‘Mirror mirror on the wall, who is the fairest of them all?’ If it is the modern day mirror with the highest knowhow, it will never say the usual story but the truth! Today if you ask the mirror about the emerging startup ecosystem, it will not name the big brothers of the startup world but tier II and III cities like Nagpur, Kochi, Jaipur, Ahmedabad, Chandigarh, Raipur and Indore. As startup culture and entrepreneurship breaks the boundary to spread across the world, different ecosystems are gaining relevance and impacting economies in a more meaningful way. Joining the big brothers are the young and emerging cities, not just in India but globally. So what is resulting in this shift?
Offering unprecedented advantages over the big cities, these small towns are emerging as the perfect plinth for startups. Abundantly available skillsets, unmatched innovative-minds that attract investors and the deep seeded zeal to make something big in their own town/cities are bringing back talents from other cities but even across the borders. Adding fuel to their enthusiasm are the various government initiatives for startups like Startup India, Stand up India, bodies like Atal Innovation Mission who nurtures startups right from the school and college days to even grooming startups by providing mentoring and funding platforms.
What’s in Your Name? Probably Nothing
Last year during his address to the students of IIT Madras, PM Modi said, “In the age of startups, the language you speak matters far less than the language you can code in. The power of your surname does not matter; you have the opportunity to create your own name. What matters is your merit”. According the Economic Survey of 2018-19, out of the 16,500+ recognized startups, nearly half were from tier II and III cities. Nearly 61 percent queries received by Startup India was from these small cities.
The past few months saw a major part of innovation in the country coming from the tier II and III cities. Thanks to COVID that many brilliant brains returned to their hometown with enough time to spend on research and innovation. Hence even tier III cities like Madurai, Indore, Mohali, Bhubaneswar and others are producing successful startups. These cities are also providing eccentric job opportunities allowing local talent to stay at their hometown while enjoy the work challenges that startups from big cities offer.
So what make these cities so attractive? The initial lower costs, skilled personnel & affordable talent, and the increasing support from the local administration/authorities apart from the various funding initiatives of the central government. The government has even focused on funding incubators to help back innovation. However, there still lies a gap in funding and an opportunity for these startups to showcase their offerings. Investors though see a considerable innovation from these startups, but they are not much open to invest in them.
But let’s look at the brighter side. The digital era has brought an opportunity for not only the big guys but for startups too providing them a platform to take their products to the global market and even impress investors to grab funding. But despite several obstacles, the odds of failure are far from overwhelming. Who knows the next unicorn may be from tier II or III cities.