$10 Trillion! That’s what the Indian economy will be worth by the year 2030, and a major part of this economy will be startup-driven. It is interesting to note that in the current scenario, even though high-growth startups or scaleups are only a 15% constituent of the economy, they account for 50% of job creations! Thus, it is pretty clear that startups are, and will continue to be a major part and parcel of the Indian economy, as well as worldwide!
Startup & Corporate Interaction
The way forward for a startup-driven economy is in conjunction with big corporations. Right now, the way well-established large-scale businesses and startups engage with each other is still to be defined under a set pattern. A considerable amount of startups are motivated by the disruption of current industries, however, many are eager to partner up with big corporations. 19% of large businesses are yet to establish a system for startup-engagement and 38% are yet to lay down the appropriate metrics for measuring startup interaction. 47% of corporations are yet to establish a fixed “ point of contact” for the management of startup interactions.
In a survey conducted about the nature of work occurring in big-brands and startup collaborations, major revelations have come to light. The top 5% of corporations with the highest startup engagement realized that a vast majority of startups (88%) utilized the platform to receive mentorship and/or sponsorship. 79% of startups also seem to have grown into a great avenue for corporations to co-develop new products. 85% of the top corporates engaged with startups also take part in university startup programs. This presents startups with great opportunities to start well by leveraging the benefits of this increased corporate interaction.
The Wave of Change
The startup-corporate partnership is yet to evolve from the mentorship phase to the phase of sustained growth together. However, it is only a matter of time before this happens. David Brown, the co-CEO of Techstars proclaims, “Our experience tells us that it’s not a question of if this disruption will occur, but, when. For big corporations, the true innovation-cultural change and avoiding the ill-effects of industry disruption is to partner with progressive startups”.
The startup and corporate partnership has seen to span across various classes of engagements. Some of the reasons for the collaboration were as follows:
- Corporate VC investment.
- Startup-focused technology accelerator like us, at India Accelerator!
- Becoming early consumers of startup products and services or reselling the same to their consumers.
The majority of large-scale corporates, however, were very clear with one objective in mind – knowledge gaining. Most corporates admit that among their top goals for having a startup interaction ecosystem in place was to run pilot-tests or proof-of-concepts tests for ideas which were new and extraordinary. This, they believe, will help achieve the ‘driving of internal transformation’ by the leveraging of startup tools and insights. This, the big corporate chains hope will also give an idea about customer trends as well as the newest tech trends. However, a small percentage (29%) were also eyeing potential acquisitions.
It is, therefore, well documented by now that by combining their respective powers, there is a mutual benefit for startups and corporates working together. Corporates get an insider view into the industry trends and latest technological innovations, while startups get the opportunity to leverage resources such as knowledge and exposure to accelerate their growth.