealisticexpectation and brand-hypehas the reverse ability to hitnegatively when the chipsare down. The start-upmovement of India mustbase itself solidly on thefundamentals and mustprove to the world thatyoung India is capable ofnot only dreaming, but de-livering as well.
Let's remember, in threeyears' time, for every 10start-ups we have today wemay have nine shut-downs.As we dream of buildingUnicorns, we need to beaware that fundamentalbusiness ideas are the onesthat will survive, thrive and
deliver value. We need to en-sure that the young and nas-cent start-up movement fo-cuses not only on the servic-es sector of the economy, butalso on the manufacturingand agriculture segments.Solidity rests there.
What is your outlook onIndia as an economic pow-erhouse in the region?
I am a total optimist onthis. India is a story you justcannot stop.
© ImagesBazaar
Joe Louis D’anto
‘India is a story youjust can’t stop...’
Over the decades, India has turned into a globalinvestment and business centre. With globalisation andan active marketing campaign on to draw more globalcorporates to set shop here, the image projected of thenation as a potential investment destination is crucial.
Harish Bijoor, brand expert, outlines the changingperception of India in the world
© Getty Images
