Date : 28/10/2023

Relevance:GS Paper 3- Economy - Start-Up ecosystem

Keywords:Startup 20, G-20, Sustainable Development Goals, Startup India Mission

Context-

The Kerala Startup Mission, backed by the state government, will host the startup networking event, Huddle Global, from November 16-18 in Thiruvananthapuram. It will be in line with Startup20, the latest Engagement Group established during the Indian G20 Presidency with the primary objective of unifying the global startup landscape and fostering collaboration across various fields such as education, finance, energy, sustainability, agriculture, and more.

Status and Significance of Global Startup Ecosystem

• The global startup industry, currently valued at approximately $3 trillion in a world economy of $90 trillion, is undergoing rapid growth and disruption.
• Startups have risen as catalysts for reviving, reorganizing, and expanding economies, driven by their innovative spirit. Their goal is to shape a decentralized yet collaborative future that aligns with the specific needs and evolving values of each nation.
• Startups are increasingly offering platforms and technologies that facilitate cross-border collaboration and innovation, assisting economies in achieving the Sustainable Development Goals. Consequently, startups play a vital role in job creation, advancing technology, fostering sustained growth, and effectively addressing global challenges.
• India has emerged as the third-largest startup ecosystem globally. Through the launch of Startup20 during its G20 Presidency, India aims to position itself as a worldwide hub for startups.

Five Task Forces to Empower Global Startup Ecosystem (Under G-20)

The five Task Forces within Startup20 have collaborated to reach a consensus, resulting in a Policy Communique that encapsulates the new era of innovation and technology and its influence on the global startup ecosystem.

1. Foundations:

• Focus on creating consensus-based definitions and terminology to strengthen startup ecosystems within and across G20 nations.
• Develop a handbook for startups to strengthen the Startup20 foundation.

2. Finance:

• Concentrate on policies and frameworks for a favorable policy environment for startup financing.
• Create a supportive environment by providing networking and launch opportunities.
• Enable measures to facilitate the cross-border flow of capital across G20 Nations.
• India encourages G20 hu Nations to increase their joint annual investment in the global startup ecosystem to US$ 1 trillion by 2030.

3. Alliance

• Alliances are critical for scaling businesses in domestic and international markets.
• The recommendations and policy directives address challenges faced by startups when expanding to international markets, navigating regulatory requirements, accessing mentor networks, finding entrepreneurial talent, and collaborating with larger corporations and governments.
• Emphasis is placed on creating a framework for global partnerships and fostering cross-country collaboration.

4. Inclusiveness:

• Offer recommendations and policy directives to promote inclusivity and diversity in the global startup ecosystem.
• Support startups that prioritize inclusion.

5. Sustainability:

• Work towards establishing mechanisms to accelerate startups addressing significant Sustainable Development Goals (SDG) gaps.
• Focus on areas of common interest to all countries or groups requiring special attention, such as women entrepreneurs and people with disabilities.

G20 Communique:

The G20 summits culminate in 'The Communique,' an official statement expressing consensus. Startup20, an engagement group under the G20, produced its policy communique.

• These included virtual and physical public consultations called Startup20 Sabha.
• Stakeholders from G20 countries discussed and provided feedback on the Policy Communique.
• Representatives from 24 countries, including G20 and invitees, participated.
• Introduced task forces and their objectives to a broader audience.
• Feedback was shared during discussions.

Additional Initiatives

• Startup20 also worked on creating a Startup Handbook with common definitions and terminologies for the startup ecosystem.
• It aimed to establish a Global Innovation Centre fostering cross-border collaboration.
• Efforts to promote Startup20 as a Global Point of Contact for startup ecosystems worldwide were underway.
• The group aimed to develop a startup financing framework to enable financing of startups across G20 member nations.

Government Initiatives to Foster Startups in India:

Startup India Initiative:

• Launched in January 2016, the initiative has recognized over 69,000 startups in India as of May 2022.
• These startups span 56 diverse sectors, including IT services (13%), health and life sciences (9%), education (7%), professional and commercial services (5%), agriculture (5%), and food and beverage (5%).

Key Functions:

• Development of enhanced infrastructure, including incubation centers.
• Streamlined facilitation of intellectual property rights (IPR), making patent filing more accessible.
• Creation of a more favorable regulatory environment, offering tax benefits, simplified compliance, ease of company setup, quicker exit mechanisms, and more.
• Introduction of an economic stimulus in the form of an INR 10,000 crore Fund of Funds managed by SIDBI to increase funding opportunities.
• Latest Findings: According to data from the Ministry of Commerce and Industry, startups covered under the Start-up India initiative employed approximately 1.74 lakh people in 2021.
• Start-Up India Programme: A flagship initiative aimed at nurturing innovation and startups to drive sustainable economic growth and generate significant employment opportunities.
• Start-up India Digital Platform: The world's largest virtual incubator, with over 300,000 registered startups and aspiring entrepreneurs.
• Start-up Grand Challenge: Facilitates collaboration between Indian and Korean startups to develop solutions for global challenges.

Conclusion

India's G20 presidency is committed to promoting consensus among member nations through transparent discussions. While the G20 focuses on social protection, financial inclusion, the digital economy, health, technology, sustainability, and economic growth, the engagement groups aim to make these discussions participatory and open to the public, fostering Jan Bhagidari.

India's goals include raising $1 trillion in annual investment for the global startup ecosystem by 2030, harmonizing the global startup landscape, and continuing the Startup20 group in future G20 presidencies. The presidency also emphasizes gender equality and empowerment.

The G20, originally for crisis management, now serves as a forum for economic growth and stability. Each presidency brings unique narratives, and India focuses on collaboration and consensus-driven decisions.

Source - Indian Express