Startups- The Employment Engine


India is the fourth largest base for young Startups in India. Today it is home to more than 3000 young and vibrant tech/digital Startups in the world. And it is beyond doubt that by 2020, this number will conveniently rise to 11,500. Driven by factors such as massive funding, constantly evolving technology and the gift of having the world’s largest youth population, the Startup landscape in India has witnessed unprecedented growth in the last few years. There were about 800 Startups which were started in India in 2014 alone, Bangalore and Delhi-NCR being the top two destinations accounting for more than 50% of new Companies.

It is quite evident that a Startup ecosystem like this would also provide a fertile ground for budding professionals from all domains. According to a report, the Startups employed about 50,000 to 60,000 people in 2014 and it is estimated to hire 2.5-3 Lakhs employees by 2020. What is even intriguing is that job seekers are showing a great interest to work in these Startups. said in its study that almost 55% organisations witnessed candidates changing jobs to work in Startups. A large number of young professionals are declining lucrative corporate jobs to venture out into making their own dreams a reality by either starting a Company on their own or by being recruited by one of these new-age Startups. They feel that they have a better opportunity to learn, establish and grow faster and hence, they are willing to take a risk of working with a small Company despite the risks involved. The entrepreneurial spirit, backed by strong education, ample capital and economic policy support is what is luring these people towards these Companies. Today, Startups have access to multiple sources of funding from venture capitalists, private equity, angel investors, banks and financial institutions as well as incubators. Indian online Startups are a major chunk of the Startup ecosystem. Among the various industry verticals, Hyper local Startups seem to be the strongest contenders for success and the rise rise of Hyper local markets has also resulted in a considerable improvement of the country’s employment. Their requirement of professionals from across several verticals such as marketing strategy, brand consolidation, logistics, business development, technology etc will result in more employment opportunities for the country’s educated workforce.

Some may argue, that a Startup framework is not a steadfast one, at least initially; and the recent layoffs by some of the well-known Startups like Zomato, which laid off 300 odd people as part of a Global restructuring or Tiny Owl which showed pink slips to almost 250-300 employees. These layoffs may somewhat give them an opportunity to speculate . Some might also see these instances as the first signs of a bursting (Startup) bubble but, one must remember that age is not an indicator of failure. Experienced Organizations also crumble at times and these could be because of a variety of factors and reasons. The instances discussed above might also have a broader set of factors and reasons which get unnoticed by speculators. The bigger picture shows us a very different and bright future for Startups in India. It is because of this reason that the Govt. of India also has been instrumental in developing the Startup landscape with its policies and initiatives. Our Honourable Prime Minister, Shri Narendra Modi’s ‘Start-up India; Stand up India’ campaign to promote bank financing for start-ups and offer incentives to boost entrepreneurship and job creation is a remarkable step to look at the Banking Sector in a whole new light. Nasscom has partnered with the Governments for Start-up warehouses to create a micro-ecosystem where start-ups and entrepreneurs can work together and share their learning and best practices with each other. This aims to foster an entrepreneurial culture contributing to increased knowledge, employment and societal wealth. Further, as part of the Skill India and Digital India initiative, the Prime Minister stated that a package of incentives will be given to manufacturing units for generating jobs. According to a report by KPMG, there are approximately 46 million Micro, Small, Medium Enterprise (MSME) Sector enterprises across various enterprises, employing 106 million people. This MSME sector accounts for 45% of Indian industrial output and 40% of exports. It only makes more sense to invest in this sector for the overall development of the country and in employment generation.

It is imperative that development of this segment is extremely critical to meet significant levels of employment across urban, and rural areas across the country.



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“Thinking Aloud” reflects the emerging trends and varied outlook of the rapidly evolving internet and communication sector. An IAMAI publication, this is a part of the market education initiative of the association.

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