A paper by Samiksha Jain and Neha agarwal

“a country of job creators

instead of job seekers”
-the Hon’ble Prime Minister, Shri Narendra Modi

Can unemployment be solved with startup

ecosystem?

What effect does startup ecosystem have on the

overall country growth?

Before we dive into these questions, what is a startup ecosystem?

The startup ecosystem consists of a group of people, startups, and related organizations
that work as a system to create and scale new startups.

What are the advantages posed by this ecosystem on the country’s economy?
 Startup ecosystem is solving one of India’s one of the bigger issues, unemployment.

Yes. If you are going to become an entrepreneur, then you can create more jobs. Thus the rate of
unemployment in our nation also decreases. So employment creation is one of the main advantage
from startups.

 Creation of wealth

Since entrepreneurs are attracting investors by investing their own resources, the people of the
nation would get benefit when startups grow. Since the money is sharing with the society, wealth is
creating within the nation.

 Better standard of living

Startups can implement innovations and technologies to improve the living of people. There are
many startups who is working for rural areas to develop the community.
 Increase in GDP

GDP (Gross Domestic Products) plays a vital role in enhancing the economic growth of a
country. World Bank says that India will become the fastest growing country as economic growth in
the world. By supporting and encouraging more startups, it is possible to generate more revenue
domestically and consumer’s capital will also flow around the Indian economy.

 Additionally, startups create a talent pool. Most startup employees are freshers or younger than
average. Working in startups, they get trained and become versatile in many skills. Essentially,
startups are becoming training workshops, and local economies benefit from this creation of a
talented work pool.

Who are the drivers of a startup ecosystem in India?

Corporate Connect
Enterprises are realizing the disruptive potential of start-ups and are thus,
partnering/investing in them.
Examples of corporate support:

Facebook in partnership with Startup India disbursed cash grants of $50,000 each to the top 5
selected startups

10000 Women program by Goldman Sachs is providing women entrepreneurs all around the world
with a business and management education, mentoring and networking and access to capital.

Microsoft Ventures Accelerator Program in India has recently picked up 16 startup

In 2018 Indian startup ecosystem raised funds of 78,000 Cr. Rs., increasing up to 1 lakh crore
Rs. In 2019.

Government Support
In August 2015, the Hon’ble Prime minister announced the launch of the nation flagship
initiative – “Startup India”, with a mandate to promote and encourage young entrepreneurs
of the country
Government of India is understanding the value of working with disruptive innovators
across the value chain and using their innovations to improve public service delivery.
Department of Animal Husbandary and Dairying has conducted a grand challenge in
association with Startup India to award top startups in 5 categories 10 lakhs INR.
Small Industries Development Bank of India has launched a scheme to provide assistance to
existing Small and Medium Businesses in need of capital for growth
Over 26 states in the country have Startup policies.
Today, India has the third-largest startup ecosystem in the world.
During this ongoing pandemic, startups have shown resilience in coping up with the
disruption. Though many new-age companies have resorted to laying off people as part of
cost-cutting measures, many of them have already seen business growth at the pre-Covid
level.
India added 12 unicorns in 2020 despite a pandemic year.As on December 23, 2020, the
Indian government has recognised a total of 41,061 startups and 4.7 lakh jobs have been
reported by more than 39,000 startups.

Can startup ecosystem be a boon for unemployment crisis of India?

 National Career Services (NCS) portal under the Ministry of Labour and Employment has
analysed the major issue of unemployment in India. It observes 8.1 million job seekers in against of 0.1
million jobs
 At a time when India has one of the youngest populations in this ageing world, gainful
employment is a must to cash in from this demographic dividend. Otherwise, Indian society may
face unrest from a huge unemployment problem. Therefore, healthy growth of the startup
ecosystem is a must to solve the country's unemployment problem.

Missing shoe in the growth of startup ecosystem

Most of the Indian startups are running on losses and burning cash raised through multiple rounds of
fundraising. This wild chase of top-line without much care for profitability can take a wrong turn once
funding dries up. In this process, employees will be adversely impacted owing to this faulty business
model. Therefore, the Indian startup ecosystem should take the learning from the traditional business
world and show prudence in the form of focusing also on the bottom line. Once the ecosystem matures
with such prudence, India can surely solve the most gigantic problem of unemployment through these
young entrepreneurs.

Conclusion

Startups have the potential to be the engine of growth in the medium to long run
Successful startup ecosystems are a boon to local economies. Apart from basics like creating
jobs and generating revenue for the local economy, they facilitate development in more
ways than one.
 Methodology :
This research is based on studies done in India on the effect of startup ecosystem. The
analysis and conclusions drawn are an interpretation of what the studies suggest. This paper
concentrates on how a startup ecosystem can affect a developing country like India, and
dwells upon its potential of solving larger economic problems faced by the country. After
studying the statistics of surveys conducted and comparing them with what we think is a
startup ecosystem, this paper tiers to prove the notions we have about this ecosystem along
with contradicting the same due to the immaturity of this economic system and lack of
knowledge in the nascent entrepreneurs. Like every other system this economic system too
have disadvantages but are overruled by the power of its advantages. This paper suggests
what the future of startup ecosystem might look like if handled properly and where is the
country still lacking to make it the largest startup and profitable ecosystem. The role of
government in bringing India to the place where it stands now in growth of this ecosystem is
commendable, but still needs a lot for making this ecosystem a solution for the mass
intellectual unemployment faced by the country right now.

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