Start- ups are important for the economic growth of the country. It is evident that more and more start-ups are gaining pace by catering to new types of demand. With these, the most persistent economic challenges of job creation and lower consumption can be tackled.
The government has also identified the potential of the start-ups and has thus implemented few measures for nurturing innovation and promote sustainable economic growth through the Start-ups. In this article, let’s analyse how Start-ups Help the Economic growth of a Nation:
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A start up is a young company that is beginning to develop and is in its early stages of development. Start-ups play a key role in economic growth. As we know, business activities help in the creation of jobs and global data shows start-ups are creating more jobs compared to the large companies and enterprises.
Most of us would like to believe that start-ups can only grow in developed countries due to the availability of resources and the right environment to grow. Contrary to this belief, start-ups can begin anywhere and it’s often the countries with the required demand that present opportunities for start-ups. A start-up can easily prosper in underdeveloped countries, nations in conflict and the countries with new entrepreneurship. Countries with such environment offer problems, which is an opportunity for a start-up to make a profit and thus establish itself.
See Also: How Economic Growth Benefits You?
Let’s discuss the role a start-up plays to enhance the economic growth:
Start-ups help the economy in several ways. Firstly it boosts the economic activities that help the economy to expand. It tries to maximize profits through technology and innovation thus leading the country towards future development. It also improves the GDP of the nation by creating jobs, thus transferring money in the hands of the consumer. Thus when there is increased consumption the GDP of the country grows. It also brings competitive dynamics in the economy encouraging the existing businesses to adopt newer technologies.
Take a look into some of the important roles played by start-ups in an economy:
Any kind of business activity helps to generate jobs. With more and more start-ups an economy will not only experience increase jobs but also the creation of a skilled workforce. Start-ups are a great way to enhance the employment creation in the economy, especially for the skilled workforce.
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Since start-ups are in their growth phase they would attract investors by investing their resources. Thus, the expansion of the start-ups helps the citizens of the particular country benefits from it. Since money is being invested and spent within the country, wealth is created within the nation. In future, when these start-ups go public they help the employees and shareholders make profits.
One of the most important aspects of the start-up is that they incorporate technology and innovation and provide the best services to people. This, in turn, will allow improving the standard of living of the people. In India, there are a large number of start-ups working to promote local artisans and develop their community.
The gross domestic product plays a vital role in boosting economic growth. According to the report of the World Bank, India is can become the fastest growing country due to its GDP growth. By encouraging more start-ups and promoting them, it is possible to generate more revenue in the domestic market. Thus the consumer’s capital will flow around the Indian economy. The most dynamic changes can be felt in the handicrafts and weaving which was proceeding to a slow death some decades before. With start-ups like Flipkart, the artisans can sell their products to a larger audience.
See Also: Economic Survey 2020
The start-ups are the centres of innovation and they can boost the economy through the adoption of new technology and creating new industries over time. Due to the bold decisions of the start-ups to work on newer technologies we can see how drastically the economy is changing. For example, the banking industry has experienced a massive change by the adoption of innovative technologies like digital banking, automated financial services and blockchain technology.
The start-ups have also lead to the creation of alternative markets which were previously unfathomable to many. The start-ups seek to regularize and develop the sectors that were previously considered unorganised. Some of the examples of start-ups that have created new markets are Ola, OYO, Byju’s, Swiggy, Paytm and Practo.
Start-ups have a direct impact on the localities in which they start operations. An example of this can be Bangalore itself, changing drastically over the years after the establishment of Wipro and Infosys. Today we can experience an employment pattern providing job opportunities to both the organised and the unorganised sector. This also led to a surge of skilled professionals and relocation of experienced professionals from different cities.
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