Startups and India’s Vision 2047: How Founders See Startups Influencing Economic Development and National Policies

Independance Day

Muskaan Kapoor

Aug 15, 2024 — 6 min read

Independence Day Special: Founders Share Insights on Startups Influencing Economic Development and National Policies

As we celebrate the 78th Independence Day on 15th August 2024, it's clear that startups are shaping India's future in remarkable ways. With a vision set for 2047, startups are driving economic growth, creating jobs, and promoting innovation. In tune with this, StartupTalky reached out to several founders to understand their perspectives on how startups are influencing India's path to becoming a developed nation. Here’s a glimpse into their insights on the role startups play in advancing economic development, shaping national policies, and contributing to sustainable growth.

Driving Economic Growth and Technological Advancement

Shashank Avadhani, Co-Founder and CEO of Alyve Health, highlights the role of startups in accelerating economic development:

Startups have always contributed, and they will continue to turbocharge the development in India. For economic development, all the cylinders in the ecosystem need to ignite and must continue to do well. For e.g., Startups in the semiconductor space are working towards technological advancements, and startups in the AI space are working towards AI growth, similarly, Alyve Health is playing a part in building the health-tech space.

Avadhani stated there are 2 ways to grow GDP: 1.) Incremental growth 2.) Non-linear growth. The only way the GDP can grow non-linearly is through technological advancements.

Drawing parallels to historical examples, Avadhani noted that during the 70s and 80s, Japan’s GDP grew because startups like Sony took on the mantle of technological advancement. In the last decade, China has been doing the same. In the last 3-4 years, India has become one of the world’s fastest-growing large economies. This has happened because of a vibrant startup environment which infuses plenty of growth in the ecosystem.

Key Contributions of Startups to Economic Development

Nimish Pant, Founder Director of SVATANYA, echoes this sentiment by emphasising technological innovation and investment attraction. He highlighted some key aspects of how startups are playing a crucial role in helping India become a developed nation by 2047:

Employment Generation: Creation of job opportunities vital for our country having a young employable population.
Technology & Innovation Attracting Investments Leading to Economic Growth: Startups are often at the forefront of developing new technologies and solutions leading to more efficient and innovative ways of doing things thereby fostering a culture of creativity. The productivity gains and technological advancements position India as an innovation hub thereby attracting substantial domestic and international investments leading to GDP growth. This influx of capital not only supports the startups but also the broader economy.
Addressing Societal Challenges: Many startups focus on solving critical issues such as healthcare, education, livelihoods, and sustainability thereby contributing to the overall development of society.

By fostering innovation, creating jobs, and attracting investments, startups are pivotal in driving India’s economic growth and helping the country achieve its goal of becoming Viksit Bharat by 2047.

Impact on Job Creation and Policy Influence

Anshul Khurana, Co-founder and CEO of Entitled Solutions, provides a snapshot of the scale of impact:

As of December 2023, approximately 117,254 startups, including 110 unicorns, have created over 1.24 million jobs. Startups are pivotal in advancing economic development and achieving India's goal of becoming a developed nation by 2047.

Khurana highlighted that startups drive technological advancements and create competitive industries, addressing gaps in sectors such as healthcare, agriculture, and education. They encourage risk-taking and resilience, crucial for economic dynamism. Startups also influence national economic policies by advocating for favorable regulatory environments and investment climates.

Khurana emphasised that while the ecosystem faces challenges, initiatives like "Make in India" offer immense opportunities. He noted that combined efforts from startups and the government are essential for sustainable growth and economic stability, making startups integral to India's prosperous future.

Influencing National Policies and Sustainable Growth

Surinder Bhagat, Founder and CEO of Gigin Technologies, discusses the role of startups in shaping national policies:

Startups are pivotal in advancing economic development and achieving India’s vision of becoming a developed nation by 2047. They drive innovation, create jobs, and foster competition, thereby enhancing productivity and economic resilience. By leveraging advanced technologies and agile business models, startups can rapidly address socio-economic challenges, stimulate local economies, and contribute to GDP growth.

Bhagat highlighted that startups play a crucial role in shaping national economic policies and fostering sustainable growth. By introducing innovative solutions and business models, they highlight gaps in existing regulations and drive policy reforms that support entrepreneurship and digitalization. Their agility and responsiveness to market needs encourage a dynamic economic environment, fostering resilience and long-term sustainability.

Collaborative efforts between startups and the government can significantly advance India's socio-economic objectives, explained Bhagat.

Job Creation and Policy Needs

Gurashish Singh Sahni, COO & Co-Founder of ReCircle, highlights the impact on job creation and policy needs:

Acting as incubators for cutting-edge innovations, startups are not only pivotal in job creation and disruption of entire industries but also drive economic growth. Startups have been significant contributors to job creation, with over 500,000 direct jobs created by startups in 2020 alone (NASSCOM, 2020).

Sahni explained that this surge in employment can bolster India’s economy and impact local economies by exerting a positive influence on the cities in which they operate. Right from creating an influx of revenue for local economies to infrastructural upgrades, to supporting overall communities, and increase in flow of capital within the Indian market, startups have proven time and again that they have an impactful influence on the Indian economy.

For sustainable growth, Sahni emphasised the need for policies that strike the right balance between social justice, environmental preservation, and economic growth. He also advocated for more incubation and innovation centres, entrepreneurial cells, and a bigger push towards instilling an entrepreneurial spirit to drive India towards a developed nation.

Broad Impact on the Economy

Nirupama VG, Founder of AdAstra Consultants, reflects on the broader impact:

In the report titled, 'The Indian Economy: A Review January 2024', the Department of Economic Affairs said that the 1.14 lakh startups recognised by the Government under the 'Startup India initiative' created more than 12 lakh jobs (as of October 2023).

Startups play a critical role in advancing economic development through:

Providing jobs across levels and geography.
Improving technological advancements, innovation, and overall productivity.
Boosting the economy by inviting domestic and foreign funds into India through PE and VC firms.
Promoting holistic growth by stimulating economic activity in Tier-2 and Tier-3 cities, reskilling people, and providing wider opportunities, ensuring growth not only in large towns but also in smaller towns.

Overall, they play a pivotal role in transforming the economy and improving India’s GDP.