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Bangalore: India is going to foresee more than 150 new start-ups by the end of this year. A study from Zinnov Management Consulting reveals the fact on India's Innovation Potential and Growth titled "India Innovation's Thrust- Driven by Start Ups and MNCs". The study is an in-depth discussion on the Start-up and MNC ecosystem in India which is likely to drive India's future innovation growth, supported by a huge domestic market with immense untapped potential.
Founded in 2002, Zinnov is a management consulting company providing advisory services in the area of Global Sourcing, Emerging Markets Expansion and Human Capital Optimisation to Fortune 1000 and reputed SMB companies. They work collectively with clients to tackle prevailing organizational challenges by analyzing the changing dynamics, improving performance and building institutional capability.
The study reveals that India today is at the cusp of becoming an epicenter for global innovation, which is driven by the timely amalgamation of multiple factors like domestic market, global aspirations of Indian firms and the need for innovation to succeed. Large MNCs are looking towards Indian Start-ups for entering into the Indian market.
Karthik Ananth, Director-Market Expansion, Zinnov Management Consulting, says, "Many companies have successfully created new innovation paradigms and are using India to export innovation to global markets. Some start-ups are innovating with technology and business models also. This is fuelling innovation growth and encouraging other companies to follow suit."
More than 150 start-ups are estimated to emerge in India alone by the end of this year, in various verticals. Indian start-ups are focusing on solving a problem with the philosophy of 'Jugad'(arrangement). India is going to be the fifth largest market by 2025 in the consumption market. Indian domestic IT investment will become significantly large and potentially contribute to 33 percent of the growth in global IT investment in the next five years, which will take India's IT spend to over $50 billion indicating a strong untapped local market potential. "The complexity of the local Indian market like diversity, infrastructure challenges, regulatory environment shift and the price/performance expectations, which needs to be cracked by these start-ups to build an unparalleled innovation growth story," adds Ananth.
Emphasizing on the new product start-up scenario, the study says that while India is still to make significant contribution on the product front as compared to services, the country has seen more around 2020 new product start-ups till date. The increase in the VC funding and a large number of successful exits has given a thrust to the start-up ecosystem. India has over 2,50,000 professionals working in R&D related services across captice centers and service prodivers. The contribution of second generation entrepreneurs in India also needs to be highlighted in the same breath; successful IT company founders like Narayan Murthy and Azim Premji have started venture funds to encourage entrepreneurs resulting in the growth of the start-up ecosystem.
Government is also playing their part in India's increasing shift towards becoming a technology enabled economy. The government is making a strategy shift to contribute towards this development. "India is inherently an innovative country and companies need to get their strategies right to realize the true potential of this market. There is a combination of factors that is driving the growth story and India will become the innovation hub of the world. The coming decade is going to play a crucial role in the evolution of India's ecosystem, which will also have a significant bearing on the innovation growth story," says Pari Natarajan, Co-Founder and CEO, Zinnov Management Consulting.
The co-creation between the Indian start-ups and MNCs is the best way forward for driving the innovation. Many MNC firms are coming forward with multiple initiatives namely venture funds, evangelism programs, partnership with angel networks and outsourcing services to very small early stage service providers and trying to scale them as dedicated service providers.
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